This is an interesting bit of disinformation about Germany and Russia. Incidentally, I predicted this precise development in late 1998 for some clients. After inquiring minds read it I'll explain what's really happening.

http://www.thetimes.co.uk/article/0,,50383,00.html

To start with the quoted figure of 14 billion pounds of Russian indebtedness to Germany is far off the mark, literally. These were new Russian government bonds issued after 1991 for marks but denominated for repayment in rubles. I won't speculate as to the motivations of those German fiduciaries responsible for such unsound transactions. Most readers here can fill in the blanks.

Not only did the Dollar Ruble rate go from 1-6 to 1-25, but the mark itself has fallen by almost half against the dollar in that same period. Just on the basis of foreign exchange rate movements Germany's 1990s investment losses have been close to 90%. This is even before the Organizatsiya and local gangsters took their cuts.

The German banks are still carrying these loans on their books at the older pre-1998 ruble-mark exchange rate, which has since quintupled (or declined depending on which side of that transaction you're on). If these loans were actually "marked to market" on the German books today you'd see a significant number of German banks and investment syndicates suddenly showing a negative net worth. Even on ZOG banking principles a bank has to have SOME equity, typically 3-5%. The German banks in reality often have -10% figures.

In other words there's a large number of bankrupt German banks masquerading as going concerns. Instead of 'marking to market' they're now going to exchange these 'loans' for 'equity' in Russian businesses.

In the absence of a competitive market in Russia for pieces of businesses there's no way to really establish a fair value. There's probably 100 casinos in this country with a bigger daily turnover than the Russian Stock Market. That is not exactly a liquid entity.

Therefore the 'fair exchange value' from debt to equity will be whatever the two parties choose to say it is. The German managers will choose values that reflect no loss to their pre-1998 debt position. The Russian government has every incentive to cooperate in building this Potemkin Village for the German public and the dumber portions of the European Economic Community. What we really have here is quantum accounting according to the Heisenberg Uncertainty Principle.

Establishing values is further complicated since NO ONE ON EARTH knows what the real size of the Russian economy is. This emphatically includes the Russian Government. Russians don't keep their savings in banks. They keep them in U.S. dollars buried in coffee cans at the dacha or in waterproof containers on lake and stream bottoms.

Then there's the nature of economic transactions. Consider this one: Sasha repairs a computer in Ekaterinburg. As a result of this Alek (who owes Sasha money) in St. Petersburg gives Ted from the Ford Motor Company plant $250. Ted later mails a check to a house in Atlanta, Georgia, which is where Sasha's cousin lives. This was a simple true example. Barter, half barter, four way service swaps, cross border exchanges and transnational deals are commonplace to settle transactions for which we'd just use VISA at Computer Depot. A $3,000 debt owed in Vladivostok might be repaid in Warsaw as a used car full of vodka.

So will the German bankers really get "14 billion pounds" value for their bonds? Of course they will. Ask any of them. They will say so and so will the Russians. Just don't try to exchange any of it for ZOG bucks or commodities exchangeable for ZOG bucks, such as gas, oil or steel....

And speaking of gas, again,....

The second grosse lugen in that article is the percentage of gas Germany gets from Russia. Claims of less than 30% are a half truth at best. Whatever the true number, I can say that import capacity as measured by pipeline port capacity is vastly greater from the east than from the North Sea. And GAZPROM has to be paid for whatever the amount is. As our President De-Elect says, 'it depends on what the meaning of is is.'

And right you all are! Go to the head of the class. GAZPROM still adheres to old fashioned Newtonian concepts of accounting instead of modern Einsteinian Special Relativity. Now GAZPROM is not part of the Russian Government at this time. The Russian government is just the majority shareholder. GAZPROM's revenues are not incorporated into the Russian Federal budget, nor are the balances in its various European bank accounts.

Since GAZPROM stock is already fully distributed, there won't be any included in this Debt For Equity swap.

Such a deal!

Maguire