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It is very important to distinguish between political power and private capital. In Russia they are far less separated than in the U.S.

Money sent to Russia, by institutions who receive tax money from governments, is not investment. It is economic aid with different standards of concern about risk. Such money can ignore possibilities of loss that private investors, investing privately owned capital may not wish to ignore. Therefore when such money is sent to Russia it may mean nothing as far as the view of private investors is concerned with respect to the attractiveness of investment in Russia. Plan your strategy acordingly.

For years, consistent with its political and military policies, the American government has been feeding corporate America a line of malarkey about investing in Russia. To the extent convenient for its interests corporate America has been willing to listen, as long as the government GAVE them the money to make the investments with. Rare exceptions exist in oil and a few major industries. A few companies have sufficient money to 'buy" a foothold for the long term. It is not really an investment. It is an "ante' at the poker table, to have a seat.

This is not investment and Russia cannot reconstruct on the strength of these few billions. It needs trillions.

The global corporate world knows darn well what it expects and needs from Russia and they think Russian bankers know it also. Until they have a level of comfort that the banking industry of Russia means it when they say they want investment, they are sitting pat and folding their hands and paying their paltry antees.

No matter how chummy the Russian government and the U.S. government get, for Russian owners of private industry this produces no results, because the U.S. government doesn't control sufficient capital to help Russia. $6 billion so far and the $2 billion put into EBRD for a 10% interest, are the size of their ability. America have problems at home as you know. It has many things we need to attend to domestically.

So the Russian banking industry has to understand that their target is private America, not the government and that private America doesn't believe their government any more than Russian industry believes theirs. I think they already know that.

Russian bankers should cosy up to private corporate America and tell it like it is. If corporate America believes Russian bankers are going to become straight shooters they will "make-a deal". If instead, Rusisan bankers feed American private investors the same rhetoric they are fed by their government they will continue to stand pat.

This is a chance for Russian bankers to get attention, create credibility, and open a dialog. None of us are perfect. We all have and will continue to make mistakes. At the moment US corporations can afford mistakes better than Russian companies can. They can afford lip-service, which to Russian companies may already seem like considerable amounts of money, but don't let that fool you. They aren't at the table yet and for valid reasons.

The Russian banking industry could become the spokesman for what the Russian people need to rebuild their economy and their industry. The rules corporate America suggests are helpful to Russia and Russian banks would do well to "get-in-bed" with them. That may mean Russian banks cannot get in bed with the Russian government. Well, neither can American companies get in bed with their government. Business and economy is about something other than government. It has to do with creating money. Government has to do with spending it or taking it. The two are not close relatives.

What Rusisan bankers have said up until now doesn't feel good to me and I doubt it will to those Americans the banking industry of Russia would most like to reach. No offense is intended and I hope none is taken. My objective is the same as that of the Russian banking industry. I just don't want to kid myself as to how they can get there. A good campaign manager would advise his clients they aren't going to get elected with this platform. I am doing just that with the intention of achieving the goal not defeating it.

It's time to put pleasantries aside and play hard-ball. I know what investors want and I think I know how to get them there. I know all the skeletons. If Russian bankers sincerely want to move ahead, there is no reason they can't get there. They just have to clarify whom it is they want to collaborate with. They are going to have to step on some toes in the process. The entire planet isn't uninformed. there is nothing to keep Russian banking from becoming a key player. All it takes is for them to change their mind, if they mean it.

 



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Palms & Company, Inc. Founded 1934
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