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Guest Post: Is Putin's Luck About To Run Out?

Tyler Durden's picture




 

Authored by Jan Winiecki, originally posted at Project Syndicate,

With the Winter Olympics underway in Sochi, Russia is again in the global spotlight – and President Vladimir Putin is taking the opportunity to present his country as a resurgent power. But, beneath the swagger and fanfare lie serious doubts about Russia’s future. In fact, long-term price trends for the mineral resources upon which the economy depends, together with Russia’s history (especially the last two decades of Soviet rule), suggest that Putin’s luck may well be about to run out.

Mineral-resource price cycles generally begin with a rise lasting 8-10 years, followed by a longer period of stable, relatively low prices. Given that prices have been on an upswing since the middle of the last decade, they should begin declining within two years, if they have not done so already. Moreover, the last price trough lasted more than 20 years, implying that Russia cannot expect simply to wait it out.

But, beyond acknowledging the need to cut spending – an obvious imperative, after the estimated $50 billion cost of the Sochi Olympics – Putin has not signaled any concrete plans to tackle Russia’s economic weaknesses.

Russia faced a similar challenge in the 1970’s and 1980’s – and, like Putin today, its leaders failed to do what was needed. According to former Prime Minister Yegor Gaidar, who led Russia’s only post-Soviet government that was oriented toward systemic change, the socialist command economy exhausted its growth potential by 1970.

Under non-totalitarian circumstances, the threat of stagnation would have generated strong pressure for systemic reform. But the Soviet Union’s aging communist leadership, encouraged by the OPEC-generated oil-price explosion and the discovery of massive hydrocarbon reserves in western Siberia, took a different tack, using natural-resource revenues to finance continued military expansion.

In an effort to appease the public, the Soviet leadership increased food imports – both directly (meat imports, for example, quintupled from 1970 to 1980) and indirectly (by increasing feedstock imports). While this strategy worked in the short term, it caused food consumption to increase far beyond what the economy could sustain.

As a result, the Soviet economy became even more dependent on resource revenues, making it extremely vulnerable to price fluctuations in international commodity markets. When mineral prices began to decline in the early 1980’s – reaching their lowest point in 1999 – the economy, which had already been stagnating for about five years, went into a free-fall.

Today, the Russian economy is no more resilient than it was in the late Soviet era, with commodities, especially oil and natural gas, accounting for around 90% of total exports and manufacturing for only about 6%. If anything, the economy’s dependence on exports of fuels and industrial minerals has increased, meaning that smaller price fluctuations have a greater impact on Russia’s fiscal and external position. Indeed, some observers – including the Central Bank of Russia (CBR) – have predicted that the country’s current account could slip into deficit as early as next year.

A lasting deficit would eliminate the major economic difference between Putin’s Russia and its Soviet counterpart during the 1980’s – namely, the financial buffer that has been accumulated over the last decade. It is this buffer – which amounted to $785 billion in the 2000-2011 period – that protected the economy from a larger shock when the global financial crisis erupted in 2009, and that has financed Russia’s foreign-policy initiatives, including its recent cooperation with Ukraine.

The CBR’s warning of twin fiscal and current-account deficits assumed that oil prices would remain steady, at $104 per barrel in 2015. But my expectation that oil prices will decline over the next 3-7 years suggests that Russia’s medium-term prospects are actually considerably worse.

In short, Russia will soon have to confront diminished macroeconomic health, with few options for restoring it. Russia’s uncompetitive manufacturing sector certainly cannot pick up the slack, and this is unlikely to change, given Putin’s unwillingness to pursue the needed shift to a more knowledge-intensive economy.

This new reality will not only affect Russia’s foreign-policy and imperial ambitions; it will also undermine the relative social and political stability that has characterized the last decade. Without resource revenues, the government will struggle to finance the policies and programs that are needed to placate ordinary Russians. In this context, the Sochi Olympics, intended to herald Russia’s triumphant return as a global power, may soon come to be regarded as a swansong.

 

 

[ZH - It seems pretty clear what Putin needs - higher oil prices... makes you wonder what his next plan is...]

 

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Wed, 02/19/2014 - 12:02 | 4452655 Flakmeister
Flakmeister's picture

The wheels are coming off the resource driven kleptocracy...

BTW, Tyler, higher oil prices don't solve matters if the economy gags on Brent at $115....

Wed, 02/19/2014 - 12:09 | 4452682 SilverIsKing
SilverIsKing's picture

I think Putin will be just fine as long as he doesn't accept a position at JPM.

Wed, 02/19/2014 - 12:25 | 4452750 Occident Mortal
Occident Mortal's picture

Check out this link

 

https://www.cboe.com/publish/MicrositeCharts/HV_oil.jpg

 

The infamous volatility of oil prices is actually fading. Oil prices are quite stable at this level.

Probably because of the more diversified consumption across more countries, i.e. East Asia.

 

Oil is more resiliant to the US business cycle than at any time in the past 50 years. Good money to be had writing Iron Condors in this space.

Wed, 02/19/2014 - 12:36 | 4452825 Clint Liquor
Clint Liquor's picture

Mineral-resource price cycles generally begin with a rise lasting 8-10 years, followed by a longer period of stable, relatively low prices. Given that prices have been on an upswing since the middle of the last decade, they should begin declining within two years

Of course, massive worldwide QE that has never occurred in History will have no affect on the historic 'price cycles'.

