The World Turned Upside Down

The world is now facing the first truly global economic crisis, which is continuing to develop at an unprecedented pace. The current situation is often compared to the Great Depression of the late 1920s and the early 1930s. True, there are some similarities.

Naturally, all national governments and business leaders must take resolute actions. Nevertheless, it is important to avoid making decisions, even in such force majeure circumstances, that we will regret in the future. We must not revert to isolationism and unrestrained economic egotism...Although additional protectionism will prove inevitable during the crisis; all of us must display a sense of proportion.

Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake. True, the state's increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent. The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation...

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the
state...

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.

What makes this speech all the more amazing is that it comes from Vladimir Putin, Prime Minister of Russia, and former KGB officer. Being an old Reagan era cold-warrior, who manned this nations ballistic missile early warning system from the height of the cold war to the after the collapse of the Berlin wall and the Soviet Union... I never, in my wildest dreams, thought I would live to see the day that that an ex-KGB officer, President of Russia, and current Prime Minister would lecture, and rightly so, the United States on the dangers of Socialism and the Socialist state. I now know how General Cornwallis felt as he surrendered at Yorktown as the band played "The World Turned Upside Down". All I can say in absolute astonishment and amazement is:

LISTEN TO THE NICE RUSSIAN MAN, HE KNOWS WHAT HE'S TALKING ABOUT!

The serving men doe sit and whine, and thinke it long ere dinner time: The Butler's still out of the way, or else my Lady keeps the key, The poor old cook, in the larder doth look, Where is no goodnesse to be found, Yet let's be content, and the times lament, you see the world turn'd upside down.

Cheers!

~Finntann~

http://online.wsj.com/article/SB123317069332125243.html?mod=googlenews_wsj

Putin's Puppet Cutting the Strings?

It was a cozy little deal: Vladimir Putin, Russia's barechested macho czar, was constitutionally required to vacate the presidency.

Easy enough. He installed political son little Dmitry Medvedev in the presidency and took over the newly empowered post of Prime Minister. It was widely understood who the top dog was. Dmitry was the junior partner keeping the seat warm until Putin could legally regain it after Medvedev's term was compete

Now it looks like Czar Vlad's son may be gazing upon Mother Russia and entertaining Oedipal thoughts. Russian President Dmitry Medvedev made the following statement to a reporter not too long ago:

“The final responsibility for what happens in the country and for the important decisions taken would rest on my shoulders alone and I would not be able to share this responsibility with anyone,” Mr Medvedev told an interviewer.

Putin's people are not happy.

Kremlin watchers say this assertiveness seems to be part of a new pattern, with Mr Medvedev appearing frustrated that, in spite of his constitutional power as commander in chief, he is stuck in a subordinate role.“An apprehension is growing on both sides, particularly the Putin side,” said Dmitry Simes, head of the Nixon Centre in Washington, who spent last week in Moscow.Dmitri Trenin, director of the Carnegie Moscow Centre think-tank, said:

"I don’t think he [Medvedev] is amused that he is regarded as a junior partner."

This could get interesting...

http://www.ft.com/cms/s/0/cfa5d788-d697-11dd-9bf7-000077b07658.html

http://www.moscowtimes.ru/article/1110/42/373438.htm

Vlad and Hugo Hit an Oil Slick

Oh, the many benefit of cheap oil...

Vlad the Impaler can't be happy:

MOSCOW (AP) - Russia would come under crippling financial pressure and may need to raise money externally if oil languishes at an average of $30 a barrel over the next two years, the World Bank predicted Friday.

The bleak scenario would mark a rapid unraveling of Russia's oil-fueled economic gains over the past eight years, during which time the government has paid down most of its foreign debt and built up a vast stockpile of international reserves.

Fidelito Chavez of Venezuela is now in a big hole. He blew the oil profits on buying friends instead of upgrading infrastructure. This is from The Telegraph back in October:

The state oil company, PDVSA, produced 3.2 million barrels per day in 1998, the year before Mr Chavez won the presidency. After a decade of rising corruption and inefficiency, daily output has now fallen to 2.4 million barrels, according to OPEC figures. About half of this oil is now delivered at a discount to Mr Chavez's friends around Latin America. The 18 nations in his "Petrocaribe" club, founded in 2005, pay Venezuela only 30 per cent of the market price within 90 days, with rest in instalments spread over 25 years.

The other half - 1.2 million barrels per day - goes to America, Venezuela's only genuinely paying customer.

"There is a bottleneck in the Venezuelan production system," said Mazhar al-Sheridah, 68, an oil expert at the Central University of Venezuela. "It will cost at least $32 billion to build another three upgrading units and take some five years, meaning that Venezuelan production is stuck at current levels for a while yet."

All this means that Venezuela has missed much of the benefit from the oil boom and, now that prices are falling, Mr Chavez faces huge financial problems. Nobody is sure at what point his government would be unable to pay its bills, but most sources consulted believe this would probably happen if oil falls to $80 a barrel. Yesterday, oil was trading at $79.80.

The fat little tin pot dictator laughed at the USA's financial problems, but was too stupid to realize that if his only paying customer fell on hard times, he could not escape a similar fate:

Chavez has accumulated foreign reserves and organized loans from nations such as China to shield his socialist government from a protracted fall in income. But economists say he may have to slash spending if the oil price, which was at a 20-month low on Wednesday, remains low deep into next year.

Chavez initially reveled in the financial collapses in the United States. But as the crisis has widened to hit economies worldwide and caused oil prices in recent weeks to plunge he has begun to warn Venezuelans of the possible impact at home. (Reporting by Saul Hudson; Editing by Frank Jack Daniel and David Gregorio)

Enjoy the schadenfreude while you can. Odds are one of these men, or perhaps their grubby little gay-bashing buddy from Iran, will manufacture some global crisis to drive the price of oil back up.

http://www.breitbart.com/article.php?id=D955PMC80&show_article=1

http://www.telegraph.co.uk/news/worldnews/southamerica/venezuela/3183417/Venezuelas-oil-output-slumps-under-Hugo-Chavez.html

http://www.reuters.com/article/oilRpt/idUSN1229709920081112