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Berlin Conference 2.0: Russia To Bail Out Hyperinflationary Belarus As Colonization Scramble Heats Up

Tyler Durden's picture


Who said that only Germany is allowed to annex Greece (and soon Ireland and Portugal)? (and if Der Spiegel has anything to say about it, again, Bailout #2 is far from certain... more on that shortly). In a surprising move, Russia has decided to remind everyone just how irrelevant the IMF is now that Russia and China run the "sovereign rescue" show, and that it too can play the imperialist game just as well as the Troica. Following the recent hyperdevaluation of the Belarus Ruble as discussed on Zero Hedge, and the country's collapse into a hyperinflationary hell, Reuters has just reported that Putin, that "White Knight" of former USSR imperialist dominance, has decided to "bailout" Belarus. From Reuters: "Cash-strapped Belarus will receive a three-year $3 billion loan from a Russia-led regional bailout fund as it seeks to stabilize its economy, Prime Minister Vladimir Putin's spokesman Dmitry Peskov said on Saturday. The former Soviet republic on Friday unveiled a series of measures to end the crisis, including a vow to cut its budget deficit in half, after its currency lost 36 percent of its value in May and inflation reached 20.2 percent." It is unclear just how many billions in funds will need to be derived from forced "privatization" of Belarus assets for the benefit of the old KGB guard, or what the interest rate on the rescue loans will be. What is more than clear is that as more and more countries fall into the toxic debt spiral, their neighbors who actually have capital and/or natural resources (ergo the irrelevance of the IMF), will "bail them out" only to remind the world that colonization is what it has always been truly about.

Berlin Conference ver 2.0 -  here we come.


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Sat, 06/04/2011 - 13:08 | 1339348 Caviar Emptor
Caviar Emptor's picture

Drug pushers are so 20th century. 

Debt pushers are so much cooler 

Hey, kid, have some know you want'll make you feel cool, strong, invincible! All the other kids will drool....and that hot chick will want you....go on, whaddya got to lose? The first loan is on me .......till Tuesday....

Sat, 06/04/2011 - 13:14 | 1339372 Cleanclog
Cleanclog's picture

Excellent CE!

How long until Hungary, Romania, Moldava, Estonia, Slovakia and Bulgaria get the 'ol Russian bailout?  Only Poland and the Czech Republic will escape being sucked back into the Iron Curtain - can you say Comecon Countries?  Can't really use Warsaw Pact if Poland doesn't go back in.

Sat, 06/04/2011 - 13:28 | 1339397 Caviar Emptor
Caviar Emptor's picture

That's the plan, buried somewhere deep inside the Kremlin.....Operation Moscow Phoenix

Sat, 06/04/2011 - 17:57 | 1339951 Hulk
Hulk's picture

and Putin is the man who can pull it off...

Sat, 06/04/2011 - 20:56 | 1340260 Enceladus
Enceladus's picture

John Maudlin has a piece from last week about 'Visegard' the Polish 'Nato'. It talks about how lines are being drawn in Eastern Europe. He gets it from Stratfor.


~ Linda Green

Polish Ambasador to Danzig

BOA Senior VP

Sun, 06/05/2011 - 04:57 | 1340751 globalcapital
globalcapital's picture

Important developement in world's largest (Banana) Democracy.

A must for people who want to  develop the right perception of India. The developments of the last 24 hours have been phenomenal to say the least. There are huge repercussions for the political stability of India.

Background - A yoga guru will hundreads of millions  of followers took up a fast until death against corruption in India. Across the country millions joined. The  corrupt Governtment got nervous and attacked the peaceful gathering in the middle of night.

Surely one can expect markets to be jittery when they open tomorrow!!

Tyler it would be great if you could put some more light on the stories.

You can get more info here!!

Sat, 06/04/2011 - 13:11 | 1339364 falak pema
falak pema's picture

now you see where the new empires will emerge : the Russia/Germany/Turkey axis that will solidify around Russia's gas reservoir. As for PIGS and Bella....they are toast and part of slave empire of the new oligarchic europe. We see how the Oligarchy will now move to proscribe civil liberties by financial means rather than war! 

