The US is still by-far the number one arms producer and exporter in the world. Despite Russia's recent advancements, it still lags way behind the US in many sectors. The overwhelming power and influence the US has had over the financial, political and socio-cultural aspects of this world in the post Second World War era is a bit difficult for an average humanbeing to realize, let alone comprehend. However, this decades long American trend in politics, finance and culture is finally beginning to changing. The US is no longer the undisputed leader (or policemen) of the so-called free world, nor it is the economic powerhouse it once was. Despite what some may want to believe, there will be no turning back. New centers of political and economic powers (Russia, China, India, Brazil) are rising on the horizon. It will take some time to hit bottom, but the American empire is definitely on its downward slide. The following news articles relate to the separation anxiety and growing pains the world is feeling in its attempt to finally create a true "multipolar" financial system as it gradually begins to move away from the US dominated global financial system:

Arevordi

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Moscow Says U.S. Leadership Era Is Ending


September, 2008

Perhaps inevitably for a country often lectured by the United States about its own economy, Russia is using the occasion of the American financial crisis to do some lecturing of its own. President Dmitri A. Medvedev has blamed what he called financial “egoism” for the crisis and said it should be taken as a sign that America’s global economic leadership was drawing to a close. Along with some European leaders, Mr. Medvedev has called for greater multilateralism in financial regulation, echoing a Russian position on international relations generally. “The times when one economy and one country dominated are gone for good,” he said Thursday at St. Petersburg State University during the eighth annual Petersburger Dialog, a forum devoted to developing relations with Germany. After the American banking collapses, he said, the world does not want America as a “megaregulator.”

Chancellor Angela Merkel of Germany, in Russia for the forum, said Germany, too, would “always support a multilateral approach” to market regulation. Along with the Germans and others, Russian leaders contend that poorly regulated American markets caused the current crisis. While it is hardly a new sentiment, in Russia there is a gloating quality, as the American crisis deepens. There has been a drumbeat of pronouncements in recent days on this theme. Prime Minister Vladimir V. Putin made a speech about what he called American financial “irresponsibility” on Wednesday, blaming non-Russian causes for Russia’s stock plunge of more than 50 percent. Of the financial crisis, he said, “This is not the irresponsibility of some people but the irresponsibility of the system, which as it is known, claimed to be the leader.” In contrast to the Europeans who have also criticized lax American regulation, however, Russians are facing a financial system that has been in such chaos that regulators suspended trading on the stock market three times last month. The global credit crisis could trim about 1 percent from Russian growth next year, said the finance minister, Aleksei L. Kudrin.

As in other emerging markets, investors are pulling money out of Russia and depositing it in United States Treasury securities because they are considered the safest place to park money. By the time Mr. Medvedev spoke on Thursday, investors had pulled about $52 billion in net private capital out of Russia since the second week of August, when the war in Georgia and political tension with the West heightened concern about political risk here. The criticism of American finance coincided with a rise in Russian military bluster that has been viewed by some in the West as a resurgence of the Kremlin’s cold-war mentality. On Thursday, Russian generals announced plans for the largest air force exercise since the collapse of the Soviet Union, called Stability 2008, to be held next week. Also on Thursday, the deputy commander of Russia’s navy said the country would build eight new nuclear submarines before 2015.

