Putin Speech at Davos World Economic Forum - Open thread

Russian Prime Minister Vladimir Putin spoke at the opening ceremony of the World Economic Forum in Davos, Switzerland a few days ago. His speech takes a conciliatory tone and emphasizes co-operation, possibly because Russia, like everyone else, is encountering economic problems. Part of Russia's problems are no doubt due to the lower price of oil and the lack of availability of credit. (As we have discussed earlier, most recently here, all of these problems seem to be indirectly the result of world peak oil.)

Putin's speech includes comments on energy security and on actions Russia taking with respect to energy. As one might expect, much of the speech relates to the world economic crisis.

Below the fold are some excerpts. The full transcript can be found here.

Putin's View of the Causes of the Current Economic Crisis

In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.

I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.

The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.

In our opinion, the crisis was brought about by a combination of several factors.

The existing financial system has failed. Substandard regulation has contributed to the crisis, failing to duly heed tremendous risks.

Add to this colossal disproportions that have accumulated over the last few years. This primarily concerns disproportions between the scale of financial operations and the fundamental value of assets, as well as those between the increased burden on international loans and the sources of their collateral.

The entire economic growth system, where one regional centre prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.

I would like to add that this system has left entire regions, including Europe, on the outskirts of global economic processes and has prevented them from adopting key economic and financial decisions.

Moreover, generated prosperity was distributed extremely unevenly among various population strata. This applies to differences between social strata in certain countries, including highly developed ones. And it equally applies to gaps between countries and regions.

A considerable share of the world's population still cannot afford comfortable housing, education and quality health care. Even a global recovery posted in the last few years has failed to radically change this situation.

And, finally, this crisis was brought about by excessive expectations. Corporate appetites with regard to constantly growing demand swelled unjustifiably. The race between stock market indices and capitalisation began to overshadow rising labour productivity and real-life corporate effectiveness.

Unfortunately, excessive expectations were not only typical of the business community. They set the pace for rapidly growing personal consumption standards, primarily in the industrial world. We must openly admit that such growth was not backed by a real potential. This amounted to unearned wealth, a loan that will have to be repaid by future generations.

This pyramid of expectations would have collapsed sooner or later. In fact, this is happening right before our eyes.

Putin's Proposed Solutions to the Economic Crisis

In our opinion, we must first atone for the past and open our cards, so to speak.

This means we must assess the real situation and write off all hopeless debts and "bad" assets.

True, this will be an extremely painful and unpleasant process. Far from everyone can accept such measures, fearing for their capitalisation, bonuses or reputation. However, we would "conserve" and prolong the crisis, unless we clean up our balance sheets. I believe financial authorities must work out the required mechanism for writing off debts that corresponds to today's needs.

Second. Apart from cleaning up our balance sheets, it is high time we got rid of virtual money, exaggerated reports and dubious ratings. We must not harbour any illusions while assessing the state of the global economy and the real corporate standing, even if such assessments are made by major auditors and analysts.

In effect, our proposal implies that the audit, accounting and ratings system reform must be based on a reversion to the fundamental asset value concept. In other words, assessments of each individual business must be based on its ability to generate added value, rather than on subjective concepts. In our opinion, the economy of the future must become an economy of real values. How to achieve this is not so clear-cut. Let us think about it together.

Third. Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future. It is high time we launched a detailed discussion of methods to facilitate a smooth and irreversible switchover to the new model.

Fourth. Most nations convert their international reserves into foreign currencies and must therefore be convinced that they are reliable. Those issuing reserve and accounting currencies are objectively interested in their use by other states.

This highlights mutual interests and interdependence.

Consequently, it is important that reserve currency issuers must implement more open monetary policies. Moreover, these nations must pledge to abide by internationally recognised rules of macroeconomic and financial discipline. In our opinion, this demand is not excessive.

At the same time, the global financial system is not the only element in need of reforms. We are facing a much broader range of problems.

This means that a system based on cooperation between several major centres must replace the obsolete unipolar world concept.

We must strengthen the system of global regulators based on international law and a system of multilateral agreements in order to prevent chaos and unpredictability in such a multipolar world. Consequently, it is very important that we reassess the role of leading international organisations and institutions.

I am convinced that we can build a more equitable and efficient global economic system. But it is impossible to create a detailed plan at this event today.

It is clear, however, that every nation must have guaranteed access to vital resources, new technology and development sources. What we need is guarantees that could minimise risks of recurring crises.

Naturally, we must continue to discuss all these issues, including at the G20 meeting in London, which will take place in April.

Putin's Views on Energy Security

Three years ago, at a summit of the Group of Eight, we raised the issue of global energy security. We called for the shared responsibility of suppliers, consumers and transit countries. I think it is time to launch truly effective mechanisms ensuring such responsibility.

The only way to ensure truly global energy security is to form interdependence, including a swap of assets, without any discrimination or dual standards. It is such interdependence that generates real mutual responsibility.

Unfortunately, the existing Energy Charter has failed to become a working instrument able to regulate emerging problems.

I propose we start laying down a new international legal framework for energy security. Implementation of our initiative could play a political role comparable to the treaty establishing the European Coal and Steel Community. That is to say, consumers and producers would finally be bound into a real single energy partnership based on clear-cut legal foundations.

Every one of us realises that sharp and unpredictable fluctuations of energy prices are a colossal destabilising factor in the global economy. Today's landslide fall of prices will lead to a growth in the consumption of resources.

On the one hand, investments in energy saving and alternative sources of energy will be curtailed. On the other, less money will be invested in oil production, which will result in its inevitable downturn. Which, in the final analysis, will escalate into another fit of uncontrolled price growth and a new crisis.

It is necessary to return to a balanced price based on an equilibrium between supply and demand, to strip pricing of a speculative element generated by many derivative financial instruments.

To guarantee the transit of energy resources remains a challenge. There are two ways of tackling it, and both must be used.

The first is to go over to generally recognised market principles of fixing tariffs on transit services. They can be recorded in international legal documents.

The second is to develop and diversify the routes of energy transportation. We have been working long and hard along these lines.

In the past few years alone, we have implemented such projects as the Yamal-Europe and Blue Stream gas pipelines. Experience has proved their urgency and relevance.

I am convinced that such projects as South Stream and North Stream are equally needed for Europe's energy security. Their total estimated capacity is something like 85 billion cubic meters of gas a year.

