Quote Originally Posted by Aemilius Paulus View Post
The inflation rate is high beacsue of the recession. Normally, it is, of course, much lower.
The inflation rate of 14% is well in line with the past years (in the current recession the inflation should actually tend to go down).

Since your investments are in USD and you get paid back in USD the inflation rate should however indeed not be a major concern for you.

Ser Clegane, you are of course correct that higher return equals higher risk, but this is Russia. Hungary, Pakistan, Mexico, South Africa, Argentina, Egypt, Indonesia, Brazil and Russia all feature economies that sag under the weight of high interest rates. It is not as much about safety.
If a bank or a state is willing to pay double-digit interest rates while you get less than 5% in Western countries you can bet that they are not doing this because they are so generous, but because the market thinks there is a much higher risk in lending them money and therefore demands a significant premium. This risk might be a bankruptcy risk or it might be a risk of political instability.

High interest rates are not set by the government (or actually the central bank) for fun - they are there to counter e.g. inflation - and the interest rates given or asked for by banks do not necessarily reflect the interest rates set by the central bank/government, e.g. on the German market interest rates did not decrease in the same way as the ECB rates due to the higher perceived risk on the financial markets.

Don't get me wrong - I also have invested in bonds from e.g., Russia and enjoy higher returns in good times - I am just saying that there are no free rides. If you get returns that are very high you are paying for these returns by accepting a higher risk of losing money (remember that somebody has to pay these returns and this somebody would not pay these returns if he would be considered credit worthy enough to get the money at a lower interest rate).