Blog Credo

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

H.L. Mencken

Wednesday, March 5, 2014

Yeah, This Is BS

Russia's top economic adviser.

Russia's main product are natural resources.  Once they get beyond the Russian border, they are beyond Russian control.

Russia recently became a source for Foreign Direct Investment, primarily because Western companies - especially petrochemical companies like BP - have been partnering up with Russian companies.  If Russia pursued the sort of Bond Villain economic doomsday scenario outlined in that dude's rambling screed, they'd find precious little leverage to recoup their investments.

Russia ranks 20th in the world in imports, between Switzerland and Australia.  They don't buy our crap.  If they ARE buying crap, it's from China (just like everyone else).  If they stop buying our stuff, we would barely notice.

Russia is the 8th largest exporter in the world - ahead of Italy.  It exports about $500B a year.  But Russia is the second biggest oil exporter in the world, and Europe is its primary market.  So basically it's primary source of income is oil and LG.  Which it sells to the very people who would level sanctions.  We saw what happened to the Russian markets after the Crimean crisis erupted.  That was a prelude.

So Russia's real threat is to cut off the oil.  That would have a profound effect on European markets.

Of course, it would crash the Russian markets, too.

So the only weapon Russia has is the Doomsday Machine.

But the idea that they could crash the US dollar is absurd.  Catch this nonsense from the article:

He told the RIA Novosti news agency Russia could stop using dollars for international transactions and create its own payment system using its "wonderful trade and economic relations with our partners in the East and South."

This has been Putin's dream - creating a Eurasian Economic Zone.

The problem is that Russia's best markets are to the West.  Starve those markets, and the Russian economy collapses, too.

This reeks of epistemic closure.  This guy is high on his own bullshit.

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