Source: http://www.nytimes.com/2008/10/03/wo...russia.html?em

Unipolar World Unacceptable – Russian FM



Russia's Foreign Minister has used an appearance at the UN General Assembly to lash out at the world's unipolar security system controlled by the U.S. Referring to the recent conflict in South Ossetia, Sergey Lavrov said efforts to resolve conflicts are hampered by what he called a distortion of reality. He also said all talk about the territorial integrity of Georgia after its aggression against South Ossetia has become senseless. "The bombings of sleeping Tskhinval and the killing of peaceful citizens and peacekeepers put an end to the territorial integrity of Georgia," said Lavrov. "Now this issue is closed. The future of the peoples of Abkhazia and South Ossetia is effectively protected by the agreements between Moscow and Sukhum and Tskhinval," he added. Lavrov also called for an analyse of the Caucasus crisis in terms of its consequences not only for the region but for the whole world. "The existing security architecture in Europe did not pass the test of the latest events. Attempts to adjust this architecture to the laws of unipolarity made it unable to curb the aggressor and prevent supplies of offensive weapons to it despite the existing codes of conduct," he said. Sergey Lavrov urged the international community to confirm their commitment to the United Nations as the only legitimate international body. "The Cold War distorted the nature of international relations and turned them into an arena for ideological confrontation," said Lavrov. "Only now that it is over the UN, created on the basis of a polycentric vision of the world, can use its potential in full," he said.

‘Tired of playing a static role’

Lavrov also criticised the unipolar security system in the world. He said U.S. missile defence ambitions, as well as NATO expansion, are America's attempts to be the boss: "The inertia of unipolar world ideology also revealed itself in other spheres of international life, including unilateral steps on AMD and militarization of outer space, attempts to bypass the parity in arms control regimes, enlargement of political and military blocs, and politicization of the issues of access to energy resources and their transit”. The United States is involved in two wars that are killing millions. It has been hit hard by a financial crisis resulting from bad choices within the country. However, few would argue that America still considers itself to be the messenger of truth. The U.S. always has a harsh word or two up its sleeve and is never reluctant to lash out, especially when it comes to Russia. And one has to wonder - how long until one voice continues to attempt to influence the rest of the world. Russia says "enough is enough" - the United States has to work with other countries. "In order to control a totally new situation as it evolved after 9/11, instead of required genuine co-operative effort, including joint analysis and co-ordination of practical steps, the mechanisms intended for a unipolar world started to be used, meaning that all decisions were to be taken in a single centre while the rest just had to follow," Lavrov said. Saturday’s speech of Russia’s Foreign Minister follows addresses by U.S. President George Bush and French President Nicolas Sarkozy earlier in the week. George Bush spoke for the last time as U.S. President. He criticised Russia for its actions during the conflict in South Ossetia, adding that Washington will continue to support Georgia. As for Sarkozy, speaking on the recent violence in South Ossetia, he stressed the EU can't compromise when it comes to the sovereignty of states.

No sanctions against Iran

Meanwhile, the Russian message was not the only spotlight at the UN on Saturday. The Security Council has adopted a new resolution on Iran. The text is sanction-free, it calls upon Iran to follow the three previous resolutions passed by the Security Council. The goal of the resolution is to show that the Security Council is united in one stance when it comes to Iran's nuclear programme. The President of Iran spoke at the UN General Assembly on Tuesday. Mahmoud Ahmadinejad said his country had a right to peaceful nuclear energy and was being bullied through political and economic pressure.

Source: http://www.russiatoday.com/news/news/31060

In other news:

Time For A Gold Rouble?


There used to be a habit of framing old Tsarist bonds and putting them on the wall. Lenin's decision to renege on the Russian imperial debt meant that it became mere paper, interesting only as a historical relic. In the light of the recent financial crisis in the USA, could the same thing happen now to the bonds issued by the American government, and could the country which has dominated the world for the last half century now enter history as a bankrupt state? And what can Russia do in the circumstances?

The decision by the US government to inject $700 billion into the financial system means that the already gigantic annual budget deficit of the American state (previously some $450 billion a year) will now rise by a factor of three. The total state debt of the USA will rise to well over $11 trillion. It is obvious that such a colossal debt can never be repaid. Instead, it will be serviced by more debt in the future. The contrast with Russia, which has painstakingly sanitised its state finances to the point that it now has more money to lend than the IMF, could hardly be greater. The recent financial crisis itself grew out of this American culture of debt. To some extent, all countries share it: since 1914, all countries use paper currencies, i.e. debt instruments which are never redeemed. Whereas before the First World War, bank notes were essentially vouchers for specific amounts of gold cash, now the "promise to pay the bearer" (which remains inscribed on British bank notes) is in fact hollow.