See the new paradigm as it emerges...

Sat, 06/04/2011 - 13:19 | 1339381 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

My thinking is there will be no first and third worlds, only one big second world where the US, Japan, and Europe share their lush lifestyles that they created on the back of worthless fiat currencie with the rest.

Sat, 06/04/2011 - 13:56 | 1339463 Crab Cake
Crab Cake's picture

FWIW The notion of "worlds" applies to economy... First is Capitalist, second is Communist, and third world is unaffiliated with either bloc. Technically there hasn't been a "world" structure since China flipped to capitalism, bastardized though it is. Third world at this point is just slang for poor, or IMF/WB bitch. At any rate...

Sat, 06/04/2011 - 13:19 | 1339378 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Back in the USSR! 

Sat, 06/04/2011 - 13:27 | 1339395 tmosley
tmosley's picture

More likely the USCR.

They have found capitalism to be a bit more sustainable than communism, at least, when practiced (rather than simply preached, as in the US these days).

Sat, 06/04/2011 - 14:36 | 1339560 The_Euro_Sucks
The_Euro_Sucks's picture

Iam sure you ment corporatism being more stable then communism and still benefitting the same group of people. In my opinion this soap has nothing to do with capitalism. Capitalism, brrr having to take the losses yourself instead of being able to socialise them. Horror, a governement (aka the enforcer) having to live within its means and so on.

Sat, 06/04/2011 - 15:37 | 1339724 marsovka
marsovka's picture

actually is equally fucked up as communism. Happened before like the Great depression.

You know why FDR did all those socialist things and arrested banksters.


Sat, 06/04/2011 - 19:38 | 1340149 mynhair
mynhair's picture

I bet on the USOR, the United Soviet Oil Recipients.

Sat, 06/04/2011 - 13:22 | 1339386 spanish inquisition
spanish inquisition's picture

Wow.... Everyone is going to have to print a lot more money to help with the bailouts..

Sat, 06/04/2011 - 13:33 | 1339411 Caviar Emptor
Caviar Emptor's picture

Piles and piles of worthless cash....what does the fox see in the chicken coop that looks yummmy? 

Sat, 06/04/2011 - 13:33 | 1339419 Franken_Stein
Franken_Stein's picture


It's funny that you blame Germany for annexing Greece, which is a blatant lie.


Not only is it not Germany, but German banks,

not only is it not only German banks, but also French and British banks, who, interestingly are never mentioned in all of this,

not only is it a small power elite in Germany, France, Britain, Luxembourg and Brussels of course, providing the political framework, while the populace has no say in it,

not only is Merkel acting on behalf of the people in the CfR, who see the EU as just a stepstone on the erection of the New World order.


But that is probably too much diligence to ask for.


And regarding Putin:


Belarus was never economically viable.

I've never understood why they separated from Russia.

Until today Russian is spoken there, Russian culture is dominant there.

And Putin can't be that much worse than Lukashenko.


And why shouldn't Putin be allowed to do what the U.S. is doing on a daily basis with totally foreign countries, both linguistically and culture-wise ?


Belarus is Russia's backyard and even once belonged to the SU to 100 %.


The U..S. is not the only country allowed to illegally invade and conquer sovereign states.

It's not their God given right and the people in Washington learn that better sooner than later.


There's nothing good about America spreading "democracy".

It's just a euphemism for dominance and the installation of the Rothschild central banking system and access to natural resources of course.


So why is it bad when Russia does it and good when America does it ?


Sat, 06/04/2011 - 13:38 | 1339434 Caviar Emptor
Caviar Emptor's picture

I think the historical analogy you're looking for that's more accurate to describe who's really benefitting from money lending in foreign nations is the British and Dutch East India Company. So-called capitalism hiding colonialist expansion and resource extraction through debt slavery. 

Sat, 06/04/2011 - 13:57 | 1339471 magpie
magpie's picture

At least with the re-amalgamation Lukashenko might have a chance to be Putin's handpicked successor.

Sat, 06/04/2011 - 14:18 | 1339529 hamurobby
hamurobby's picture

In the good old days it was roll in the tanks, now its roll in the banks.