Gazprom, together with its partners – Shell, Mitsui and Mitsubishi – will soon launch capacities for liquefying and transporting natural gas produced in the Sakhalin area. And that is also Russia's contribution to global energy security.

We are developing the infrastructure of our oil pipelines. The first section of the Baltic Pipeline System (BPS) has already been completed. BPS-1 supplies up to 75 million tonnes of oil a year. It does this direct to consumers – via our ports on the Baltic Sea. Transit risks are completely eliminated in this way. Work is currently under way to design and build BPS-2 (its throughput capacity is 50 million tonnes of oil a year.

We intend to build transport infrastructure in all directions. The first stage of the pipeline system Eastern Siberia – Pacific Ocean is in the final stage. Its terminal point will be a new oil port in Kozmina Bay and an oil refinery in the Vladivostok area. In the future a gas pipeline will be laid parallel to the oil pipeline, towards the Pacific and China.

Also, with respect to Russia's internal efforts related to energy security:

A promising area for joint efforts could be the sphere of energy saving. We see higher energy efficiency as one of the key factors for energy security and future development.

We will continue reforms in our energy industry. Adoption of a new system of internal pricing based on economically justified tariffs. This is important, including for encouraging energy saving. We will continue our policy of openness to foreign investments.

Putin's Final Comments

Ladies and gentlemen, the international community is facing a host of extremely complicated problems, which might seem overpowering at times. But, a journey of thousand miles begins with a single step, as the proverb goes.

We must seek foothold relying on the moral values that have ensured the progress of our civilisation. Integrity and hard work, responsibility and self-confidence will eventually lead us to success.

We should not despair. This crisis can and must be fought, also by pooling our intellectual, moral and material resources.

This kind of consolidation of effort is impossible without mutual trust, not only between business operators, but primarily between nations.

Therefore, finding this mutual trust is a key goal we should concentrate on now.

Trust and solidarity are key to overcoming the current problems and avoiding more shocks, to reaching prosperity and welfare in this new century.

Thank you.

It's a bizarre world. A world that seems turned on its head. Who would have thought it, that two of the key speeches at Davos came from representatives of the of Russia and China?

Where was the West? Where was the USA?

What was Putin saying? He said quite a lot. He seemed to be saying that the age of the American Empire is coming to an end and along with it the rule of the dollar as the world's reserve currancy. Putin also called into question the entire structure of the 'imperial tribute' system whereby the United States sucks capital out of the rest of the world by printing money and over-valued government bonds. The United States is effectively printing 'debt' and not anyting of real value. The world supplies the US with resources, for example oil, and consumer goods, and in return they get 'paper' or 'debt' which is dramatically over-valued. This system has to come to an orderly conclusion, not a collapse which could damage the entire world economy.

OK this is an interpretation of what I think Putin was getting at, and he isn't alone in thinking along these lines. Everyone seems to know the US is broke, yet it hasn't sunk in yet in the United States. This is probably why the financial elite are in the process of robbing the treasury of whatever's left of value, before this realisation spreads.

While much of what he says maybe right, Putin is the wrong person to say it. When it comes from russia it smacks of "market economies are bad, communism and central planning good" and "please set a floor under our major exports so we can reap the rewards".

To make headway such sentiments would have to come from a different commentator. I'll guess that russia was the only country to have these views and that they were ignored because of it.

Politics is a game where who says it is as important as what is said.


I agree, only Putin isn't a communist, and the communists are not in power in Russia. The communists are the opposition today. The Communists are highly critical of the policies of the present regime. Putin is first and formost, seen from a Russian perspective, a patriot, who believes in putting the interests of 'Mother Russia' first. In Russia he's popular because he is perceived to be the man who saved the country from anarchy and collapse, and that he statbilised the situtation and then reversed the slide towards chaos.

Putin's views are ignored, because they are correct, everyone knows this, only Western leaders aren't allowed to say such things in public because they are inside the US sphere of influence, whilst Putin and Russia are not and therefore have the ability to have independent veiws. I'd like a Western leader to be as honest as Putin, only that's impossible as they are vassal states, with vassal leaders.

Not really saying he is. However the mindset of central control rather than free market lives on - its part of his world view learnt in the past, he seeks to put things within his direct control.

Now actually I think that might be the future in a larger measure than it currently is; but the people he's talking to are free-marketists through and through. To them they will hear 'communism' and ignore the rest. Hence why he needed to get someone else to present it if he wanted it to be taken seriously.

As for western leaders being vassals to the US - you haven't been paying much attention to the views expressed, both over the last 8 years and the preceeding 3 decades, have you? The US is viewed as something of the big dumb kid at school - useful, but you wouldn't ask him to do your homework. They don't say that openly of course, but its there in the actions and in the words they chose to use.

Well said.

Fortunately I have a couple of exile Russian friends mathematicians as I am.
Although they are Yeltzin-Oligarch-refugees and are US, Canada, citizens they travel Russia frequently.
I think they have a more precise view of Putin's Russia.
The best notion to describe Putin's Russia
is "Mafia- alike Kremlin-Officials-Oligarch entanglement".
It has nothing to do with communism.
There is a saying in Moscow "he (Putin)
bails out the Armanis".
The wealth of those super rich Oligarchs
is due to a Ponzi scheme.
A developed economy can get some scratches from one Madoff and one Enron
but an undeveloped economy cannot grow up with only Madoffs and only Enrons.
The Oligarch bailout of Rub 200 bn was immediately exchanged to USD and in 30 year US treasuries.
A significant portion of toxic papers European banks hold are not bundled subprimes but Russian shares deposited as securities for loans in Euros and USD. Of course the loans are not repaid and UBS, Deutsche Bank etc. sit on valueless Vympelcom, Norilsk Nickel etc. stocks.
Now as ever fewer Russians can afford medicare - in communism it was free - and as food prices skyrocket - in communism the basic goods' prices were capped- there is another saying in Moscow
"Putin is Bush by another name"

Interesting observations! I had heard before that Europe had a lot of bad emerging market loans, but I hadn't really connected that with Russia. I am sure they have some from elsewhere as well.

This is a classic case of foreign currency risk. Europe has bad emerging market loans in the same way as other "reserve" currencies, i.e. when a business or oilgarch or even Joe Schmoe in an emerging market say Estonia, Latvia etc wants to borrow money they often cannot do so from local banks in local currency therefore they borrow in USD, EUR, GBP, JPY... Whilst the economy is booming everything is fine and dandy but when say the demand for raw materials they are exporting declines along with the price and the currency then all of a sudden they have a problem. The cheap foreign currency loans they took out are no longer cheap and if they are short term they have to be repaid and how are they going to be able to refinance the loans when banks are retrenching.