There will not be normal cycles for a very long time.

Wed, 02/19/2014 - 12:47 | 4452937 Flakmeister
Flakmeister's picture

Oil starting its bull run long before QE....

In fact, the pre QE peak price has not been retraced...

Wed, 02/19/2014 - 22:05 | 4455395 philipat
philipat's picture

I'm calling BS on this. This is PTB propganda pure and simple. The price of energy is headed much higher, despite the shale distraction. And with Europe not having any (Except for Norway and Scotland in relative small and declining amounts) Russia is very well positioned. Especially true after The US didn't invade Syria to allow Qatari gas to transit to The Med and thus provide another source of energy.

Thu, 02/20/2014 - 00:47 | 4456013 Flakmeister
Flakmeister's picture

Russia needs Europe, all of its infrastructure points that way.

It is not going much higher because everytime Brent gets above ~80 Euro the economy goes splat and European demand drops...

Look at the chart in Euros...

http://www.indexmundi.com/commodities/?commodity=crude-oil-brent&months=...

It currently 80....

Wed, 02/19/2014 - 12:55 | 4452970 Georgia_Boy
Georgia_Boy's picture

I am curious about this, given the same argument now has to be faced for predicting the secular price trend for most any other commodity, possibly even gold. QE is the monkeywrench that makes me a lot less confident in saying whether any commodity is above or below long term price trends at any given time now. Yet, if QE only served to make the one percent richer and little wealth effect on the 99 percent, not all commodities should react the same to this huge increase in the supply of fiat money.

Oil is fairly unique among commodities due 1. to the limited world supply, and 2. its status as an enabling commodity, the energy key that unlocks supply, and demand to some extent too, for other resources. Gold is unique by its role as medium of exchange in the absence of confidence in fiat money. The one percent can soak up a big share of the world's supply of gold if it suits them, not too surprising that there would be a big secular bull market in it if the currency goes to hell. Oil, not as much. The one percent consume more, but cannot eat 50 percent of the food supply, drive 50 percent of the miles, consume 50 percent of the plastic, or even fly 50 percent of the air miles. Metal ores, wood, etc., even more democratic. Oil hasn't had a gold type bull market since 2009, read that as whatever guarantee of future results that you will.

Wed, 02/19/2014 - 13:20 | 4453082 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

What is really killing Russia is the same blight striking Europe, US and especially Japan. Lack of young people. I have read that the former Soviet Union lost around 100 million people after the iron curtain collapsed. There is no way they can make up for that loss of population.

Demographics is destiny

Wed, 02/19/2014 - 13:34 | 4453148 Herd Redirectio...
Herd Redirection Committee's picture

You mean lack of exploitable labor?

Wed, 02/19/2014 - 13:37 | 4453166 zuuma
zuuma's picture

Why is there such high youth unemployment, then?

Wed, 02/19/2014 - 13:56 | 4453262 Flakmeister
Flakmeister's picture

Extraction of resources is not labor intensive...

Wed, 02/19/2014 - 13:59 | 4453276 TBT or not TBT
TBT or not TBT's picture

Raising children is, however, and that's how and why Russian Russia is dead nation walking. Buh bye. Done.

Wed, 02/19/2014 - 14:01 | 4453292 TBT or not TBT
TBT or not TBT's picture

Countries with high youth unemployment AND deathbed demographics are consuming their capital, not investing in new. And this extends to the most fundamental capital of all: people.

Wed, 02/19/2014 - 14:42 | 4453475 Flakmeister
Flakmeister's picture

Consuming it or stashing it in Switzerland...

But you clearly get it...

Wed, 02/19/2014 - 12:33 | 4452858 Flakmeister
Flakmeister's picture

When there is essentially zero spare capacity weighing on the market, the price will get pinned to the maximum that the economy can support...

Wed, 02/19/2014 - 16:26 | 4454022 Martel
Martel's picture

There will be a big hangover after Sotchi. Russians will surely feel betrayed, now that their ice hockey team was beaten by Finland. Like this article tells, ice hockey matters most, and now they're out.

Finland's clinical 3-1 quarter-final victory in front of a devastated capacity crowd at the Bolshoy Ice Dome will leave the most expensive Olympics without the show-stopping climax that Russians had ached for.

Only spectacular victories elsewhere might soothe the Russians, and those victories might not be coming. Disappointed people will be more likely to question the whole thing, along with Tsar Putin's rule. I doubt it will be Ukraine-style riots for Russia, but after the games are over, Putin is a bit more soiled than before.

Wed, 02/19/2014 - 16:45 | 4454119 Flakmeister
Flakmeister's picture

Hockey is the continuation of politics by other means....

Just witness the 1972 Summit Series or Lake Placid in 1980...

Wed, 02/19/2014 - 12:10 | 4452690 nope-1004
nope-1004's picture

But guaranteeing a higher oil price puts the supplier in your court.  Once you have the supplier, you can then force the medium of exchange.

.... Not that its never been tried before or anything.....

 

Wed, 02/19/2014 - 12:11 | 4452693 Occident Mortal
Occident Mortal's picture

So the entire basis of this article is the assumption that commodity prices follow a rigid 8-10 year cycle?

