Tag: Russia

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Make No Mistake, Russia WILL Go To War Over Ukraine. Plus, Market Update

Update: Russian troops and tanks enter Ukraine @ Sevastopol. So it begins. 

Well, the American Government and the EU Bureaucrats have done it again. They have “liberated” the people of Ukraine from oppression and injustice. I wonder if there were high fives flying in the Oval Office over the weekend.  

Yet, as the Chinese story goes “Maybe it’s good and maybe it’s bad, we shall see”.

I have said it before, but I need to say it again so people have a clear understanding.  The US and the EU destabilizing and interfering in the business of Ukraine is equivalent to Russia destabilizing and trying to take over the government of Kentucky.  Technically speaking, Russia and Ukraine is a unified state going back thousands of years.  I would argue that it is idiotic at best and extremely dangerous at its worst for the western world to interfere in Russia’s and Ukraine’s business.

Luckily, I am not alone in thinking this way. Here is an open letter from Ron Paul: “Leave Ukraine Alone”

What most people don’t understand is this…… Russia and Putin in particular will never allow Ukraine to become a part of EU or worst NATO. They will go to whatever extent necessary to make sure that doesn’t happen. Even if it means going to war.  Also, it is only half of the Ukraine (western half, the poorer half) wanting closer ties with the EU. The other half (wealthier industrial eastern part) wants nothing to do with it. They want to have closer ties with Russia.  So, when American politicians scream out “Ukrainian People Want Freedom From The Tyranny of Russia”  they are talking about 25% of Ukraine’s population. Either way you twist it, this is a ticking time bomb.  

With Olympics now over, Russia has a lot more room to maneuver.  It will be interesting to see what develops over the next few weeks. I see 2 outcomes.

1.  In the past, Russia and Putin have proved to be good strategists. They might give an indication that they are stepping aside by allowing the EU and World Bank to try and bail Ukraine out by pumping billions of dollars into Ukraine’s economy.  Over the next few years, through various political actions and economic positioning Russia will, once again, replace Ukraine’s leader with their own “puppet” as they have done so many times before.  Of course, Western powers will never see their money again.  This is the most likely outcome and exactly what I would do.  

2.  However, if Russia is pushed too hard and too far, they WILL sanction and execute some sort of a military action in Ukraine.  With the EU and the US interfering in its business, Russia might literally have no other choice.

Which option will play out? Only time will tell, but I wouldn’t be surprised to see some sort of military intervention over the next few weeks.  Will Obama draw his “Red Line” again and send in the Marines to protect newly liberated Ukrainian people?  Yeah right. I truly feel sorry for the Ukrainian people who believe that the West will come to their rescue. 

One thing is for sure.  Neither the US nor the EU have any business interfering in this part of the world. Doing so might lead to an all out conflict with Russia and a new Cold War.  Unfortunately, it looks as if it is exactly what some of our leaders want.

russian022412

MARKET UPDATE:

The market surged higher right at the open with the Dow Jones appreciating +103 point (0.64%) and with the Nasdaq gaining +29 points (0.69%) for the day. 

With most speculative issues appreciating the most, the question I see from a lot of the bears anticipating a collapse….. Is this is the “blow off” top? As I have mentioned so many times before, the bear market of 2014-2017 will not be directional. While it will have a general down trend, it will not present us with a directional move as it did between 2007-09. That means a lot of volatility and a lot of powerful ups/downs that will surely confuse and frustrate both bulls and bears. With that said, what does it say of today’s market?  

Our last inflection point was located at……. XXXX.

Not quite yet. This market is certainty not making things easy for our trading position as it continues to push upper ranges of what is possible if February XXXX was indeed a turning point.

There is couple of reasons for my hesitation. 

1. All indices have opened up a gap in the morning. Typically, the market comes back to close this gap over the next few trading days. While the market can do so during the next leg down, it closes it within the next 3 trading days 70% of the time. Indicating a high % possibility of a short-term decline. 

2. My calculations show an alternative top at today’s top of XXXX. It is hard to explain, but at times the market produces gaps within its own mathematical structure. It might be the case here.

In summary, it’s too early to call the market either way. While it is pushing upper boundaries, it is possible….. XXXX.

What are we to do?

Maintain our positions as described below while watching the market on an hourly chart. If the Dow breaks above XXXX we must nullify our XXXX top. If that is the case, the market is likely to continue higher. Not much higher, but high enough to close the gap that was left at 16,400 on the Dow.

If No Position: XXXX

If Long: XXXX

If Short/Trader:  XXXX

Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start. 

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Make No Mistake, Russia WILL Go To War Over Ukraine. Plus, Market Update Google

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Sochi Olympics Downhill Race

AFP Writes: Putin’s failure damning Russia to low growth trap

Russia-investwithalex

Moscow (AFP) – Russia’s failure to significantly change its energy-dependent economic model under President Vladimir Putin is consigning the country to potentially decades of low growth and eroding its status as a top emerging economy.