So, e.g. the European banks find themselves with lots of loans (assets in their books) that are not being repaid. This is particularly problematical where the banks have bought up local emarging market banks and expanded their lending in their home currency, e.g. Swedish banks expanding into the Baltic states and pushing mortgages in EUR.

Similarly in Japan "Mrs. Watanabe" has borrowed JPY at low interest rates and invested in higher yielding bonds denominated in foreign currencies (Uridashi bonds). All of a sudden, oops, the JPY goes up the Aussie dollar, South African Rand.. goes down and "Mrs. Watanabe" is looking at a loss.

It's the same everywhere really. The big banks and corporations get the bailouts at the expense of taxpayers.
The free markets are a hoax. They do not exist, not even in the West. Its the same CORPGOV all over the globe.

But at least Putin tells the truth sometimes.

garyp, it quite clear that you have NOT READ the speech.

I disagree. Who should have said something like this? Russia is not communist. Putin is not ... reading down I see garyp makes the same point. Obama did not attend and sent no representative of any kind (afaik.) Merkel (Germany) maybe? Moreover, I interpret Putin as implying that labelling and divisiveness get in the way of problem solving.

His speech was extremely well received on the spot and all the EU press I saw (I read a lot it) was laudatory, and not just in the usual puff-piece way. Some ignored it of course.

Chinese leaders often make interesting speeches as well.


I understand Putin got a standing ovation. That raises the question as to whether other folks were thinking some of the same things.

Writerman, I think your analysis of Putin is spot on and Putin's comments on the financial crisis are among the most intelligent and constructive I have heard from any politician from any nation. Unless capitalism can be reformed globally and be put under proper regulation then its days are numbered.

The thing I find interesting is that there is so much discussion amongst the very top levels of leadership of important nations about de-throning the US dollar as the global reserve currency, and hardly a whisper about this amongst US domestic public policy discourse.

I would draw one of two possible conclusions from this observation:

1) Maybe the foreign talk is just that, talk. The US PTB and most of the talking heads on the news programs know this and are thus not concerned.


2) It isn't just talk, this is real and probably will happen, probably suddenly, and there isn't much of anything left that the US can do to prevent it. Thus the mad scramble among US power elites to scarf up as much from the public feeding trough while they can, to diddle the tax man, creditors, shareholders, pensioners, the general non-elite public in any way they can, and to not worry very much about long term projections or consequences of actions - short term survival is all they are focused upon. All while keeping hush-hush and not alerting the plebians to the coming catastrophe, lest they panic and spoil the last opportunities of the elites for their share of the spoils.

The second option sounds a little too conspiratorial for my tastes. However, the nagging thought does present itself: if something catastrophic was on its way and could not be prevented, if only those with advance knowledge could protect themselves, and if revealing this knowledge to everyone would foreclose one's opportunity to protect oneself, would anyone in the know actually reveal the truth in advance? Might it be that the greed and corruption and selfishness and rot are so widespread amongst the power elites that there remains no one left that would put the welfare of the public ahead of their own personal interests?

I also wonder if people like Putin or Hu would bother making speeches calling for scrapping the US$ reserve currency monopoly at a high profile place like Davos unless they really meant it?

The answer is 2)

As for "revealing this knowledge" that is the part you don't get. All of the present and pending nasty things were "revealed" long ago, but the revelations were lost in the noise. Hubbert on PBS TV 1976:


As for pure fiat currencies, I recently read that over 3k of them have failed. Typical lifespan of a fiat currency is 30 -40 years. The fiat US dollar will turn 38 this year. Expecting the fiat US dollar to go on indefinitely is incredibly naive. Expecting it to fail in the reasonably near future is the common sense conservative assumption. There is nothing special about federal reserve notes or their electronic equivalents.

Dr. Hubbert handed over a copy of the following, which was the subject of a seminar he taught, or participated in, at MIT Energy Laboratory on Sept 30, 1981:

"The world's present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of matter and energy; and the associated monetary culture which has evloved from folkways of prehistoric origin.

"The first of these two systems has been responsible for the spectacular rise, principally during the last two centuries, of the present industrial system and is essential for its continuance. The second, an inheritance from the prescientific past, operates by rules of its own having little in common with those of the matter-energy system. Nevertheless, the monetary system, by means of a loose coupling, exercises a general control over the matter-energy system upon which it is super[im]posed.

"Despite their inherent incompatibilities, these two systems during the last two centuries have had one fundamental characteristic in common, namely, exponential growth, which has made a reasonably stable coexistence possible. But, for various reasons, it is impossible for the matter-energy system to sustain exponential growth for more than a few tens of doublings, and this phase is by now almost over. The monetary system has no such constraints, and, according to one of its most fundamental rules, it must continue to grow by compound interest. This disparity between a monetary system which continues to grow exponentially and a physical system which is unable to do so leads to an increase with time in the ratio of money to the output of the physical system. This manifests itself as price inflation. A monetary alternative corresponding to a zero physical growth rate would be a zero interest rate. The result in either case would be large-scale financial instability."

Likewise, many, many people in the know have "revealed" a great deal about the extreme unpleasantness in the big apple at the end of summer 2001. But because what they revealed is "a little too conspiratorial for my tastes", the majority of the population continues to ignore it.

There are no secrets, only willful ignorance and denial.

The vslue of fiat money is determined by credit in its ( future ) value.
The construction of fiat money is as such that it is a map of a model of a economy
or of a simulated economy.
Both imply instability or "chaotic behavior" must inevitably occur.
Theory is nice but the vital question is
what is if any the alternative?

what is if any the alternative?

At best some sort of paper/electronic currency supposedly backed by something which exists in the physical world. After the German hyperinflation, they introduced new marks "backed" by real estate. This restored confidence for awhile.

Convertibility with any commodity, or basket of commodities would work as well.

Idealists have suggested a labour backed currency, but none has ever functioned. This would require an agreement of a fixed exchange rate between different sorts of labour.

In Latin America the norm is to periodically knock a few zeros off the fiat unit and promise to manage the "new" fiat unit more responsibly. This hasn't worked well because confidence is seldom restored and savers used (then) more reputable foreign "reserve" fiat units.

That is what is probably going to happen on a global basis. We will be offered a new fiat unit with a new marketing campaign. People will accept it as they will have no external alternative to flee to.