 

What a load of garbage.

Wed, 02/19/2014 - 12:20 | 4452752 BurningFuld
BurningFuld's picture

Russia just knocked out of Men's Hockey at Sochi. <= much bigger headline for Putin.

Wed, 02/19/2014 - 12:49 | 4452945 Carbon Beach
Carbon Beach's picture

I Agree. When I glanced at this article I thought maybe someone, somewhere, had discovered cold fusion again.

Wed, 02/19/2014 - 13:17 | 4453064 Rafferty
Rafferty's picture

Thinking the same thing.

Wed, 02/19/2014 - 15:07 | 4453585 SilverSavant
SilverSavant's picture

Exactly!

Wed, 02/19/2014 - 15:55 | 4453895 OceanX
OceanX's picture

+1

And that is where I stopped reading...

Wed, 02/19/2014 - 12:21 | 4452756 onelight
onelight's picture

Doesn't seem like they got $50 billion worth of international prestige for the $50 billion they spent on the Sochi Olympics, whatever else pertains.

Wed, 02/19/2014 - 12:37 | 4452885 CrimsonAvenger
CrimsonAvenger's picture

Certainly not based on the efforts of US commentators. Seriously, have we ever tried to shit on an Olympic host the way we're shitting on Russia right now?

Wed, 02/19/2014 - 12:47 | 4452939 john39
john39's picture

have to admit, the lgbt temper tantrum led by obamao has been pretty comical.   i would say a backfire... 

Wed, 02/19/2014 - 13:18 | 4453068 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

We are seeing LGBT overreach here folks. The anti-progressive backlash begins in .....3....2.....1.....

Wed, 02/19/2014 - 13:35 | 4453156 Herd Redirectio...
Herd Redirection Committee's picture

Wasn't it more like $40 billion for Putin, oligarchs, select members of the IOC, their sponsors, and then $10b cost of actually putting on the Olympics?

Wed, 02/19/2014 - 12:22 | 4452771 TBT or not TBT
TBT or not TBT's picture

The main risk to Russia's future is the ongoing depletion of its most important resource....people. Russian demographics are worse than dismal. The scary part is, what does a paranoid, proud nuclear armed nation do on its way out? It's going to feel pretty godammned apocalyptic to culturally Russian russians. If history is any guide, they will share their pain.

Wed, 02/19/2014 - 12:45 | 4452893 bobnoxy
bobnoxy's picture

Well, I guess that means he's not on the hook for billions in unfunded Social Security and Medicare payments as they tend to die youger there. More pie for Vlad. And last I read, debt to GDP at the government level was about 9%.

Self sufficient in oil, gas, most food, lumber...I think he'll be just fine. And he's a lot smarter than Obie, Bush, Romney, Palin or anyone else we threw at him, or almost did.

Wed, 02/19/2014 - 14:05 | 4453317 TBT or not TBT
TBT or not TBT's picture

Vlad will be dead in 25 years and so will be Russia. They're going to make a hell of a show on their way out, probably.

Wed, 02/19/2014 - 14:36 | 4453454 TBT or not TBT
TBT or not TBT's picture

Well anyway with all of those resources you are talking about, the non-Russian replacement population might do well. It will be up to them.

Wed, 02/19/2014 - 13:09 | 4453024 Georgia_Boy
Georgia_Boy's picture

The Ukrainians aren't even the half of the cultural danger either. If I were the Chechens, or any Muslim splinter group in any of the Russian-sphere Stans right now, I know I'd be turning up the heat on my unwanted masters right now.

Wed, 02/19/2014 - 13:21 | 4453088 Rafferty
Rafferty's picture

All the muslims have to do is wait and let domographics hand them power.  Thier numbers are explodin while, thanks in part to Soros' abortion campaign actual Russian numbers are plumetting.

Wed, 02/19/2014 - 14:10 | 4453338 TBT or not TBT
TBT or not TBT's picture

Abortion rates in the soviet era were enormous. That was just 20 odd years ago. Those uncountable millions of Russians are not forming young families now because they don't exist. Sadly, the health of Russian society continued to get worse after the fall. 70 years of ultra statism, that's two and a half generations of destruction.

Wed, 02/19/2014 - 17:26 | 4454324 Dr. Acula
Dr. Acula's picture

"The main risk to Russia's future is the ongoing depletion of its most important resource....people"

What are you talking about? It looks like the Russian population is usually growing:

http://www.multpl.com/russia-population-growth-rate

Current Russia Population Growth Rate: 0.40%

Wed, 02/19/2014 - 12:24 | 4452783 Oh regional Indian
Oh regional Indian's picture

Abiotic Oil, FTW!

Cold Fusion FTW!

Thorium, FTL...

Over Unity FT frigging W! (I Know 2 developers of them specifically).

Me, FTW : http://squareandc.net/

;-)

The energy crisis is with-in. We are losing the spring to our mortal coil all too easily. Afraid.

And no, Putin's luck is not going to Run out. What a joke. Leader of the second most powerful (most perhaps) military in the world makes his own luck.

ori

Wed, 02/19/2014 - 12:42 | 4452908 Canadian Dirtlump
Canadian Dirtlump's picture

Russia is no doubt doomed to failure for not bending over and being a vassal state of the invisible satanic hand which operates the western powerbase through agents ( many of whome enjoy dual citizenship ). Russia is part of the new axis of bad people who hate freedom.

