On August 15, when many of the neo-cons(and some of our own posters) were fulminating about the Russia-Georgia Conflict, I wrote that Russia would pay a heavy price in the global financial markets, and our better action would be to stop pounding the table and wait. Yesterday Bloomberg reported that the situation is getting tougher for Putin in the marketplace.
Russian stocks plunged and the cost to protect government bonds from default jumped to the highest in four years after the central bank shored up the ruble. Bank Rossii said today it intervened, buying rubles from its foreign currency reserves, after withdrawals by investors sent the currency to its lowest level in almost a year. Russia’s RTS Index dropped 3.8 percent today, capping its worst week since May 2006, and credit-default swaps on the government’s debt rose 14 basis points to 166, the highest since November 2004.
In light of all the “USA” chest-thumping going on in St. Paul for the last four days from The War Party, I thought it would be instructive to put up this matrix, once more, from the Global Business Network. Our future prosperity will be determined by two factors–our economic and cultural strength and our ability to adapt to a bottom-up, networked world. The same applies for the Russians and the Chinese.