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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: Z Analyzer who wrote (251)	6/29/1998 5:45:00 PM
From: Real Man	Read Replies (1) \| Respond to of 1301

Let's see... The rouble devaluation. I believe, the government would HATE to do it. The reason is simple - anything leading to more suffering of the ordinary public will lead to social explosion and to a change of power. However, they are almost broke, so they might have to devalue. I would think non-payment on the debt is more likely solution in the current situation, if it comes to this. The rouble has lost exactly 3 zeroes since spring 1991. People had large amounts in savings then, I doubt they have any now, although some converted their savings into $$$ and hold those dollars at home. Largely introducing the corridor which pegged the rouble to the dollar allowing slight devaluation was a tool to control inflation. I doubt it's overvalued - the "attack" was the result of a massive run of foreign and domestic investors away from the rouble investment instruments into the greenbuck (or this is what I read). I was worried a lot about the possibility of a return of communism. Other regimes (fascism) are also a possibility. This still worries me a lot. However, the communists don't have a particularly good image for the youth, who already were brought up in a different society. Besides, the communists lack a strong leader. The danger may come from a strong nationalist leader. I see now one - Mr. Lebed'. However, I do believe the leading Russian bankers have the ability to control the media and produce a nice image for a democratic candidate, if necessary. I have read that Russian standards for counting the reserves are different from Western. So Lukoil likely has less reserves than published. How much - I have no idea. I will remain long RNE, but I have not bought more of it recently. I think this Fall might prove to be difficult. Besides, the interest rates are still on the rise. Hungary and Poland might be a good play in Eastern Europe, since they will enter EU. I had no access to a computer this week (travelled to Europe) -so no postings. -Vi