Bank of England fights Brexit slowdown with stimulus

[billd766]

On 8/5/2016 at 7:08 PM, Grouse said:

 

No, the great unwashed wanted to rebel. Felt down trodden.

 

Encouraged by fraudsters (who have since run off) they voted to leave the EU.

 

I suspect many regret that and many more will follow.

 

Too late now

 

Well done Brexiteers! Great job!

 

 

 

 

I see that your 5 week holiday did nothing to improve your arrogant insulting remarks as usual.

[billd766]

16 hours ago, webfact said:

Lower growth, higher unemployment

Carney said uncertainty from the Brexit vote will mean less demand, so businesses will cut their output reducing GDP growth and putting people out of work: “The combination of these demand and supply factors means that cumulative GDPgrowth is expected to be 2.5 percent lower by the end of the forecast period than was the case in May. On balance – even after stimulus – the margin of spare capacity is expected to open up and the unemployment rate is expected to rise from its current level of 4.9 percent to around 5.5 percent over the next two years.”

 

A nice little statistic about the unemployment rates in the EU.

 

Sadly the UK is only the 4th lowest in unemployment numbers of the 28 countries.

 

http://www.statista.com/statistics/268830/unemployment-rate-in-eu-countries/

 

 

[bkkcanuck8]

1 hour ago, billd766 said:

 

 

I see that your 5 week holiday did nothing to improve your arrogant insulting remarks as usual.

That is the first thing that should go.... now that you are going to eliminate the European influence you should change the laws so that everyone is allowed to work again (i.e. eliminate European Working Time Directive implementation laws)

[baboon]

6 hours ago, Grouse said:

You understand eugenics?

 

I believe they know EXACTLY who voted for Brexit

 

They should be careful what they consume.....

 

You clearly don't understand Forex trading

 

the interest rate cut was obvious

 

Dealers needed to maximise the cable drop so forced up Sterling before the announcement.

 

sterling will fall to 1.20 USD and 42 Baht. 

 

Like a bet?

 

I wouldn't, but I do remember the Thaivisa predictions during the financial crisis of the Pound dropping to the 30 Baht level and god knows from there. It didn't happen. I am not about to poop my pants over the predictions of such movers and shakers residing in Pattaya, despite having moved there as dropping 50 Grand per hand at Blackjack in Monte Carlo was becoming plain boring.

[Berty100]

28 minutes ago, baboon said:

I wouldn't, but I do remember the Thaivisa predictions during the financial crisis of the Pound dropping to the 30 Baht level and god knows from there. It didn't happen. I am not about to poop my pants over the predictions of such movers and shakers residing in Pattaya, despite having moved there as dropping 50 Grand per hand at Blackjack in Monte Carlo was becoming plain boring.

 

You thought it should have dropped to 30 Baht within a week after the refrendum, if there was any truth in the predictions?

Hold on mate, we're only little over a month yet, and the British government has just made clear that they don't welcome a recovery of the Pound, but have given the go ahead for a further decline.

How else do you think they gonna safeguard their lame promises that a Brexit would not affect exports?

 

[goldenbrwn1]

6 hours ago, Grouse said:

 

The 3 month nicely illustrates the trend with the vote in the middle

 

my opinion is that that cable will hit 1.20 when the Fed increases interest rates. I reckon about a month out.

 

Again, I never saw parity as an outlook.

 

I am not an forex expert. I am an Engineer. But I did move into USD from GBP in plenty of time ?

 

I agree we will be hitting near 1.20 when the fed raises interest rates but the dollar will also rise significantly against a whole basket of currencies inc the baht. So not all bad. Plus the uk will recover ,just like the pound will.  It's like breaking 1s leg, painful at first, but will heal and come back stronger . Come on people show some optimism . 

 

I voted remain by the way. I've just got over it that's all.....

[bkkcanuck8]

5 hours ago, goldenbrwn1 said:

 

I agree we will be hitting near 1.20 when the fed raises interest rates but the dollar will also rise significantly against a whole basket of currencies inc the baht. So not all bad. Plus the uk will recover ,just like the pound will.  It's like breaking 1s leg, painful at first, but will heal and come back stronger . Come on people show some optimism . 

 

I voted remain by the way. I've just got over it that's all.....

