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Peter R.: Perspective from the Ground in Russia

Tom welcomes Peter from St. Petersburg Russia.

He has a background in economics and finance while also being a private investor in both stocks and cryptocurrency.

Peter was just old enough to remember the collapse of the Soviet Union and recollects the emotions of family during that time.

The Russian stock exchange has been closed for several days. Some of his foreign brokerage accounts are also suspended or closed. Just a few weeks ago few could have predicted what is transpiring. Before the invasion markets felt riskier and in hindsight, he would have preferred to have taken additional precautions.

Peter has been buying gold coins for several years and normally the premiums are around four to five percent. Current spreads are between thirty and forty percent. ATMs are limited to 10,000 rubles (USD 150) and the ATMs are no longer able to dispense Euros.

He believes the last straw for Putin was the threat and support from western powers for arming Ukraine with nuclear weapons. This was an unacceptable risk to the Russian state. Putin’s objectives appear to be the replacement of the Ukrainian government and the disbanding of its military. Peter has extended family in Ukraine who have been witnessing the conflict first hand.

So far Ukraine’s demands at the negotiating table have been unacceptable and little headway has been made. Thankfully, both sides have agreed to open humanitarian corridors.

He discusses the increasing bias against Russia and contrasts the global reaction with the relative lack of complaint of America’s past ‘interventions’.

So far life in Russia remains fairly normal and most forms of payment still work. Inflation hasn’t shown up in goods yet but that seems likely to change. The Ruble has declined by 30% over the past few days and spreads on currency trades are high.

He remains concerned about the potential for internal problems in Russia over the long term. The anti-Russian hysteria may limit the options for moving out of the country. Discrimination against Russians appears to be an escalating problem.

Most people in Russia support Putin and understand their governments’ motivations around Ukraine. Protests against the conflict are fairly limited, but this could change.

Putin consistently gets good ratings despite what the opposition may claim. Anyone living in Russia can see that Putin has the majority of support.

He says, “The more the world interacts, the more value we can bring to each other. On a basic level, we all have much in common. These conflicts are not helping humanity to move in the right direction, especially when one considers the risk of a nuclear exchange.”

You should have a disaster plan and think carefully about potential problems. There are always unforeseen risks like bank runs or market closures. Even ‘safe’ investments like bonds aren’t useful in the current Russian environment. Being independent and non-reliant on the grocery store is a very good idea along with having a stockpile of medicine on hand. Also, important is having a backup home in a remote location.

Lastly, he notes that the West has frozen 300 billion in Russian reserves and that other countries are probably watching that situation very carefully.

Time Stamp References:
0:00 – Introduction
2:47 – His Perspective
5:20 – ATMs and Cash
6:22 – Recency Bias
8:26 – Media Bias
10:53 – Conflictions
12:20 – Putin’s Motivations
15:08 – Hot Zone Conflicts
18:33 – His Current Finances
20:16 – Inflation & Spreads
24:12 – Investing Thoughts
26:20 – Sentiment & Russia
28:15 – Putin’s Ratings
30:06 – Russia & the Pandemic
33:49 – Hard Times & Savings
37:33 – Interconnectedness
40:23 – Important Lessons
43:58 – Concluding Thoughts

Talking Points From This Episode:

  • His background and being caught somewhat off guard by the conflict.
  • Russian markets and the current situation on the ground.
  • Sentiment against Russia and the motivations of the Russian government.
  • Interconnectedness and the importance of being prepared.

Peter R. lives in St. Petersburg Russia and is big a fan of Palisade and experts like Rick Rule. Peter is old enough to remember the collapse of the Soviet Union and the impacts that had on his family. He graduated from an economics department and has worked in finance in Russia. Seven years ago he was a CFO for a company in Russia. For the past five years, he’s been a freelance financial advisor with clients in Europe and Russia.

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