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Re: The Rise of the Russian Empire: Russo-Armenian Relations
In light of all that's been happening in the financial sector here in the US, this is a very difficult question to answer. But I'll attempt to give you 'my' perspective, and I'll try to do so in as few words as possible.
Although I am not a financial expert (I hate numbers), I read a lot and I have observed global politics for a long time now. In my opinion, the current crisis is much-much more serious than we are led to believe. We are not being told the severity of the turmoil in Wall Street because government officials along with Wall Street executives and news media representatives are engaged in a concerted effort to downplay the current financial crisis in an attempt to alleviate concerns in the general public. However, the situation is getting so bad now that despite their best efforts they can no longer hide it.
While the US was a beloved industrial power with substantial gold reserves and natural wealth, the US dollar was powerful, claimed by many to be "almighty," an obvious reference to its perceived divine power (perhaps to its detriment). Due to its stability, strenght and longterm promise, nations worldwide chose to trade in the US dollar, thereby further elevating its value in the global market. This global reverence towards the US dollar reached its height in the post-World War Two years and then again in the post-Soviet years. However, the dollar's longterm prospects began to change when the US economy began to transform itself from an industry based economy to a service based consumer economy led by financial institutions and international corporations. What's more, by the 1970s (?) the US government no longer backed the dollar with gold reserves. With the dropping of the traditional gold system, the legal tender essentially became a government backed credit, a piece of paper with nothing to back it up other than the government's word. What's more, the recent years were plagued by liberal lending practices, chronic mismanagement, severe corruption, etc., which also began to gradually undermine the dollar.
By the turn of the 21 century the US dollar no longer looked as stable or as promising as it had been in the past. This, coupled with major geopolitical tangles the US government kept getting involved in, encouraged some major nations to begin flirting with the idea of moving away from the US dollar in their trade transactions, further weakening the US currency. As a result of all this, the US dollar has been worthless as a currency for some time now. During the 20th century, the dollar managed to first create and then maintained a high global posture while America was considered to be the leader of the so-called free world. And in recent years the dollar got a major boost after the Soviet Union's collapse, making America 'the' undisputed global superpower. So, in a sense, the dollar's current worth is derived from its previous momentum and a lot of political 'hype' and not much else. For some time now I have been saying - don't believe the hype.
Geopolitically, things have changed quite a bit since the dawn of the 21st century. China rising, India rising, Iran rising, Russia rising... Since the financial power of the US is intimately connected to its preponderance on the global stage, US government officials and financial experts must have seen the looming financial crisis. Seeing it, they had to take action to secure their wealth and power. However, instead of attempting to devise plans that would truly remedy the root causes of the nation's economic problems, special interests in government began devising plans that were politically and financially very risky. In a sense, these special interests sought quick fixes that could also yield high dividends. So, they eventually began to plan the invasion of the Middle East as an attempt to control the region's energy wealth. There was also talk that if Washington could control Middle Eastern and Central Asian energy distribution it could also control China, since China, as big as it's economy is, it is not an energy producer. Moreover, taking advantage of Russia's political weakness during the 1990s, Washington also planned to setup shop in the immensely energy rich republics of Central Asia. Naturally, the Balkans and the Caucasus also played a crucial part in these equations. In a certain sense, this was a race against time for Washington.
However, the government had to somehow convince "we the people" that we had to do this. But how? How could they convince the people that they had to willingly carry the burden and support the invasion of nations and be involved in armed conflicts overseas for the foreseeable future?
Difficult task, no?
Well, in my opinion, the answer was - September 11, 2001. That highly suspicious event convinced the grazers in this nation (the majority) that the US had to get involved in bloody militarily campaigns overseas, not surprisingly mainly in the Middle East and Central Asia. For the grazers, it was a simply a matter of protecting America and you know, freedom... democracy... human rights... etc... For government officials, however, it was simply a matter of getting their hands on black gold so that they can revitalize their weakening financial system and maintain their political advantage over Russia and China. Of course there were several other major factors involved: Israeli lobby, the defense industry, mega corporations... Nevertheless, as a result of 9/11 we saw the US (and its lackeys) getting involved in conflicts from the Balkans to the Caucasus, from the Middle East to Central Asia. I need to mention here that Washington's agenda had started several years prior to the 9/11 attacks, the 9/11 attacks served to accelerate it and intensify it.
