Putin Tells His Ambassadors: The West Is All Washed Up
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  • Eurydice

    Yes, as my father used to say of even Gorbachev’s pronouncements, “Old bones, new grave.”

  • Walter Sobchak

    Putin does not seem to understand that he too is a kufir.

  • An

    @WRM Walter, it’s funny with the west being so washed up that Russia lost $84 billion dollars in capital flight in 2011. In 2010, that figure was $33 billion.

  • Tony McNease

    So the Russian head of state gives a speech that could have been given 130 years ago by a Russian head of state. The subject is about how the West is doomed, because it cannot change. Yet can anyone imagine an American today giving a speech that could have remotely been given by an American 130 years ago? The Russians are guilty of projection. The West’s great ability, and Achilles heel, has been its penchant for self doubt, self reflection, and ultimate self correction. The Russian inability to both understand this and appreciate it, is to the great detriment to its foreign policy goals.

  • thibaud

    Has Putin been ghost-writing for Via Meadia?

    Putin’s Ministerstvo Innostrannikh Del speech sounds awfully similar to much of the Mr Hyde-Mead content., both in form and substance.

    There’s the smug boasting about oil wealth, mingled with jabs at decadent, weak old Europe’s dependence on Ameri-, I mean Russian, fossil fuel exports.

    There’s the jeering at the Obama administration’s foreign policy, and taunts about the difficulties faced by Arab democrats.

    There’s the constant drumbeat of End is Nigh warnings about Europe, with the facile and complacent belief somehow Russ-, er, the US will be immune to the global effects of a European meltdown.

    There’s the steady stream of sneers at environmentalists, humanitarians, social democrats, idealists of all sorts who think that perhaps government has a role to play in protecting the weak.

    Perhaps the American Interest can pair Via Meadia with a sister blog called “Doroga Putina.”

    First post could be a reprise of that VM classic in which it was argued recently that “Putin and his Orthodox allies aren’t resisting the West because its commitment to democracy and pluralism is too strong. They are resisting the West in Syria because they believe that the western commitment to Syria’s minorities is pathetically weak.”

  • Corlyss

    “We will bury you!” – Nikita Khrushchev

    Still waiting . . .

  • Mrs. Davis

    Shall we start writing the Downfall script for when some poor underling tells Pootie about the Marcellus shale?

  • Kris

    “at Via Meadia we think that among the many problems we in the US need to worry about, being overtaken by Russia is low on the list.”

    And if the US gets overtaken by Russia, Russia (along with the rest of the world) needs to seriously worry.

  • Felipe Ramirez

    Russia is like Mexico with nuclear weapons. Both Mexico and Russian people earn the same each year. When oil prices are good, the economy is good. When oil prices are bad, the economy is bad. I wonder what Putin will say when oil prices drop.

  • EVL29

    GIven that the only thing of value that Russia has are oil,nickel ,natural gas and hockey players(all for export),just what does Putin think will happen to his country when the West goes belly up?

  • Please capitalize West, or at lest consider it. I believe it is a proper name, not a direction or geographical area: it is a civilization, our civilization, and it deserves some respect.

  • An

    @WRM Walter do you have an opinion on why Russia produces such bad leaders? Americans must not forget our victory over the USSR was not preordained. They gave us a hell of a run for half a century. Having befriended quiet a few Russians over the years, I am amazed at the intelligence and talent of the people. While they may appear a bit gruff in public, their warmth and generosity was heart rendering. When I was in college visiting some friends for two weeks, every family I met bought a small can of caviar and some instant coffee for my visit, knowing that we Americans love our coffee. This was back in ’99 just a year after Russia defaulted, the economy was in shambles, and oil was $20 a barrel.

    It’s a really a shame how Russia’s rulers have treated their own people over the centuries. It doesn’t matter who’s running the country, the people are treated like serfs. Americans and Russians have a lot in common, and should be natural allies. I hope one day in my lifetime, a Russian president realizes this fact. Instead of buzzing each others airspace with bombers, we should be allies protecting each others borders. Russia could use the help.

  • thibaud

    Thanks, Luke for injecting a bit of class and knowledge [nasty and unnecessary disparaging remarks about quality of other discussants ommitted; this poster will be banned from the site without a basic improvement in manners].