The Russian economy ministry on Thursday dramatically confirmed what was obvious to many, by downgrading its estimate of Russia’s average growth to 2030 to a paltry 2.5 percent, a far cry from over seven percent rates in the early Putin years.

“The pace of Russia’s economic growth will fall behind the global average in the forecast period,” admitted Economy Minister Alexei Ulyukayev.

This year even Russia’s official forecast puts 2013 growth at just 1.8 percent. But most worrying for the Kremlin is that the weakness cannot just be blamed on external factors but stems from domestic shortcomings.

The Russian economy faces a daunting list of troubles –- a declining population, the re-emergence of the United States as a rival energy superpower due to shale gas, and the government’s colossal spending on defense that stretches the budget.

These factors are compounded by Russia’s failure to stimulate private enterprise, reform the judicial system, improve labor productivity and turn the Russian economy into more than a lumbering energy producer.

Read The Rest Of The Article

Russia is screwed. Big time.

The only thing that kept Russia afloat over the last decade or so is high energy prices. Now that energy prices are down substantially and with no indication for them to recover, Russia is standing on the edge of the cliff looking down into abyss. No doubt, there are multiple structural problems in Russia (aging population,  low energy prices, corruption, etc…), however, the biggest problem is psychological/cultural. 

Having lived in both Russia and the USA I know exactly what I am talking about. The difference between the two economies is as follows.  In the USA everyone knows that they have unlimited potential in terms of starting their own business and trying to get rich. Everyone has an understanding that if they work hard, risk, sacrifice and get lucky, there is really no limit to what they can accomplish. As a result, everyone tries to excel at something and you end up with a highly diversified economy benefiting all.

That part of the equation is gone in Russia.  Culturally people do want to get rich, but they don’t want to work for it. They want it to happen overnight and the only way to do that is too steal or take something away from someone or to be corrupt.  That is how most “New Russians” got rich and that is what most Russians aspire to.   

Given this reality, I do not see how Russia will amount to anything anytime soon. The fact that their economy will suffer over the next decade is now a certainty. The only way to fix it going forward is to change the culture or to change the psychology.  Unfortunately, I do not see that happening anytime soon. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!! 

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Warning: Russian Economy Is About To Implode

AFP Writes: Putin’s failure damning Russia to low growth trap

Russia-investwithalex

Moscow (AFP) – Russia’s failure to significantly change its energy-dependent economic model under President Vladimir Putin is consigning the country to potentially decades of low growth and eroding its status as a top emerging economy.

The Russian economy ministry on Thursday dramatically confirmed what was obvious to many, by downgrading its estimate of Russia’s average growth to 2030 to a paltry 2.5 percent, a far cry from over seven percent rates in the early Putin years.

“The pace of Russia’s economic growth will fall behind the global average in the forecast period,” admitted Economy Minister Alexei Ulyukayev.

This year even Russia’s official forecast puts 2013 growth at just 1.8 percent. But most worrying for the Kremlin is that the weakness cannot just be blamed on external factors but stems from domestic shortcomings.

The Russian economy faces a daunting list of troubles –- a declining population, the re-emergence of the United States as a rival energy superpower due to shale gas, and the government’s colossal spending on defense that stretches the budget.

These factors are compounded by Russia’s failure to stimulate private enterprise, reform the judicial system, improve labor productivity and turn the Russian economy into more than a lumbering energy producer.

Read The Rest Of The Article

Russia is screwed. Big time.

The only thing that kept Russia afloat over the last decade or so is high energy prices. Now that energy prices are down substantially and with no indication for them to recover, Russia is standing on the edge of the cliff looking down into abyss. No doubt, there are multiple structural problems in Russia (aging population,  low energy prices, corruption, etc…), however, the biggest problem is psychological/cultural. 

Having lived in both Russia and the USA I know exactly what I am talking about. The difference between the two economies is as follows.  In the USA everyone knows that they have unlimited potential in terms of starting their own business and trying to get rich. Everyone has an understanding that if they work hard, risk, sacrifice and get lucky, there is really no limit to what they can accomplish. As a result, everyone tries to excel at something and you end up with a highly diversified economy benefiting all.

That part of the equation is gone in Russia.  Culturally people do want to get rich, but they don’t want to work for it. They want it to happen overnight and the only way to do that is too steal or take something away from someone or to be corrupt.  That is how most “New Russians” got rich and that is what most Russians aspire to.   

Given this reality, I do not see how Russia will amount to anything anytime soon. The fact that their economy will suffer over the next decade is now a certainty. The only way to fix it going forward is to change the culture or to change the psychology.  Unfortunately, I do not see that happening anytime soon. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!