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David Stafford
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Student of markets, enjoys following their course.
My book:
Around the World in Several Pieces
  • The Cricket And The Ant 0 comments
    Jul 16, 2012 6:18 PM

    There is an old fable, whereby a cricket spends the spring time twittering away, without a care in the world, while a methodical ant plugs away, building up food-stocks for the next winter. When the next winter arrives, the reality that ensues is fairly obvious/predictable.

    Now as S&P rightly pointed out, the US has some political problems. People's primary concerns seem to be centered around people getting married, whether or not taxes are legitimate, and cuts to the US Military's gargantuan budget. Simpson and Bowles(not sure if Bowles is spelled like that) came up with a bipartisan approach to cutting the budget, but DC is such a fun place to hang out, that once they had gotten their rounds with the think tanks etc over, no one really seemed to care about the meat and potato's of their suggestions, and the ensuing budget proposals were seemingly radical in the sense that they were very partisan, either mainly focused on cutting projects key to the democrats or vice versa. As opposed to the logical suggestions that the somewhat unbiased S&B had come up with.

    And thus the cricket chirps. Chirps chirps chirps away, while the more focused ant starts building up its stores of decaying organic matter etc.

    Who is this Ant? Well, in my belief this ant is Russia. Does any of this matter? Is this a mute-point since our entire economic and financial system is a ship full of holes anyway? Perhaps this remains to be decided. Perhaps those being fastidious in their preparations for the future these days, simply don't get that investing in real estate is not a good idea in Rome, when the Visigoths are about 200 kilometers away, and very hungry. But either way, it seems as though Russia is catching up on the good old USA.

    Perhaps the truth of this lies behind the scenes per se, in responses that we could see as normal given the overly caffeinated news anchors of the world's matter of fact dispositions towards the "facts". But behind the facade of "normality", is a new reality emerging?

    I believe that the "proof in the pudding" of this scenario can be detected in the recent murmurs coming out of the middle east.

    The "West" has been denouncing the atrocities committed by the regime and "freedom fighters" in Syria for quite some time. It turns out that Syria is a huge buyer of Russian Arms, and given that Russian Arms Corps are on their back-foot these days, they're not standing down, and agreeing with the "West".

    Now let us remember, this is the same Russia, which about a decade ago, was a little Wild-West like, and which is primarily run based on the corporate aspirations of an elite inner-circle, of investors/ and or energy/commodity magnates.

    So what have these Russian business leaders been doing?

    Well, it seems as though focused as they are, they have been busy building pipelines isolating certain countries like the Ukraine etc, from the main boulevard of Russian Natgas distribution and have been laying pipe connecting their huge Nat Gas reserves to mainland Europe.

    When it gets cold in Europe, people usually die, and people start flipping out, as can be seen by the craziness that occurred several years ago, when Natgas was deprived to several countries, in chilly old Europe.

    Thus we have a very new image of Russia these days. Putin and his cadre, have unlike the US, not been fishing for votes by being their country/s version of Oprah Winfrey(not a bad thing Oprah's a very nice and generous person), they haven't been trying to thigh slap their way into populist dreams. They have been building up their countries markets, and energy dependent nations and hence allies.

    Lets take a step back from the situation in Syria for a second and look at it as it really is. The all powerful USA is being left spouting indignant prose over Syria, while their "allies" Russia and China, are tired of the hegemonic creep of the US. Now with Russia criticizing the Govt's reaction to recent protests in Saudi, the Russians have realized, that the US is weakening. Hence not only are they ignoring the US and the "West" on Syria, but they are pushing back and saying, "hey man, don't beat up on our client state, when your client state over here isn't exactly keeping its nose clean through this whole Arab spring thing either."

    Perhaps its the tone, and power levels being flexed, that at time goes not un-noticed and unstated in our views of the common events that unite our lives, which unfold on a regular basis. For, Russia and China's positions don't really matter, if this was over Tasmania's right to secede from Australia it wouldn't matter. What matters is that Russia is not only standing up to the US but its pushing back. When this new reality sets in, it seems clear, that while the US has been frittering its time away, threatening Govt. shutdowns etc, Russia has been building up its client, and hence ally base in Europe, and hence is not longer, the big red bear, sitting by the sidelines anymore, and even though China normally minds its business, its clear that it might be on, in certain circumstances, Russia's side from time to time.

    Youngsters, half-jokingly saying they should immigrate to Brazil for work. The US kind of having an opinion but not really an actionable opinion on Syria, having its allies denounced by pseudo-allies/competing arms dealing nations, isn't exactly a good sign for the US.

    Perhaps this slipping towards(toward but not near) the side of obscurity and irrelevance by the good old US is going through is just temporary. However, it seems there are some very big temporary problems in the US. As opposed to having strong leadership focused on economic expansion like some other states, the US is getting caught up in kind of MC-Escher esque debates, over the truth of taxes, marriage, etc, and its dragging down its confidence, and productivity.

    The US is clearly one of if not the major player on the global "scene" per se, however, as its strength/weakness is tested these days, we may see that it may have to give up some of the pie, and will continue to do so into the foreseeable future.

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