12/26/14

Russia Anticipates Slump-Will that Stimulate Investment?

Russia forecasts a solid economic slump in 2015 because I would think, of U.S. led sanctions and the sharp downturn in oil prices. The Russian recession may stimulate direct foreign investment and trade as the ruble crashes in value. It may also lead Russia and perhaps the U.S.A. to seek membership in the oil cartel. A future U.S. President may look into forming a rival oil cartel with Russia and the U.S.A. as members as well as Iran and Iraq, yet who can say?

http://uk.reuters.com/article/2014/12/26/uk-russia-crisis-market-rouble-idUKKBN0K40H420141226

https://news.vice.com/article/ukraine-and-pro-russia-rebels-complete-major-prisoner-swap-in-donetsk

http://www.reuters.com/article/2014/12/25/us-ukraine-crisis-parliament-idUSKBN0K30JT20141225

President Obama's foreign policy in retrospect seems to have been to stimulate conflict and expand the Dar al Harb to benefit Sunni fundamentalists in the long run. Creating civil war in Ukraine and Syria does tend to attack non-Sunni peoples. I hope the next U.S. President pursues a different policy. The United States could benefit from a prosperous Russia rather than one where the poor experience protracted unemployment, underemployment and destitution in a very cold climate. One recalls Solszhenitsyn's descriptions of the cold weather at the Kolyma transit camp in the Gulag Archipelago II and how the frozen corpses were stacked outside the hut like cord-wood. The Hawaii-Harvard-high thermostat set probably don't get it. Taking all of the Ukraine for the west from Russia was not a good long-term policy.

The Obama administration seemed teed off at Putin and probably expects Russia to become a queer marriage friendly, dope growing and toking nation if it wants the sanctions dropped.

Analysts believe that the sanctions may deter foreign investment in Russia and even create capital flight out of the country yet obviously the opportunities for those not honoring the sanctions to invest in Russia will be of interest. Devaluation of currency and inflation can bring a new economic investment fundamentalism in Russia perhaps better than at any time since the 1990s.

One would think that President Putin will be seeking a varriety of Asian trade and investment opportunities ahead. Russia though has a history of self-reliance. With its population crash and solid resource assets it is likely to weather the economic storm ahead and plant for long-range growth more reasonably than the Washington Redskins and Denver Broncos-teams that each needed a premier ground game to go with their star quarterback.

Russia has updated its defense policy and plans to upgrade its nuclear ballistic missile force intended to defrappe aggression and attacks on Russia. One must wonder though how effective a traditional ballistic missile force will be when the U.S. is developing a space-hyper-plane drone to serve as nuclear weapons packages within 3-5 years? Those maneuverable drone warhead delivery systems can make adaptive flight course changes unlike ballistic missiles that are comparatively  easier to knock down? Another avoidable  new nuclear arms technology race seems to be in the cards. They are expensive, dangerous and not worth much to the poor-especially when one's political leaders don't really give a whit about finding better alternative policy directions.

http://rt.com/news/217823-putin-russian-military-doctrine/

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