Last week, I watched a business interview segment, which featured around twenty-odd Russians who were affected by the western business closures in Russia.
So one of the folks had a logistical job with Ikea, and he talked briefly about the people in his group who had mortgages. These weren't people with capital to cover a lengthy period of unemployment, and still cover the mortgage.
Unless the government steps in....they would be getting warning letters....and probably within three months....face some type of harsh action (eviction).
But I sat there and wondered over this.....Moscow has a population of 12.6-million. How many people fall into this problem? Does the government know? Does the government care? Do the banks grasp this approaching problem? If the banks did reach the level of sending eviction notices and people default....then what? Is there anyone to actually be interested in buying such houses? Where would default folks move to?
Is anyone briefing Putin over this? I doubt that. The remarkable amount of fear existing today over Putin's power....leads people to just sit quietly and let matters unfold on another day.
But then you start to look across all of Russia....same scenario playing out.
Then you add credit card debt.....car loans....business loans.
In the old USSR, you didn't worry about this kind of problem. Now? There's an enormous trap that has been sprung...a society spiral which will start to have serious results, and require a massive amount of printing of Rubles to rig up a one-star marginal 'solution'.
I would take a guess by July....defaults will be in play with notices sent out and someone finally tells Putin how he's got a much bigger problem than the Ukraine on his plate. Other than printing more Rubles....there's not much left in the tool-kit to resolve this mess.
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