    Contrary to the hallucinations of both the Kremlin’s chief thug and the know-nothing russophobes on display here, Russia is part of the West and has been for hundreds of years.

    It’s true that Russia’s unique geo-strategic situation implies that it will never be as friendly to the US as Mr Mead would wish, but the fact remains that Russia is a core European nation whose contributions have been and will continue to be indispensable to the cultural heritage and scientific achievements of the West.

    It would behoove us to respect those contributions and seek to preserve what we have in common, rather than sneering at each other and trashing any notion of a shared culture. Putin doesn’t speak for most Russians. He’s a bully and a thief whose time has passed, and he’s running scared now.

  • thibaud

    Russia’s problem is not its leaders but Russian society itself.

    The Soviets destroyed the habit of forming spontaneous, civil associations of ordinary citizens, be it in labor unions, trade or industrial groups, local fraternal organizations, church groups, neighborhood associations etc. Today, Russians remain extraordinarily mistrustful of not just their leaders but of any social organization, including their own neighbors. The common space barely exists.

    So unlike Poland, Russia never developed its own version of Solidarity; unlike Finland, Russia has not combined its extraordinary reserves of scientific and technical talent in companies that can produce what Nokia has done.

    When and if Russians begin to nurture those core habits of association that Tocqueville remarked upon – into labor unions, civic associations and ordinary citizens’ groups – then you will see a very quick emergence of many capable and dynamic Russian leaders (cf Kasparov).

  • Mick The Reactionary

    @Corlyss:

    ““We will bury you!” – Nikita Khrushchev

    Still waiting . . .”

    God works in mysterious ways.

    America is under the Dear Leader Barak Hussein, a devoted disciple of Rev Jeremia “America’s chickens are coming home to roost” Wright.
    One could argue that America is effectively buried.

    While semi-literate Nikita K would have not
    recognized Dear Leader as a comrade in Class Struggle, the more educated hacks in KGB International Department, the ones that fed Herbie Marcuse and the Frankfurt School cafe revolutionaries, they would have known how to use the Big O.

  • Mick The Reactionary

    @Felipe Ramirez

    “Russia is like Mexico with nuclear weapons.”

    Absolutely.
    Russia has about 20 Nobel Prize winners in sciences, virtually all did they work in Soviet Union/Russia.

    The only Mexican who has ever won the Nobel Prize -Mario Molina in Chemistry in 1995 – did all his research in the US.

    Yea, I say both countries are exactly the same.

    Especially in sciences and technology.
    I hear Mexican built jet fighters are very popular in Central America.

  • Mick The Reactionary

    @EVL29

    “GIven that the only thing of value that Russia has are oil, … just what does Putin think will happen to his country when the West goes belly up?”

    Obviously Putin thinks that the West in belly up state will have some money for russian exports.

    He also believes that China, India and others will make up the slack.

  • AAllison

    As it happens, I’m visiting Russia at the moment and while the ecomomy appears to be in good shape (even provvincial cities appear prosperous, there’s a direct relationship between GDP and the price of oil. Putin is simply attempting to divert attention from the implications of the enormous increase in oil and gas discoveriesm in the west.

  • dearieme

    I’d have thought that a president might assemble his ambassadors so that they could report to him on the state of the world. Herein may lie a clue to the perennial state of Russia.

  • Jim.

    Putin may have some kind of vision of what he believes Russia’s strengths are; whether the average Russian is capable of (or interested in) living up to them is another matter.

    The West’s problems — ranging from irreligiosity, decaying sense of community, and substance abuse, to over-reliance on government, Eurosocialism, and deficit spending, are not exactly problems Russia can claim immunity to.

  • @ re thibaud

    [nasty and unnecessary disparaging remarks about quality of other discussants ommitted; this poster will be banned from the site without a basic improvement in manners].

    Dang! And I didn’t get to find out if his disparaging remarks were about me or somebody else. In any case, tibaud must not be banned; he’s one of the most interesting commenters on this blog. If his remarks get a little ad hominem now in then, bracket those, though seriously I doubt they are really that bad. I know WRM can take it.

  • JimK

    Considering the fact that Russia’s fertility rate is 1.42 which is not enough to maintain their society, the chance of them “burying” us or even catching up with us is less than zero.

