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A new ABC series, “Designated Survivor,” elevates the concept of Washington paranoia to new heights:
During a State of the Union address, an unknown enemy destroys the Capitol building with a giant bomb. The president, vice president, plus nearly every member of the Cabinet and Congress are killed instantly. Only three government officials survive; and one of them, an instrument of the same enemy power, becomes Acting President of the United States in a conspiracy to destroy America.
This is crazy. But taking a page from the TV plot, Washington paranoia about Russia is also off the charts:
We hear not only accusations of election meddling, but also innuendo about penetrating the president’s inner circle; not just allegations of collusion, but also talk of treason; not only rumors about the president’s aides, but also whispers about the president, himself. In the worst case, say some, the president is conspiring with a foreign power to weaken America’s defenses.
All of this is very unhealthy, and it’s happening at a very delicate time.
As I demonstrated in a three-part video series last December …
- Russia and the United States have embarked on a long march to war (Part I).
- A conflict could be much more dangerous than most people realize (Part II).
- The two countries still have a one-time opportunity to turn the tide (Part III).
But now, the combination of scandal and paranoia is threatening to torpedo that opportunity.
Major Economic Headwinds
All this is also very unhealthy for another reason: Both the U.S. and Russia face strong economic headwinds that can only be made worse by deteriorating relations.
As we explained here last week, the Trump budget is in serious trouble, the U.S. economy is overdue for a cyclical crisis, and America’s soaring debt load threatens future growth. We can ill afford an expensive escalation in Syria or Eastern Europe. We certainly cannot afford a major new arms race.
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And as I explain today, Russia’s economy is in even worse shape. Here’s why:
Falling confidence. Recent polls by the Russian Federal State Statistics Service (Rosstat) and the Moscow School of Economics reveal shocking new evidence that Russian citizens have turned extremely pessimistic about their economic outlook: 35% report a deterioration in their material conditions over the last 12 months, versus only 15% who report an improvement. And among them, the most pessimistic are precisely those who are the most active in the country’s work force — the 30-49 age group.
Widespread poverty. According to the IMF, Russia’s income per capita in 2016 was a meager $8,929. That’s much lower than the income per capita of economically devastated PIIGS countries like Spain ($26,609) and Greece ($17,901). It’s lower than chronically poor countries like Slovakia ($16,499), Equatorial Guinea ($14,174) and Croatia ($12,095). It’s even worse than Venezuela’s, where the income per capita in 2016 was still $9,258.
Chronic structural problems. If you travel around Russia, you see governmental institutions riddled with inefficiency and corruption, rural communities in chronic decline, agriculture in a state of paralysis, manufacturing in decay, and the entire economy still terribly dependent on energy.
Oil boom encourages Putin’s global gambits. Between 2009 and mid-2014, when a barrel of crude oil was holding in the $80-$120 range, and when cold cash from energy exports flooded into the economy, Russia’s underlying structural weaknesses were well camouflaged. The Russian ruble was strong. Foreign direct investments poured in. And Putin was assured he had more than enough resources to finance bold actions on the world stage.
So, in 2014, when the Ukrainian government fell to a pro-Western regime, Putin was willing to take an enormous risk: He made a historic move on Crimea, completely upsetting the world order that had prevailed since the end of World War II.
Sanctions. The U.S. and the E.U. responded with three rounds of retaliatory sanctions, crippling key aspects of the Russian economy. Russia then responded with a series of import bans designed to punish the European countries, but, in the end crippling Russia itself.
Crude oil bust. The biggest blow came in the second half of 2014: Crude oil prices plunged by nearly 50%. The Russian ruble collapsed. Foreign direct investment vanished. And the Russian economy plunged into a deep recession. With a moderate bounce in crude late last year, there was talk of some sort of recovery in the economy. But it’s already fading again.
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Here’s the key: In the midst of deepening recession, Russia simply does not have the financial firepower to maintain its current posturing as a great world power. Already, as I showed you in “Urgent War Quiz for Investors,” Russia is cutting defense spending by approximately 7%. And if the current trends continue, they will have to cut even more.
Now can you see why Putin wants
better relations with the United States?
His desires are very clear:
- He wants to cut Russia’s huge expenditures in Eastern Ukraine. The costs are draining their already-bare coffers. It must stop.
- He wants to cut back on Russia’s intervention in Syria, where the costs are also massive.
- He wants more foreign investment in a wide variety of industry sectors to help reduce Russia’s reliance on energy exports.
- He also wants more foreign investment to help create more jobs and raise consumer confidence.
- He wants more money to institute costly reforms and finally get Russia’s economy on a growth path.
But it’s going to be almost impossible for him to achieve any of this without reaching some sort of deal with the United States.
My main point: It’s not a trick. And the sooner Washington recognizes this reality, the sooner the United States can take advantage of the opportunity.
