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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

March 28, 2014 at 11:30 AM

Vote: Does Russia matter to the economy?

Let’s stipulate that using even a few of the 8,500 nuclear weapons believed to be in Russia’s stockpile would ruin much more than the Amerikans’ bull market. But short of that, as Vladimir Putin masses troops on the border with Ukraine and digests the Crimea, how concerned should we be about Russia’s effect on the global economy?

Few serious thinkers argue we are headed back into a second Cold War. Russia is too weak. The spread of international Leninism has no hold on Moscow. Instead, we are dealing with a Russia holding grudges, torn in its relationship with the West and seeking to reclaim its “near abroad.” Much of this mindset goes deep into history.

As an international economic player, Russia is big in natural resources, especially energy. So it has the capacity to roil energy markets, especially in Europe. It is a major trading partner with Germany. So much for “isolation.” Meanwhile, the International Monetary Fund’s rescue of Ukraine is apparently a windfall for Russian banks, as well as thee hedge fund boyz. Russia can team up with the other BRICS to try — try — to displace the dollar.

Russia had the 7th or 8th largest economy in 2012 (depending on the list). Its GDP growth rate in 2013 ranked 166th. GDP per capita: 77th. The Moscow stock exchange seems to have bounced back. What happens next?

This Week’s Links:

Candy Crush’s terrible debut shows we’re not in a tech bubble | Slate

The 67 people as wealthy as the world’s 3.5 billion poorest | Forbes

Pitfalls of reverse mortgages may fall to borrowers’ heirs | NY Times

• How a Chinese tech firm became the NSA’s surveillance nightmare | Wired

Pixel and dimed: On not getting by in the gig economy | Fast Company

The misuse of theoretical models in the economy and finance | Economist’s View

Today’s Econ Haiku:

Word for the iPad

But that yearly user fee

Lacks Apple appeal

Comments | More in International economy, Russia trade

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