  • Fiddlesticks

    Anything Putin declares to his ambassadors in public is simply grandstanding for the likes of Reuters, which laps this stuff up. Notice their care in never mentioning Obama in their story which would cast it as a personal challenge in which he loses face. Reuters prefers to do that when there’s an R in the White House.

    US/UK media are great at prying out foreign-policy secrets from their own governments and trumpeting them to the world, but generally report other countries’ pronouncements in a more credulous, superficial way, which gives readers a distorted view of the forces at work.

  • Russ

    Mexico: great people, messed-up public culture, crappy government.

    Russia: great people, messed-up public culture, crappy government.

    Looks like time to address the Three Russian Questions(tm): “What Happened? Who is to blame? What is to be done?” and maybe turn them on their head a bit.

    “What didn’t happen? What’s been going right? What pitfalls do we want to avoid?”

  • Kris

    [email protected]: “The Soviets destroyed the habit of forming spontaneous, civil associations of ordinary citizens”

    Yes, they certainly had an unfortunate centralizing tendency.

    [email protected]:

    (i) For the Nobel prizes, it would certainly help if Mexico had more Jews.
    (ii) Russia certainly has an advantage in science and technology. So what does it give them?
    Mexico:
    male life expectancy: 73.84 years
    GDP – per capita (PPP): $15,100 (2011 est.)
    Russia:
    male life expectancy: 60.11 years
    GDP – per capita (PPP): $16,700
    (iii) Felipe’s main point stands: Until Russia gets its house in order, it is little more than a petro-economy. With nukes.

  • World Bank data available via a handy Google tool (search “Total Fertility Rate” in Google) offers a figure of 1.54 for Russia’s total fertility rate. It also records a modest improvement (+0.19) in mean European fertility rates over the last decade, including that of Russia. Were one to simply extrapolate, one might posit a return to replacement levels of fertility in Russia within about 30 years. As recently as 1985, Russia had fertility rates above replacement level. The precipitous decline was contemporary with economic implosion.

    Oil exports currently account for about 20% of Russia’s domestic product. They are exceedingly important, but much else is produced in Russia. Most value added is in services.

  • Kris

    I will pre-emptively edit myself: [email protected] that Russia “is little more than a petro-economy” is an exaggeration. It would be much more accurate to write that its economic fortunes are highly dependent on oil and gas prices.

  • Jacksonian Libertarian

    “thibaud says:
    July 9, 2012 at 11:24 pm
    Thanks, Luke for injecting a bit of class and knowledge [nasty and unnecessary disparaging remarks about quality of other discussants ommitted; this poster will be banned from the site without a basic improvement in manners].”

    It would strengthen the discussion on this blog if “thibaud” was gone. All he does is insult people; call people names like all leftists do, for example Bush-Hitler or Mr. Hyde-Mead. He describes articles on this blog with adjectives like (Taunts, Jeering, Smug, Sneers) without presenting the text evidence so that readers can judge for themselves. I personally think all of Mr. Mead’s articles are excessively diplomatic, with expressed wishes for a good outcome even when no silver lining is visible. “thibaud” on the other hand sees nothing but vicious attacks on his leftist opinions and responds with personal attacks on Mr. Mead and commenter’s instead of reasonable arguments with historical examples or statistical evidence supporting his leftist opinions about the news of the day.

    I like to think of everyone as open minded seekers of Truth, but some people are just extremist advocates of positions which they take on faith, like Environmentalists, Warmists, Communists, Socialists, etc… even when scientific evidence and historical examples prove them wrong.

  • Kris

    [Since I have no idea what is happening with the moderation, let’s try again, with edits.]

    [email protected]: “The Soviets destroyed the habit of forming spontaneous, civil associations of ordinary citizens”

    Yes, they certainly had an unfortunate centralizing tendency.

    [email protected]:

    (i) For the Nobel prizes, it would certainly help if Mexico had more Jews. [Note: this statement refers to the well known fact that Jews are disproportionately represented among Nobel Prize winners, and that many of the Russian winners are Jewish. This statement is not meant to be antisemitic in any way.]
    (ii) Russia certainly has an advantage in science and technology. So what does it give them?
    Mexico:
    male life expectancy: 73.84 years
    GDP – per capita (PPP): $15,100 (2011 est.)
    Russia:
    male life expectancy: 60.11 years
    GDP – per capita (PPP): $16,700
    (iii) Felipe’s main point stands: Until Russia gets its house in order, its economic fortunes will be highly dependent on oil and gas prices. And the main reason it is respected to the extent it is is its nukes.