Its imperialism either way.

Sat, 06/04/2011 - 14:46 | 1339597 Founders Keeper
Founders Keeper's picture

[ its roll in the banks.]---hamurobby

Good one!


Mon, 06/06/2011 - 01:44 | 1342609 Moonrajah
Moonrajah's picture


Who needs carpet bombing anymore? Today it's carpet banking.

Sat, 06/04/2011 - 14:46 | 1339598 kito
kito's picture

everything he said except for the stale rothschild conspiracy argument.

Sat, 06/04/2011 - 19:44 | 1340168 TK7936
TK7936's picture

Even if you could blame en entire population -Germany is just beating everyone at there own game. They kicked out this system 1933 and as a result of loosing the war got it reinforced 1949. So there really is noone to blame there, atleast they tried something different.Its up to all the cheerers of the Ponzy Gods now too clean up the mess. Germany can sit back and watch what happens, if things get to hot, they can just devalue the euro and compensate through exports, which is what a Greek default would insure.

Sun, 06/05/2011 - 00:36 | 1340637 Dirt Rat
Dirt Rat's picture

So why is it bad when Russia does it and good when America does it ?


I'll bite. It's that old us-vs-them tribal mentality. When we do it, it's the greatest act of heroism. When they do it, it's the worst act of dastardly cowardice.


Sat, 06/04/2011 - 13:34 | 1339423 Oh regional Indian
Oh regional Indian's picture

The great "scam" that was the collapse of Russia is now laid bare!

Only now the "dynasty" is secure...nice moves!


Sat, 06/04/2011 - 13:35 | 1339427 alexwest
alexwest's picture

idiot putin plays w. mathches

only idiots who read about Russia in western papers in artciles written same idiots think Russia is stable..

Russian consolidated budget is ~550-600 bln $$$, not chump change , bigger then japan's ( japan has 1 trln $ budget , but prints half of it ),, so problem is


its only matter of time before oil before be down to 50$, so suddenly Russian budget wont get 25-30% revenues (as it was in 2008/9), so deficit will be 150-200bln per year..


M2 in Russia is around 700 bln $, but gold/hard currency reserves are ~500 bln, so as soon as crisis come up, there will be huge flight from rubles into eur/$, so currency will collapse 50-100% ( same in Belarus, only bigger by factor 100x)

there's HUGE INFLATION problem in Russia, official rate is around 8.5-9%, in reality life as is in every country is much dearer.. inflation is probably 15-18%, so there's no much trust in rubles, as long as currency rates ( rubles/$ , euro) are stable, fine, but as soon as oil get down, russian will take rubles from banks and put into hard currencies/real estate/gold, so banking systems will collapse too.. it did in 1998, and almost happened in 2008/9.

+++ there's huge external debt ,more than 500 bln $,



Sat, 06/04/2011 - 13:52 | 1339462 Jack Burton
Jack Burton's picture

  I can agree Russia is resource price dependent. The only question is will oil decline to the extent needed to trigger financial problems in the kremlin budget.

The external debt, 500 Billion dollars? Who holds it and when was it issued?

Sun, 06/05/2011 - 08:56 | 1340985 alexwest
alexwest's picture

only oil decline will trigger..
goverment /consumer /mortgage debt does not exist..

#external debt

its private debt taken by private companies, mostly in oil/metals sector and banks.. I'd call it quasi-goverment debt cause biggest oil/gas companies and banks in RUssia pretty much do what Putin/goverment want , such as Gazprom, Russia RailSystem (RGD), Sberbank (biggest bank), BTV bank, LukOil, Rosneft ec,,

russia is cooked

Sat, 06/04/2011 - 13:59 | 1339476 Segestan
Segestan's picture

Hey.. stop telling these stupid western Marxist the truth. You're destroying a wet dream.