 

If they just submitted to free wetsern democracy they'd be doing as well as us all.

 

*shits pants laughing*

 

Their oligarchs are evil but ours are noble right?

Wed, 02/19/2014 - 14:49 | 4453500 akak
akak's picture

Moreover, there is this incredibly blinkered and idiotic "analysis":

Mineral-resource price cycles generally begin with a rise lasting 8-10 years, followed by a longer period of stable, relatively low prices. Given that prices have been on an upswing since the middle of the last decade, they should begin declining within two years, if they have not done so already. Moreover, the last price trough lasted more than 20 years

"Generally"?  Based on what, the last 30-40 years?  Which was ONE such supposed 'cycle'!

Give me a 100 or 200 year chart of mineral-resource prices, and try to make the same egregiously erroneous argument.  In addition, the author utterly ignores the current world monetary and fiscal situation, which all but promises significant if not radical debt monetization and hence currency depreciation going forward.

One single datum does not a trend make.

Wed, 02/19/2014 - 15:20 | 4453688 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Yes, minerals and energy vary in importance over time. We've had times where wood is king, then coal, natural gas, oil, radioactive/nuclear fuel, etc. Silver used to be huge for the photographic industry, but with digital photography and advanced printing technology, the mfg of gelatin silver paper, film, etc has gone down dramatically. 

If the author really wanted to harp on resource "one trick ponies", he should go after the Gulf monarchies, who rely on 90% of their income from 1 source (oil), and they have ridiculous welfare--let's call it social bribes-- to continue to accept the status quo. Any change in the oil consumption paradigm will utterly kill these countries and drive them back to the middle ages (at best).

Wed, 02/19/2014 - 14:50 | 4453511 Jumbotron
Jumbotron's picture

Precisely right Flakmeister.  The more pictures of this clown like some outdoorsman stud just harkens back to the days of old Russian propaganda.  The more the swagger......the more bullshit you're trying to produce to hide the fact that your situation and your country is going into the toilet.

Who in their right mind could have ever believed that a totally corrupt, morally bankrupt country that lurched from Communism to a Fascist Oligarchy could EVER come out on top of the world scene is beyond me !

 

Enough about Obama and the U.S.A.     About Putin and Russia..........

Wed, 02/19/2014 - 15:55 | 4453896 caconhma
caconhma's picture

Putin is a walking dead man. He is just another Saddam building his new palaces and making speeches. He is a thief, a gangster, and a clown.

Very shortly Russia will follow Ukraine. A mafia elite controls both Russia and Ukraine. Their oligarchy is keeping their loot in US and EU banks. Consequently, it is just a matter of time before Russian people will revolt like Ukrainian people doing it now.

As for the Soviet Union, it has collapsed because their ruling Communist Party leadership became utterly corrupt and stupidly believed into their own lies and propaganda. This is why the Soviet Union is gome and Communist China is an evolving giant. China was capable of changing its Mao doctrine in a dynamic fascist economic and political society.

Wed, 02/19/2014 - 17:31 | 4454348 Dr. Acula
Dr. Acula's picture

"Communist China is an evolving giant."

I think you mean "expanding bubble".

 

Wed, 02/19/2014 - 12:03 | 4452658 Radical Marijuana
Radical Marijuana's picture

The whole world's "luck" is running out.

Wed, 02/19/2014 - 14:08 | 4453331 kralizec
kralizec's picture

Most honest post I've read all day.

Wed, 02/19/2014 - 14:45 | 4453476 TBT or not TBT
TBT or not TBT's picture

The ZH masthead covers that, if you scroll up: "on a long enough time line...".

That has to with individual humans. However, ideas(including here entire cultures) and of course genetic codes can and do carry on....but only some of them. Russian Russia committed suicide and will not likely pull out of its power dive. This is baked into the demographics of Russia.

Wed, 02/19/2014 - 15:00 | 4453541 Kirk2NCC1701
Kirk2NCC1701's picture

Jan Winiecki's "luck" will run out when someone exposes him as utterly ignorant of economics and monetary policy.  Especially when the former (economics) is based on the latter (monetary policy) being a Ponzi that I have seen nowhere else in the Galaxy.

"The Fed & Friends have boldly gone where no man has gone before."  -Kirk out.

Wed, 02/19/2014 - 12:05 | 4452663 Ulterior
Ulterior's picture

"putkins luck" - a new meme

Wed, 02/19/2014 - 12:05 | 4452664 Theta_Burn
Theta_Burn's picture

The Russians are doing fine.

They are a resurgent power.

They control vast resorce

They export and get paid well for those resorces

The corruption in Russia is worse than anywhere else?

Try harder Project syndicate.....

Wed, 02/19/2014 - 12:07 | 4452676 Flakmeister
Flakmeister's picture

I'm impressed, how did you type that with your tongue jammed up Putin's asshole?

Wed, 02/19/2014 - 12:16 | 4452714 Theta_Burn
Theta_Burn's picture

So your saying I'm wrong? or gay?

Wed, 02/19/2014 - 12:24 | 4452789 Flakmeister
Flakmeister's picture

I am saying that you understand next to nothing about Putin and Russia and that you are clearly blinded by something given your obvious cheerleading...