  • Mrs. Davis

    I’d like to stand up for thibaud’s right to express his opinions on the blog. I rarely agree and find the manner of expression a reflection on the author. But the arguments made, when the polemic is removed, are still worth consideration.

  • An Nguyen

    @Art Deco

    Exceedingly good points. Russian women are actually have more kids in the past year or two with birth rates per 1000 converging to the US last year. However, the demographic decline has been baked in. When the total fertility rates stabilizes it will be at a lower population base.

  • @ An (#12):

    I’ve heard similar stories from people who’ve done business in Russia over many years, re the warmth, graciousness, generosity, hospitality, lack of animus towards Americans, and yes, sometimes even culture and learning, of the proverbially barbarous Russian people. But re your second paragraph . . .

    “It’s a really a shame how Russia’s rulers have treated their own people over the centuries. It doesn’t matter who’s running the country, the people are treated like serfs. Americans and Russians have a lot in common, and should be natural allies. I hope one day in my lifetime, a Russian president realizes this fact. Instead of buzzing each others airspace with bombers, we should be allies protecting each others borders. Russia could use the help.”

    . . . there’s something you need to understand. The truly GREAT rulers of Russia – Peter, Catherine, Nicholas I, Alexander III, and just about every Soviet and post-Soviet leader since Lenin (sarc/)- tend to regard the peculiar culture (or lack thereof, or whatever) of the great bulk of their people as an endless source of embarrassment, shame and disgust. These rulers simply can’t beat, or torture, or enserf, or terrorize, or collectivize, or shock-therapize that peculiar Russianness out of their own people fast enough, or brutally enough. Even if it means the slaughter, degradation or destitution of millions, they’re not going to rest until the Russians are some truly great people like the Imperial French or the Imperial Prussians or maybe even the Imperial Chinese. So naturally the last thing they want are some idle notions of democracy, human rights, civil society, labor unions – in short, more or less exactly the direction in which Russia was moving until deflected by the Great War and the Revolution – intruding upon their own grand, epoch-making schemes of radical modernization.

    And their efforts might by now have seemed largely hopeless, but for another development outside Russia over roughly the past century. Exact details concerning the precise aims and participants are far from clear to me, so the best I can offer are hunches and guesses. But it seems to me that a number of influential people, from various countries but all having a very similar or converging geopolitical bent, have developed an interesting opinion concerning many if not most of the Russian people: namely that (unfortunately for themselves and the rest of the globe) they are most inconveniently located with respect to the many vast and valuable resources they’re sitting on. While these Russian TERRITORY-lovers hardly represent any single whole country or assortment of countries, to the best of my knowledge they tend to be Germans, Austrians, Turks, Arabs, Pakistanis and Chinese, along with some Americans (though relatively fewer Brits and French, I notice). These elements, in their various ways and capacities, have worked either to help the more dubious schemes of Russian rulers and other operators, or to hinder the quality and stability of life of the great masses of Russian people, or both. Certain of these elements – though evidently not the Muslims among them – have been quite happy to pander to Russian elite or popular dreams of grandeur or renewed world influence so long as result is more or less the opposite. In the desired outcome, Russians as a whole will not become a great people – or maybe even much of a people at all – but the territory itself will be much more liberally available for exploitation by others better qualified to use its resources.

    As for your final point, re the American and Russian PEOPLES, I couldn’t agree and hope more. What I question is whether our current American elites can ever feel similarly. Historically many in our elite foreign-policy circles have been for practical purposes what I like to call post-Christian Protestants, who either have abandoned Christianity (though by no means Puritanism) altogether, or who – much like German liberal Protestants of the 19th-20th centuries – fail to see the relevance to it of doctrines like the Trinity and the Incarnation. In any case, I find it hard to imagine these “PCPs” ever becoming comfortable with the liturgical, sacramental or aesthetic “excesses” of ANY form of Orthodox Christianity, Russian or otherwise. That doesn’t mean they don’t find other “exotic” religions far more congenial: hence the extraordinary comfort levels of many of our foreign-policy elite, whatever the degree or content of their own faiths, with just about every shade of Muslim or Islamist one can think of.