Sat, 06/04/2011 - 14:12 | 1339507 Cheeky Bastard
Cheeky Bastard's picture

Read "The return of History and End of Dreams" by Kagan, where he discusses and exposes the geo-economical repositioning into blocks. Main blocks being Sino-Pacific (ex-Japan), Anglo-American (USA, Canada, UK, Japan), EU, Russia (and former soviet states in Central Asia, as well as in Europe), and most surprisingly India and Middle Eastern oil producers, and Brazil as well. In short he acknowledges that while geo-politics ruled in the past 2000 years, when it came to international relations, now, without any ideological dialectics (in political context) the next dialectical field is geo-economics. How this relates to this particular situation where Russia bails out Belarus is that blocks will operate independently with the dominant country taking the role of supra-national institutions that have so far provided assistance to countries. This will not only be restricted to economic influence, but also military interventions (read the latest statements made by Russian foreign minister about Libyan situation) etc etc. In short, as this crisis progresses, you will see more and more "independent geo-economic structures" each with their own cultural identity (which is non-existent in the ideology of of liberal capitalism), military laws etc etc. This in turn will help in dethroning USA from it's position of the "World's Policeman", because it's access to resources to maintain such foreign policy will be severely reduced. Anyway, a good book to read if one wishes to gain insight into future geo-economic trends (especially with China and Russia establishing themselves as equals to US).

Sat, 06/04/2011 - 14:17 | 1339519 magpie
magpie's picture

On a related note, i was just taking Geopolitics for Poltroons and Dummies, seeing how the DVD regions decreased from 8 to the three Blu-Ray Großraums, plus China's very own standard sphere.

Sat, 06/04/2011 - 14:52 | 1339630 dark pools of soros
Sat, 06/04/2011 - 16:37 | 1339824 BorisTheBlade
BorisTheBlade's picture

This makes Fukuyama very sad.

Sat, 06/04/2011 - 19:40 | 1340157 mynhair
mynhair's picture

Elena Kagan can write?  O, 'he..'

Sat, 06/04/2011 - 14:13 | 1339509 kaiten
kaiten's picture

Belarus first, Ukraine next.

Sat, 06/04/2011 - 14:25 | 1339540 digalert
digalert's picture

Isn't Belarus on the Obama/Nato regime change hit list?

Sat, 06/04/2011 - 14:36 | 1339561 Franken_Stein
Franken_Stein's picture


For any German Chancellor there are now 3 options:


1. You go the "Atlantic way": Westwards leaning, i.e. become a CfR/Chatham House whore (Kohl, Merkel)

2. You go the "Continental way": Eastwards leaning, i.e. become a Kremlin whore (Brandt, Schröder)

3. You go the "Silk road": Eastwards leaning, i.e. become a Zhongnanhai whore (none until today)


1. U.S. influence is militarily/financial.

2. Russia influence is energy-wise.

3. China influence is trade-wise/financial.

4. Turkey/Middle East influence is demographical.


So Germany is the place where cultures clash.


Sat, 06/04/2011 - 14:39 | 1339583 kaiten
kaiten's picture

Gee, and where is option 4, the real option: EU?

Sat, 06/04/2011 - 14:43 | 1339599 magpie
magpie's picture

Option 5, slowly implode on your own, going Japanese.

Mon, 06/06/2011 - 01:50 | 1342615 Moonrajah
Moonrajah's picture

Fiscal harakiri, prolonged for extra pleasure...

Sat, 06/04/2011 - 14:51 | 1339625 ike
ike's picture

Belarus economy is fine. There is extreme pressure from the West now, becouse they are printing money like crazy.

This is just decoupling shock. 

All economic analysis now is like: Moody, S&P or so

But soon will be: Argentina has 40 mil people and 50 mil cattle

EU27 is 500 million but just 20 mil cattles




Sat, 06/04/2011 - 14:59 | 1339647 magpie
magpie's picture

So how much cattle does Belarus have ?

Sat, 06/04/2011 - 16:42 | 1339843 Hulk
Hulk's picture

several million Belarus blues...

Mon, 06/06/2011 - 01:53 | 1342619 Moonrajah
Moonrajah's picture

Um, judging from the way things are it is safe to state that EU has 520 mil.cattle, but only 20 million of them are of animal origin.

On the other hand all 520 million are edible given the right circumstances and spices, so all's not that bad.

