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« Experts use brain differently than novices -part 2 | Main | Was airport security alerted one week before the Moscow Domodedovo airport bomb blast that killed 35 people? Domodedovo-gate? »

January 23, 2011

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Listed below are links to weblogs that reference When will the Recession End ? Part 138 Forty one (41) early warning signals of the collapse and decay of the Russian Federation (Putinism) and Ukraine (Yanukowych Regime) :

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discjocke

I've been predicting the same as you're predicting within Ukraine, for a few months now, at my ukraine-english-news.com/forum.

As has been mentioned, it might just happen as soon as the warm temperatures start rolling in. Demonstrations are occurring throughout Russia, and we hear about just a handful. Both Russia and Ukraine are in dire straits, and the fear of both country's leaders are seen. Desperation is starting to blossom. Just a matter of time. Who will lead it in Russia's beyond me. I believe in Ukraine, it'll once again be started again by the small business sector, which can cripple the country in a heartbeat. I do hope the change will happen quickly, much faster than is happening in the middle east currently.

Account Deleted

Hi Walter, I would share the most of your conclusions. I even "voted for it by my feet" as we say here in Russia by applying for immigration to one of the Western countries. However I would not agree to your proposals about Russia's braking apart in the nearest future. There are two points for that:
1. The power of Russian people is in the dip history and culture of nationalities living in Russia for centuries. They are able to get together in the face of danger. Political and economical collapse are able to get together people of different political wings. I am witnessed how civil society improved for the last 10 years. People do not quiet anymore and they protect their rights by all available constitutional manner.
2. The second reason against that bad scenario is that political elite clearly understands that situation is going out of their control. They started legally step by step liberate political dialog. The controlled by government Mass media reflect more and more different from the officials opinions.

SmartEconomy

Mit106
Remember your history

Back in the 1970s and 80s, cybernetic experts in Kyiv and Moscow using system dynamics modeling, predicted the collapse of the Soviet Union due to low oil prices, by 1990 plus or minus one or two years - not a popular notion at the time, but key people did pay heed. Two years before the collapse of the Soviet Union, Russian and Ukrainian oligarchs started to move their wealth off-shore in 1988-89. Similar systems dynamics modeling shows similar collapse signals and that Putinism in Russian and President Yanukovych’s regime in Ukraine will suffer a similar fate as did the former Soviet Union

SmartEconomy

Reply to Russell Smith-thanks for taking time to comment..see my reply below--Walter