    Lastly, I for one am urgently praying that thibaud will acquire a basic improvement in manners quickly; among other reasons, it would weaken immeasurably the quality of discussion on this blog if he were gone (even as, sadly enough, his often hostile tone weakens the impact of his arguments). Yes, he can be insulting or, more often, belittling; in fact I believe I was the target on one occasion. But if anyone seriously believes that ALL thibaud does is insult people, and that he never offers a reasonable argument – I think it can be legitimately assumed JL was speaking off the cuff – well, all I can say is: If that were merely were the case, don’t you think his most vehement opponents would have come up with better and more persuasive rejoinders than they have up till now?

  • rkka

    When Putin first became President, deaths exceeded births in Russia by 958,000/year. Wages were often years in arrears, the Russian government’s foreign debt was 50% of GNP, and the Russian Central Bank’s foreign currency reserve was ~$12 billion. The Economist had this to say: “As it is, many public sector workers-teachers for instance, who are supposed to get a princely $20 a month-have not been paid in a whole year. Much of Russia’s nascent middle class has been pulverized. The monetized economy is barely half the size of the Netherland’s. The murder rate may be the world’s highest.” “Now the prospect is of almost unrelieved gloom. The economy is shrinking and most Russians think their lives will get worse before they get better.”

    For 2012, there’s a small chance that births will equal deaths, the Russian government’s foreign debt is less than 10% of GNP, and the Russian Central Bank faces the next “Creditanstalt” phase of the global financial collapse with over $500 billion in foreign exchange on hand. Male life expectancy has exceeded the peak of the USSR, haven fallen to 57 years in the 1990s.

    Yeah, that thug Putin, it was so wrong of him to steal the energy price wndfall from the energy oligarchs only to waste the money on wages for Russians and building up financial reserves!

  • Tolstoy and Chekhov are certainly part of the West. Not sure about Ivan the Terrible, Peter the Great, Lenin, Stalin, or Putin. Genghis Kahn did a number on them from which they have never entirely recovered. But then Genghis Kahn’s youngest son (was it?) Kubla Kahn did a number on China, the same number, and then their distant cousins the Manchus did it again with the result that both societies suffer a Mongol complex of dark satanic rule.

  • An

    @rkka

    Russia’s economy has lived and died based on the performance of the commodities market. Russia exports grain, timber, minerals, and most importantly of all…oil. Back in 1999, the year before Putin took power as President, brent crude was at $12 per barrel, the lowest point in the modern era. In 2000, the year Putin took over oil was $25 a barrel and has gone all the way up. Right off the bat Russia went from destitute to paying off their bills without Putin enacting a single reform. Due to the climate and geography of Russia, production costs per barrel is much higher than that of other OPEC members. Had oil stayed at or below $20 a barrel as in the case in the 1990s, Putin would have been just another failed president.

    As most would agree, Russia’s economic collapse was due to decades of communist mismanagement. What people don’t realize is those oligarchs were part of the communist power structure. That was how they were able to seize those resources and build their financial empires after the fall of the USSR. Corruption, graft, mismanagement is endemic in Russia. Putin simply replaced one class of oligarchs with another, his fellow former communists who ran the security regime.

    With oil prices above $90 per barrel for much of the year, Russia has a forecasted budget deficit of 0.3% of GDP. What happens when the price of oil in Russia declines, and when new N. and S. American energy resources go into stable production? Oil exports is the main source of hard currency in Russia.

    Whatever faults of Yeltsin, the rest of the world felt Yeltsin believed in democracy, and was trying to build a transparent state. However corrupt the former oligarchs were, and yes they were stealing the country blind, the consequences of Putin seizing those assets on a whim, has cause massive damage to Russia’s image as an honest place to do business. Putin did not just go after the oligarchs, he made life difficult for foreign investors in all industries.

    Capital outflows were $80 billion last year due to Putin, up from $33 billion in 2010. Russia needs foreign investors and technology to become a first world nation. For the past decade, Russia’s economic make-up has largely stayed the same being heavily dependent on commodities.

  • rkka

    “Back in 1999, the year before Putin took power as President, brent crude was at $12 per barrel, the lowest point in the modern era. In 2000, the year Putin took over oil was $25 a barrel and has gone all the way up. Right off the bat Russia went from destitute to paying off their bills without Putin enacting a single reform.”