Won't heal until they set it.... and the equivalent to that is when a framework of what is likely to be the agreement post executing article 50. Until businesses know what to plan for -- they will be left in a status-quo or batten down the hatches if a recession takes hold.  Existing "projects" will eventually come to completion and then if there is any real risk what-so-ever for new projects that would replace them.... the decisions will be pushed into the future.

 

The transition to this "new freedom" though will not help if the UK does not adopt a more libertarian (less governmental interference) in the economy - and that means also getting rid of some of the extra perks like pairing down the statutory leave policies to be more competitive in the open market (maybe a compromise of 18 days instead of 28 days; i.e. 2 weeks + statutory holiday equivalents).

[12DrinkMore]

15 hours ago, thaibeachlovers said:

The BOE is an evil organistaion that seeks to maximise private bank profits by allowing them to borrow money for next to nothing which they then lend out for interest, and depriving savers of any interest on their savings. IMO, the people that run the BOE are scum that are ruining the common person.

 

It is not even their job to stimulate the economy.

 

Next they will be bringing in negative interest and the cashless society.

 

Banks do not borrow money from the BoE to lend out. It is worse. Banks create money themselves by simply putting numbers into accounts.

 

The BoE has two obligations, 

 

- inflation rate targetting of 2% (and don't ask me why, it has become central bank dogma)

 

- keeping the finance system running

 

QE originally provided a lot of liquidity to prevent the wheels grinding to a halt. ZIRP also boosted asset prices to keep the finance industry's balance sheets solvent.

 

Those reasons have since disappeared, but the BoE carries on because they hope it might keep the economy going and the debts paid off. It has not been effective in Japan or Europe, so there is no reason to expect the UK will fare any better.

 

This is why there is increasing pressure put on the lazy b6ms sitting in Westminster to do some work and implement fiscal policies. However there is no "get up and work" ethic in those halls, any attempt at large infrastructure projects is debated an nauseum and shot down for one reason or another. They have sat on their hands for the last fifteen years thinking the City of London will keep the whole of the UK going. Now they will continue to sit on their hands because of "Brexit doubts".

 

And ask yourself, what incentive do they have to actually do some heavy duty policy lifting?

 

It is just an extra mountain of work with a high risk that they will back the wrong horse.

 

 

 

 

[bkkcanuck8]

7 minutes ago, 12DrinkMore said:

 

Banks do not borrow money from the BoE to lend out. It is worse. Banks create money themselves by simply putting numbers into accounts.

 

 

LOL, I wish I had known that before.... It would have been easier to explain away erroneous data caused by a defect.... no no... not matter that it is out a cent, the numbers in your accounts are all made up so it does not matter.

[12DrinkMore]

7 minutes ago, bkkcanuck8 said:

 

LOL, I wish I had known that before.... It would have been easier to explain away erroneous data caused by a defect.... no no... not matter that it is out a cent, the numbers in your accounts are all made up so it does not matter.

 

It does matter because the whole edifice of finance is built on trading and balancing out IOU's. The accountants will not allow a cent to simply disappear.

 

Those numbers typed in become IOU's, when a loan is given out you sign an IOU as a debt to the bank and the bank has an IOU to you in terms of the numbers it just created in your account.

 

[bkkcanuck8]

1 minute ago, 12DrinkMore said:

 

It does matter because the whole edifice of finance is built on trading and balancing out IOU's. The accountants will not allow a cent to simply disappear.

 

Those numbers typed in become IOU's, when a loan is given out you sign an IOU as a debt to the bank and the bank has an IOU to you in terms of the numbers it just created in your account.

 

Where does the "create money by themselves" take place? 

 

I understand the basics above - which is limited by regulator capital requirements.... but the above calculation has no "created money by themselves". 

 

I am having a hard time understanding what you are saying.  What numbers are just typed in to become IOUs?  The simple model (before securitization) is that you have to take in deposits and fixed deposits (cheap cash) at a certain interest rate; or make it up by borrowing cash from another financial institution that has excess (or lend it out if you have excess) - then turn around and loan it out at a higher rate of interest (usually backed by security of some sort - valued at more than the loan - and in the case of Canada the mortgage must be insured.... most commonly by a Crown corporation that covers 20% I believe).   Obviously even this simple model will be under stress during severe economic downturns, which is why the financial regulators require that the institution is limited by the capitalization of the institution so that they can withstand the downturns.