Needless to say, Washington's moves have backfired in the Middle East, Central Asia and most recently in the Caucasus; but succeeded somewhat in the Balkans. Overall, the West did not realize its ambitions in Central Asia (which was to control the massive oil/gas wealth of the region) because Russia, rebounding for their 1990's slumber, gradually managed to make longterm deals with Central Asian republics and in a sense monopolized their energy distribution. The West was not able to realize its ambitions in the Middle East (which was to exploit Iraq's oil wealth and impose itself on Gulf states) because the Iraqi people did not accept them as liberators, as Washington had initially hoped. The West did not realize its ambition in Afghanistan (which was to become a route through which Central Asian energy would be diverted south to Pakistan and beyond) because of botched deals with Pakistani officials and the Taliban. And, finally, the US was not able to realize its ambitions in the Caucasus (which was to divert Central Asian energy through Azerbaijan and Georgia to the West) because Moscow recently crushed their puppet in Tbilisi.
Therefore, the major gamble has in a sense backfired severely. These quagmires are now costing the US government hundreds of billions of dollars annually. Don't forget that the US already has approximately a ten trillion dollar debt.
All this means: The US has a hollow economy with no future.
What does the US produce anymore? The answer is, only arms. The US is the number one arms exporter in the world. Which is quite revealing, incidentally. Nevertheless, China is becoming the economic superpower, surpassing Japan, Germany and the US. As global demand for energy rises, energy resources dwindle. The undisputed 'natural resource' superpower today is Russia. The world's last major proven reserves today (which are located in Eurasia) are more-or-less controlled by Moscow. In recent years China and Russia have been getting closer, economically, politically and militarily. And when you join together the world's biggest producer of goods (who also happens to have the world's largest military) with the world's biggest holder of natural wealth (who is also a military superpower) - you end up having a 'supermegapower' on your hands.
Anyway, I would be afraid of what the future holds in America because serious governmental policy in the US is not made by American patriots, they are made by the Federal Reserve (a privately owned institution that controls the US dollar), by international mega corporations, by the Israeli lobby, by the oil lobby, by the defense industry... Unless these people begin placing America's well being ahead of their special interests this nation will implode and its demise will be worst than that of Rome's...
I suggest you read the following articles:
Portrait of an Oil-Addicted Former Superpower: http://forum.armenianclub.com/showpo...postcount=1549
The Rise of the Rest: http://forum.armenianclub.com/showpo...postcount=1548
“Velvet Revolutions” Backfire in Central Asia: http://forum.armenianclub.com/showpo...postcount=1833
Europe and America: Sharing the Spoils of War: http://forum.armenianclub.com/showpo...postcount=1832
The Sino-Russian Alliance: Challenging America's Ambitions in Eurasia: http://forum.armenianclub.com/showpo...postcount=1830
The Almighty Ruble: http://forum.armenianclub.com/showpo...postcount=1560
Deals With Iraq Are Set to Bring Oil Giants Back: http://forum.armenianclub.com/showpo...postcount=1814
And here is an interesting piece from today's New York Times:
WHEN I drove to the Beverly Hills offices of Drexel Burnham Lambert on Feb. 13, 1990, the last thing I expected to hear was that the investment bank where I worked was going under. Yet early that morning, we were told that the company was filing for bankruptcy. I was, to put it mildly, blown away. At the time, Drexel had $3.5 billion in assets and was the biggest underwriter of junk bonds. It all seemed like a very big deal at the time. But what’s happening this week makes me pine for the good old days. When Lehman Brothers filed for bankruptcy on Monday, it became the latest but surely not the last victim of the subprime mortgage collapse. Lehman owned more than $600 billion in assets. Financial institutions around the world have already reported more than half a trillion dollars of mortgage-related losses and that figure will most likely double or triple before the crisis exhausts itself.