It is hard to figure out how money will work in the future, because the world will have less and less, as time goes on. If there is a fixed amount of currency, each dollar (or other unit of measure) will be worth less, the longer you hold it. Theoretically the system will eventually reach a steady state, once it stops declining and gets back to a fully renewable level, but that is still a long way away.

For the period of decline, we should ideally have a currency that expires. You use it or lose it--like a crop you have harvested.

Whether the economy is declining or has already reached steady state, the idea of using debt to create money really doesn't make sense in the future, because it becomes too difficult to repay long-term debt with interest. There can be some debt to facilitate transactions, but not a fractional reserve banking system.

Perhaps a commodity based system would work again. Perhaps gas ration coupons could be used as currency, for example.

"a currency that expires"

Wasn't that a central aspect of the Swiss Local currency (name?) that developed during WWII? A gradual devaluation?

It also sounds as sensible and inevitable (albeit disappointing) as Thermodynamics.. which revives the question for me of having a currency based on joules.

"When you've eliminated the impossible, all that remains, however unlikely, is the truth." Sherlock Holmes

Hubbert's early writing was about the use of an energy based monetary system, when he was associated with the Technocratic Movement. The notion of using rationing coupons as "money" misses the fact that the quantity being rationed is a flow variable, not a commodity which would have some fixed valuation, such as gold or real estate. Many people think of using money as a fixed store of "value", such as the dollars in a bank account. This turns out to be a false assumption due to the impact of inflation over time in that the store of "money" can not be converted to hard assets at the same ratio over time. All this is execrated by the corrosive effects of un-regulated growth in leverage which is made possible by using a fiat currency, such as the dollar has become.

E. Swanson

Once the rationing coupon was used to buy gasoline, it would be permanently gone. It would be only if there were enough additional gasoline pumped that more coupons could be issued. It might need an expiration date, but it would be tied to specifically available gasoline.

The United States, from my perspective, isn't really a functioning democracy at all. It has democractic traits, but I think it's more accurately described as a form of oligarchy, with economic power, which is arguably the most important form of power, concentrated in the hands of a tiny group of 'aristocratic' families and individuals.

For example, yesterday I was reading an article about some statistics provided by the Internal Revenue Service on the distribution of incomes in the United States. The numbers are from 2006. The 400 richest Americans had a combined income of 105 billion dollars. They paid only 18 billion in taxes on this collosal sum. The magazine Forbes estimated that this same mega-rich group had a total wealth in excess of 1.57 trillion dollars, which I think might be considerably larger than all of Africa! Underneath the mega-rich is the layer of the merely super-rich. They represent a few percent of the total population of the United States, yet they probably own more than 40% of the nation's wealth.

These ratios are not too different from classic fuedal societies, and resemble pre-revolutionary France, where a fabulously wealthy elite existed in virtual parallel society compared to the vast social pyramid that supported them with their labour and sweat.

What characterises the American aristocracy today? Are they really all that different from the French aristocracy and will they suffer the same fate?

In some respects, the fate of the american aristocracy will probably be quite similar to what happened to the french aristocracy.
One thing is quite different this time though. No peasants. Only 1 % work in agriculture.
The second american revolution will be unlike anything we have seen before, even though all of the aspects of the coming catastrophe will have echoes in history.
All urban cultures can be certain of one thing: hunger is around the corner.
There will be hitches in the food delivery system.

People will seek to sell, and buy protection. This will undermine nation states, which will erode into localized protection rackets, protecting and controlling mostly food and whatever juice is left through extant weaponry.

After the first big die-off, things will be just peachy, for a while.

Then global warning will strike us with furious vengeance, and leave whoever is left gasping for air.

If in the meantime, some maniac decides to perform some major climate-stabilizing magic on poor old, used and abused earth, we can only hope some far too smart creature evolved from current rats (or cockroaches) could find some evidence of what we did, in the geological remains of some 60 million years in the future.

2) It isn't just talk, this is real and probably will happen, probably suddenly, and there isn't much of anything left that the US can do to prevent it....

I'm no expert at all, but I would guess that this is probably the case. The US dollar gets 2 huge subsidies at the expense of the rest of the world. First is its prevalent use as the primary reserve currency and second is its use as the pricing and payment currency for oil. These two facts create a baseline demand for the dollar that tends to support it, allowing the government to make borrowing/spending decisions that would be otherwise not be possible. This advantage basically comes at the expense of the world's other currencies. Lots of countries have been whining about this for a while (most notable of late have been France and China). Putin's remarks certainly seem to indicate that Russia is now firmly in that camp as well. I think that it's just a matter of time before currency reserves are more widely distributed among dollars and euros (assuming, of course, that the euro actually survives the current financial/banking crisis that is rampant in the EU).

Interesting questions would be... To what extent do countries flee the dollar as a reserve? What is the net effect of this process, relative to the supporting demand "subsidy" the dollar gets? What effect does this have on monetary/fiscal policy in the US, specifically on dollar value and debt financing?

Another interesting question is whether support will also build for non-dollar denominated oil pricing. If so, will the US/Saudi connection hold strong enough to maintain dollar pricing?


Its definitely 2)

This is not a secret or a conspiracy, however. It is happening already. It doesnt happen in an overly overt manner, because while many countries are trying to reduce their exposure to the dollar, everyone is afraid of a run on the dollar if they pull out of it too fast. With many countries holding such enourmous quantities of dollars, they have a great interest in keeping the price of it up to protect their investment. So I think the situation right now is that they *wish* they had their reserves in another currencies, but they can not do much about it at the moment.
If it became public that f.i. China was selling its dollar holdings, the dollar would most likely crash immediately and no one wants that.

"would anyone in the know actually reveal the truth in advance? "
This is really public knowledge: it is beeing "revealed" all the time in the media and even the swiss Bank of International Settlements (who facilitates exchanges between central banks) warns about a dollar collapse repeatedly since some years already:
"The BIS is saying you can’t completely rule out a disorderly decline in the dollar " (http://www.worldcurrencywatch.com/2008/06/30/the-dollar-was-just-dissed-...)

" probably will happen, probably suddenly,"
Well, since last year the whole world is trying like mad to make it happen not suddenly, but rather in a less catastrophic fashion. Nobody knows if that will succed, however.