Thu, 02/20/2014 - 05:46 | 4456481 thestarl
thestarl's picture

Could you imagine the outcry if Obamarsehole changed the constitution so that he could serve another term or two?

So Vlad did now where's the outrage (deafening silence).Putin is a thug and steals from his own people.

And as I've said before here if he really was a tough guy he'd have the balls to sell the Iranians the advanced S400 SAM system

Wed, 02/19/2014 - 12:26 | 4452806 TBT or not TBT
TBT or not TBT's picture

You're wrong. Russian demographics are cataclysmic, not just very bad. Russian Russia is disappearing fast. Dismal birth rates for decades on end, atop 70 years of communism to ruin the culture, have done their damage. It's going to be dangerous for the rest of us.

Wed, 02/19/2014 - 12:36 | 4452879 Theta_Burn
Theta_Burn's picture

Thank you TBT...

Demographics are bad in Russia, but i'd say they are worse in Japan, or even white America

They sit atop arguably the largest energy reserves on the planet (with means of defending it) and people are worried about Putins luck?

Now if this thread was about Abe, i would agree totally

 

Wed, 02/19/2014 - 13:04 | 4453001 Flakmeister
Flakmeister's picture

White America?? Comparing a flat birth rate with a fertility collapse???

You are truly an apologist...

Wed, 02/19/2014 - 13:36 | 4453157 dogbreath
dogbreath's picture

at least russian chicks are bangable.

Wed, 02/19/2014 - 13:38 | 4453175 TBT or not TBT
TBT or not TBT's picture

They're not having babies as a result of it.

Wed, 02/19/2014 - 13:57 | 4453271 Flakmeister
Flakmeister's picture

The Russian men are too drunk to get it up...

Wed, 02/19/2014 - 16:33 | 4454075 pot_and_kettle
pot_and_kettle's picture

Go on, dear, show us on the doll where the russians touched you

Wed, 02/19/2014 - 13:36 | 4453158 TBT or not TBT
TBT or not TBT's picture

Demographics are spectacularly catastrophic in Russia. Nightmarishly bad, atop third world life expectancy figures. People will continue live atop the expanse of land called Russia, but they will be ever less russian, and short of genocide/cleansing on a scale that would have made not just Stalin but also Pol Pot blush, this is going so fast it will be pretty stark in a few decades hence.

Wed, 02/19/2014 - 13:33 | 4453145 TuPhat
TuPhat's picture

Flak says everyone that has a good comment is wrong.  Putin did not get where he is by luck or by playing russian roullette.  I think he knows very well what cards he is holding and how to play them.  Do you have a lot of gay thoughts Flak?

Wed, 02/19/2014 - 16:17 | 4453999 pot_and_kettle
pot_and_kettle's picture

I'm more impressed with the ramblings of a zionist sock puppet - do continue.

Wed, 02/19/2014 - 12:18 | 4452731 Tsukato
Tsukato's picture

Ha! Suck it Putin! That's what you get for stealing billions of Jewish dollars. Payback time bitch.

Wed, 02/19/2014 - 12:22 | 4452775 Theta_Burn
Theta_Burn's picture

Thats funny....

Jewish <hard earned> dollars...

 

Wed, 02/19/2014 - 12:31 | 4452828 Divided States ...
Divided States of America's picture

Yeah the hard earned Jewish money that they stole from everyone else....

I think Tsukato was being sarcastic...look at the picture on his profile....remind you of anything?

Wed, 02/19/2014 - 12:50 | 4452950 Tsukato
Tsukato's picture

What are you driving at? It's a picture of me drawn by my 7 year old daughter. Don't you find me handsome?! So fucking rude.

Wed, 02/19/2014 - 13:27 | 4453116 Rafferty
Rafferty's picture

Seven Jews stole all Russia's resources fair and square.  Larry (the Looter) Summers will testify to this.

Wed, 02/19/2014 - 13:37 | 4453167 Tsukato
Tsukato's picture

7 very clever Jews you mean. So what about it, anti-Semite, cocksucker?

Wed, 02/19/2014 - 13:41 | 4453197 Son of Captain Nemo
Son of Captain Nemo's picture

Hey Tsukato, love the nose!

At least you're a Jew that doesn't try to become "goy" concealing your identity through plastic surgery.

Wed, 02/19/2014 - 13:57 | 4453270 Tsukato
Tsukato's picture

Thanks :) it's my mother's.

Wed, 02/19/2014 - 14:02 | 4453295 DoChenRollingBearing
DoChenRollingBearing's picture

We knew it!

:)

Wed, 02/19/2014 - 20:51 | 4455085 pot_and_kettle
pot_and_kettle's picture

 

 

not sure if serious...

 

[          ]  <------ add Heath Ledger joker face

Wed, 02/19/2014 - 12:05 | 4452666 Occident Mortal
Occident Mortal's picture

If Europe goes down, Russian goes down.

 

Check out the BP Statistical Review to see just how much money flows from Europe into Russia every single day. Incredible stuff. Truly wrath of god quantities of money.

Wed, 02/19/2014 - 12:17 | 4452679 Flakmeister
Flakmeister's picture

Zackly....

Edit; the breakdown of greenies for this and above are an excellent example of the cognitive dissonance that exists here...