But there is a bigger potential failure lurking: the American International Group, the insurance giant. It poses a much larger threat to the financial system than Lehman Brothers ever did because it plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds. Late Monday, A.I.G. was downgraded by the major credit rating agencies. This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts. Fat chance. That’s collateral A.I.G. does not have. There is therefore a substantial possibility that A.I.G. will be unable to meet its obligations and be forced into liquidation. A side effect: Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression.
A.I.G. does business with virtually every financial institution in the world. Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size. Nobody knows this market’s real size, or who owes what to whom, because there is no central clearinghouse or regulator for it. Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss. The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.
As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized. But even worse, many of the insurers are grossly undercapitalized. In one case in the New York courts, the Swiss banking giant UBS is suing a hedge fund that said it would insure nearly $1.5 billion in bonds but was unable to do so. No wonder — the hedge fund had only $200 million in assets. If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow. Regulators knew that if Lehman went down, the world wouldn’t end. But Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.
While Gov. David A. Paterson of New York on Monday allowed A.I.G. to borrow $20 billion from its subsidiaries, that move will only postpone the day of reckoning. The Federal Reserve was also trying to arrange at least $70 billion in loans from investment banks, but it’s hard to see how Wall Street could come up with that much money. More promisingly, A.I.G. asked the Federal Reserve for a bridge loan. True, there is no precedent for the central bank to extend assistance to an insurance company. But these are unprecedented times, and the Federal Reserve should provide A.I.G. with some form of financial support while the company liquidates its mortgage-related assets in an orderly manner. The Fed cannot afford to stand on principle. The myth of free markets ended with the takeover of Fannie Mae and Freddie Mac. Actually, it ended with their creation.
Source: http://www.nytimes.com/2008/09/16/op...ml?ref=opinion
Originally posted by yerazhishda
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Although I am not a financial expert (I hate numbers), I read a lot and I have observed global politics for a long time now. In my opinion, the current crisis is much-much more serious than we are led to believe. We are not being told the severity of the turmoil in Wall Street because government officials along with Wall Street executives and news media representatives are engaged in a concerted effort to downplay the current financial crisis in an attempt to alleviate concerns in the general public. However, the situation is getting so bad now that despite their best efforts they can no longer hide it.
While the US was a beloved industrial power with substantial gold reserves and natural wealth, the US dollar was powerful, claimed by many to be "almighty," an obvious reference to its perceived divine power (perhaps to its detriment). Due to its stability, strenght and longterm promise, nations worldwide chose to trade in the US dollar, thereby further elevating its value in the global market. This global reverence towards the US dollar reached its height in the post-World War Two years and then again in the post-Soviet years. However, the dollar's longterm prospects began to change when the US economy began to transform itself from an industry based economy to a service based consumer economy led by financial institutions and international corporations. What's more, by the 1970s (?) the US government no longer backed the dollar with gold reserves. With the dropping of the traditional gold system, the legal tender essentially became a government backed credit, a piece of paper with nothing to back it up other than the government's word. What's more, the recent years were plagued by liberal lending practices, chronic mismanagement, severe corruption, etc., which also began to gradually undermine the dollar.
By the turn of the 21 century the US dollar no longer looked as stable or as promising as it had been in the past. This, coupled with major geopolitical tangles the US government kept getting involved in, encouraged some major nations to begin flirting with the idea of moving away from the US dollar in their trade transactions, further weakening the US currency. As a result of all this, the US dollar has been worthless as a currency for some time now. During the 20th century, the dollar managed to first create and then maintained a high global posture while America was considered to be the leader of the so-called free world. And in recent years the dollar got a major boost after the Soviet Union's collapse, making America 'the' undisputed global superpower. So, in a sense, the dollar's current worth is derived from its previous momentum and a lot of political 'hype' and not much else. For some time now I have been saying - don't believe the hype.