My recommendation: If the Russia scandals and paranoia fade, and if a real path is opened for restoration of relations, there will be major profit opportunities for investors in Russian ETFs like the VanEck Vectors Russia ETF (RSX) and iShares MSCI Russia Capped ETF (ERUS). You will be able to buy them at depressed price levels and watch their share prices recover dramatically.
However, if the scandals snowball and the chances for better relations are dashed, you can expect further massive declines in Russian assets.
Good luck and God bless!
Martin
{ 33 comments }
We will never have improved relations with Russia as long as the liberal democrats control our government. They are the ones….. not the Trump organization who are attempting to convince the America idiots that we must go to war against Russia. War has always been good business for the liberal cabal who controls Washington and this country. The liberal cabal does not want Trump or his administration to establish a constructive relationship with Russia. There is not a simple solution to this issue. However, the state department deserves a considerable amount of credit for our horrible relationship with Russia. All those Ivy league bureaucrats have proven to be failures. Now everyone except the imbedded cabal will suffer the consequences of the state departments failures.
Who do you work for?
I totally agree! Have said this for years.
There is truth in what Ivano says, but it goes even deeper. As long as society emphasizes competition over cooperation, the human race will be on a path of self destruction. That is the root of why we have “swamp critters”, always seeking to be Number One, and to tell everyone else what to do with their lives.
The Caesars, Genghis Khan, Hitler, Stalin, Mao…even Putin and Trump, were or are all swamp critters in disguise – as are just about every politician in human history. Also the academic social theorists. DESTROY the old, has been their motto. Bring in their version of the ideal – which usually involves more destruction.
Last time I looked, Republican party was in control, or trying..,
They control the wh, congress, senate and the supreme court. Obviously the repubs are too corrupt and stupid to govern.
Yea. The Republicans really learnt from the Democrats. We know the grand thieves
Dr Weiss,
I really believe you are correct on your statements about Russia, I also believe that President Trump is aware of the situation that you are stating in this letter to us. He has been and is being continually hampered by the liberal media and all the fake scandal going on in this country about all this nonsense about the election being influenced by Russia. Overall, I believe President is a very intelligent man with great negotiating skills.
Thank your for your input, much appreciated.
Everytime we offered a hand to the Soviets, they have bitten it off. And, now it is supposed to be different? Star Wars ended the Cold War and sent the Soviets back to the borders of Russia. Then Cheney/bush allowed American Oil companies to do contracts with the Russians to open new oil and gas sites and the improvement of existing sites which gave the Russians billions in income. Did they use those Billions to improve the life of the average Russian? No, they used those Billions to rebuild their military (and to make Putin and his Oligarchs billionaires) and that new stronger military was used to invaded two Democracies which brought increased deployments of Americna military might to Baltic Democracies and Poland at great cost to the U.S.. And it is supposed to be different this time? Perhaps the smartest thing we can do is impose even greater sanctions on the Russsians for their probable meddling in our elections if and when it is found to be true. Thankfully, the only things the Russians are capable of exporting (other than war) are oil and gas, which are dropping as more and more renewable power comes on line…
Eagle,
Wrong and who was instrumental in the Arab Spring and the toppling of the governments in Egypt & Libya? Benghazi, bombing civilians in Afghanistan and Pakistan with drones? Who supplies ISIS with training and weapons(Farc rebels & Al Queda)? It was Obama and the democrats under John Kerry & Hillary Clinton. Uranium One deal? Clinton gave 20% of US uranium to Russia in return she received over 100 million in donation to the criminal Clinton Foundation. Who gave Iran 158 billion? Obama. Who said they were a Christian and then turned thier back while Christians are getting killed in the middle east? Obama. Who said. “The most beautiful sound in the world is the Muslim Call to prayer in the morning? Obama.
You are sadly misinformed dude stop watching CNN
Communist News Network
you have sole survivor plot wrong
Well what is to be expected after eight years of President Wishy-washy? Uncle Valdy flush with oil rubles decided to play Uncle Joe Stalin junior. And Hillary and Barack aided him every step of the way. Maybe this will present an opportunity to bring some kind of end to the bloodshed in Syria. And maybe better stability to Eastern Europe. But then anywhere Trump goes and tries to put the USofA first he stirs up controversy. Like pulling the USofA out of the Paris Climate Accords. Which means you and I will not be footing the bill for everybody.
Russia does not want war. Russia does not have 900 bases around the world. Russia is not conducting war games in Canada or Mexico. See Ray McGovern, Russian expert and ex-CIA analyst or Professor Stephen Cohen. Maninstream media lies and/or fails to report.
Here is an excellent example of what id actually going on in Venezuela today:
https://www.youtube.com/watch?v=YUYWrPiUeWY
Excellent analysis. Wars start when leaders do not communicate and negotiate with each other.