Sat, 06/04/2011 - 15:22 | 1339683 FOREX loop.
FOREX loop.'s picture

People just dont get it. I guess they just want to be oblivious to whats going down around us.

This guy has a good take on it

Personally I think we are going straight for a cliff because the masses are to stupid, and the elite are to greedy to slow down.

Sat, 06/04/2011 - 16:51 | 1339851 onlooker
onlooker's picture



What a pleasant surprise. Hope to see you more often.

Sat, 06/04/2011 - 16:50 | 1339854 falak pema
falak pema's picture

When USA goes south, Germany will go east... and EU will follow... The economic centre of gravity of the world moves east... forget USSR and communism...see the rise of the new will not be USA centric...that is the trend as the USa is determined to go into a tail spin for the next ten years...By then, the writing will be on the wall and we will know which way the cookie crumbles for the rest of the century...or at least  its first fifty years...lets stay our predictions...The tragedy is that western civilization is losing its grip on the the Oligarchs are not the people; just an empty shell of dying values, the dregs of the new house of the Atreus.

Sat, 06/04/2011 - 17:50 | 1339934 magpie
Sat, 06/04/2011 - 19:58 | 1340189 Fiat Money
Fiat Money's picture

yes, the Neo-Con "of, by & For Goddamn Sachs & the war lobby"  traitor bastards

have SABOTAGED America's ENTIRE industrial/production economy, so they can wallow in SHORT TERM profits... and when THAT little rubinite/summers/paulson scam BLEW UP, they (via bribed & bought congress-critters & pres-i-dents) went straight to DIRECT TAXPAYER EXTORTION ("bailouts") and SERIAL   back-door THEFT of savings & wealth (by Greenspan/Bernanke/Geithner's "FREE MONEY FOR BANKSTERS...  DEBT & DEBASED MONEY for you peons!" "Liquidity Injections" & QE 1,2, 3...)

   Now, the rest of the world would have eventually CAUGHT UP with America's technology, industrial production, & higher education system... the Goddamn-Sachs uber alles crowd just ACCELERATED that losing race (for USA)  by 2 decades, while SABOTAGING our ENERGY PROGRESS, so to make us MORE DEPENDENT on fossil fuel (which MONOPOLY CARTEL is the BASIS of their oil/petro-dollar  Fed oligopoly trust)


Sat, 06/04/2011 - 18:05 | 1339969 Cast Iron Skillet
Cast Iron Skillet's picture

look what happens when the troika is out to Greece for a little souvlaki ... the IMF isn't on the balls as good as when DSK was the boss.

Sat, 06/04/2011 - 18:47 | 1340051 geno-econ
geno-econ's picture

Russians have strong feeling of nationalism and willing to die for Motherland and end their misery as Germans found out.  On other hand new oligarchs may dilute  that feeling of nationalism and may even spark another trend towards revolution. Belerus interesting because it tests feeling of Slav/Russo nationalism as opposed to embracing western economic and political change. Problem is Belerus does not have much going for itself in terms of human or natural resources--plenty of forests and swamps and people oppressed to the point of lethergy

Sat, 06/04/2011 - 18:47 | 1340052 geno-econ
geno-econ's picture

Russians have strong feeling of nationalism and willing to die for Motherland and end their misery as Germans found out.  On other hand new oligarchs may dilute  that feeling of nationalism and may even spark another trend towards revolution. Belerus interesting because it tests feeling of Slav/Russo nationalism as opposed to embracing western economic and political change. Problem is Belerus does not have much going for itself in terms of human or natural resources--plenty of forests and swamps and people oppressed to the point of lethergy

Sat, 06/04/2011 - 19:11 | 1340091 sbenard
sbenard's picture

I have a close friend who is Belorussian, and I am dating a woman that is Belorussian.

Belarus still has an old-style communist dictator, Lukashenko, who continues to do to his countrymen what the Soviets did to theirs. Putin should flush the toilet and get rid of him!

