Goldman Sachs Attacks Putin's State-Led Economic Policy

May 26 (LPAC)--The International Herald Tribune warned against investing in Russia today, in a preview of the June 8-10 international economic conference to be held in St. Petersburg . The daily reported "a blistering note to investors by Goldman Sachs, suggesting that the liberal wing might be losing influence over economic policy" in Russia.

"Outside of oil and natural gas, the Kremlin has consolidated control over aircraft manufacturing, domestic automakers, diamond mines and other industries," the IHT noted, adding that "this past week, President Vladimir Putin suggested government oil revenue might be invested in the Russian stock market to prop up the lagging performance of state companies, something that would signify an even greater interventionist economic policy by the Kremlin."

What might have alarmed Goldman Sachs and its like more than Putin's policies, is the fact that investments nevertheless continue to flow into Russia at an accelerating pace. With an inflow of $10 billion in the first quarter of this year alone, the $16 billion inflow of the entire Yeltsin era will likely be surpassed by the time of that St. Petersburg meeting, the IHT noted. What is more probably frightening Goldman Sachs, is.