Saturday, January 23, 2016

Russia To Invade The United States In Eighteen Months

by JASmius

No, this story isn't about that, strictly speaking; I just thought I would cut to the chase, because this pretty much establishes the time window Czar Vlad has to realize his global ambitions while he still can:

Russia’s foreign currency reserves reportedly may be exhausted within eighteen months as the nation’s economic woes are keeping pace with quickly plunging oil prices.

With tax revenue taking a big hit from the ongoing plunge in oil and gas prices, the main Russian government strategy is to cut spending 10% across the board and to rely on its reserves until oil prices improve.

“Russia has around $360 billion in foreign currency reserves and some $120 billion in two rainy day funds, down from just under $160 billion a year ago,” the New York Times reported.

“At current spending rates, however, the two funds are expected to last only eighteen months. It might also sell significant stakes in state-run companies like the oil giant Rosneft or Sberbank, and it will not increase military spending,” the Times reported.

While the global collapse in oil prices is reordering economic relations around the world, the change is particularly daunting for Russia, which relies on energy exports for 50% of its federal budget. [emphasis added]

In business terms, the Russian economy is not diversified.  All its eggs have been in one basket - energy - and consequently it has always been vulnerable to the boom and bust cycle.  The past fifteen or so years have been an energy boom off of which Vlad has rebuilt and modernized the Russian military; now here comes the bust, and it's a big bust, and suddenly the "Russian strongman" doesn't have unlimited time in which to resurrect the old Evil Empire and complete the mission of global conquest it almost but couldn't quite achieve.  He has precisely eighteen months.

He might not have even that long in political terms.  Remember the universal political dynamic of leaders enjoying popularity in more or less direct proportion to the perceived strength and success of the economy.  Putin has been president or prime minister over this whole decade and a half boom period, which goes a long way towards explaining his 80+% approval ratings.  Prosperity will cover a multitude of sins, as it were.  Poverty is the imparter of universal guilt.

Especially when the leader in question dispenses spin that doesn't withstand subsequent events:

Russian President Vladimir Putin told the nation late last year that the worst of the recession — the economy shrank 3.9% and inflation hit 12.9% in 2015 — was over and that modest growth would return in 2016, the Times reported. He touts the oil-price collapse as an “opportunity” that will wean Russia off energy imports and diversify the economy.

Then in January oil fell below $30 per barrel, with no bottom in sight, and the ruble hit a record low of nearly eighty-five to the dollar before recovering slightly, the Times reported.

Hell hath no fury like a populace up whose asses their leader has been conspicuously blowing smoke.  And strongmen leaders have a historic tendency towards coping with unpopularity at home by launching military adventures abroad.  Now that we've been "fundamentally transformed," the U.S. would be a nice, big, fat, helpless target of conquest, ripe for the taking.  Like Alaska, for instance, on which the Russians hold a historical claim, and which contains a great deal of energy resources.  It would make perfect sense from Vlad's perspective.

Here's the punchline, in case you were waiting for one:

"The last time oil prices dropped so low and stayed there, in the 1980s, the Soviet Union disintegrated.

Which Putin calls the "greatest tragedy of the twentieth century" and vows to rebuild.  Do you think he'd let the same thing happen again on his watch, or try to do something, anything, to prevent it?  Even starting a global war.

It's not the 1980s now, folks, but the 1930s.  There is no longer a benevolent global hegemon standing in the way of ambitious, aggressive regional "strongmen" with planetary ambitions.  We've returned to the pre-World War II "anything goes" survival-of-the-fittest jungle, and much like when FDR slapped his oil embargo on the Japanese and they had a year or so in which to either realize all their imperial ambitions or knuckle under to U.S. demands, so Vladimir Putin's imperial clock has begun its countdown.  And Barack Obama isn't putting any demands on him.

That's a wonderful context in which for the remainder of the 2016 presidential campaign to unfold, don't you think?

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