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:
• 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