The Phaserl


Political Noise Can’t Drown out Russia’s Potential

by Jim Rickards, DailyReckoning:

There’s a great amount of Russia hysteria in the air. You see it in the media, in political discourse and in popular conversation.

Much of this hysteria can be traced either to the unorthodox Trump campaign or its hyperbolic critics. It’s too bad, because Russia is an important country that deserves serious consideration, not the superficial caricature now on display.

Investors have a rare opportunity to make huge profits in Russian markets right now. They key to unlocking this profit opportunity is to ignore the political bombast and focus on the fundamentals.

Your correspondent during a visit to Moscow. The red walls of the Kremlin appear behind me across the Moskva River. Inside the Kremlin is a mixture of traditional Orthodox churches with gilded onion-style domes, 18th- and 19th-century-style European palaces and unattractive modern government buildings.

Before diving in on the more sensitive aspects of U.S.-Russian relations, a reality check is in order.

Here are the facts: Russia is the largest country in the world by size, almost as large as the next two largest, Canada and the U.S., combined. Russia is one of two nuclear weapons superpowers, along with the U.S.

Russia is the world’s second-largest producer of oil and natural gas, ahead of Saudi Arabia. It has the 12th-largest economy in the world and the ninth-largest population. Russia is the third-largest gold producer in the world, at 250 metric tons per year, and has the sixth-largest gold reserves in the world, at 1,460 metric tons.

In short, Russia is too big to be ignored. Whatever politicians and the media may say, Russia is not going away. Russia will inevitably play an important role in geopolitics under any balance-of-power scenario.

The drumbeat of adverse publicity began last summer during the presidential campaign, when a stream of hacked Democratic Party emails was released by WikiLeaks. That computer hacking was traced to Russia by the U.S. Intelligence Community.

In turn, the Democrats blamed the leaks for their loss in the presidential election, on Nov. 8. That’s probably a stretch, but it made a strong talking point for the liberal-progressive wing of the Democratic Party and was picked up by sympathizers in the press.

Meanwhile, Trump had made some positive comments about Russian President Vladimir Putin during the campaign, and indicated he might lift some economic sanctions on Russia if elected. A number of Trump campaign officials, presidential appointees and other associates had business ties to Russia, including Paul Manafort, a Trump campaign manager, and Rex Tillerson, former CEO of Exxon Mobil and the new secretary of state.

Almost out of nowhere, Trump cordiality with Russia and Democratic anger at Russian hacking merged into an out-of-control conspiracy theory that somehow Trump associates had conspired with Russian intelligence to throw the election to Trump. The alleged conspiracy and the media frenzy around it reached a fever pitch.

One Trump official, Lt. Gen. Michael Flynn, had to resign as national security adviser because of conversations with the Russian ambassador to the U.S. Another Trump official, Attorney General Jeff Sessions, had to recuse himself from Russia-related investigations by the FBI and Justice Department.

Leaks about the “Russia connection” seemed to be coming from everywhere. Various congressional investigations are gearing up. This story won’t go away soon.

Before drowning in the fever swamps of scandal, it’s important to clear the air so investors can focus on fundamentals.

Russian intelligence certainly did try to hack every U.S. government or political server they could find. That’s their job. The U.S. does the same thing to Russia. That’s our job (although the U.S. is probably better at it than the Russians).

Of course, Russia tried to influence the U.S. election. They’ve been interfering in elections around the world since the Comintern (short for “Communist International”) was established by Lenin in 1919.

The U.S. is just as active in influencing foreign elections and foreign governments. The U.S. backed the assassination of Ngô Đình Diệm, president of South Vietnam, in November 1963. The entire Japanese Diet was on a CIA payroll from 1950–70. The U.S. was influential in fomenting civil unrest in Ukraine in 2014. This led to the Russian reaction in Crimea and eastern Ukraine.

I’m not stating a moral equivalence. I’m just stating the facts. The idea that Russia hacked our servers and tried to influence our election is so mundane as to be boring. The real story is why the Obama administration didn’t do anything about it. Why not publicize it, take countermeasures and impose sanctions?

The answer is that Obama thought Hillary Clinton would win the election and the Russian actions wouldn’t matter. Oops. Trump won. And now perfectly ordinary Russian actions are at the center of a media and political storm.

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1 comment to Political Noise Can’t Drown out Russia’s Potential

  • Ed_B

    “There’s a great amount of Russia hysteria in the air.”

    Agreed and every bit of it is being brought to us via Dem oral flatulence. Worse yet, no matter how idiotic this makes them look, they insist on doubling and tripling down on it for even more idiocy. Folks, this is nothing but a GIANT smoke-screen that is being laid out there to cover up the REAL treason committed by the Dems. They are the guilty ones who point their fingers at everyone else to distract us all from pursuing investigations of THEM. Such investigations are sorely needed if we are to move forward from this point and hold those responsible for many of our current problems. The mindless pursuit of the innocent is not helping anyone of real value.

    After all, it was not Trump who said to the Russians on an open mic, “I’ll have more flexibility after the election”. That was Obama. Had Trump said anything 1/10th that onerous, the lefto-communists would have gone totally insane screaming about it 24/7.

    It was not Trump who approved the sale of 20% of US uranium deposits to a company owned by Russian oligarchs and who then received a $149 million bribe… er, foundation donation… from those same Russians. No, that was the traitor Hellery Clinton. Leftist “news” organizations reaction? NONE. ZERO. ZIP. NADA. NULL.

    Then, of course, there is Billy Boy Clinton and his reception of $500,000 for each of his speeches to various groups of Russians. Not only is this double his usual fee, it is coming from those who got VERY favorable treatment from the Hellery-led US State Dept. The Quid Pro Quo here is gigantic, yet goes unremarked by the lefto-communist media. I guess that selling out the country is OK, IF the right people are doing it while a pro-USA agenda is not, again depending upon who is doing it. Making something legal or illegal depending upon who is doing it is one of the biggest signs of tyranny. What a pity that so few leftists seem to notice this.

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