Sat, 06/04/2011 - 21:19 | 1340317 geno-econ
geno-econ's picture

What would Putin gain by flushing Lukashenko or for that matter the Ukranian leader ? Putin is in control with energy and really does not want to invite Western influence more than he has to. Russia lost the Cold War, all the more reason to be fearful of more encroachment by Western powers. On your next date talk it over with your Belerus friend-- they are beautiful people having been in a difficult situation for a long time and not really respected by the Russians.

Sat, 06/04/2011 - 22:43 | 1340463 onlooker
onlooker's picture

The Belarus Tractor is quaint, in some respects, but a sturdy/ simple design tractor. It has standard features that are unique to the market. I have 3 of them and hope the company can operate without complications from the National economy.

Sun, 06/05/2011 - 09:21 | 1341004 Sathington Willougby
Sathington Willougby's picture

Wow. 3 Billion. We gave more than that to a foreign popsicle stand. Western pride!

Sun, 06/05/2011 - 11:00 | 1341130 KillTheFed
KillTheFed's picture

I feel bad for Belarus, who like many sovereign nations of the globe, are pawns in geopolitcal/economic games.  I am happy Russia is standing up to the banker's power at the IMF in their quest for world hegemony and world governance.  The big picture is the US (UN/IMF/World Bank/banking elite) against Russia and China.  If Russia and China do not exert some of their power now (while they still have some) then the world domination plans and the neo-fuedalsim planned for the common man is all but assured.

Sun, 06/05/2011 - 13:57 | 1341442 falak pema
falak pema's picture

well I can see your point. Yu love those eastern neo-feudalists better than their western versions!

Sun, 06/05/2011 - 14:30 | 1341445 falak pema
falak pema's picture


Sun, 06/05/2011 - 16:04 | 1341746 SovietCong
SovietCong's picture

Let me make it very clear: Belarus has been a colony of Russia for quite some time. Under Lukashenko, a former kolhoz (in the USSR times, state-owned, farming entity) manager, Belarus became a relic of in the middle of Europe with a highly inefficient economy. Lacking basic industrial commodities, most notably, being 100% dependent on Russian energy, over the last 15 years Belarus made a living off its status of a backward vassal: it refined oil and burned gas, imported at discounted prices from Russian companies only to subsequently sell it to the EU countries (profit coming not as much from refining as the oil&gas prices arbitrage); it exported energy and energy-intensive machinery b/c of comp cost advantage (pollution? what pollution...?). Poles even got the idea to build a new coal power plant out there, some 30 miles off the border, thus avoiding those cumbersome CO2 limits and environmental rules the EU requires.

Every winter the people of Belarus learn to appreciate their friendship with Russia somewhat more, or else they face the same headache their neighbors from Ukraine experienced several times: Russia threatens to shut off gas. And Eastern European weather around the new year's eve is very sobering when it comes to one's aspirations of economic independence and similar silly ideas. Each time Russians agree to provide energy at a discount, they want something in return: control over the power transmission system; control over local rafineries or powerplants; some help in arms sales to friendly regimes that happen to be subject to a UN embargo.

The current crisis in Belarus is nothing new, really. Russia already has so much leverage against Belarus that this bailout thing is more of a trouble in a struggling colony than an opportunity. The Baltic republics, however, that is quite a different story. Who will bail the former Soviet republics, now in the EU, but not in the eurozone, after local banks get drained (even more) to rescue their failing parents?

Sun, 06/05/2011 - 16:40 | 1341804 litoralkey
litoralkey's picture

Belarus hasn't had a functioning financial system since independence, 

this is the 20th year of independence from the USSR,

Russia (or the CIS) has had to supplement and donate energy to Belarus EVERY SINGLE YEAR in the last twenty.

In return, Russians in the Kremlin have been dictating terms to Lukashenko for 17 years.

No paradigm shift in the current Belarus currency deval.

No paradigm shift in Belarus' total and absolute dependence on Russian BTUs for the winter.


Sun, 06/05/2011 - 17:08 | 1341846 geno-econ
geno-econ's picture

Belerus hooked on Russia for energy, same as USA hooked on China for cheap labor and financing. The Hooked will perish while the Providers will flourish--- along with the Global Bbankers that make it happen

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