Wed, 02/19/2014 - 12:19 | 4452743 fonzannoon
fonzannoon's picture

I'm pretty sure it's just that no one likes you. 

Wed, 02/19/2014 - 12:24 | 4452788 Dr. Engali
Dr. Engali's picture

Ouch.

Wed, 02/19/2014 - 12:30 | 4452841 Divided States ...
Divided States of America's picture

Flaks is colorblind....red is green for him and green is red....thats why he cant drive alone without mommy next to him.

Wed, 02/19/2014 - 13:05 | 4453009 falak pema
falak pema's picture

he is the only guy who understands energy and climate change better than anybody else here on ZH.

Apart from that his knowledge of history is second to none on subjects he likes. 

So what were you saying? 

Wed, 02/19/2014 - 14:26 | 4453416 Herd Redirectio...
Herd Redirection Committee's picture

Flak has not learnt a single thing here on ZH.  And then he blasts everyone else for not listening to him.

Wed, 02/19/2014 - 14:38 | 4453466 Flakmeister
Flakmeister's picture

Au contraire... but I admit that the quality of articles has taken a nosedive since the 2012 campaign, so the butter is spread pretty thin now...

I don't blast people for not listening, I blast people for repeating the same old discredited bullshit in the face of facts...I also try to call out the most egregious of bigots, but that clearly is a loosing battle..

Unless you think that listening to a chorus of abiotic oil wingnuts is your idea of insightful posting...

Wed, 02/19/2014 - 12:26 | 4452804 Flakmeister
Flakmeister's picture

Aww... please don't hurt my feelings...

</sniffle>

Wed, 02/19/2014 - 12:40 | 4452897 superflex
superflex's picture

You put way too much emphasis on the minority who vote here at ZH.

Who fucking cares about the red/green ratio?

 

Wed, 02/19/2014 - 12:50 | 4452946 Flakmeister
Flakmeister's picture

The comment clearly flew over your head...

I'm not surprised...

Wed, 02/19/2014 - 13:26 | 4453108 Iwanttoknow
Iwanttoknow's picture

Flahemeister,how's the weather inTelaviv?

Wed, 02/19/2014 - 13:32 | 4453140 Flakmeister
Flakmeister's picture

Whatsammatta?

Are you too stupid to google it for yourself?

Wed, 02/19/2014 - 12:25 | 4452795 CrashisOptimistic
CrashisOptimistic's picture

Money doesn't matter.

Oil does.

Wed, 02/19/2014 - 13:43 | 4453205 TBT or not TBT
TBT or not TBT's picture

People matter. Oil is inanimate.

Wed, 02/19/2014 - 12:41 | 4452907 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Doesn't matter who goes down. The world will follow.

Wed, 02/19/2014 - 13:38 | 4453170 TuPhat
TuPhat's picture

Exactly

 

Wed, 02/19/2014 - 13:40 | 4453190 TBT or not TBT
TBT or not TBT's picture

What do you mean "if" ?

Wed, 02/19/2014 - 12:05 | 4452668 buzzsaw99
buzzsaw99's picture

Putin will be fine until somebody Stalins his tea.

Wed, 02/19/2014 - 12:06 | 4452671 yrbmegr
yrbmegr's picture

Just another sovereign printing money.  Nothing to see here.

Wed, 02/19/2014 - 12:07 | 4452674 y3maxx
y3maxx's picture

...With only 12.5 million citizens and a plethora of Natural Resources, Western Canada is the safest place to live on the planet.

Wed, 02/19/2014 - 12:09 | 4452684 Spastica Rex
Spastica Rex's picture

I like the Okanagen.

Wed, 02/19/2014 - 12:13 | 4452706 oddjob
oddjob's picture

Surely you know its the Okanagan.

Wed, 02/19/2014 - 12:15 | 4452710 Flakmeister
Flakmeister's picture

Oh the fuck could you get junked for that (unless it was your spelling)....

Spent yesterday planning a trip to Jasper in early May. Gotta see the glaciers one more time before they disappear...

Wed, 02/19/2014 - 12:17 | 4452723 Spastica Rex
Spastica Rex's picture

I've never been the best speler in the world.

Wed, 02/19/2014 - 12:18 | 4452732 Flakmeister
Flakmeister's picture

I'd lobby for a refund on that English degree....  ;-)

Wed, 02/19/2014 - 12:21 | 4452757 Spastica Rex
Spastica Rex's picture

I live only three hours south of the Oakinoggin, you think I would no how to spell it. At least I can spell Kelownuh.

Wed, 02/19/2014 - 15:31 | 4453770 SilverSavant
SilverSavant's picture

I like Kelownduh

Wed, 02/19/2014 - 12:22 | 4452774 Dr. Engali
Dr. Engali's picture

That's okay, I've never been the best reader in the world.

Wed, 02/19/2014 - 12:44 | 4452927 superflex
superflex's picture

Why visit a glacier when you could be waxing your vagina?

 

Wed, 02/19/2014 - 13:42 | 4453199 dogbreath
dogbreath's picture

Why visit a glacier when you could be waxing your vagina, bitch.

 

Fixed it for ya

Wed, 02/19/2014 - 13:39 | 4453185 TuPhat
TuPhat's picture

Why don't you stay there until the glacier comes back.  Or take a ship to Antarctica.