If you only read the headlines of most newspapers, the perception you would get is that Russia is a rising regional power with ambitions of becoming a global super power again.
A public 2009 Canadian military foresight report summarizes the following: “Since 1999, Russia has been experiencing an economic revival largely based on its oil and natural gas exports. Unlike the USSR, modern Russia is not challenging the world order, only the current power distribution.” It concludes: Wanting to be a player on the world stage again, Russia will pursue continued relations with Europe, NATO, and the United States in order to prevent marginalization and help recreate Russia as at least a regional power. For the foreseeable future, Russia will not aggressively challenge the United States or its allies.”
In fact, this vision of Russia may be overly optimistic. The reverse may now be true.
In reality, both Russia and Gazprom, the state-owned gas company, are both quietly going broke, which the mainstream media and experts ignore. But wait a minute, you ask? Isn’t Russia selling oil and gas like there is no tomorrow? Yes, but that is Russia’s strength for the time being and its Achilles Heel in the medium and long run.
Russian Energy Minister Sergiy Shmatko admitted last November that the Russian oil sector had reached the point where it needs immediate reforms and a reduction in the tax burden, in order to prevent a rapid decline of oil production, starting in 2011-2012. This sector, meanwhile, generates over 40% of Russia’s export revenues, so that reducing the tax burden on the oil sector when Russia is already carrying a budget deficiency in the area of 10% is a very challenging task indeed. Coupled with tumbling oil production, we may see another collapse of both oil and gas prices in the near future. Europe is not as dependent on Russian gas as it once was. It now has other options, such as liquefied natural gas from Qatar and shale gas from Poland and Ukraine within the next five years.
Gazprom also carries a very heavy debt load, and can sustain stability only if its revenues increase, which looks unlikely. Russia had already depleted most of its sovereign wealth fund reserves, and is running budget deficiency 9-12% per year. Under these conditions it will have no resources for bailing out Gazprom. The recovery of the gas market in Europe will not be sufficiently fast, and will not produce sufficient demand to offset emerging competition from Central Asia, Azerbaijan, Qatar, and possibly Poland and Ukraine in European markets.
Remember too that oil price manipulation (keeping oil prices artificially low for a decade) was a geopolitical weapon that was successfully used by the USA (Zbigniew Brzezinski and the Reagan Administration) in an attempt to bankrupt the former Soviet Union. It worked.
Back in the 1970s and 80s, cybernetic experts in Kyiv and Moscow using system dynamics modeling, predicted the collapse of the Soviet Union due to low oil prices, by 1990 plus or minus one or two years - not a popular notion at the time, but key people did pay heed. Two years before the collapse of the Soviet Union, Russian and Ukrainian oligarchs started to move their wealth off-shore in 1988-89.
Similar systems dynamics modeling shows similar collapse signals and that Putinism in Russian and President Yanukovych’s regime in Ukraine will suffer a similar fate as did the former Soviet Union.
These geopolitical and economic developments may lead to the economic collapse of Gazprom in the short term and the Russian Federation during the second half of the current decade. Russia already defaulted on sovereign debt in the 1980s and won’t hesitate again to leave foreign bond holders with worthless paper. Such a collapse, even if it won’t impact on the territorial integrity of the Russian Federation, will essentially weaken Russia. It could lead to the rapid escalation of ethnic tensions in the Northern Caucasus, massive infiltration of Chinese migrants into Siberia, and growing separatist movements that will fill the power vacuum. Its ability to play the role of the superpower may be diminished at the regional level and over a larger geographical area, which includes Moldova, Ukraine, Russia, Kirgizstan, Tajikistan, Armenia, Georgia, and Azerbaijan, which may become unstable. The cause of such instabilities are still existent “frozen” conflicts in Transdnisteria, Abkhazia, South Ossetia, Karabakh, and border disputes in Central Asia. So far, all these conflicts remain “frozen” because of Russia’s heavy military grip. As this weakens, the probability of cross boarder and internal conflicts grows.
A new energy wild card has come into the mix. A new US biotechnology company Joule Unlimited has received a patent on a genetically modified E coli bacteria that can use only carbon dioxide (CO2) and sunlight to generate refined hydrocarbons including gasoline, jet fuel and diesel at a cost of $30 per barrel. So who do you think Europe will be buying oil products from in the future? High priced Russia ?


So if the worst case scenario takes hold in Russia, similar to conditions before the collapse of the Soviet Union, why would Ukraine want to strengthen its economic and political ties with Russia, a losing horse?

See more here at http://bit.ly/fDyi3m

SmartEconomy

Mit106

I'm posting your comment because any opposing views would likley be censored or banned in your country. I actually hope you are right, because I feel sorry for the hard working Ukrainian and Russian people, but not for the current regime in power. But your own experts are predicting collapse. Go complain to them, not to me...wd

Account Deleted

Hey, You! Russia, Ukraine, Belarussia and all Slavic nations will never fall down! You'd better think about your own country, which debts are goring too fast!

Remember! We will never be surrended and nothing will crash us!

Russell Smith

I don't understand number 24.

27 may be one of the most important, but a long term decline in oil pricing seems unlikely. I guess it depends on what price point you want to use as your basis point: $50 or $100 going forward?

I think the bigger problem going forward is a general one of the "Dutch Disease" of easy exports. And of course there is always the matter of how long the oil will last in so far as inexpensively obtained reserves.

Some of your list in the 30s were stated as future-possible events, but I take it to mean that they reflect lower level current events.

The Tunisian and Egyptian rulers both have learned that it is expensive but necessary to keep their military happy.

Once you have rioted in the streets to throw the bums out, presumably the second time is easier, but on the flip-side, are not a lot of Russians still disenchanted with the results of the Soviet break up?

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