Another Russian loan expected to be approved

Russia is currently earning 1.6% on 10 year US Treasury bonds that it buys from the US government but wants to charge Serbia 6% on a 7 year loan? So the Russians prefer lending the US money and only earn 1.6% interest on it but charge their friends in Serbia 6%?What kind of friend is that?

I am an economist but thanks for pointing out the risk/reward factor for me Marko so your point is that the Russians have faith in the US government paying the money back and are willing to accept only a 1.6% return on their money whereas they are not so sure about Serbia therefore they need to charge the Serbs such a high interest rate?

Lucianno, to answer your question, they are smart friends. Buying US Treasurey Bonds is a much smaller risk than lending money to Serbia. Despite that,[ the Russians have trust that corruption is being reduced and the money will be spent, and a plan is in place to repay the debt. This will mean more Russian influence in Serbian Affairs, and Russia will have a greater stake in Serbia's future. It is honestly A Poli- Economic Win Win.

Russia is currently earning 1.6% on 10 year US Treasury bonds that it buys from the US government but wants to charge Serbia 6% on a 7 year loan? So the Russians prefer lending the US money and only earn 1.6% interest on it but charge their friends in Serbia 6%?What kind of friend is that?
(luciano, 26 November 2012 23:40)

Don't forget though that Russia still is a Serbia's friend because it does indeed support Serbia with statements

Yes, of course Serbia is a greater risk than the US government. The US is an Economic and Military superpower and Serbia is a small war ravaged Balkan nation who's wealthiest neighbors are the poorest countries in the EU.

You question why Serbia pays such a high rate, I answer your question, and then you tell me that you are an economist. Why did you post a question on a public forum if you did not want a response?

Russia is currently earning 1.6% on 10 year US Treasury bonds that it buys from the US government but wants to charge Serbia 6% on a 7 year loan? So the Russians prefer lending the US money and only earn 1.6% interest on it but charge their friends in Serbia 6%?What kind of friend is that?
(luciano, 26 November 2012 23:40)

Don't forget though that Russia still is a Serbia's friend because it does indeed support Serbia with statements

Lucianno, to answer your question, they are smart friends. Buying US Treasurey Bonds is a much smaller risk than lending money to Serbia. Despite that,[ the Russians have trust that corruption is being reduced and the money will be spent, and a plan is in place to repay the debt. This will mean more Russian influence in Serbian Affairs, and Russia will have a greater stake in Serbia's future. It is honestly A Poli- Economic Win Win.

Russia is currently earning 1.6% on 10 year US Treasury bonds that it buys from the US government but wants to charge Serbia 6% on a 7 year loan? So the Russians prefer lending the US money and only earn 1.6% interest on it but charge their friends in Serbia 6%?What kind of friend is that?

I am an economist but thanks for pointing out the risk/reward factor for me Marko so your point is that the Russians have faith in the US government paying the money back and are willing to accept only a 1.6% return on their money whereas they are not so sure about Serbia therefore they need to charge the Serbs such a high interest rate?

Yes, of course Serbia is a greater risk than the US government. The US is an Economic and Military superpower and Serbia is a small war ravaged Balkan nation who's wealthiest neighbors are the poorest countries in the EU.

You question why Serbia pays such a high rate, I answer your question, and then you tell me that you are an economist. Why did you post a question on a public forum if you did not want a response?