Here is anothe interesting read on the subject: http://www.scribd.com/doc/9488949/Hyper-Inflation-Book

Here is another Statement from the BIS. Its been written in 2003(!) and it already warns of everything that has been happening in the last two years:

The global effect of the US treasury defaulting on US treasuries can be in magnitude compared to dropping of some ten
megaton hydrogen bombs concurrently. Magnitude refers to number of victims.
The footprint of the USD is just too large. Russian ruble as a reserve currency... hum Belarus and Russia indeed have ruble as trade currency but not in general. And no one else especially not China despite of numerous efforts of Czar Putin and his suitcase attendant Medvedev.
Every Russian who can count up to 3 in the proper sequence has cash savings in USD Euro and CHF but not in rubles.

All world currencies have their problems. Not just rubles.

That being said Euro is looking like a viable candidate to replace USD.
Even though it cannot be replaced completely as a reserve currency, a very significant diversification of assets will take place. And is taking place right now.

The US treasury doesn't need to default on its treasuries. The FED has publicly announced the use of "quantitive easing" as one of its policy instruments, and part of that is buying up treasuries. So if no one wants to buy US treasuries anymore, the FED will stand ready to buy government debt with dollars it has just printed. Printing money on such a large scale sooner or later leads to hyperinflation. Hyperinflation and the accompanying strong devaluation of the dollar against other currencies is a much more likely outcome. The US doesn't need to default on its debt, as it is denominated in a currency it can produce itself. Think the Weimar Republic in the twenties.

Thanks for the posting, interesting reading for sure. Russia is in the typical energy producing country corner, potentially with very big issues and problems given the decrease in oil and gas prices.


Thank you. That's an interesting quote from Hubbert. An interesting perspective. It's also, and I'm not sure I should say this, arguably one of the central tenets of Karl Marx's analysis of the inherent contradictions and structural problems at the core of the capitalist system and why it's so unstable and subject to periodic upheavals, also known as boom and bust.


Thank you. That's an interesting quote from Hubbert. An interesting perspective. It's also, and I'm not sure I should say this, arguably one of the central tenets of Karl Marx's analysis of the inherent contradictions and structural problems at the core of the capitalist system and why it's so unstable and subject to periodic upheavals, also known as boom and bust.

Yes and no. Marx was talking about the cyclical phenomenon of the credit/investment cycle. Similar to the snowshoe hare/lynx population cycles in ecology. Declines are followed by recoveries back to the previous state.

Hubbert was talking about the fossil fuel age as a brief one off phenomenon in human history. From Hubbert's point of view, the whole 1750 - 2000 era was an extended period of exponential economic growth. Little blips like the panic of 1873, panic of 1907 or great depression were unimportant. What he was predicting to occur post peak oil we now more commonly call collapse. No recovery to the previous state is possible.

What Hubbert is saying is basically what I have been saying. As long as we have exponential growth, the current monetary system can stay together. Once we hit peak oil, that exponential growth stops, and the system becomes very unstable. Even before peak oil, there was massive issuance of debt, trying to disguise the slowdown in growth. We are now at the point in history where a huge amount of debt needs to unwind, because exponential growth has stopped. This is the reason for all of our financial problems.

It seems to me that there is a significant chance most of the world will need to develop new monetary systems. The political situation will become very fluid if this is the case--revolution and new political orders often go with major currency problems. I can imagine the borders of some countries will be redrawn. I would expect foreign trade to drop greatly, because of lack of trust for other currencies, and because of a desire to develop jobs locally.

I expect that the downside of the oil curve will be much steeper than the upside--partly because we are to some extent in overshoot with respect to production, because of all of the debt that has been available, and partly because big fields and little fields are now depleting simultaneously, with little resources available for further exploration. On a per capita basis, depletion will be steeper yet, because of our current large population.

The US does not need or buy anything from Russia.
Why do we care about what Putin says at Davos?
He can switch Russia to whatever currency he desires because the ruble is no good.
The financial collapse of the Soviet Union did nothing for his knowledge.
Now he tells us how to manage a financial issue?????

The US does not need or buy anything from Russia.
Europe does. It's called energy. Europe is important to American vested interests, as is global energy supply.

Why do we care about what Putin says at Davos?
Anyone who leads a country of 140 million people is someone of note. Besides, we often can learn more from listening carefully to our opponents (former enemies or otherwise) than sometimes even our friends. While it would be naive to expect an entirely honest or sympathetic assessment, there is reduced risk of sycophancy or like-minded thinking impairing the judgment.

He can switch Russia to whatever currency he desires because the ruble is no good.
What is true of the ruble today may be true of the dollar tomorrow. Don't step on the hands of those who are lower down on the ladder just in case you need their help when you slip on the rungs. Moreover, a poorer Russia is not in the U.S. or anybody else's interest.

The financial collapse of the Soviet Union did nothing for his knowledge.
Are you sure about that? I don't like him (he's a thug), but he is a smart cookie. I would caution anybody not to underestimate his expertise or experience.

Now he tells us how to manage a financial issue?????
The Russians have been there, done that, bought the teeshirt. They were the last superpower to go down. Those who don't learn from history are condemned to repeat it.

IMO and this opinion is shared by my Russian exile friends the Brzezinsky plan
is still at work and makes good progress.
The only valid statement that consistently and completely explains the
"Russian miracle" reads
"The FED giveth, and the FED taketh".
Without the easy credit row that started basically after WWII Russian Oligarchs
would today ride a bike and at night they would steal potatoes and vodka from peasants and sell that on black markets.
Because the commodity bubble had not happened without FED and IMF controlled excess liquidity.
Now it is the FED's turn to take.
Russia under Putin made no efforts at all
to establish a self sustaining industry.
To this day Russia has to import even nuts and bolts.
At the culmination point of USSR the soviet union was the leader in pure and applied mathematics.
Today those once famous universities are junk yards. Education industrial and craftsman apprenticeship what the heck is that? We have the energy resources the rest of the world has to buy from us at the price that we fix!
In simple words Putin giving lessons on economy compares to Bush giving lessons
on politics of enduring peace.

Europe needs to free itself from Russian energy dependence.
Indonesia has more people than Russia, and is it of note?
The Dollar may go down, but Putin can make his own choices about his currency.
Putin is smart and pretends to care about others, but is self-serving.
Russians have been there, done that, and are not doing so well in their recovery.
When he speaks, he sounds like an arrogant know it all.
He just wants the US to go down, so he can rule the world.
The sad fact is that it could actually happen.

"Putin is smart and pretends to care about others, but is self-serving."


"Why do we care about what Putin says at Davos?"

Umm, maybe because some of what he says is true?