[i claudius]

21 hours ago, salavan said:

i hope the brexit voters suffer the most teach them a lesson not to vote for things they know nothing about,

also cameron should go to jail for giving  idiots the chance to vote about something they know nothing about but he's also run off now couldn't get away fast enouh

 

So it was only you remainers who knew what you were talking about was it ? well us 52% that knew nothing won ,so suck it up loser .

[Grouse]

2 minutes ago, i claudius said:

 

So it was only you remainers who knew what you were talking about was it ? well us 52% that knew nothing won ,so suck it up loser .

 

Correct, the peasants won because there are more of them.

 

We have to put up with the results of your poor decision

 

Pity all your leaders seem to have buggered off!

 

We'll see what the wise can do to mitigate the damage

[billd766]

12 minutes ago, Grouse said:

 

Correct, the peasants won because there are more of them.

 

We have to put up with the results of your poor decision

 

Pity all your leaders seem to have buggered off!

 

We'll see what the wise can do to mitigate the damage

 

 

The Brexit side (not peasants as you insist on calling us) won because more of us voted to leave. That is called democracy which you appear to know little about. Insults, yes, democracy no.

 

If the Bremain side had won then we would have had to put up with the results of your poor decision. That too is called democracy.

 

Most of the Brexit leaders didn't bugger off as you so quaintly put it but having won the vote they left the existing government to carry out the plan that they didn't have to deal with Brexit. If they had been in power then there would have been a plan in place for an exit strategy and also one for remaining. That there wasn't a plan is not their fault. Blame the arrogant Tory government for not doing their homework.

 

As for the "wise" people most of them are from the Bremain camp and it will be interesting to see what plans the will have for Brexit. They haven't done too well so far though I do applaud them for sacking George Osborne.

[i claudius]

28 minutes ago, Grouse said:

 

Correct, the peasants won because there are more of them.

 

We have to put up with the results of your poor decision

 

Pity all your leaders seem to have buggered off!

 

We'll see what the wise can do to mitigate the damage

 

 

It was you "wise" that got us into the mire in the first place .

[chiang mai]

My but the UK economy is looking pucker is it not, and what about that Pound, flying like a kite is it not.

 

Er, actually no they're not and whilst it's slightly crass to say, we told you so,  we told you so!

[12DrinkMore]

38 minutes ago, bkkcanuck8 said:

Where does the "create money by themselves" take place? 

 

I understand the basics above - which is limited by regulator capital requirements.... but the above calculation has no "created money by themselves". 

 

I am having a hard time understanding what you are saying.  What numbers are just typed in to become IOUs?  The simple model (before securitization) is that you have to take in deposits and fixed deposits (cheap cash) at a certain interest rate; or make it up by borrowing cash from another financial institution that has excess (or lend it out if you have excess) - then turn around and loan it out at a higher rate of interest (usually backed by security of some sort - valued at more than the loan - and in the case of Canada the mortgage must be insured.... most commonly by a Crown corporation that covers 20% I believe).   Obviously even this simple model will be under stress during severe economic downturns, which is why the financial regulators require that the institution is limited by the capitalization of the institution so that they can withstand the downturns.

 

OK. You have combined two sides of the financial system, normal banks and the shadow banking sector.

 

A bank has a balance sheet. On the left it has assets, which are mostly loans, and on the right it has liabilities, which are mostly deposits.

 

You go to the bank and ask for a loan. Provided the bank is happy that you can repay it, the following happens.

 

1. Your current account is credited with 100 money units as a liability to the bank.

2. Your 100 debt is entered on the asset side of the bank's balance sheet.

 

Job done.

 

The bank has simply expanded its balance sheet on both sides in the creation of a new loan and new money, neither of which was prior to the transaction in existence. The idea that banks take in existing deposits to fund loans is simply not true. If that was the case, where did all the trilions come from? We did not start with that much.

 

That is the bank's story.

 

Then you went on to the shadow banking side of things. These are institutions such as pension schemes and insurance companies. They have large amounts of funds and want a bit of interest, so they will lend out these funds in exchange for an interest bearing IOU. These IOU's are often MBS's, company bonds or Treasuries. The shadow banking sector plays with existing funds and does not create new money. Although is does get a bit hazy around the edges.

 

 

 

 

 

 

[bkkcanuck8]

18 minutes ago, 12DrinkMore said:

 

OK. You have combined two sides of the financial system, normal banks and the shadow banking sector.

