Good morning to you all. At 9:02 AM EST this morning, Russian officials
stated that Russia will be forced to import grain due to expectations of
the worst harvest in 41 years. Up until recently, Russian officials had
hoped to harvest approximately 65 million tons of grain. However, they
now report an expected harvest of 56 million tons, a 17% reduction. This
will put even further pressure on Russia's currency reserves, which are
already insufficient to pay upcoming installments on large amounts of
debt. In turn, this will put further pressure on global economic
conditions. For your convenience, we have re-printed our report
regarding the Russian debt situation.
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The situation is not much better in Russia, where there is now a real
threat of massive default on loans ranging from the IMF, to major banks
and other lending institutions. To date, banks around the world have had
to write down about
$US 10 billion. In addition, another $US 20 billion in debt is under
payments moratorium and in danger of being lost. However, the main
concern comes from an additional $US 180 BILLION of government and
corporate debt which have not yet come due since the crisis began. That
situation will begin to hit the markets in November, when Russia must
begin payments of at least $US 2 billion per annum. In 1999, that amount
escalates to $US 17 billion in annual payments. Quite simply, when
taking into account Russia's Central Bank Reserves and Government
revenues, analysts are hard pressed to figure out where the money will
come from.
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After today's report, analysts will be even more hard pressed to figure
out where the money will come from.
Have a great day.
Regards,
Agora
The Investor's Investor. Published by Agora International Enterprises Corp.
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