...but he is a smart cookie. I would caution anybody not to underestimate his expertise or experience.

That's what struck me. There are few if any on the world stage with a sharper mind. I too don't day that out of sympathy.

It is a very telliing sign that speeches like this can now be given at Davos. US leaders find themselves ever more on the receiving end of lectures.

They are desperate for cash, and will offer their shirt for a short-term reprieve:

Gazprom to Offer Puts on Bonds
Gazprom will offer put options for the first time on 15 billion rubles ($414 million) of bonds, giving investors the right to demand repayment before the notes come due.
The new issue market for ruble bonds has been all but shut to Russian companies since August as the currency declined 35 percent versus the dollar and investors shunned the securities as the economy weakened. Put options, introduced to lure investors to corporate bonds after Russia's 1998 default, have forced companies to offer investors higher returns or face redemptions.


наличные деньги король, нет?
[cash is king, no?]

Putin was brutally frank and tactful simultaneously; the speech was masterful. To puff up the American Exceptionalism and denigrate Putin and Russia is a very big mistake, but expected. Putin was correct on most every point; and for those able to notice, his speech was directed at a European audience. His point about not needing to citicize the USA, just look at the results ought to have made every US citizen cringe, for the facts speak for themselves. His is the first articulation by a "first" world leader about the need for a new economic paradigm, and the added fact that the new paradigm is required to solve the current crisis (Chavez, Castro, Morales, Da Silva, and others have also made similar suggestions). Lastly, his call for cooperation and cooperative ventures on a global scale was very refreshing, as was his renewed commitment to demilitaization, which are far to the left of anything Obama has said.

Geopolitically and ecologically, Europe's future is with Asia, and Africa's future is with Eurasia. The Americas will have themselves. There will still be intercontinental trade, but not in the frivolous goods of a consumeristic economic paradigm. Putin is certainly aware of the crises confronting humanity--he specifically uses crisis often--which likely sparked his candor. The time is overdue for a great change in direction. Putin has provided excellent suggestions and offered Russia's cooperation in facilitating such a change--change lightyears beyond Obama's advisors's notions.

If Putin's speech is able to overcome the Propaganda System, it ought to spark many conversations.

I don't see anyone denigrating Putin here - IMO he's smart and ruthless, and a real patriot.

Unfortunately, Putin's asking for demilitarization may very well look like weakness to the US interests, inviting a reenactment of the Reagan years' arms race/strip poker. It worked out for the US in the eighties - Russia folded, but good. Now it looks like the same beggar-thy-neighbor game is being played out on the economic stage, and the ruble hasn't got a chance against the greenback.

But the hackneyed "frivolous goods of a consumeristic economic paradigm" criticisms of Americans are trite propaganda - you really need to listen to Professor Warren:

I'm simplifying a lot here, but, having read all of Putin's speech at Davos, which contains a lot of interesting points, one is struck by how conservative his analyis really is, especially of the causes of the current economic crisis.

He seems to be saying that the roots of the crisis are to be found in the disparity between nations, like the United States, that consume more than they produce, print money and suck more of the world's resources than their economies 'entitle' them to. Then there are the nations who produce a 'surplus' which they don't enjoy because the US swallows it all, one way or another. Putin appears to believe on needs to re-balance the world's economy again and everything will be fine, eventually.

For him, and this is widespread attitude, the United States needs to tighten its belt and live within its means, without plunging the entire world into a Great Depression.

But there might be a more 'radical' alternative to Putin's 'conservative' view. Putin doesn't believe that there is anything fundamentally flawed in the entire capitalist model, a structural crack. Essential Putin is calling for reforms of the current capitalist system to make it function optimally and that the United States is in danger of destabilizing the entire basis of free-market capitalism; competition, moral hazard, responsibility, incentives... by intervening to support inefficiency and incompetence, trying to save, what in reality, should be allowed to fall, because otherwise we undermine the very structure of capitalism itself. Putin is asking the United States to live by and let the rules of capitalism rule! He even referred to the experience of the Soviet Union that destroyed competition and Russia paid a decades long price for this mistake, and that the US would be ill-advised to go down the same route.

But what it Putin is wrong? What if the capitalist system itself is the problem and reforms won't work this time around? This is a massive subject to bring up, and I'm half-regretting it already!

The imbalance isn't really between the USA and the rest of the world, it may be an imbalance inherent in the structure of capitalism itself, a world-wide problem, only in countries like the US and the UK, because they have followed such extreme neo-liberal economic policies for decades, the results of the 'sickness' have become apparent first.

Basically both the US and UK have turned their economies upside down over the last few decades, undermining their industrial base and inflating their financial/capital sectors out of all proportion to the value of what they were actually producing. Simply put this was because one discovered that one could create massively vaster profits by 'producing' capital/debt, rather than things. So the illusory economy took off for the stratosphere, leaving the old-fashioned, real economy to languish back on earth.

Now, of course, the entire speculative, fragile, edifice of cards, held together by 'confidence' and collosal fruad, is collapsing, with untold consequences to follow, maybe even war. War the traditional capitalist way of restoring 'balance' and clearing the ground for new growth. War as a form of gigantic fire-sale.

Putin's analysis is good, as far as it goes. For me, the really important question is, is there an in-built 'self-destruct mechanism' contained in the dna of capitalism, and if there is, how does one go about reforming such a system, based on infinite growth on a finite planet?


As a US citizen your analysis did anger me. But only because, on balance, it does seem to capture well the nature of our current problems. I also agree that Putin's analysis, while obviously self serving. is valid. And capitalism, at least how it is practiced in the US, may have a built-in "self-destruct mechanism" if, for no other reason, due to unsustainability. I'm sure many here will respond to your "reforming such a system" proposition. But I'll chance to say that the folks at TOD are quit different then the average US citizen. IMO, do not wait for us to change our methods here. We, collectively, do not have that level of sacrifice for the rest of the world. We will do what ever it takes to salvage BAU. A rather nasty commentary on my fellow citizens but one that has been confirmed by our history at every turn in the last 50 years at least.

Putin fosters mercantilism. Mercantilism
is often confused with capitalism.
Gazprom Norilsk Lukoil Rusal etc etc are
mercantilists they operate in the style of United Fruit Co.
Mercantilism is beneficial for those who have something to sell that they don't need to produce with added value.
Like bananas. Or nat gas.
Mercantilism however subdues another product which is not material: ideas.
Ideas in general problems and their solutions pertain to the domain of intellectual products.

