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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?


To: energyplay who wrote (17385)4/17/2007 6:19:43 PM
From: TobagoJack  Respond to of 217588
 
Thanks EP for the clue, I am on it.

On another matter ... something that may eventually matter to resource price and real estate and the spread of thoecracy because ignorant GWB and his moronic minions failed to keep eyes on the ball, choosing instead to look on the soul of nice nice Putin;

Per Stratfor ...

The Coming Era of Russia's Dark Rider
By Peter Zeihan

Russian opposition members rallied in Moscow's Pushkin Square on April 14. The so-called Dissenters' March was organized by Other Russia, an umbrella group that includes everyone from unrepentant communists and free-market reformers to far-right ultranationalists whose only uniting characteristic is their common opposition to the centralization of power under President Vladimir Putin's administration.

Minutes after the march began, the 2,000 or so protesters found themselves outnumbered more than four to one by security forces. They quickly dispersed the activists, beating and briefly detaining those who sought to break through the riot-control lines. Among those arrested were chess-champion-turned-political-activist Garry Kasparov and Maria Gaidar, the daughter of Russia's first post-Soviet reformist prime minister. Former Prime Minister Mikhail Kasyanov only avoided arrest because his bodyguards helped him to escape. A Reuters crew was permitted to capture the events and disseminate them to the West. A day later, another protest, albeit far smaller, was broken up in a similar way in St. Petersburg, though Kasparov was detained before the protest even began.

What gives? The protests were insignificant in both numerical and political terms. Moreover, with all that is going on in the world right now, the last thing the Putin government needs is to attract negative attention to itself. The answer becomes apparent when one considers Russia's point in its historical cycle and the mounting pressures on Putin personally that have nothing whatsoever to do with "democracy."

The Russian Cycle

At the risk of sounding like a high school social studies teacher (or even George Friedman), history really does run in cycles. Take Europe for example. European history is a chronicle of the rise and fall of its geographic center. As Germany rises, the powers on its periphery buckle under its strength and are forced to pool resources in order to beat back Berlin. As Germany falters, the power vacuum at the middle of the Continent allows the countries on Germany's borders to rise in strength and become major powers themselves.

Since the formation of the first "Germany" in 800, this cycle has set the tempo and tenor of European affairs. A strong Germany means consolidation followed by a catastrophic war; a weak Germany creates a multilateral concert of powers and multi-state competition (often involving war, but not on nearly as large a scale). For Europe this cycle of German rise and fall has run its course three times -- the Holy Roman Empire, Imperial Germany, Nazi Germany -- and is only now entering its fourth iteration with the reunified Germany.

Russia's cycle, however, is far less clinical than Europe's. It begins with a national catastrophe. Sometimes it manifests as a result of disastrous internal planning; sometimes it follows a foreign invasion. But always it rips up the existing social order and threatens Russia with chaos and dissolution. The most recent such catastrophe was the Soviet collapse followed by the 1998 financial crisis. Previous disasters include the crushing of Russian forces in World War I and the imposition of the Treaty of Brest-Litovsk; the "Time of Troubles," whose period of internal warfare and conspiracy-laden politics are a testament to the Russian predilection for understatement; and near annihilation under the Mongol occupation.

Out of the horrors of defeat, the Russians search desperately for the second phase of the cycle -- the arrival of a white rider -- and invariably they find one. The white rider rarely encapsulates what Westerns conceive of as a savior -- someone who will bring wealth and freedom. Russian concerns after such calamities are far more basic: they want stability. But by Russian standards, the white rider is a rather optimistic fellow. He truly believes that Russia can recover from its time of trial, once a level of order is restored. So the Russian white rider sets about imposing a sense of consistency and strength, ending the free fall of Russian life. Putin is the current incarnation of Russia's white rider, which puts him in the same category as past leaders such as Vladimir Lenin and, of course, Russia's "Greats": Catherine and Peter.

Contrary to portrayals of him by many in the Western media, Putin is not a hard-nosed autocrat set upon militarization and war. He is from St. Petersburg, Russia's "window on the West," and during the Cold War one of his chief responsibilities was snagging bits of Western technology to send home. He was (and remains) fully cognizant of Russia's weaknesses and ultimately wanted to see Russia integrated as a full-fledged member of the Western family of nations.

He also is pragmatic enough to have realized that his ideal for Russia's future and Russia's actual path are two lines that will not converge. So, since November 2005, Putin has been training two potential replacements: First Deputy Prime Ministers Dmitry Medvedev and Sergei Ivanov. At this point, nearly a year before Russia's next presidential election, determining which one will take over is a matter of pure guesswork. Also unclear is what role, if any, Putin will grab for himself -- up to and including a continuation of his presidency.

