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CodeNCats t1_iyd6p2c wrote

Reply to comment by will_holmes in The EU is looking at seizing $330 billion in frozen Russian assets and investing them — with any profits going to Ukraine by KeenlyFirst

This is weird to me. Why invest and give profits? This seems like a really round about way to essentially take the money for your own use.

Give them the fucking money.

If the EU invests it. They will without a doubt take fees from the money under the guise of needing to pay people to invest it. That $330 billion in money will net some bankers some nice fees and some nice bonus checks. All while locking the money up for years and trickling it into Ukraine.

It's grifting and profiteering.

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redsquizza t1_iydh57j wrote

The original capital may need to be given back at some point in the future, that's the point.

Whereas interest/investing profits from the original capital are easier to legally and morally extract from the frozen assets, one assumes.

Almost every war ends with negotiated peace. Frozen assets will play part of that negotiation so if you've suddenly spent it all, you've just lost a bargaining chip.

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Papa-Yaga t1_iydek5n wrote

Assuming you invest your money in a diversified index fund like the msci world or the s&p 500 your money roughly doubles every 10 years (on average in the long term). Investing a large sum of money and putting the profits to work can go a looong way and personally i have a feeling that Ukraine will still be feeling the effects of the war 10 years down the line (rebuilding stuff, clearing mines, ect.). This fund could not only help with rebuilding Ukraine, it could also generate funds that can be invested into the countries economy in the long term.

This way they would still on average recieve funds of around $23 billion each year and that for all eternity.

Obviously this is just some quick maths and oversimplifying the situation but generally speaking, if it's for a country or a private person, investing money and putting the profits to work instead of just spending the money itself is not such a bad idea after all.

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Thatsaclevername t1_iyeurmi wrote

That was the thing that jumped out at me too, like wtf? It would be one thing if Ukraine was in the EU and this was seed money for some form of reconstruction post-war. But it sounds like the EU is just going to take the money. I'm not sure what the expected returns on investment would be on something like this, but I'm sure it's nowhere near that 300 billion total.

The whole thing seems kinda weird.

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CodeNCats t1_iyeytxd wrote

Very weird.

I mean. It's also weird for balance sheets. Give me 300 billion of someone else's money. I promise to give them all of the returns.

Yet I have 300 billion in assets I can leverage as collateral in loans and to put in a balance sheet.

This seems like some fuckery.

Before anyone thinks I am pro-russia. Fuck Russia and fuck putin. Glory to Ukraine.

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