Insofar , mercantilists are parasites.

Only a theoretical, a simulating model of
capitalism can make real money profits out if not_material not_things, intellectual products. Real capitalism
is not perfectly mapped by simulation.

I am not sure that I understand what you mean when you call sellers of commodities parasites. Work has to be done to extract oil and gas from the earth and to transport it to end users. Expecting to be rewarded for that work is not parasitism. Of course some people are more highly rewarded than others because of the phenomenon of economic rent. The price of a commodity is determined by the most marginal productions process that can still make a profit given the current demand for the commodity. So the price of oil is determined by the smallest, hardest to develop oil fields that somone can eek a profit out of. People who are exploiting oil fields which require less effort to exploit gain higher profits relative to the work they are doing. I am not sure that this phenomenon is parasitism, though I agree that it is not fair.

Furthermore, I am not sure that the situation is really that different with respect to intellecual work either. Almost no one invents new technology ex nihilo. All of the developments in electronics since WWII have been build on the backs of the great scientists of the last three centuries who have laid the foundations of modern chemistry and physics. Is some company who comes up with with a new spin on some electronics design and ends up making many millions of dollars through intellectual property rights really any less a parasite than people mining deposits in the earth which they did not create? Is ownership of intellectual property really any more fair than ownership to the earth's resources?

Firstly the idea to forward is on the difference between capitalism and mercantilism.
No theory, just an example.
Imagine a fisherman , somewhere near Timbuktu. He crafted his equipment the rowing boat the net etc. all by himself
and he does the maintenance.
Provided he sells all fish he catches
how is the price determined, in particular
what is the price of the fish as percentage of the sales price?

Industrial metals, oil, nat gas cannot cost more than the added value that can be generated by industrial use of the raw commodity.
Every price above is paid in debt, or not returnable credit then, if the total units of work that creates added value
remains constant.
Or oil demand is an almost linear function
of GDP, oil price must be capped by GDP.
So insofar mercantilists are parasites then, if they do not follow this rule and demand higher prices.
Then they are partly paid in hot air and that is what the "economist" Putin is lamenting about .

I do not understand what distinction you are making. In the current economic system, everyone demands as high price as they can, not just the producers of commodities. The price that any product anywhere along the supply chain can command depends on the use value placed on final products in the hands of the consumer. In a wealthy economy you can sell cutting edge toys like cell phones, MP3 players, HDTVs, etc. for enormous profits, while commodity products like computer disk drives for desktop computers have paper thin profit margins. This difference in profitability does not mean that cell phone makers work any harder than the makers of computer disk drives.

If our economy declines to the point where the majority of people are struggling to put food on the table and keep warm at night then the manfacturers of electronic toys will go down hard no matter how brilliant their engineering may be.

I used to work in the disk drive division of IBM in the day when we sold refrigerator size disk drives for more than $100,000 apiece. We made money hand over fist in those days. Now profit margins are low and competiton is fierce. I miss the good old days, but I realize that miniaturization and high volume manufacturing has changed the technology forever.

The situation with oil and natural gas is quite different. A new, cheaper, better option is not available. Putin is undoubtedly self interested in desiring stable high oil prices, but I think he has a valid point that on the downslope of oil/gas production curve huge oscillations in demand/price can create economic chaos.

The distinction is in example above the fisherman is paid for his work the fish itself costs nothing.
So the price is determined by price of units of work/ number of fish caught.

According to German Gref, shortly before
he was fired by Putin, the productivity
in Russia is at best at the level of Botswana.
This is a consequence of Putin's strong pro-Oligarch politics that leads to lack of competition, innovation etc. a lack of items or economical dimensions which in totality make a working economy.
Thus the price of oil and nat gas Putn demands is first of all a compensation
for lack of productivity.
Or in harsh words Russian economy is
a Madoff scheme.
A while ago, on the European culture/education TV channel ARTE was a docu about some Swiss farmers who emigrated to Russia to do farming.
They could not buy farmland as that was owned by an Oligarch who however had no intention to do farming. Eventually they got some hardly agrable land.
Next they had to import farming machines
because these are not produced in Russia.
Next they had to import cattle because there is no cattle breeding in Russia.
Interwoven was an almost incredible story
what they had to do to get fertilizer on time.
nevertheless they became succesfull by standard marketing methods, delivering to client's door on demand , and the breakthru came with production of mozarella. A particular sort of soft cheese very popular all over Europe. Also in Russia but imported from Italy.
None of the various dairie oligarchs had ever the idea to produce something the client wants. No wonder as most of them are former members of communist Politburo.

Putin has had plenty of time and plenty of inflow of foreign money to give Russia a self sustaining economy. He didn't.

Thus the old Brzezinsky formula is still valid "as goes oil, so goes Russia".

The west should not bail them out for a second time.

The distinction is in example above the fisherman is paid for his work the fish itself costs nothing. So the price is determined by price of units of work/ number of fish caught.

The oil and gas in the ground cost nothing. There were put there by biological/geological processes. Oil and gas producers are paid for the work of extracting the oil and from the earth and delivering it to customers. I do not see any difference in the two cases. A fishermen who happens to live next to a very rich fish ground will have a big advantage over one who lives near a poorer fishing ground. Incompetent fishermen will have a hard time making a profit. If the Russian oil and gas industry is incompetent then they will also have a hard time making money.

You are worrying about a non-issue. No one is going to agree to a controlled oil trade just to save Putin's rear end. The question is whether, on a global basis, a controlled trade in oil could help to prevent economic chaos during the downslope of oil production. I started thinking about this issue long before I read about Putin's speech at Davos.

Presumably such a trade agreement (I am not really that hopeful that it will come to pass) would be based on inputs from various producers about how much oil they think they could produce at various prices. If Russia comes in last in the class in terms of what kind of output they can offer at a given price then the final agreement would reflect this fact. Furthermore if they could not deliver what they promised they should be economically punished for this failure. Are you cheering for the fastest and most destructive possible decline in global oil production just becaue it will hurt Putin more than anybody else?

No I merely question Putin's qualification
to propose solutions to the economic crisis.
What Putin "should have achieved" is to clean up the mafia- alike power structures that Yeltzin has left. He did not but entered the path of "integration under control".
That has failed. The oligarchs control Putin he became controlably integrated.

That is what I worry about. A nuclear armed Mafia. Russia will become the most dangerous state if the crisis goes on or accelerates into depression.
I am unworried about peak oil and such as I bet and rely on man's inexhaustible ingeniuity to find substitutes on time.

