Category Archives: Russia

Stop Waiting For “Clarity”

Just remember as we interpret the headlines and digest the political rhetoric that emotions and knee-jerk reactions rarely produce sound investment decisions. You need to be able to synthesize and distinguish what is actually the “music” and what is simply loud “noise.” In other words….

  • If your looking for “clarity” in regard to Putin…it’s not going to happen. He is in power, he is not going away, and he is going to remain highly unpredictable. 
  • If your looking for “clarity” in regard to the Middle East…it’s not going to happen. They have been fighting for over a 1,000 years and its not going to change anytime soon.
  • If your looking for “clarity” in regard to the US Fed…it’s not going to happen.  The dynamics of the game are constantly changing and they are clearly shooting at a moving target.
  • If your looking for “clarity” in regard to the Chinese economy…it’s not going to happen.  They obviously have their own agenda, so the economic numbers and data released will always be questioned.
  • If your looking for “clarity” in regard to the European Union…it’s not going to happen. There are simply too many moving parts in this machine.  In other words there are just too many countries under one roof ALL with different agendas.

Moral of the story, there is no such thing in the investment sphere as a “perfect world.” You can choose to focus on the “what if’s” and the “doom and gloom” scenarios, but will there every be time when uncertainties and problems do not exist? 

The Port City of Odessa…Why it’s an Important Piece of the Puzzle

Not only is Odessa an important warm-water port in Ukraine, once giving the Russian Empire and the Soviet Union access to the Atlantic Ocean, but it is also home to the Ukraine Navy. Thoughts are pro-Russian activist are aggressively trying to take over this region. Reports circulating inside the trade show the Odessa port will move between 20 and 25 million tons of cargo per year. Their container terminal is massive and GRAIN represents the largest percentage of that business. There is also talk that about 100,000 jobs are directly or indirectly related to the port’s activities. To say it’s a key piece to the puzzle would be an understatement. It appears Russia is most interested in the port city of Odessa (with approximately 1 million residents) because of its geographic proximity to “Transdniester,” which is only about 40 miles northeast of Odessa. For those who don’t know, “Transdniester” is is a breakaway independent state located along the Ukraine border. The area hosts a strong Russian military presence. It is also argued that following the collapse of the former Soviet Union, the Russian 14th Army left 40,000 tons of weaponry and ammunition in Transdniester. Moral of the story, Russia has troops and weaponry in Transdniester and the best way to gain access to the Black Sea is via the well connected rail and roadways into Odessa. If Ukraine looses control of the port then their begins to be more questions and uncertainty in regard to grain shipments out of Ukraine. 

A HUGE Russian What If???

I hate to even bring this up, but what if these so called “economic sanctions” are exactly what Putin and the Russian’s wants to see happen.  Considering the fact Russia is clearly the “underdog” when matched against the worlds #1 (the US), and the world’s #2 (China), Putin understands he needs to be smarter and more creative if he is to ever make a move towards the top spot. With this in mind, maybe he is trying to actually entice harsh US sanctions?  This would then ultimately allow Putin to persuade his countrymen to abandon the US dollar all together. My point is if the US squeezes down hard enough and tries to enforce sanctions by limiting trade with the US dollar, Putin may simple create his own new world currency that buyers of Russian resources will use to exchange for goods.  This little move could potentially run a ripple through the global financial system like one we have never witnessed. Remember, both Russia and China (and several others) have been looking for a way out of the US dollar system for years. If Russia and Putin believe the time is right to leverage their “natural resources” in order to gain a more favorable foreign currency reserve position then the price of poker, in my opinion, just went through the roof.  If Russia decides to start demanding payments for natural resources in some NEW type of non US dollar denominated currency, all while blaming it on US sanctions, then you will know that a full-blow “financial war” is under way.  Moral of the story, we might soon look up and find ourselves sitting at the chess table staring at a wise old Russian Grandmaster who has knowingly setting us up for a “deep game.” I am telling you now, Russia is clearly playing it’s own game…by it’s own set of rules and anything is possible!