Ukraine/Crimea Crisis Harming U.S.,World Economies: WW3, Part 2

posted by Shopping4Bargains @ 9:00 AM
March 14, 2014

Russia-taking-Crimea      Russia’s move yesterday toward over-taking the rest of Ukraine has thrown world economies into a tail-spin––including the billionaire fortunes of its oligarchy.  U.S. stock markets fell several points. They remain nervous today.

Much of the concern is over Russia’s threat on its ‘right’ to invade all of Ukraine in order to “control violence” if Crimean residents vote this Sunday to secede from Ukraine and join the Russian federation.

Secretary of State Kerry’s attempts today to mediate a settlement with Russian Foreign Minister, Sergei Lavrov, failed.  Kerry told the Washington Post: “there will be consequences if Russia does not find a way to change course.” And he said there would be “an even greater response” if Russia were to “threaten the Ukrainian people,” such as by sending forces into eastern Ukraine.

Pointing out that China’s economy is also in down-fall, today’s ‘Investor’s Business Daily’ headlines: “U.S. stocks fell on higher volume Thursday, erasing this year’s gains for the S&P 500, as tensions in Ukraine and weaker data from China overshadowed reports showing an improving American economy.”

Agnes Lovasz of avers: “President Vladimir Putin’s brinkmanship in Ukraine has already cost some of his closest comrades billions of dollars. The other 144 million Russians may also pay a price.”

Lovasz quotes Timothy Ash, chief emerging-market economist at Standard Bank Group Ltd. in London: “Russia will be the big loser of the crisis in Ukraine . . . There’ll be a big hit to domestic and foreign confidence, less investment and likely increased outflows, likely losses for Russian banks with exposure in Ukraine, a weaker ruble and weaker growth and recovery.”
In ‘Putin’s Ukraine Gambit Hurts Economy as Allies Lose Billions, Lovasz points out:  “The tensest standoff with Putin-Obamathe West since the end of the Cold War is exposing the weakness of an economy rebuilt on the back of the energy industry. With oil and gas accounting for more than half of all exports and energy prices stagnant, the growth potential is all but exhausted, prompting officials in Moscow to sound the recession alarm.” But a new economic war is a much louder alarm!

Thus, this whole Ukrainian drama may be to cover up the fact that Russia’s economy is failing, even as those in the rest of Europe and the U.S. recover! However, instead of helping its economy, the ‘war’ in Ukraine may well worsen it.

Karl Henkel on The Detroit News writes today in ‘Ukraine Crisis Makes Carmakers Wary of Russia’:  “The geopolitical struggle over Ukraine could slow growth in Russia’s auto market, which until recently was considered a diamond in the rough . . . but the problems facing [it] aren’t confined to its reaction to the uncertainty over the future of Crimea in the Ukraine.”

As discussed in the last ‘economy blog,’ Russia’s attempts to play offense in an economic war, belies its extremely defensive position.  Vladimir Putin is a very proud man who wants his nation to be on par with the U.S. and E.U.  To cover up his country’s failures, he will push for land and economic expansion until it starts a hot World War III, and China will, of course, join him for the same reasons.

But as used Christian Bibles promise:  “Pride goeth before destruction, and an haughty spirit before a fall (Proverbs 16: 18).” Only this time, Putin will bring down many more in destruction other than himself, Russia, or the Ukraine!

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