S8 Ep161: Russia's Financial Desperation: Failed Bond Issues and Discounted Oil — Michael Bernstam — Bernstamdocuments Russia's systematic struggle to finance its expanding budget deficit and war costs through issuance of "Panda bonds" denominated in Chinese renmin
The John Batchelor Show
John Batchelor
4.5 • 2.8K Ratings
🗓️ 4 December 2025
⏱️ 10 minutes
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Summary
- Russia's Financial Desperation: Failed Bond Issues and Discounted Oil — Michael Bernstam — Bernstamdocuments Russia's systematic struggle to finance its expanding budget deficit and war costs through issuance of "Panda bonds" denominated in Chinese renminbi, efforts that have largely failed as Chinese investors regard Russian sovereign debt as excessively risky. Bernstam documents that Russia's oil revenue is severely constrained by Western sanctions enforcement, forcing Moscow to sell crude petroleum at approximately $40 per barrel compared to global market prices exceeding $60, while the European Union remains gridlocked regarding authorization to utilize frozen Russian assets for Ukrainian defense funding.
Transcript
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| 0:34.9 | This is CBSI on the world. I'm John Batchel. Russia under sanctions, Russia at war, |
| 0:40.5 | Russia in negotiation with Ukraine, the United States, and the EU. Russia at its wit's end |
| 0:46.9 | to find the money to pay for the budget that fuels the public to drive the war. |
| 0:53.5 | I welcome Michael Bernstam of the Hoover Institution, |
| 0:56.4 | my guide on Russian sanctions regime these nearly four years. Michael has identified the gold |
| 1:02.2 | in the basement of the Russian National Bank. At the beginning of the war, it was my memory |
| 1:07.8 | in the $300 billion worth. Now, according to the Financial Times reporting most |
| 1:13.8 | recently, it was under $200 billion. And the report is gold is fueling Putin's war machine, |
| 1:20.2 | keeping Russia afloat. Not quite. Michael, you've identified gold as a major source. Oil, of course, |
| 1:26.1 | is a major source. But this new twist |
| 1:28.4 | needs explanation. Russia strengthens financial ties to China with its first Raminbi bond. |
| 1:36.2 | Countries 3 billion dim sum bond will help finance war in Ukraine and could lead to many more. |
| 1:43.1 | I'm told that they also call this the PANDA bond. |
| 1:46.0 | What is it? Why did they invent it? Good evening to you. Good evening to you. And in the past, |
| 1:52.7 | Russia traditionally used to issue in small amounts, dollar-denominated bonds. They were called |
| 1:59.1 | Eurobonds, but they were dollar-denominated. Now, of course, under sanctions, Western financial markets are closed. They have a huge budget deficit because of the declining oil prices and oil revenues and tax revenues from oil. Used to be the time when 45 to 50% of their federal budget was financed by taxes on oil. |
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