In America, this basic culture of debt is aggravated by the fact that other countries use the dollar itself as a reserve. This means that the United States can export dollars in order to pay for its imports without the dollar losing value. Other states also need dollars to buy key commodities like oil. The USA can therefore export paper currency almost indefinitely - the famous "deficit without tears" analysed by the great French economist, Jacques Rueff. Naturally, if the state itself encourages such a culture of debt by issuing unredeemable paper currency to pay for imports, and by accumulating such mountains of debt, then it is no surprise if the American financial markets themselves operate on the same basis. But the collapse of those markets is only a symptom of a much deeper problem, the basic insolvency of the American state itself.

What can Russia do about this? At first sight, Russia's role in the international financial system does not seem very large. However, as a major exporter of hydrocarbons, her role in the world economy is actually very important. As the age of the dollar draws to a close, Russia will have to consider selling her oil and gas not in the devalued American currency, but instead in the euro used by most of her customers. It is surely unnatural for two geographical neighbours to do such large volumes of business using the currency of a distant and now ailing nation. Second, the Russian leaders might also consider making their own currency, the rouble, convertible into gold. The idea of gold convertible currencies is extremely unpopular among most economists: they dismiss gold as a "barbarous relic" (to use the famous phrase of John Maynard Keynes) and suggest either the present regime of paper currencies or, at best, a link to a basket of commodities.

Both these solutions are highly artificial and based on the same level of state control which has now just so spectacularly failed. Indeed, which is more "barbarous" - the reintroduction of gold as an instrument of payment, or the practice of amassing huge quantities of the precious metal to keep it locked underground in the vaults of central banks? The contempt of the Keynesians notwithstanding, it is an indisputable fact that gold does remain the ultimate store of value, which is precisely why states own so much of it. Russia has less to fear than other countries from the introduction of a currency convertible into gold. Governments are typically hostile to gold because it reduces their discretionary power over the currency and the economy: they say that the money supply cannot be made dependent on the production of gold mines. In reality, this argument is bogus because the amount of mined gold already in existence vastly exceeds the yearly production, so mining does not in fact have an appreciable impact on supply. But, as it happens, Russia is a major producer of gold anyway and therefore to some extent controls production.

Secondly, Russia is vulnerable to her status as an exporter of primary materials - and as an exporter generally - especially in the age of inflation which is about to dawn. The more the Russian economy exports, the more her national paper currency will rise, making those exports more expensive. This is bad for an export-oriented economy. By contrast, the value of a gold rouble would depend not on the trade balance of the Russian economy at all, but instead simply on the price of gold itself which generally remains stable with relation to other commodities. Russia has shown surprising success in putting an end to the unipolar world of which American strategists have dreamed now for over a decade. There are no permanent victories in diplomacy, however, but a shift in the structure of the world financial system would help to entrench recent gains.

Source: http://en.rian.ru/analysis/20080924/117072937.html

After Financial Crisis, Uncertainty and Lectures From Abroad


As America’s financial crisis was gathering speed, Brazil’s president seemed dismissive, almost gleeful, about the troubles up north. “What crisis?” said the president, Luiz Inácio Lula da Silva, when asked last month about the financial maelstrom. “Go ask Bush about that.” Like a number of South American countries, Brazil had been flashing a newfound confidence, one born of a deliberate push to decrease political and economic reliance on the United States. But on Monday, shortly after Congress rejected a proposed $700 billion bailout package, Mr. da Silva struck a very different tone, saying in his weekly radio address that Brazil was not immune from the spreading woes after all. “A recessionary crisis in a country like the United States,” he explained to Brazilians, “can bring problems to all countries.” In only a few days, Latin American leaders have gone from schadenfreude to fear. Despite strong economic growth this decade and some aggressive efforts to break free of the American orbit, there is a growing nervousness that once again Latin America cannot escape the globalized connections in the financial sector that run through the United States. After seeming to revel in the collapse of Lehman Brothers, Hugo Chávez, Venezuela’s president, skipped the opening of the United Nations General Assembly last week to visit China instead, saying that Beijing was now much more relevant than New York.