 

A bank has a balance sheet. On the left it has assets, which are mostly loans, and on the right it has liabilities, which are mostly deposits.

 

You go to the bank and ask for a loan. Provided the bank is happy that you can repay it, the following happens.

 

1. Your current account is credited with 100 money units as a liability to the bank.

2. Your 100 debt is entered on the asset side of the bank's balance sheet.

 

Job done.

 

The bank has simply expanded its balance sheet on both sides in the creation of a new loan and new money, neither of which was prior to the transaction in existence. The idea that banks take in existing deposits to fund loans is simply not true. If that was the case, where did all the trilions come from? We did not start with that much.

 

That is the bank's story.

 

Then you went on to the shadow banking side of things. These are institutions such as pension schemes and insurance companies. They have large amounts of funds and want a bit of interest, so they will lend out these funds in exchange for an interest bearing IOU. These IOU's are often MBS's, company bonds or Treasuries. The shadow banking sector plays with existing funds and does not create new money. Although is does get a bit hazy around the edges.

 

 

 

 

 

 

I did not want to overcomplicate things so I described only the "conservative" bank model (before it expanded to merge in the 5 or so pillars of the financial industry).  But the basic thing is the bank itself does not create money, they even in the reworked model.  The securitization of the mortgages which allowed the banks (and other financial institutions) to sell off the mortgages and basically not carry them on their balance sheet.  Basically you just package up a set of mortgages and sell them off to other buyers (the bank is no longer funding them).  This works great when it is properly managed, but when fraud sets in and mortgages are not properly rated -- and too many people get mortgages that they cannot afford and even those are rated as investment grade..... which are both insured by private insurers (who went belly up) leaving a bunch of bad debt which was owned by other financial institutions etc. and since the bank itself is in high risk sectors of the other areas of the financial industry.... they wind up holding the offending securities (often rated wrong).  Obviously there are a few weak points to the model.  In the US they had private insurers who would insure stuff and invest during good times but went bankrupt during bad which meant the government had to step in (government did not receive any of the premiums for insurance, but had to step in when the insurer went bust).   This of course did not happen in Canada since the insurer itself is a Crown corporation - and they were at that time very conservative.   The second weak point is that you had very large banks institutions that were allowed to merge into riskier financial business -- which fed back and blew chunks.  If they had kept the pillars separate the risky institutions would have failed horribly, but the banks would have continued without problems.  On top of the fact that "conservative" banks were both in high risk business and poorly regulated for the risk that they posed for the greater economy.

 

The trillions come from the fact that the fixed income / bond trading dwarfs the equity trading business in size...  which is where the bulk of mortgage backed securities are traded (i.e. sold to other owners).

[12DrinkMore]

22 minutes ago, bkkcanuck8 said:

I did not want to overcomplicate things so I described only the "conservative" bank model (before it expanded to merge in the 5 or so pillars of the financial industry).  But the basic thing is the bank itself does not create money, they even in the reworked model.  The securitization of the mortgages which allowed the banks (and other financial institutions) to sell off the mortgages and basically not carry them on their balance sheet.  Basically you just package up a set of mortgages and sell them off to other buyers (the bank is no longer funding them).  This works great when it is properly managed, but when fraud sets in and mortgages are not properly rated -- and too many people get mortgages that they cannot afford and even those are rated as investment grade..... which are both insured by private insurers (who went belly up) leaving a bunch of bad debt which was owned by other financial institutions etc. and since the bank itself is in high risk sectors of the other areas of the financial industry.... they wind up holding the offending securities (often rated wrong).  Obviously there are a few weak points to the model.  In the US they had private insurers who would insure stuff and invest during good times but went bankrupt during bad which meant the government had to step in (government did not receive any of the premiums for insurance, but had to step in when the insurer went bust).   This of course did not happen in Canada since the insurer itself is a Crown corporation - and they were at that time very conservative.   The second weak point is that you had very large banks institutions that were allowed to merge into riskier financial business -- which fed back and blew chunks.  If they had kept the pillars separate the risky institutions would have failed horribly, but the banks would have continued without problems.  On top of the fact that "conservative" banks were both in high risk business and poorly regulated for the risk that they posed for the greater economy.

 

The trillions come from the fact that the fixed income / bond trading dwarfs the equity trading business in size...  which is where the bulk of mortgage backed securities are traded (i.e. sold to other owners).