Geopolitically, things have changed quite a bit since the dawn of the 21st century. China rising, India rising, Iran rising, Russia rising... Since the financial power of the US is intimately connected to its preponderance on the global stage, US government officials and financial experts must have seen the looming financial crisis. Seeing it, they had to take action to secure their wealth and power. However, instead of attempting to devise plans that would truly remedy the root causes of the nation's economic problems, special interests in government began devising plans that were politically and financially very risky. In a sense, these special interests sought quick fixes that could also yield high dividends. So, they eventually began to plan the invasion of the Middle East as an attempt to control the region's energy wealth. There was also talk that if Washington could control Middle Eastern and Central Asian energy distribution it could also control China, since China, as big as it's economy is, it is not an energy producer. Moreover, taking advantage of Russia's political weakness during the 1990s, Washington also planned to setup shop in the immensely energy rich republics of Central Asia. Naturally, the Balkans and the Caucasus also played a crucial part in these equations. In a certain sense, this was a race against time for Washington.
However, the government had to somehow convince "we the people" that we had to do this. But how? How could they convince the people that they had to willingly carry the burden and support the invasion of nations and be involved in armed conflicts overseas for the foreseeable future?
Difficult task, no?
Well, in my opinion, the answer was - September 11, 2001. That highly suspicious event convinced the grazers in this nation (the majority) that the US had to get involved in bloody militarily campaigns overseas, not surprisingly mainly in the Middle East and Central Asia. For the grazers, it was a simply a matter of protecting America and you know, freedom... democracy... human rights... etc... For government officials, however, it was simply a matter of getting their hands on black gold so that they can revitalize their weakening financial system and maintain their political advantage over Russia and China. Of course there were several other major factors involved: Israeli lobby, the defense industry, mega corporations... Nevertheless, as a result of 9/11 we saw the US (and its lackeys) getting involved in conflicts from the Balkans to the Caucasus, from the Middle East to Central Asia. I need to mention here that Washington's agenda had started several years prior to the 9/11 attacks, the 9/11 attacks served to accelerate it and intensify it.
Needless to say, Washington's moves have backfired in the Middle East, Central Asia and most recently in the Caucasus; but succeeded somewhat in the Balkans. Overall, the West did not realize its ambitions in Central Asia (which was to control the massive oil/gas wealth of the region) because Russia, rebounding for their 1990's slumber, gradually managed to make longterm deals with Central Asian republics and in a sense monopolized their energy distribution. The West was not able to realize its ambitions in the Middle East (which was to exploit Iraq's oil wealth and impose itself on Gulf states) because the Iraqi people did not accept them as liberators, as Washington had initially hoped. The West did not realize its ambition in Afghanistan (which was to become a route through which Central Asian energy would be diverted south to Pakistan and beyond) because of botched deals with Pakistani officials and the Taliban. And, finally, the US was not able to realize its ambitions in the Caucasus (which was to divert Central Asian energy through Azerbaijan and Georgia to the West) because Moscow recently crushed their puppet in Tbilisi.
Therefore, the major gamble has in a sense backfired severely. These quagmires are now costing the US government hundreds of billions of dollars annually. Don't forget that the US already has approximately a ten trillion dollar debt.
All this means: The US has a hollow economy with no future.
What does the US produce anymore? The answer is, only arms. The US is the number one arms exporter in the world. Which is quite revealing, incidentally. Nevertheless, China is becoming the economic superpower, surpassing Japan, Germany and the US. As global demand for energy rises, energy resources dwindle. The undisputed 'natural resource' superpower today is Russia. The world's last major proven reserves today (which are located in Eurasia) are more-or-less controlled by Moscow. In recent years China and Russia have been getting closer, economically, politically and militarily. And when you join together the world's biggest producer of goods (who also happens to have the world's largest military) with the world's biggest holder of natural wealth (who is also a military superpower) - you end up having a 'supermegapower' on your hands.
