Mother Russia Looks For Someone To Blame

Vitaliy Katsenelson  Dec 29, 2008 12:53 pm

Mother Russia Looks For Someone To Blame
 
Will the global economic crisis bring about another Cold War?
 

 

Russia's economy is deteriorating at a very fast pace. The Stabilization Fund of the Russian Federation -- a giant $450 billion savings account -- has been depleted by a quarter since September as Russia has tried to defend its currency. But in spite of these attempts, the ruble still declined.

Russian companies are facing $170 billion in debt rollover next year. Since the rest of the world isn't willing to finance companies in a stable political regime, getting financing for Russian companies will present a problem. President Dmitry Medvedev and his boss, Vladimir Putin, will have to spend another quarter of the reserve to fund Russian corporations.

According to the Financial Times, the Russian economy is staring into a deep abyss and its citizenry and leadership should wake up to the realization that it was oil and natural gas that were responsible for the (temporary) resurrection of Mother Russia, not Mr. Putin. In fact, some are already whispering for his resignation.

These whispers will magnify as things get worse. But what concerns me is the inevitable response. I visited Russia in September for the first time since I left in 1991, and even though at the time the country was prospering (the economic crisis was still weeks away), I  felt this broad anti-American attitude.



Now that things are getting worse by the minute, Putin will likely attempt to shift the blame to -- you guessed it -- the US. America will be made a scapegoat for the global crisis, for manipulating oil markets and for anything else that goes wrong in Russia.

The relationship between the countries is liable to get a lot worse.

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Comments (3) See All Comments »
12-29-2008, 8:18 pm
Russia is slowly de valuing the ruble, up to 29 to 1 just
yesterday. At that pace Russia will use more than 75%
of that fund by the end of the year.

Seems Putin, laughed to early about the US crisis:)


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12-30-2008, 12:51 am
Read this in the online WSJ.

As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S.

http://online.wsj.com/article/SB123051100709638419.html

It would be almost funny if the guy was not rea
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02-26-2009, 7:08 am
I've been living in Russia and Ukraine for the past 4 years. When discussing the crisis, the Russian press must refer to it as "the crisis started in America...". The anti-American sentiment is not something I encounter typically, b
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