 

All good except for 

 

Quote

But the basic thing is the bank itself does not create money, they even in the reworked model.

 

This myth has been busted, but still most people are clueless where all the money comes from.

 

Try this
 

Quote

 

In the real world, banks provide financing through money creation. That is they create deposits of new money through lending, and in doing so are mainly constrained by profitability and solvency considerations. 

 

 

From the horse's mouth, the Bank of England.

 

http://www.bankofengland.co.uk/research/Documents/workingpapers/2015/wp529.pdf

 

and except for

 

Quote

The trillions come from the fact that the fixed income / bond trading dwarfs the equity trading business in size...  which is where the bulk of mortgage backed securities are traded (i.e. sold to other owners).

 

[Khun Han]

One of the main strategies of Project Fear's rearguard action (and that of it's lay supporters) is to try to shame brexit supporters away from their support for brexit: they are 'stupid/ignorant/racist/mugs who fell for lies/nobody will admit to voting Leave', etc, etc. And the evidence for this is always anecdotal. Notwithstanding all the ranting about it on internet forums and comments sections, there are frequent online 'news' articles using this tactic.

 

My own anecdotal evidence is that brexiters are happy with their decision: I've yet to talk with one who isn't. They all expected some turbulence post-referendum during brexit, but expect things to settle down and improve in 2 - 4 years variously. The two big concerns about remaining are sovereignty, and the fact that the European project has not been a success economically for the UK. And the view is that we will be economically better-off when we can negotiate our own trade deals with whoever we wish to on the basis of what's best for us, rather than having the deals negotiated at least as much for the benefit of other countries in the same grouping.

 

These are simple, time-served philosophies that are relatively easy to enact where there is a will to do so, despite all the obfuscation and attempts to muddy the waters by the Remain camp.

[Khun Han]

34 minutes ago, 12DrinkMore said:

 

All good except for 

 

 

This myth has been busted, but still most people are clueless where all the money comes from.

 

Try this
 

 

From the horse's mouth, the Bank of England.

 

http://www.bankofengland.co.uk/research/Documents/workingpapers/2015/wp529.pdf

 

and except for

 

 

 

Didn't the unwritten rule used to be that 10% of a bank's working money had to be cash reserves? Is that still the case?

[12DrinkMore]

30 minutes ago, Khun Han said:

 

Didn't the unwritten rule used to be that 10% of a bank's working money had to be cash reserves? Is that still the case?

 

That was the "reserve requirement" where 10% or some percentage of the value of the deposit accounts wes supposed to be held as reserves. It led to the fallacy that banks only lent out 90% of deposits.

 

The regulators found that it was meaningless and so, for example, the UK only has a voluntary reserve. The banks decide how much they need for daya to day cash flows. The US still has a reserve requirement on certain types of deposits, but the banks introduced a couple of schemes to get around it, for example "sweeping" deposit accounts overnight into another deposit account that did not require a reserve.

 

It never restricted bank lending and QE has given the banks an enormous amount of reserves anyway.

[Grouse]

4 hours ago, billd766 said:

 

 

The Brexit side (not peasants as you insist on calling us) won because more of us voted to leave. That is called democracy which you appear to know little about. Insults, yes, democracy no.

 

If the Bremain side had won then we would have had to put up with the results of your poor decision. That too is called democracy.

 

Most of the Brexit leaders didn't bugger off as you so quaintly put it but having won the vote they left the existing government to carry out the plan that they didn't have to deal with Brexit. If they had been in power then there would have been a plan in place for an exit strategy and also one for remaining. That there wasn't a plan is not their fault. Blame the arrogant Tory government for not doing their homework.

 

As for the "wise" people most of them are from the Bremain camp and it will be interesting to see what plans the will have for Brexit. They haven't done too well so far though I do applaud them for sacking George Osborne.

 

You won because there are more of you! Well, what a revolutionary idea!

 

of course you won because there are more of you! It doesn't make you right or any better informed!

 

Frankly, the fact that you are the majority frightens me. The country is turning into a distopian nightmare. 

 

Real damage is happening NOW in exchange for some unquantified, unspecified future benefit in 2 to 4 years time.

 

Ridiculous.....

 

Forgive them for they know not what they have done

[sandyf]

5 hours ago, i claudius said:

 

So it was only you remainers who knew what you were talking about was it ? well us 52% that knew nothing won ,so suck it up loser .

