Russia Breaks Down - Joe Blogs

[TexasTowelie]

Russia is heading deeper into a full-scale debt and bond crisis.

For more than three and a half years, Russia has been battling elevated inflation, and the central bank has been forced to keep interest rates at crisis levels. The result is simple: borrowing has become extremely expensive, and the entire Russian economy is now feeling the effects.

At the same time, Russia’s total debt pile has ballooned. Both corporate debt and household debt have surged, and companies across the country are now having to borrow more — but at dramatically higher rates.

Russian businesses are being squeezed from both sides:
• More debt than ever before
• Much higher interest payments due to expensive Russian bond yields
• Falling producer prices eating into profit margins
• Cashflow problems spreading across major sectors

Many firms are now operating as zombie companies, barely able to cover interest payments, let alone repay the principal. As more bonds mature in the coming years, companies will be forced to refinance at today’s punishing rates — making the crisis even worse.

In this video, I break down the inflation problem, the surge in borrowing, the spike in bond yields, and why Russia could face a major debt crisis and corporate failure wave in the next few years.

Chapters:
0:00 Intro
0:45 INFLATION
2:04 INTEREST RATES
3:47 DEBT
5:42 LENDERS
6:32 CORPORATE DEBT
8:57 YIELDS
12:17 SUMMARY & CONCLUSION