Too right. I am looking from Aust and I think USA should work with Russia and China mainly because they have capacity for growth. They are young horses while US & Europe are old horses.
Putin, the ex-KGB officer and vice mayor of St. Petersburg was in the right place at the right time. Putin (and Yeltzen) became rich by orchestrating the transition from Communism to the privatized oligarchy in place today. Perhaps Putin envisioned Trump as the leader who could replicate his Soviet feat and apply it in the United States.
Martin,
I am 71 and I remember watching a news report with my father in 1959. It had a speech by Nakita Khrushchev. he claimed that communism would take over the United States without firing a shot. It appears he was right. The Democrat party is already fully taken over and the Republican party is not far behind. They call themselves progressives, liberals left wing. Communism by any other name is still communism. It’s the Marxist ideology. Thank God there are conservatives that are willing to fight it.
Are you aware that the greatest growth of the Middle Class, the grestest growth of manufacturing and economic output and thee greatest increase in the living standards of the average American happen betwen 1932 abd 1982, when led mostly by Liberal Progressives? Do you know how much the fate of the average Russian improved during those dates? Virtually nothing!…… Notice any Americans wanting to emigrate to Russia? Notice all the Russians wanting to emigrate to America?….Geeezzz… :(
i havev often said that the USA is it’s own worst enemy and as the Russians are in the main Christians we need to cooperate with instead of acting in a belligerent manner towards them. Mc cain and co would like nothing better that to have a war with the RUSSIANS. Although i cannot imagine why because of Russia ges down then the Chinese will step in and we already know all about them when they are roused and wake upto the reality of any situation.
Indeed, there is no simple solution to this issue, because American media is brainwashing the populace with the falsehoods. Furthermore, America needs an enemy, the mighty military-industrial complex thrives when wars and more wars take place. Remember, America’s biggest export is war. Hence, they need an enemy and the Russian Federation fits the picture perfectly. Regrettably, it is the middle class on both sides of the Atlantic who will pay the highest price. USA’s debt will, eventually, destroy the dollar and, the middle class.
I have a suggestion with regard to a deal with Putin. Since the start of the civil war in Syria the world community has witnessed crimes against humanity equal to the second world war. Over 500,000 people have been killed. We should demand that Putin turn over Assad and his cronies to the international court of justice so that they can stand trial for their crimes against humanity. We should also insist on free elections in Syria without any interference from us or Russia. In exchange, Russia can keep its pipelines in Syria. We will remove all economic sanctions against Russia. Ukraine must be left alone to determine its own future without outside interference. We promised this when we signed the Budapest memorandum along with Russia the United Kingdom and Ukraine. If all sides agree, everyone will win and tensions between us and Russia will subside.
The US also agreed not to weaponize eastern Europe. The US also agreed to not interfere in Eastern Europe. Promise broken by US! When the Ukranians elected a bunch of thugs friendly to Russia, the US funded a counter coupe of American friendly thugs. These thugs then started a Ukranization of the russian speaking areas. As for Crimea , it was always part of Russia , until Kruschev in a drunken rage took it form one functionary and gave it to another !
US funded and started the civil wars in Libya and Syria. In Libya the french government wanted Gaddafi out because he was setting up an alternate currency to the French African currency and to make it worse, the new currency would be gold based. ( Suggest you google Henri Levy DGSE and Libya for the low down ) They paid millions to the Clintons and got there war. Russia does not want pipelines in Syria. Qatar and Saudi Arabia wants pipeline. They paid millions to Clintons and got their civil war. Suggest you google Robert F Kennedy’s essay in http://www.politico.com/magazine/story/2016/02/rfk-jr-why-arabs-dont-trust-america-213601 and http://www.globalresearch.ca/the-secret-stupid-saudi-us-deal-on-syria/5410130
Its unfortunate but the majority of deaths in Syria and Libya can be attributed to the good old U S of A and the US arming of Islamic extemists
My opinion is the best way the US could help the middle east and eastern Europe is to get to hell out and stay out.
