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Russia’s Politics of Isolation Leave it Economically Stranded in a Time of Crisis
While U.S. financial turmoil has seeped into virtually every global market, Russia has been devastated, as the country’s largest stock exchanges, the MICEX and RTS, have suffered their biggest losses since the 1998 financial crisis. However, Moscow only has itself to blame after heavy-handed economic, political, and military tactics scared away the foreign investments it didn’t oust directly.
Regulators suspended trading on both the MICEX and RTS for the second day in a row yesterday (Wednesday), after the nation’s two biggest exchanges suffered their worst losses in nearly a decade.
The benchmark MICEX index tumbled 10% yesterday morning, extending a three-day decline…
18Sep2008 | Money Morning | Comments Off | ContinuedBeyond the horizon
So, Hurricane Gustav wasn’t as bad as feared, and oil is down to $105 this morning. And there’s no geopolitical tension on the horizon to shake things up. Of course, beyond the horizon is a rather different matter.
Seeing as Russia has already checkmated one of Washington’s grand schemes for transporting energy from Central Asia — demonstrating Moscow can move on the Baku-Tbilisi-Ceyhan pipeline in Georgia anytime it wishes — it is now undermining another of Washington’s grand schemes, the planned pipeline from Turkmenistan through Afghanistan, Pakistan, and India.
The Times of London reports Russia is sending a small contingent of security forces to train its…
3Sep2008 | Desidooru Saloon | Comments Off | ContinuedProfit Opportunities From the New Cold War
Like it or not, with the invasion of Georgia, we have a new Cold War – as well as the profit opportunities that accompany such a conflict. International investors were able to make a lot of money during the “first†Cold War, so if any more politicians or TV commentators tell me they don’t want a return to those halcyon days, I shall scream.
And since the situation in Georgia has effectively created a new Cold War status, it’s worth reviewing where the profit opportunities will be this time, and which countries the sensible, geo-strategically conscious investor will avoid – especially…
16Aug2008 | Money Morning | Comments Off | ContinuedCommodities Coup: Moscow Seizes Control of Agricultural Exports
Russia has generated considerable political ill will throughout the former Soviet Union and even in Europe by renationalizing its energy sector – ultimately using such state-run ventures as OAO Gazprom and its resource-rich position as weapons of economic diplomacy.
And now that Russia has formed a state-run grain trader, analysts fear that Moscow is expanding these bare-fisted tactics to its agricultural sector. The new enterprise –The enterprise, the Agency for the Regulation of Food Prices, will take control of 28 government-controlled assets, including storage depots, grain elevators, flour mills and export terminals. The agency will control between 40% and 50% of the…
4Aug2008 | Money Morning | Comments Off | ContinuedGazprom Keeps the Heat on Europe by Pressing Libya
OAO Gazprom, Russia’s state- sponsored gas monopoly, is offering to buy all of Libya’s oil and gas exports in a bid to increase its dominance over Europe’s gas market and enhance Russia’s political clout throughout the region.
Alexei Miller, Gazprom’s chief executive, made the offer on July 9th at a meeting with Libya’s head of state, Muammer Gaddafi.
“Libya positively evaluated Gazprom’s proposition to buy all future volumes of gas, oil, and [liquefied natural gas] designed for export at market price,” Gazprom said in a statement after the meeting.
A member of the Organization of Petroleum Exporting Countries, Libya produces…
14Jul2008 | Money Morning | Comments Off | ContinuedRussian Oil Exploration — And Why The US Will Be Playing Catch-up
I told you so.
While the U.S. dawdles, hems and haws over offshore drilling, the Russians are committed to developing the Arctic.
And the Russians are going to do it. They will conquer the resources of the Arctic, just as their Czarist forebears gained control for Russia over Central Asia in the 18th and 19th Centuries. (Fortuitously for the U.S., the Russians “sold†Alaska to the U.S. in 1867 for a mere $7.2 million.)
The Russians are now shaping events in the Arctic in their own, characteristic way.
At a recent meeting with top oil executives, Russian Prime Minister Vladimir Putin said Russia’s declining…
14Jul2008 | Energy and Oil | Comments Off | ContinuedSilver Prices Ready to Rocket; Four Reasons Why and Two Ways to Buy
Silver prices have vaulted an extraordinary 106% in the past two and a half years.
More impressive, silver prices have gained 33% since mid December.
Now, compare that to how U.S. stocks have fared since then: The Dow Jones Industrial Average has plunged 13.6%; The Nasdaq Composite Index tumbled 10.5%; The S&P 500 Index has fallen 11.1%.
Like gold, silver is a safe haven from inflation and a weak dollar. The prices of the two metals often move parallel to one another. However, silver is poised to rocket – handing investors not only gains in our bear-market economy, but steeper…
7Jul2008 | Money Morning | Comments Off | ContinuedRussian Oil… Under Serious Constraints
I spoke on this subject in the middle of April, but there is more news coming…
“News of falling oil output has hit Moscow political circles like a bomb.â€
So states a recent article in the Hundustan Times, another “go to†source for news about what is REALLY happening in the energy industry.
The Kremlin has invested heavily in Russia’s image as an energy superpower. During the recent Russian Victory Day celebrations on May 9, many commentators referred to Russia’s energy sector as one of the key elements of Russian power. Energy took a top billing, right along with Russia’s traditional military might and still-potent…
6Jun2008 | Energy and Oil | Comments Off | ContinuedWith the New Russian President Vowing to Steer a Steady Ship, U.S. Investors Can Look to Profit
New Russian President Dmitry Medvedev wants better links with Europe. Judging by the performance of outgoing President Vladimir Putin, Europe should beware: The so-called “links” he’s seeking may resemble those used to chain together prisoners in the Gulag.
On the other hand – though it’s admittedly unpleasant to say so – there’s a point at which the effects of high oil prices are so great that in the short run they far outweigh one’s distaste for the thuggish Russian regime. And at $123 a barrel, we may be at that point.
Politically, Russia has pretty much reverted to the pre-1991 Soviet system.
Today,…
9May2008 | Money Morning | Comments Off | ContinuedRussia Turns to Libya to Tighten Grip on European Energy Supply
Russia agreed yesterday (Thursday) to write off $4.5 billion in Libyan Cold War-era debt in exchange for military and civilian contracts for Russian companies, Reuters reported.
The deal will almost certainly help Russia tighten its grip on European energy supplies.
“I am satisfied by the way we have solved the debt problem,” Russian President Vladimir Putin told reporters. “I am convinced we found a scheme which will benefit both the Russian and Libyan economies and the Russian and Libyan people.”
Much of the debt was the result of Soviet arms supplies to Libya during the Cold War. At the time, trade between the…
18Apr2008 | Money Morning | Comments Off | Continued
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