    Brent at $12/barrel in 1999 was the low point. Under Yeltsin, higher previous oil prices had failed to spark Russian economic growth. $25/barrel was hardly an unprecedented price for the decade of the 1990s, yet under Putin the Russian economy was growing even then.

    “Putin simply replaced one class of oligarchs with another, his fellow former communists who ran the security regime.”

    The new oligarchs have a markedly higher propensity to pay wages to their employees, or taxes to the government, than the previous set.

    “Whatever faults of Yeltsin, the rest of the world felt Yeltsin believed in democracy, and was trying to build a transparent state.”

    Hilarious. Do a google on “Michael Meadowcroft” and OSCE. Meadowcroft was was the head of the OSCE team that monitored Russia’s 1996 presidential election. He reports that he got heavy pressure from his OSCE superiors in Warsaw and other Western capitals to *minimize* his reporting of the flagrant media abuse and electoral fraud by which Yeltsin, polling in the single digits in the months before the elections, defeated CPRF candidate Zyuganov.

    Compare that with both the recent Duma and presidential elections, widely described in the West as fraudulent, where the outcomes were within the margin of error of the pre-election polling by Levada Center.

    The West wants transparent Russian politics. Make. Me. Laugh.

    “However corrupt the former oligarchs were, and yes they were stealing the country blind, the consequences of Putin seizing those assets on a whim,”

    Interestingly, the European Court of Human Rights ruled last September that:

    1. Yukos’ conviction for massive tax fraud was soundly based in testimony and evidence.

    2. Yukos’ legal team failed to show any actual evidence that other Russian oil majors were still indulging in similar tax fraud in 2003.

    Here’s a link to their judgement:

    http://cmiskp.echr.coe.int/tkp197/view.asp?action=html&documentId=891996&portal=hbkm&source=externalbydocnumber&table=F69A27FD8FB86142BF01C1166DEA398649

    If you want to characterize the punishment of tax fraud running into the billion$ as “seizing those assets on a whim” then even I can’t rescue your reputation for lack of perceptiveness in the face of “Saint Mikhail’s” PR flacks.

    “Capital outflows were $80 billion last year due to Putin, up from $33 billion in 2010”

    Much of this is the Russian subsidiaries of Western banks trying desperately to plug the leaky balance sheets back home.

    “Russia needs foreign investors and technology to become a first world nation.”

    I’d like to know where all these foreign investors, eager to “fund investments in technology” are as Europe approaches its “Creditanstalt” moment.

    Here’s a hint: Nobody serious is funding anything in the world but money games on paper in the present global financial environment.

    “For the past decade, Russia’s economic make-up has largely stayed the same being heavily dependent on commodities.”

    Please describe how the Russian government, from the situation described by The Economist above, could have better prepared for a global financial collapse in 2008 than by the course of action Putin selected.

  • rkka

    Oh, and as for Russia’s microscopic 2012 budget deficit, the Russian government’s *Entire* *Debt* is a smaller percentage of GNP than *each* of the of Bush’s FY2009 budget deficit, or BHO’s 2010 and 2011 budget deficits.

  • thibaud

    Rkka is correct that Yeltsin’s election in 1996 was stolen and that Khodorkovsky was a vicious thug whose wealth was stolen.

    This doesn’t excuse Putin’s thuggery, but it does explain why the Russians supported him as an antidote to Yeltsinism. In Russian eyes, the only paths on offer were incompetent, chaotic thievery ie Yeltsinism and semi-competent, orderly thievery ie Putinism.

    It will take a generation for Russia to purge itself of the banditry and lawlessness that installed itself on a minor scale in the Brezhnev era and on a grand scale in the Yeltsin era.

  • An

    @rkka

    “Much of this is the Russian subsidiaries of Western banks trying desperately to plug the leaky balance sheets back home.”

    I work in the financial markets, cash transfers were not moved to plug balance sheets. You don’t know what you are talking about. An asset in Russia still counts on a the balance sheet. It might be less or more than depending on the fluctuations of the currency market, but your wealth is there in book form.

    Hedge funds, banks, and foreign companies moved billions out of Russia because they decided 1) there was nothing good to invest in to warrant the conversion to rubles, 2) they thought the ruble is losing value or 3) they feared their assets would be taken from them. $80 billion is a huge amount of money relative to Russia’s $1.48 trillion economy.

