The Ruble rose to 57 against the dollar, however the nation's reserve of 400 billion U.S. dollars seems dwarfed by more than 700 billion in debt to Western Banks. Because of the Ruble's slide into the 40 range and domestic inflation in the range of 9 percent, state pensions have lost buying power. But ordinary citizens will stand in line behind the powerful state corporations running oil, gas, and banking who need all of the Russian $90 billion rainy day fund to meet current demands. The Russian economy teeters on the edge of recession, which in truth means it is already in recession and waits only the state of un-deniability to take hold.
Sanctions and Leadership
The Western sanctions led by the persistent vision of President Obama has delivered a telling blow to Russian international aggression. Sanctions have often been ridiculed by the international war machine because it does the work claimed by war business without the blood and other-worldly level of costs. The approximately $2 trillion adventure in Iraq under Bush is a lingering cloud on the U.S. future, a mountain of debt that President Obama has also managed quite well. The U.S. has been on a growth path despite Republican efforts to stall the economy.
Russia in a Spiral
The triumphant messaging of State TV and Radio- Putin's personal version of the Republican Fox News in the U.S.- has turned to a more defiant tone, The nation must endure against the American onslaught. Putin may indeed launch new wars to deflect the economic suffering that has begun with thousands of layoffs in the health care sector. The new connection with China has rapidly approaching limits; China cannot finance Russian ambitions nor relieve the current debt situation. In fact, China has scored record value on recent gas and oil contracts with Russia, that will become a factor in the event of rising oil prices. Today's desperate Russian oil business deals are the lost economic opportunities in a rising economic cycle.
Russian Privileged Elites
Russian aggression in the Ukraine and now also in Georgia has a theme identified by some experts as a focus on territory on the Black Sea. A prevailing line of thought is that Putin has designs on creating luxury real estate development for the Oligarch class. A territory designed like the European Riviera's to cater to Russian Millionaires. This thought cannot penetrate the state-controlled media, but as casualties from warfare rise, eventually some Russians will wonder if the Putin ideal of a greater Russia is simply a plan for greater luxury for a few Russians. If so, is the loss of life among civilians and military a reasonable trade-off? Russians who will never see the Black Sea luxuries asked to give the lives of their children, and thousands of refugees from war zones like Donetsk made to surrender their places and ways of life. It is a weighty sacrifice for the good of the rich, even in the calculus of Putin's New Russia.
A Safer, Wiser Future
The overall impact of sanctions today can strengthen U.S. resolve to use economic strategies rather than leap into costly humanitarian disasters like the implosion of Iraq into the rise of ISIL. The Bush Doctrine of perpetual war and oil hegemony can, hopefully, fade into memory, except for the cautionary tale of greed and fall. In a more civilized future, the current use of Western economic tools will stand as a bold beginning. It has been an instructive lesson on alternative dispute resolution on an international scale, it is a model for further development and expansion wherever possible.
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