Monday, March 3, 2014

Is Putin as clever as everyone thinks he is? His actions say NOT!

The pundits and the media are giving Putin all kinds of credit for having snookered the West and making a mockery of their "warnings" by rolling into Ukraine without even the slightest bit of hesitation.

But are they giving Putin too much credit? Is this guy really that smart?

First, we know he bought gold like crazy two years ago when it was near its highs. Russia is already one of the world's largest gold producers (if not THE largest), so why is he stocking up on gold? According to news stories, Putin believed that the Fed's asset buying program would weaken the dollar, so that's why he bought. In other words he was playing the market with the same misinformed views as many of the other idiots.


The next thing is this: If you want to show how strong you are and you want to give a display of your independence from the West then why do you peg your currency to the dollar? The ruble is (loosely) pegged to the dollar (and also to the euro). Today the Russian central bank raised interest rates to defend this peg. Dumb!

You're Putin, you believe Russia is a great power and it cannot be bossed around and it can do what it wants. So you "back" your currency with dollars?? Seriously???? I mean, come on, Vlad.

Finally, the guy believes he must sell his oil and gas to earn "revenue" from the West. Russia has a massive, massive, MASSIVE energy advantage over most countries. Cheap energy is priceless these days. Why are you exporting it? It's like the idiotic U.S. move of exporting its natural gas, which is just leading to higher domestic prices and an erosion of that advantage. Dumb, dumb, dumb.

If this guy really wanted power, if he understood a little bit of economics or, had somebody within his team who understood economics, he would let the ruble float, stop pegging it to the dollar or the euro or whatever and say "fuck you" to the West when it came to oil exports. The West would be on its knees in short order.

Thankfully he doesn't understand this, which means he's left himself exposed to the market "vigilantes" and his own stinkin' thinkin'.

My prediction: Russian troops will be out of Ukraine quicker than they left Georgia.


The Just Gatekeeper said...

His policy decisions on this dont' make much sense for Russia as a whole. My guess is the oligarchs want Euro so they can buy vacation property in Monaco and Saint Tropez.

Also, heres hoping Liquified Natural Gas proves to be too expensive...cant believe we would risk all the environmental hazards from fracking only to sell natural gas to other countries!! Talk about morons!

mike norman said...


Critical Tinkerer said...

But one thing is clear, there can be no effective preassure on Russia. As crisis is getting worse also the price of oil is getting higher. Since >Russia is exporting oil, they will have more money and there is no chance that EU can ban import of Russia's energy, they would collapse due to the high energy prices.
The price of oil works in russia's favor.

Another is price of food that could spring another "spring" in the world. Prices of food would rise if there is longer crisis in Ukraine that is exporting grains. Longer conflict could turn Ukraine into importer from exporter of food that will raise the prices of food. And as Complex Institute shows, demonstrations happen due to food price index.

Райчо Марков said...

Well, Mike, Vlad was put there by another empty drunk head - Boris Yeltsin. You ask too much from poor guy...