And for first prize you get -

 

A divided nation.

Significant increase in hate crime.

European residents made to feel unwelcome.

Reduction in manufacturing confidence.

Uncertainty over future investment.

A struggling economy.

Price increase on imports from currency devaluation.

 

And that is just for starters.

 

The EU exit agreement is subject to approval by the European Parliament so any deal the UK makes to leave the EU will be in the interest of the EU rather than the UK.

The PM will hold off on Article 50 in the hope of divine intervention. What did you win again?

[12DrinkMore]

12 minutes ago, sandyf said:

And for first prize you get -

 

A divided nation.

Significant increase in hate crime.

European residents made to feel unwelcome.

Reduction in manufacturing confidence.

Uncertainty over future investment.

A struggling economy.

Price increase on imports from currency devaluation.

 

And that is just for starters.

 

The EU exit agreement is subject to approval by the European Parliament so any deal the UK makes to leave the EU will be in the interest of the EU rather than the UK.

The PM will hold off on Article 50 in the hope of divine intervention. What did you win again?

 

Na, the absolute worst thing that has happened, and this is from the FT, is that there are a few sad people people about.

 

Bless.

 

[Khun Han]

1 hour ago, sandyf said:

And for first prize you get -

 

A divided nation.

Significant increase in hate crime.

European residents made to feel unwelcome.

Reduction in manufacturing confidence.

Uncertainty over future investment.

A struggling economy.

Price increase on imports from currency devaluation.

 

And that is just for starters.

 

The EU exit agreement is subject to approval by the European Parliament so any deal the UK makes to leave the EU will be in the interest of the EU rather than the UK.

The PM will hold off on Article 50 in the hope of divine intervention. What did you win again?

 

As opposed to staying in the EU, which is going to fail eventually anyway, taking everybody with it except for Germany (who will have the fix in) and to a lesser extent France. But it will be death by a thousand cuts, so everybody will get acclimatised to their impending fate. And they will have little say in it all because Germany will be pulling the strings, assisted by France. The 'Greece Strategy' for everyone. No thanks, I'll take the short-term pain in exchange for the long-term gain.

[sandyf]

3 hours ago, Khun Han said:

 

As opposed to staying in the EU, which is going to fail eventually anyway, taking everybody with it except for Germany (who will have the fix in) and to a lesser extent France. But it will be death by a thousand cuts, so everybody will get acclimatised to their impending fate. And they will have little say in it all because Germany will be pulling the strings, assisted by France. The 'Greece Strategy' for everyone. No thanks, I'll take the short-term pain in exchange for the long-term gain.

With the actual outcome of the referendum some years away, the concept of a win is a bit like a punter convinced that he has a dead cert.

[Berty100]

5 hours ago, Khun Han said:

 

As opposed to staying in the EU, which is going to fail eventually anyway, taking everybody with it except for Germany (who will have the fix in) and to a lesser extent France. But it will be death by a thousand cuts, so everybody will get acclimatised to their impending fate. And they will have little say in it all because Germany will be pulling the strings, assisted by France. The 'Greece Strategy' for everyone. No thanks, I'll take the short-term pain in exchange for the long-term gain.

 

The EU may eventually fail if some more selfish nations decide to get out, because their population doesn't have the brains to look beyond the idea of the union and are only interested in direct benefits.

 

 

[Grouse]

18 hours ago, 12DrinkMore said:

 

Na, the absolute worst thing that has happened, and this is from the FT, is that there are a few sad people people about.

 

Bless.

 

 

Not at all surprised that 49% of UK respondents said they were disappointed.

 

The fools got what they wanted

 

They outnumber the wise

 

That is one of the most worrying things.

 

Of course Russia welcomed it. What did you expect.

 

Several negatives are happening now. Has anything positive occurred?

[bkkcanuck8]

1 hour ago, Grouse said:

Of course Russia welcomed it. What did you expect.

 

Russia welcomes it because Putin is trying to put back together the old Soviet empire as the new Russian empire under his "strong leadership".  A strong Europe is a thorn in his side and anything that weakens Europe is in his interest.  If it is able to divide and weaken European nations it will make it easier for him in the future.  Since media is pretty much under direct control of the central government - the people for the most part are fairly easy to rally around the new "nationalist Russian empire".