uncle sam fostered the blood-thirsty jihadists that fight government forces in syria – think of it if you can
LETS STEP BACK FROM THE ANALYTICAL PALAVER AND LOOK AT THE TWO COUNTRIES. BOTH WERE GREAT ONCE BUT HAVE NOW SLIPPED INTO DECAY WITH CORRUPTION, POOR ECONOMY, DEBT, AND LOST CITIZENS CONFIDENCE.NOW LOOK AT IT’S LEADERS TODAY. BOTH MEN ARE INTELLIGENT, HAVE ENOUGH MONEY NOT TO BE MONEY HUNGRY (GREEDY/), A STRONG LOVE OF COUNTRY AND IT’S CULTURE, CONCRETE AND GLOBAL IN THINKING. (SOMETHING THAT IS IN SHORT SUPPLY TODAY) THEIR OBJECTIVE IS …”TO MAKE AMERICA/RUSSIA GREAT AGAIN”. ALTHOUGH THE MODE OF OPERATION IS OPPOSITE (POLITICS) THE OUTCOME COULD AND SHOULD BE THE SAME. THE TWO LEADERS ALREADY “KNOW” EACH OTHER” AS THEY ARE BUILT FROM THE SAME CLOTH. THEIR PROBLEMS ARE UNIQUELY THE SAME. SINCE TIME BEGAN THERE HAS ALWAYS BEEN A NEED FOR A TERRIFYING ENEMY TO COVER UP THE RULING CLASSES SINS AND RUSSIA AND U.S. FIT THE BILL. THE “TALKING HEADS”AND THEIR SKY IS FALLING, DEMOCRAT’S FINGER POINTING, THE POPE’S DISAPPROVAL, THE MEDIA WITH WHAT EVER SELLS, EUROPE’S TITTERING ON FENCE POSTS AND NATO’S HOMORPHY VIEW OF THE WORLD I THINK I WOULD BUY ONE OF CHINA’S HELL HAND BASKETS. MY SINKING DOLLAR IS ON TRUMP AND PUTIN TOGETHER.
About. Bloody time someone spoke up!
Christian Russia no longer has the Soviet ideology that demands world domination. All the really dangerous Communists now work for Hillary Clinton.
Hillary’s the one who needs a war with Russia.
And she needs it to kill millions of American soldiers, so as to reduce the head count for the Social Security Trust Fund and make it last another few months.
Hillary wins and America loses, if she gets her war.
All I can say is wait you I’ll be rewarded with no health care plus a crooked and corrupt goverment you Republicans deserve.
Have fun along.maybe a war to to end it all.
As usual when a country’s economy starts spiraling downward, a war is the government’s response – to get their citizens’ minds off of the rotten economy. And who suffers? The citizens, of course. The Russians are still recovering, (population-wise), from WWII – after the Nazis gained power in Germany – mainly because of an economy in a death spiral. The Nazis killed 30 million Russians.
The U.S. is on the same track and the politicians could care less about dead Americans – or Russians. So any person who tries to talk peace to the Russians is attacked.
Hen Robin, I like your frightening anlysis. Some may see WWII as an operation of self destruction – Germany killing it self – though it was a group of individuals that tried to destroyed the land, by making some believe it could become the kind of superpower they conceived, destroying the rest of the world…? One can see it as a chemical phenomenon, the explosion of a bulb since the Nazis and their ideas spread in the world,resorting to so many various techniques…Is all this nothing but the thousandth trial humanity had to face? Dis we really make it out?
In Designated Survivor, the acting president is an American patriot. The person who tried to become the vice president was a traitor. He wanted to become vice president and then when the president would be assassinated, he would become president.
A very wise and well informed analysis of the state of the Russian economy, brought on by US and EU sanctions, after Putin decided to annexe Crimea. Don’t forget also that friends of Putin in Eastern Ukraine were responsible for downing the Malaysia Airlines Boeing 777. As a further result of all this, France, UK, and Canada all have fighter planes based in the 3 Baltic states, to stop any advances there by Mr. Putin. He’s a dangerous man who has brought chaos to the Russian economy and had lots of blood on his hands. His police and army keep dissidents locked away. How long will it be before there is an army or other led insurrection to down him? This is the major question.
The problem with the US is that a loser in the last election cannot get over the fact that the majority of citizens rejected her on an obvious DIVINE instruction and will for reasons that are becoming glaringly obvious. The US has escaped by razor thin chance from the prepared doom of liberalism. All the so called Russian scandal is a distraction. How long the Citizens will tolerate this is anyone’s guess. May God deliver the USA from evil.
Russia phobia – 2017 ? …. and what about German phobia in 1937 … eh ? I have great respect for you Mr, Weiss , but you do not understand Russia at all.
Martin, I don’t think you said enough about sanctions.
Here’s the VERY BIG DEAL that IMO is virtually inevitable because Trump-Putin-Tillerson want it very very much:
1. Trump lifts sanctions, freeing Exxon to drill big-time in Russia–as previously agreed.
2. Russia pulls back (somewhat) in Ukraine and Syria.
3. Putin arranges for Trump-Kushner to share in Exxon’s Russian oil profits, and also for Russian oligarchs to “restructure” (reduce) their claims against Trump-Kushner for repayment of massive outstanding loans..
RESULT:
A. Putin, Trump-Kushner, and Exxon-Tillerson gain billions.
B. The Russian economy improves somewhat.
C. Putin puts his long-term American-European “destabilizing” strategy on the back burner for now–but not forever.
At this point I believe the parties have agreed on what they want to do and are now negotiating the details–where the devil resides.