    “I’d like to know where all these foreign investors, eager to “fund investments in technology” are as Europe approaches its “Creditanstalt” moment.”

    Europe’s problems are due to sovereign debt. No one wants to lend money to European governments but that does not mean investors are not looking at companies, technology,etc in Europe and other parts of the world. There is trillions of dollars on the sidelines being held by corporation and investors held in cash, searching for good opportunities. Why is it that Russia has net outflow but countries such Brazil and Colombia have a net inflow in this credistalt moment? We are in the middle of a commodities boom worldwide with shortages in key commodities, Russia has a lot of those key commodities. With oil constantly teetering at or below $100 a barrel, companies such as BP are staying away from Russia. Eastern Europe and Germany are turning to US coal for energy instead of Russian natural gas due to political concerns. This is money Russia desperately needs.

    Russia needs Western technology. There own companies cannot produce what is necessary for Russia to become a first world nation. In the military arena, Russia purchased a French mistral class amphibious assault ships because they build modular ships. They are buying Israeli UAVs because they are far behind in high tech electronics. Russia has some great companies such as Kaspersky software, but in most industries the companies are not competitive.

    Also, one note on the debt. Russia has a declining population, is a commodities based economy with no source of exports other than commodities and weapons. Russia’s share of the defense industry is declining with increased Chinese competition. Russia has recently defaulted in its debt and does not have monetary policy toolbox a reserve currency like the US has. Whenever the commodities has crashed, the Russian economy crashed.

    The US (and all of the world) has issues with the welfare state and entitlement spending. Our debts are due to this runaway entitlement spending. Our politicians cannot ignore this problem forever. There is a fierce debate brewing between Republicans and Democrats, but at least there is a debate. Let me ask you, knowing the situation the world is facing, why are investors in Asia parking their money in the US Dollar instead of Russia?

    In our 200+ year history, the US has never defaulted, we have a diverse economy leading the world in many essential industries, have a growing population that will approach 450 million people by 2050. Massive energy deposits are going to come online over the next decade that were started during the Bush and continued during the Obama administration. The American people can close the deficit once they reach a political agreement on government spending and entitlement reform. Our total assets total $188 trillion, 13 times GDP.

    http://rutledgecapital.com/2009/05/24/total-assets-of-the-us-economy-188-trillion-134xgdp/

    Whatever problems the US faces concerning an aging population, welfare state benefits, immigration, the magnitude of the problem is much less than other states while the US have more resources at its disposal.

    Putin and the oligarchs have no idea the regenerative powers of the American idea.

  • Mr. X

    First post could be a reprise of that VM classic in which it was argued recently that “Putin and his Orthodox allies aren’t resisting the West because its commitment to democracy and pluralism is too strong. They are resisting the West in Syria because they believe that the western commitment to Syria’s minorities is pathetically weak.”

    Well I’d find that comment more supportable than the daisies and sunshine we keep hearing about Syrian democrats who want to live in peace with Israel, not force Syrian Christian women to wear the burkah, and of course, the first thing they’ll do is open a new Syrian Central Bank. Because fiat money connected to the global fiat system = freedom.

  • Mr. X

    Per Kris’ comment above, Russia doesn’t face nearly as large an epidemic of massive obesity or diabetes as Mexico. There’s really no comparison whatsoever, except that the bloodbath south of the Border generally elicits less comment than a few thousand people marching in Moscow against Putin. The argument that Putin hasn’t instituted any reforms at all since 1999 is laughable, even within the very narrow field of hiring a foreigner it’s far easier (correction: more transparently easy) than it was then, when envelopes full of cash may have been involved.

  • rkka

    “…whose wealth was stolen.”

    You misspelled “”…whose wealth was seized as a result of a rough-and-ready but well-founded-in-evidence legal process.”

    Yukos’ high-priced legal team went to the ECHR in Strasbourg looking for $98 billion (that’s billion, with a “B”) in damages for a groundless assault on the property of one who was doing nothing the other Russian oil majors weren’t doing and who was singled out for nothing more than his political opposition to Putin.

    They came away with 35 thousand (thousand, with a “th”) Euro for the procedural abuses and with all their main legal claims totally rejected.

    35k won’t go far among “Saint Mikhail’s lawyers, lol!

    As to the rest, you’re depressingly correct.

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