The question of who takes over in March 2008 is generating much interest and debate among Kremlinologists. It clearly matters a great deal both politically and economically, though geopolitically the discussion misses the point. The real takeaway is that Russia's current white horse period is coming to an end. Putin's efforts to stabilize Russia have succeeded, but his dreams of Westernizing Russia are dead. The darkness is about to set in.

The Dark Rider

In the third phase of the Russian cycle, the white rider realizes that the challenges ahead are more formidable than he first believed and that his (relative) idealism is more a hindrance than an asset. At this point the white rider gives way to a dark one, someone not burdened by the white rider's goals and predilections, and willing to do what he feels must be done regardless of moral implications. The most famous Russian dark rider in modern times is Josef Stalin, of course, while perhaps the most consuming were the "Vasilys" of the Vasily Period, which led to the greatest civil war in Russian medieval history. In particularly gloomy periods in Russia's past (which is saying something) the white rider himself actually has shed his idealism and become the dark rider. For example, Ivan the IV began his rule by diligently regenerating Russia's fortunes, before degenerating into the psychotic madman better known to history as Ivan the Terrible.

Under the rule of the dark rider, Russia descends into an extremely strict period of internal control and external aggression, which is largely dictated by Russia's geographic weaknesses. Unlike the United States, with its deep hinterland, extensive coasts and lengthy and navigable river networks, Russia's expansive barren landscape and lack of maritime transport options make trade, development and all-around life a constant struggle. Russia also lacks any meaningful barriers to hide behind, leaving it consistently vulnerable to outside attack.

Understanding that this geographic reality leaves Russia extremely insecure is critical to understanding Russia's dark periods. Once the dark rider takes the state's reins, he acts by any means necessary to achieve Russian security. Internal opposition is ruthlessly quashed, economic life is fully subjugated to the state's needs and Russia's armies are built furiously with the intent of securing unsecurable borders. That typically means war: As Catherine the Great famously put it: "I have no way to defend my borders except to extend them."

After a period of unification and expansion under the dark rider, Russia inevitably suffers from overextension. No land power can endlessly expand: the farther its troops are from core territories, the more expensive they are to maintain and the more vulnerable they are to counterattack by foreign forces. Similarly, the more non-Russians who are brought under the aegis of the Russian state, the less able the state is to impose its will on its population -- at least without Stalin-style brute force. This overextension just as inevitably leads to stagnation as the post-dark rider leadership attempts to come to grips with Russia's new reality, but lacks the resources to do so. Attempts at reform transform stagnation into decline. Stalin gives way to a miscalculating Nikita Khrushchev, a barely conscious Leonid Brezhnev, an outmatched Mikhail Gorbachev and a very drunk Boris Yeltsin. A new disaster eventually manifests and the cycle begins anew.

Why the Crackdown?

The April 14-15 protests occurred at an inflection point between the second and third parts of the cycle -- as the white rider is giving way to a dark rider. Past Russian protests that involved 2,500 total people at most would have been allowed simply because they did not matter. The Putin government has a majority in the rubber-stamp Duma sufficient to pass any law or constitutional change in a short afternoon of parliamentary fury. All meaningful political parties have been disbanded, criminalized or marginalized; the political system is fully under Kremlin control. The Kasparov/Kasyanov protests did not threaten Putin in any meaningful way -- yet in both Moscow and St. Petersburg a few dozen people were blocked, beaten and hauled off to court.

This development was no accident. Roughly 9,000 riot police do not spontaneously materialize anywhere, and certainly not as the result of an overenthusiastic or less-than-sober local commander. A crackdown in one city could be a misunderstanding; a crackdown in two is state policy. And one does not send hundreds of batons swinging but allow Reuters to keep filming unless the objective is to allow the world to see. Putin chose to make these protests an issue.

Putin, then, is considering various groups and rationalizing his actions in the context of Russia's historical cycle:

The West: Putin certainly does not want any Western capital to think he will take exiled oligarch Boris Berezovsky's recent threats of forcible revolution lying down. Berezovsky says violence is a possibility -- a probability even -- in the future of regime change in Russia? Fine. Putin can and did quite easily demonstrate that, when it comes to the application of force in internal politics, the Russian government remains without peer.