Wed, 02/19/2014 - 12:10 | 4452688 buzzsaw99
buzzsaw99's picture

yeah, it did wonders for the kurds. [/sarc.]

Wed, 02/19/2014 - 12:12 | 4452700 pupdog1
pupdog1's picture

...unless you go outside and freeze to death, are eaten by wolves, or get attacked by a rabid beaver.

Wed, 02/19/2014 - 12:13 | 4452704 Boomberg
Boomberg's picture

With that logic, the moon is the safest place to live in the solar system. There's a reason only 12.5 million live there.

Wed, 02/19/2014 - 15:30 | 4453757 Flakmeister
Flakmeister's picture

I suggest you you take residence where your head seems to be, Uranus....

In case your didn't know the Queen Charlottes had the highest ever observed population density for a hunter-gatherer society....

Wed, 02/19/2014 - 12:07 | 4452677 U4 eee aaa
U4 eee aaa's picture

Their hockey team lost. It has begun

Wed, 02/19/2014 - 12:09 | 4452683 Flakmeister
Flakmeister's picture

There were never the favorites but that was an upset....

Wed, 02/19/2014 - 12:53 | 4452961 U4 eee aaa
U4 eee aaa's picture

That was the Russian hockey team doing what it does best

Wed, 02/19/2014 - 13:39 | 4453105 silverserfer
silverserfer's picture

now they will be ground into dog food and fed to the gold medalists after the medal ceremony

Wed, 02/19/2014 - 12:07 | 4452678 Spastica Rex
Spastica Rex's picture

But doesn't he have a "good soul" behind those steely eyes? Doesn't that count for a lot? Was I misled?

Wed, 02/19/2014 - 12:11 | 4452692 Flakmeister
Flakmeister's picture

And he is clearly a manly man that enjoys doing manly things in the company of other men...

Provided he can do it with no shirt on...

Wed, 02/19/2014 - 12:18 | 4452733 Spastica Rex
Spastica Rex's picture

Looking at pictures of Putin makes me want to produce children.

No, not really.

Wed, 02/19/2014 - 12:27 | 4452817 Flakmeister
Flakmeister's picture

\hattip

Wed, 02/19/2014 - 12:09 | 4452686 Tracerfan
Tracerfan's picture

Russia will be fine. 

The West is bankrupt and will be bankrupt and disintegrate.

Wed, 02/19/2014 - 13:48 | 4453225 TBT or not TBT
TBT or not TBT's picture

There won't be a lot of Russians there, and the environmental poisoning left around by the soviets and their kleptocratic heirs will persist, but yeah the land will still be there. What they'll call it, who knows. Somethingstan.

Wed, 02/19/2014 - 12:10 | 4452691 unplugged
unplugged's picture

When Russia + China switch over to the gold standard they will be the most likely to survive & prosper.

Wed, 02/19/2014 - 12:24 | 4452784 nightshiftsucks
nightshiftsucks's picture

I think not,they will be screwed like everyone else.

Wed, 02/19/2014 - 12:27 | 4452821 unplugged
unplugged's picture

they already are in a sense, just like almost everyone else - which is why they are preparing to pull themselves out of the ashes with gold trade settlement/gold backed currencies - Golden Rule: he who has the gold, rules

Wed, 02/19/2014 - 14:48 | 4453238 TBT or not TBT
TBT or not TBT's picture

To "have" gold or anything else, one must EXIST. Russian Russia is disappearing spectacularly fast, by demographers' measures.

Wed, 02/19/2014 - 13:54 | 4453255 TBT or not TBT
TBT or not TBT's picture

They've got a whole lot of bareback fucking and child rearing to do, on the other hand, if they want a Russian russia. Even then, by demographers' measures, they are unlikely to pull it off.

Wed, 02/19/2014 - 12:11 | 4452695 Global Hunter
Global Hunter's picture

"Mineral-resource price cycles generally begin with a rise lasting 8-10 years, followed by a longer period of stable, relatively low prices."

Honest question, what happens to the value of those resources when the world's central banks are printing money at a zimbabwean pace?  Would you prefer to be resource rich (regardless of paper resource market prices) or QE rich?

Wed, 02/19/2014 - 12:27 | 4452819 CrashisOptimistic
CrashisOptimistic's picture

Nothing happens to them.  Their value is measured in joules, not currency.

Wed, 02/19/2014 - 12:11 | 4452698 SmallerGovNow2
SmallerGovNow2's picture

"But my expectation that oil prices will decline over the next 3-7 years suggests that Russia’s medium-term prospects are actually considerably worse."

Good luck with that oil price decline thingy...

Wed, 02/19/2014 - 12:16 | 4452718 Winston Churchill
Winston Churchill's picture

I'm sure the Polish animosity to all things Russian
is not clouding his views.
Either that or maybe he believes the shale oil propaganda.

Wed, 02/19/2014 - 12:12 | 4452701 robertocarlos
robertocarlos's picture

Russia lost men's hockey. "These games are over!"

Wed, 02/19/2014 - 12:26 | 4452812 25or6to4
25or6to4's picture

Yes, those pesky Finns need to be dealt with once and for all. First the Ukraine and now this. Putin is not pleased at all right now.

Wed, 02/19/2014 - 12:14 | 4452709 fijisailor
fijisailor's picture

Anything to call attention away from a worsening US economy.

