Friday, October 24, 2014

Oil slump leaves Russia even weaker than decaying Soviet Union

Russia had the chance at the end of the Cold War to build a modern, diversified economy, with the enthusiastic help of the West. That chance has been squandered

By Ambrose Evans-Pritchard

It took two years for crumbling oil prices to bring the Soviet Union to its knees in the mid-1980s, and another two years of stagnation to break the Bolshevik empire altogether. Russian ex-premier Yegor Gaidar famously dated the moment to September 1985, when Saudi Arabia stopped trying to defend the crude market, cranking up output instead. "The Soviet Union lost $20bn per year, money without which the country simply could not survive," he wrote. The Soviet economy had run out of cash for food imports. Unwilling to impose war-time rationing, its leaders sold gold, down to the pre-1917 imperial bars in the vaults. They then had to beg for "political credits" from the West. That made it unthinkable for Moscow to hold down eastern Europe's captive nations by force, and the Poles, Czechs and Hungarians knew it......To Read More..... 

My Take - The Poles, Czechs and Hungarians know it - and if they didn't already know it - now the Ukrainians know it since Ukraine has been the number two country to hit Paradigms and Demographics for some weeks. Best wishes to them.

There is one more thing. This was inevitable. To fall back to a system that was already an absolute failure can only mean Putin is a dumb as dirt corrupt megalomaniac. This is all about him and at some point he will start doing even dumber things because he’ll begin to see the whole system begin to collapse, and at some point his big concern will become his own safety. I believe there will be a total collapse of this neo-Soviet system and moreover, I don’t see a collapse of today’s Russian as peaceful as was the collapse of the Soviet Union. This one will be violent, and Putin and his thugs will not go quietly into the night, they will not bend and they will not go down without bloodshed.

Five years ago the Russian army was disintegrating with alcoholism, the Navy was a big rust bucket, and their population was shrinking every year.  They had already crushed the entrepreneurs, took over the energy businesses, the Russian mob was extorting anyone who did business in Russia, and the government did little to stop them, and I believe that was because many in the leadership were part of that.  Has any of that changed? I don't think so. 

Economics and corruption destroyed the Soviet Union, happily ending their worldwide trouble making and support of radical governments.  This is what will end Putin’s Russia. 

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