The people: Putin knows that governance is not so much about ruling as it is about managing expectations. Russians crave stability, and Putin's ability to grant that stability has earned him significant gravitas throughout Russia as well as a grudging respect from even his most stalwart foes. He is portraying groups such as the Other Russia as troublemakers and disturbers of the peace. Such explanations make quite attractive packaging to the average Russian.

The opposition: It is one thing to oppose a wildly powerful and popular government. It is another thing when that government beats you while the people nod approvingly and the international community barely murmurs its protest. Putin has driven home the message that the opposition is not just isolated and out of touch, but that it is abandoned.

The Kremlin: Just because Putin is disappointed that his dreams are unattainable, that does not mean he wants to be tossed out the proverbial airlock. Showing any weakness during a transition period in Russian culture is tantamount to surrender -- particularly when Russia's siloviki (nationalists) are always seeking to rise to the top of the heap. Putin knows he has to be firm if he is to play any role in shaping Russia during and after the transition. After all, should Medvedev and Ivanov fail to make the grade, someone will need to rule Russia -- and the only man alive with more experience than Putin has a blood-alcohol level that precludes sound decision-making.



To: energyplay who wrote (17385)4/17/2007 7:00:30 PM
From: TobagoJack  Read Replies (3) | Respond to of 217588
 
NEWS ALERT - the dots are connecting
Forwarded to me by penpal in Canada financial house last night ...

Now the suggestion that IMF should sell its gold starts to make sense ... there are interested parties looking to BUY GOLD, and HOPEFULLY CHEAP

I wonder what actually is in Fort Knox?

Recommendation, squeeze that short!

Forwarded to me by RBC contact

BREAKING NEWS: GOLDMAN SACHS GETS OUT OF DODGE!
In the April 16 session on the TOCOM GOLDMAN Sachs COVERED a simply gob-smacking 8,302 short contracts to bring their short position to 23,019 contracts. This is the second time in 5 weeks that they have made a massive one day short covering. The last time was on March 6 when they covered 7,878 contracts. This brings their short position to the second lowest since I started recording the daily data on Jan 13, 2006. On that day their net short was just 470 contracts lower at 22,549 contracts. These sudden massive coverings are against a generally rising gold price indicated by trend channel #3 in yellow. This is VERY UNUSUAL; you can see from the graph below that the GS short position correlates almost perfectly with the gold price. As the price rises their short position rises as it falls their short position falls. The only other time where there are massive and rapid reductions in shorts was in the first half of 2006 where gold was rising inexorably to $740. It looks to me that this is another piece of the puzzle which fits with my other analysis techniques that we are in the start of a huge upleg in gold. Goldman Sachs has decided to get out of Dodge!


... and now this ...

SUGGEST WE GET READY TO MOVE IN FOR THE KILL

telegraph.co.uk
Fears over Treasury losing control of gold left in its vaults
By Ambrose Evans-Pritchard
Last Updated: 12:32am BST 17/04/2007

As Gordon Brown prepares for a grilling in the Commons over his fire-sale auction of Britain's gold at the bottom of the market, concern is mounting that the Treasury may have lost control over the small amount still left in its vaults.

Peter Hambro: 'real risk'
Peter Hambro, head of Britain's largest pure gold mining company, said he believed the Bank of England may have leased out its bullion to earn extra yield.

"The real risk is that the Treasury has lent out the remainder of the gold. It is very important to know whether the bank's gold lending is on a secured basis," he said. The concern is that counter-parties could default in a crisis such as the LTCM-Ashanti affair in 1998.

"The whole point of gold is that it's not somebody else's paper currency. It's the stuff that keeps you alive when everything else goes wrong," he said.

Central banks around the world have routinely lent out gold over the years to bullion banks such as Goldman Sachs and JP Morgan. The IMF last year questioned if they had lent out more gold than publicly revealed, a situation that would leave the market a large overhang of "short" positions. The Treasury said last night that it would look into any possible gold loans.

With gold now trading at $690 an ounce, Mr Brown's decision to break ranks with the US, Japan, France, and Germany by selling off 395 tonnes of gold has cost taxpayers more than £2bn.

In a move that astonished dealers, Mr Brown insisted on selling the gold in open auctions. The first sale drove the price down to $254, the low-point of an 18-year slide. There were 17 auctions between July 1999 and March 2002 yielding an average of $274.9 an ounce.

Ross Norman, director of TheBullionDesk.com, said the reason for the sales was to support the fledgling euro. The proceeds were switched into 40pc euros, 40pc dollars, and 20pc yen. "His motives were political, but it was carried out in an incredibly foolish way, just as the market was turning up."

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