"At The Start Of The Year, Foreigners Held $20bn Of Russian Foreign Currency Debt, As Well As  local

"At the start of the year, foreigners held $20bn of Russian foreign currency debt, as well as  local debt worth more than 3tn roubles." FT.com; Lehmann in 2008 had $613 billion bank debt and $155 billion in bond debt.

Russian default is a structural risk, but decades of free money (QE) and capital reforms have deleveraged the west. This is best seen with the growth in treasury “reverse repo”

“NEW YORK, June 9 (Reuters) - The Federal Reserve's reverse repurchase window on Wednesday took in $503 billion in cash, hitting a record peak for a third consecutive session, as financial institutions flush with liquidity flocked to the Fed facility to park their cash and secure Treasury collateral.”

sorry to bother u but i just came across ur post about europe cuting russia of swift and how that will killing their own economy in future, would u mind elaborating in that or maybe point me in right direction? i never hear of swift until today and i wonder if it kills europe economy why they do it? i think u also say it breaks global economy? sorry for my english, i hope u can understand me, it is okay if u do not or can not answer. thank u.

What is SWIFT and what happens if the Russians are cut off from it?

What is SWIFT? The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a high-security network that connects financial institutions around the world. It is used by different financial institutions to send and receive information, such as instructions for transferring money across borders.

Basically, SWIFT is the way international banking works. Cutting SWIFT off has only been done twice before, to Iran and the DPRK/‘North Korea’. Never with an economy like Russia’s - it’s like amputating them from the global financial system. Firstly, this means that import/export is near impossible, similarly with international services - destroying about 65% of Russia’s GDP already. That trade is important, though - the gas and grain Russia exports goes somewhere, largely to Europe. Without it, Europe has an extreme problem. Moreover, cutting off the banks also means that not only can trade not occur, but Russia can’t turn its invested capital back into cash to reinvest: it can’t liquidate its debt, which may lead to an even greater problem.

No trade, and no liquidation, means it will default on its debts. Some US banks defaulting on some debt caused the 2008 global financial crisis - this would effectively be a default on almost all of Russia’s debt. The holders of that debt aren’t Russia, either - they’re largely the west. Similarly, the freeze on the central bank’s assets means that its foreign currency reserves are basically null and void - and given that Russia’s foreign currency reserves are largely in Euro, this is as much a strike against the EU’s economy as it is Russia’s.

As for why they would do it… It will certainly destroy Russia’s economy. It is the nuclear option, economically. Just like regular nukes, though, it’s largely a mutually-assured destruction. The global economy can’t just cut off such a large aspect of itself without feeling it. However, the global economy was already in crisis. Historically, in times of crisis, the imperialist countries have been willing - or, rather, forced - to apply their most extreme methods of exploitation to themselves. If cutting off their own arm is what it takes to maintain global hegemony - which Russia was threatening - then they’ll do it.

The EU had previously refused to cut Russia off from SWIFT. The EU had also dragged its feet on shuttering the NordStream 2 gas pipeline with Russia - because these things will harm it just as much as they harm Russia. The US wanted escalation, and it wanted Russia and the EU to split - and a weaker EU is a benefit for the US, which is now starting to cannibalise its own allies. This will hurt the US, but not as much as it immediately hurts the EU. I suppose the US might have forced their hand, considering they now hold Europe’s lifeline, in the form of whatever gas exports they can muster.