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Capital is fleeing Russia at a record rate—one byproduct of the ongoing Ukraine crisis and the sanctions imposed by the U.S., EU, Japan, Australia and Canada. Outflows were $50-70 billion in Q1 compared with $63 billion in all of 2013. And they are projected to hit $150-160 billion by year-end. The Ukraine effect on Russia’s finances and economy is clear: credit rating one notch above junk, devaluation and looming recession. What is not yet clear is where in the world all those billions are going and what assets those investors are likely to favor. Will we see a flight to quality? If so, what
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