Sometimes, it takes awhile to find and identify the devil hiding in the details.  Back in December, demonstrators were in the streets of Kiev, pushing out the pro-Russian government.  To make themselves less unattractive, Russia then agreed to make a $3 billion loan to the Ukraine.  While it was odd that the loan was in dollars and agreed to be governed by the courts in England, the Ukraine needed the money and took the loan anyway.

Now, the Ukraine needs another billion dollars, and we have agreed to make the loan.  But, the devil is that any additional borrowing puts the Russian loan into default, because their total debt will then exceed their pre-agreed limit.  Default makes the Russian due and payable immediately, which they cannot repay.

Normally, such a default would just be ignored by the borrower, because the court in another country like Russia would be ignored in the Ukraine.  In this case, Russia knew this and sited the loan in England, where it could be enforced — very smart, indeed!  It cannot be ignored.

So, if we make the billion dollar loan . . . it could technically go straight into the Russian treasury.  I doubt it will, but it will certainly give more leverage to the Russians in setting prices for the natural gas the Ukraine needs so desperately.

I think Newport News Shipbuilding needs to start building LNG tankers . . . lots of them!