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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

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Nov 21 4:00 PM EST

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To: maceng2 who wrote (38478)	8/12/2008 1:18:51 AM
From: Haim R. Branisteanu	Read Replies (3) of 218005

All wars are ideological or economical driven. In the case of Russia attacking Georgia there is no ideology but plain brute economic interest of control of transit fees and energy resources. It seems obvious that Russia has a huge problem to keep its electorate happy below $100 a barrel of oil. Further their recent expansionist economic drive will hit the wall if prices of natural resources slide further. As an example Russians where snapping up coal powered electrical power station in CEE countries due the ample coal reserves and the lack of profitability of those enterprises to western entities as the price of electricity is set by local governments. Not once I asked high ranking officials who expressed their dismay of such assets being taken over by Russians why they do not declare electrical power station as strategic assets which they actually are – except of some rumbling about corruption and political pressure I did not hear any other reasonable excuse. Needless to say, that the new owners of those power stations are against curbing pollution or CO2 emissions or any cooperation with the locals. One more important point - the new found riches do not go to the general Russian population but only to those well connected to the present regime Some interesting quotes worth repeating from the article you posted; The war itself in South Ossetia is so far a mere economic blip. But for veteran diplomats the invasion feels all too like the Serb onslaught on eastern Croatia in 1991 that kicked off a series of regional wars. The clear risk in the Caucasus is that this could graduate into an attempt to topple the Georgian government, emboldening the Kremlin to step up pressure on Ukraine. If Moscow gains direct control of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, it would further strengthen its stranglehold on Europe's fuel supplies. Russia is suffering classic symptoms of the "Dutch Disease" or resources curse. Grand plans to diversify the economy into aerospace, shipbuilding, and high-tech industries are stuck on the drawing board. The oil bonanza has been squandered on imported cars, mostly Renaults, Volkswagens, BMWs and Mercedes. Russia's car market became the biggest in Europe this year, clocking 1.645m sales in the first half. Russia could start facing problems if oil falls to $80 to $90, now seen as likely by many energy analysts. (US crude prices closed yesterday at just over $113 a barrel, down from $147 a month ago). He said the government had been "ratcheting up" its reliance on crude revenues and now depended on prices of almost $110 to fund the budget. With import growth roaring at double-digit rates, Russia could face a trade deficit by late next year.

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