Ukraine facing bankruptcy ?

Is it ‘game over’ for Ukraine?

By Richard W. Rahn 

Providing more financial aid without reform is a waste of money

Ukraine will likely go bankrupt within the next few months. This past Friday, it was reported that the country has less than $10 billion in foreign-currency reserves. My sources (who have been spot on the Russian/Ukrainian situation over the last couple of years) tell me the situation is actually worse than the official reports in that Ukraine is now losing foreign reserves at a rate of $3 billion a month and that rate is accelerating. Even worse, some of the reserves may be “illiquid” — which likely means they have already been spent or even stolen.

Russian President Vladimir Putin very well understands the situation in Ukraine; hence, he may sit back and not try to grab any more territory for the moment and just wait for the Ukrainian economic collapse. The big unanticipated drop in oil prices is hurting Russia and so Mr. Putinhas an added incentive not to take on additional military expenses at this time.

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