Skip to main content

Who will bury who?

The Russian "August War" is still rumbling on, despite the fading of Western media interest. Russian troops continue to hold their positions well inside Georgia proper, and continue to harass Western deliveries of aid to shattered Georgia.

However already, the Kremlin is starting to have to pay the price for their aggression.

The FT reports this morning that the Central Bank of Russia has been forced to intervene to support the Rouble. The Bank confirms this, suggesting outflows of around $ 5 billion, however more independent voices suggest that he outflows over the month were more in the region of $15-$20 billion.

It is, of course, not just the impact of the war- significant though that has been. The threats by Mr. Putin against Mechel, the announcement that grain trading was to be considered a "strategic" sector, the continued attacks against BP-TNK all have unsettled the markets substantially.

Now, the perception has hardened that the risk profile of Russia needs to be significantly reviewed. The failure to enact a system based on the rule of law is undermining any attempt to attract vital international capital into Russian infrastructure. So, while Russia continues to hold significant international reserves, it will need to use them to ensure that the critical upgrading of electrical infrastructure, for example, is not so delayed as to force major power outages this Winter. It remains a race against time, and the state of the UES grid is now a considerable concern.

Russia is being repriced- the fall in commodity prices will reduce still further its attraction as an investment market- though at some point the markets should stabilise, the fact is that Kremlin contempt for law, both domestically and internationally, is already having a significant impact on Russia- and that impact is likely to grow stronger over the next few months.

The fat lady has yet to sing on the Georgian crisis.

Comments

Bob D said…
Your readers may be interested in the campaign to get the 2014 Winter Olympics moved from Russia's resort of Sochi (not far from the ethnically cleansed statelet of Abkhazia)

http://revokethegames.com/index.php

Popular posts from this blog

Cicero ReDux

By Special Request of Baroness Scott and Mark Valladares... Cicero's Songs returns: bigger, longer and uncut.
October 1st marked the half way point of the Estonian Presidency of the European Union.  Perhaps for many people such an anniversary is of passing interest at best.  Yet the conduct of the Estonian Presidency is reinforcing just how forward looking and innovative the most northerly of the Baltic States has become.
Estonia is a country that wants to live in the future, and with its openness and innovation, that future seems a lot closer than almost anywhere else in Europe
It is not that Estonia does not “do” the past: the picturesque cobbled streets of old Tallinn have tourist crowds a-plenty enjoying the mediaeval architecture in an Indian summer of sunshine and blue skies.  The real point is that Estonia refuses to be a prisoner of its past. Lennart Meri, Estonia’s President in the 1990s- who spent years of his childhood in Siberia- once told me that the country had to conc…

Trump and Brexit are the Pearl Harbor and the Fall of Singapore in Russia's Hybrid war against the West.

In December 1941, Imperial Japan launched a surprise attack on the United States at Pearl Harbor. After the subsequent declaration of war, within three days, the Japanese had sunk the British warships, HMS Prince of Wales and HMS Repulse, and the rapid Japanese attack led to the surrender of Hong Kong on Christmas Day 1941 and the fall of Singapore only two months after Pearl Harbor. These were the opening blows in the long war of the Pacific that cost over 30,000,000 lives and was only ended with the detonations above Hiroshima and Nagasaki.

"History doesn't often repeat itself, but it rhymes" is an aphorism attributed to Mark Twain, and in a way it seems quite appropriate when we survey the current scene. 

In 1941, Imperial Japan, knowing its own weakness, chose a non-conventional form of war, the surprise attack. Since the end of his first Presidential term, Vladimir Putin, knowing Russia's weakness, has also chosen non-conventional ways to promote his domestic powe…

The American National nightmare becomes a global nightmare

It is a basic contention of this blog that Donald J Trump is not fit for office.

A crooked real estate developer with a dubious past and highly questionable finances. he has systematically lied his way into financial or other advantage. His personal qualities include vulgarity, sexual assault allegations and fraudulent statements on almost every subject. 

He lost the popular vote by nearly three million votes.

He has, of course, been under criminal investigation practically since before he took the oath of office. The indictment of some of closest advisers is just the beginning. His track record suggests that in due course there is no action he will not take, whether illegal or unconstitutional in order to derail his own inevitable impeachment and the indictments that must surely follow the successful investigation of Robert Mueller into his connections with Russia.

However, all of that is a matter for the American people. 

It is also a matter for the American people that Trump is cheating…