Wed, 02/19/2014 - 15:08 | 4452711 Blazed
Blazed's picture

"This new reality will not only affect Russia’s foreign-policy and imperial ambitions"

Right, because they are such an imperial empire with military bases all over the whole globe, like the USA. Since when did strategically considering and minding the military, political, and social situation in neighboring border nations become imperialism?

"it will also undermine the relative social and political stability that has characterized the last decade"

Like the massive third world immigration(population displacement), exponential debt, rotting USD, and gutted economy are threatening the social and political stability of the US.


Wed, 02/19/2014 - 12:16 | 4452713 youngman
youngman's picture

They are a one trick pony....all oil and gas.....we dont buy cars, planes, or computers from them....nor clothing...or toys...they really do not sell anything else but oil and gas....and talk about corruption...they do that well

Wed, 02/19/2014 - 12:19 | 4452746 Lebensphilosoph
Lebensphilosoph's picture

And they don't need our useless junk either.

Wed, 02/19/2014 - 12:29 | 4452836 CrashisOptimistic
CrashisOptimistic's picture

youngdood, when the world dies immediately, literally, without oil, saying "they are a one trick pony . . . all oil and gas" says they are the dominant power on the planet.

Wed, 02/19/2014 - 13:54 | 4453253 Flakmeister
Flakmeister's picture

Yes, but it should be clear that they rely on others for a rationale to exploit that resource, left to their own means those resources would never be tapped. They are merely enablers in the energy game, not the drivers...

Wed, 02/19/2014 - 12:20 | 4452722 Dr. Engali
Dr. Engali's picture

Shouldn't the article be titled: 'The World's Luck is About to Run Out' ? As a side note, WTF is with all the Putin man love around here? Aside from the fact that he granted Snowden asylum, he only did so because it benefits Putin, he is still a statist thug.

Wed, 02/19/2014 - 12:26 | 4452811 RaceToTheBottom
RaceToTheBottom's picture

"WTF is with all the Putin man love around here? "

It is just not talked about in politer society, not that there is anything worng with those sorts of proclivities. 

And please don't mention "fight club", I am drinking coffee....

Wed, 02/19/2014 - 12:53 | 4452963 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Dr. E

I do not know why there is so much love for Putin the thug around here either.  Perhaps because Obama is such a loser and W was unpopular?  Putin has a terrible past, he is a killer.

Wed, 02/19/2014 - 13:15 | 4453051 lasvegaspersona
lasvegaspersona's picture

and Putin has man boobs...he usually has a tiger in the picture with him to distract the viewers attention from that cruel result of inactivity and too much wine and caviar.....and don't forget...he kept us out of Syria when our great leaders were trying to pull us in...not saying he is great ...just noting a few of the reasons why some might appreciate some of his actions....but a mancrush?...with those man boobs?...ain't happening...

Wed, 02/19/2014 - 12:17 | 4452725 Stuck on Zero
Stuck on Zero's picture

Russia may have brilliant people, resources, determination, and space advanced technology but the U.S. has ObamaCare, multi-cultural diversity, and Wall Street.

 

Wed, 02/19/2014 - 12:26 | 4452809 nightshiftsucks
nightshiftsucks's picture

And no one can beat that.

Wed, 02/19/2014 - 14:59 | 4453540 TBT or not TBT
TBT or not TBT's picture

Another way to look at all of that, regarding both Russia and the US, is to marvel at how each can afford those.

The USA is enormously rich compared to Russia, and COULD run rings around Russia in thise things IF it merely wanted to. The dwindling declining Russian nation is doing a bunch of glorious nationalistic chest thumping things that produce them negative returns. It'd cost the USA three minutes of QE to send a robot probe up to do victory donuts around the Apollo 11 moon landing gear and footprints the USA got bored with FORTY YEARS AGO.

Wed, 02/19/2014 - 16:07 | 4453943 RaceToTheBottom
RaceToTheBottom's picture

What technology giveth, Bankstering taketh away.

Wed, 02/19/2014 - 14:35 | 4453442 GhostInTheMachine
GhostInTheMachine's picture

I have a sneaking suspicion Putin and Obama, aren't even on the oposite sides, they are on the same side, the rich/protected/well informed/know-what-the-game-is-about side. We are on the loosing side wherever we are.

And look Putin and Obama wink at each other... wink wink... here's some missiles wink...and here is some western democracy pressure groups being send to Ukraine to bring pace and love and free Euros for children wink wink nudge nudge...

btw its the last picture on the bottom, and yes i really enjoy those pictures: http://www.popkulturalni.eu/2013-w-obrazach/

 

 

Wed, 02/19/2014 - 12:17 | 4452727 Lebensphilosoph
Lebensphilosoph's picture

Yegor Gaidar? One of Yeltsin's pigs? Seriously?

In total war, which is coming within the next couple of decades, natural resources and self-sufficiency are what count, not the financial house of cards of a Western world that has become so dependent upon outsiders, both within and wihtout its borders, that it needs to be breast-fed and have its diapers changed five times a day.

Wed, 02/19/2014 - 12:17 | 4452729 ChargingHandle
ChargingHandle's picture

The sun vortex in cali is intense. You could not possibly understand how 70 and sunny effects the ability to work. 

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