Anyway, I would be afraid of what the future holds in America because serious governmental policy in the US is not made by American patriots, they are made by the Federal Reserve (a privately owned institution that controls the US dollar), by international mega corporations, by the Israeli lobby, by the oil lobby, by the defense industry... Unless these people begin placing America's well being ahead of their special interests this nation will implode and its demise will be worst than that of Rome's...
I suggest you read the following articles:
Portrait of an Oil-Addicted Former Superpower: http://forum.armenianclub.com/showpo...postcount=1549
The Rise of the Rest: http://forum.armenianclub.com/showpo...postcount=1548
“Velvet Revolutions” Backfire in Central Asia: http://forum.armenianclub.com/showpo...postcount=1833
Europe and America: Sharing the Spoils of War: http://forum.armenianclub.com/showpo...postcount=1832
The Sino-Russian Alliance: Challenging America's Ambitions in Eurasia: http://forum.armenianclub.com/showpo...postcount=1830
The Almighty Ruble: http://forum.armenianclub.com/showpo...postcount=1560
Deals With Iraq Are Set to Bring Oil Giants Back: http://forum.armenianclub.com/showpo...postcount=1814
And here is an interesting piece from today's New York Times:
Wall Street’s Next Big Problem
WHEN I drove to the Beverly Hills offices of Drexel Burnham Lambert on Feb. 13, 1990, the last thing I expected to hear was that the investment bank where I worked was going under. Yet early that morning, we were told that the company was filing for bankruptcy. I was, to put it mildly, blown away. At the time, Drexel had $3.5 billion in assets and was the biggest underwriter of junk bonds. It all seemed like a very big deal at the time. But what’s happening this week makes me pine for the good old days. When Lehman Brothers filed for bankruptcy on Monday, it became the latest but surely not the last victim of the subprime mortgage collapse. Lehman owned more than $600 billion in assets. Financial institutions around the world have already reported more than half a trillion dollars of mortgage-related losses and that figure will most likely double or triple before the crisis exhausts itself.
But there is a bigger potential failure lurking: the American International Group, the insurance giant. It poses a much larger threat to the financial system than Lehman Brothers ever did because it plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds. Late Monday, A.I.G. was downgraded by the major credit rating agencies. This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts. Fat chance. That’s collateral A.I.G. does not have. There is therefore a substantial possibility that A.I.G. will be unable to meet its obligations and be forced into liquidation. A side effect: Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression.
A.I.G. does business with virtually every financial institution in the world. Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size. Nobody knows this market’s real size, or who owes what to whom, because there is no central clearinghouse or regulator for it. Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss. The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.
As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized. But even worse, many of the insurers are grossly undercapitalized. In one case in the New York courts, the Swiss banking giant UBS is suing a hedge fund that said it would insure nearly $1.5 billion in bonds but was unable to do so. No wonder — the hedge fund had only $200 million in assets. If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow. Regulators knew that if Lehman went down, the world wouldn’t end. But Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.
While Gov. David A. Paterson of New York on Monday allowed A.I.G. to borrow $20 billion from its subsidiaries, that move will only postpone the day of reckoning. The Federal Reserve was also trying to arrange at least $70 billion in loans from investment banks, but it’s hard to see how Wall Street could come up with that much money. More promisingly, A.I.G. asked the Federal Reserve for a bridge loan. True, there is no precedent for the central bank to extend assistance to an insurance company. But these are unprecedented times, and the Federal Reserve should provide A.I.G. with some form of financial support while the company liquidates its mortgage-related assets in an orderly manner. The Fed cannot afford to stand on principle. The myth of free markets ended with the takeover of Fannie Mae and Freddie Mac. Actually, it ended with their creation.
Source: http://www.nytimes.com/2008/09/16/op...ml?ref=opinion
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