I am unworried about peak oil and such as I bet and rely on man's inexhaustible ingenuity to find substitutes on time.

Thanks for wasting my time. Given your stated belief about humanity's economic future what possible relevance can Putin's 'qualifications' have to to the discussion at hand? If someone publicly declares that the earth is round I would not waste people's time trying to prove the incompetence and self interest of the person involved. I would simply say: "He is wrong." and go about my business.

Another reader who have NOT READ the speech.

Putin's energy nationalism was the answer for the US encirclement by NATO. 4th Generation Warfare is all over today's Earth: financial, economic, energy, cyber and guerilla warfare all over the place. It is part of the game. Putin is trying to snatch Europe from the US. And they need each other badly, but the EU political elites are the puppets of Washington. They may applaud a speech like this, but they will not do anything. At least not yet.

What if the US gave a war and nobody came?

I understand with unemployment so high, military applications are up. I am sure there are people who think that this is a good way to employ those who need jobs.

Now, now Gail. Some of us were able to escape the poverty of our childhood by going "green" (back when being "green" didn't have an environmental connotation). But there was a huge down side to that trend back in the day: it cost the lives of 60,000 of our brothers. There are nights when I do lay awake for a bit wondering how many will be lost in our next "adventure". Most don't realize that this long ago "adventure" also started as a resource war. The French really wanted to regain those rubber and tin resources they lost control over. How often our gov’t starts down one path and ends up in the most unexpected place. It would be comforting to believe that history won’t repeat itself. It really would be…..

When all you have is a hammer everything looks like a nail. If the U.S. doesn't have the numero uno economy, TPTB will look at the military to get BAU. Won't work, but it's always tried.

Probably that's exactly what Putin's worried about.

What Putin doesn't understand is the need for exponential growth to under-pin the current system. Without fossil fuels growing rapidly and pumping up growth, there is no way the current financial (and capitalist) system can work. Paying back long-term debt with interest doesn't work without exponential growth.

The reforms Putin is asking for won't fix the system, because the system depends on growth coming from a plentiful supply of fossil fuels. Without growth, financial systems are likely to collapse.

Up-thread, MicroHydro quotes Hubbert saying this same thing--you need exponential growth to prevent the system from becoming unstable. I keep talking about the subject, including in my forecast for 2008.

GDP drives demand and caps price hence supply must be so that this condition is fulfilled.
A strong support of alternative energies.
In the example above with the Timbuktu fisherman if the Niger should run out of fish the folks must find alternatives no matter what or they starve. Its all very simple.

... one is struck by how conservative his analysis really is, especially of the causes of the current economic crisis.

Spot on. It was an extremely clever speech: Putin is saying what many think and believe in Europe. It is very standard fare, can be heard in the Café du Commerce (informal discussion), can be read on blogs, etc. He thus keeps one step ahead: says outloud, in public, what many are ruminating or whispering but either can’t or don’t state, or do put forward but without having any impact. His position validates the content (and thus his audience!)

In a way, Putin’s speech was that of an ‘expert’ - by expert I mean a public pundit who gets paid handsomely for his or her ‘opinions’ and predictions. To do this successfully, one can’t be radical or innovative, one has to take public opinion and knowledge into account and use it, pick out what is mainstream but not yet stated. Roubini is an example, with his estimations of the debt mountain that get progressively bigger.. It was not the typical speech of a politician, which was appropriate for the Davos venue. He was not there as the PM of Russia, but as himself - a man of power, to be sure. What is interesting is that Obama, for example, had he made a speech, could not have done this, could not have addressed global economics in an ‘honest’ (if cleverly calculated), wide ranging way. (Or only with platitudes.)

I hadn't really thought of it this way.

He of course misses the need for infinite growth, and all of the problems the lack of growth will bring (so his solution will not work), but he is saying what the audience is thinking.

Boiling it down to its essence, Putin is only really saying what the rest of the world thinks about the totally short-sighted, irresponisble and arguably criminal way the ruling elite in the United States has run, (or run into the ground), the US economy and the terrible consequences a collapse could have for the rest of the world. Wall Street's collosal, mind-numbing, immoral, greed; greed beyond sense and reason, criminal greed; risks bringing the entire, global house of cards down around everyones ears.

About USD 3 bn of writedowns at Deutsche Bank in 2008 are Russian Oligarch stocks
once deposited as security for loans to buy European companies' stocks.
The Russian miracle stocks lost 80% since then but the European stocks they bought lost only 30% and of course backed by Putin the Oligarchs did not return margin calls.
Nice windfall profit isn't it?
I really hate it when casino gangsters give lessons on jurisdiction...
and Putin making suggestions to solution of economic crisis of which Russia is
a cause...
as a daytrader since I knew background I bought put options leverage 10 on Deutsche and made wonderful profit.
Thank you Mr. Putin.

It's like being lectured by Don 'I want respect' Corleone(the Godfather).

Of course, the Davos audience claps loudly because they KNOW that
Czar Vlad (the Impaler) has a long memory.
Europe needs renewable energy not Count Dracula.
Think of it as an opportunity, not a crisis.

Yes it is an opportunity as always if "peak" of a ressource nears
and one stands already close with back to the wall ingeniuity tends to overcome mental inertia.
For a while.0
More disastrous peak is peak education. Education systems have already peaked.
Btw. Putin holds Surgutneftegaz shares Gazpromneft shares...so when he meets Bush it is a meeting of two oilmen. Why should one trust any one of these two more than the respective other?

I don't really understand why some posters have the need to get emotional and personalize Putin's speech. It's not as if it's exactly a radical perspective is it? He's just stating the obvious, but then this level of 'honesty' implies that he questions the 'one empire' model so beloved of the American ruling elite.

I don't think Putin's a boy scout, what leader of a great country can be that? Nor do I believe he's Lucifer incarnate. Leaders tend to follow paths that they think will benefit themselves, their countries, those who support them and the people; probably in that order.

Putin's real 'crime' is that under his leadership Russia didn't collapse into total anarchy and disintegrate, which would have allowed foreigners to come in and pick up the pieces at rock bottom prices, but what leader would want that for his own country? Only people with virtually no understanding of Russia would believe that such future, Russia as a colony, would be accepted passively and without resistance.

Putin's "Oligarchistan" at the brink of bankruptcy


Putin's fraudulent Oligarch-Kremlin-Mafia regime will eventually plunge European banks in bankruptcy and cause a severe depression.