But by Tuesday, after the American stock market plunged nearly 778 points, dragging down Latin American exchanges with it, New York, and Wall Street in particular, had suddenly become relevant once more, with Mr. Chávez saying at a summit meeting in Brazil that the financial crisis would have the force of “one hundred hurricanes.” A number of governments in the region have been working for the past decade to reduce their dependence on the American economy. They have diversified trade with the rest of the world, while also making efforts to save tens, and sometimes hundreds, of billions of dollars for times when international conditions turn sour. As their economies strengthened and their political cooperation took off, it seemed the United States was being rapidly pushed out of the picture. Latin American leaders were standing up to America with growing bravado. In the past month, both Venezuela and Bolivia expelled the American ambassadors to their countries. Not only did Brazil, thought to be among America’s strongest allies in the region, support the expulsion by Bolivia, a major source of natural gas, but Mr. da Silva also railed against an American naval presence in the region, warning that his nation needed to put its own warships on alert in response.

Such anti-American sentiment reflects a longstanding bitterness over Washington’s economic prescriptions for Latin America, policies that some countries in the region blame for undercutting them. As Wall Street itself started to unravel, some leaders seemed to feel vindicated by the collapse. “We are witnessing the First World, which at one point had been painted as a mecca we should strive to reach, popping like a bubble,” Cristina Fernández de Kirchner, Argentina’s president, said two weeks ago. But the financial crisis has exploded far beyond Wall Street. Whipsawing global markets are already having a ripple effect across Latin America. As nervous investors pulled money out of emerging markets, Brazil’s currency, the real, plunged 16 percent against the dollar last month, resulting in hundreds of millions of dollars in losses at large food and eucalyptus-pulp exporters that placed bad bets on the direction of the real. In Mexico, falling remittances from the United States are also raising concern, with Finance Minister Augustín Carstens warning that money sent home from across the border could decline by $2.8 billion, or 8 percent, this year. In Venezuela, a sharp drop in the value of the country’s bonds in the last two weeks reflects fears about plunging oil prices, especially since the United States remains by far the largest buyer of Venezuelan oil despite the deterioration of relations between the countries.

The issue, economists say, is largely about access to credit, which is needed to keep Latin America’s export-oriented economies humming along. “The credit crunch and the liquidity constraints we are seeing are going to affect everyone in the world,” said Alfredo Coutiño, a senior economist at Moody’s, the credit-rating agency. “That means that the cost for Latin American companies, particularly for those with the need for external funds, is going to be higher.” Plummeting commodity prices could also hamper growth in countries like Argentina and Ecuador, while the psychological effect of a crash in the United States is already reverberating through Latin American stock exchanges. That could lead to a reining in of household spending, which has driven much of the recent growth in Brazil’s economy, especially, economists said. Some governments are also directly tied to the American institutions they have derided, as in Venezuela, where the government has lost about $300 million in Lehman-related investments. Ricardo Sanguino, director of the finance committee in Venezuela’s National Assembly, said the losses were minor compared with the Central Bank’s reserves of more than $30 billion and previous decisions to shift some of those reserves into gold and out of American investment banks into Swiss banks. “The crisis affects us because we’re not a completely closed economy, but the impact won’t be disastrous,” Mr. Sanguino said.

With increased fiscal discipline, some countries have built up stabilization funds that should help them weather the fallout from the Wall Street mess, economists said. Brazil’s government has directed its national development bank, the BNDES, to extend $2.5 billion in credit to agricultural exporters for the next harvest to try to prevent a major slowdown. Other countries in the region may struggle more. Before the crisis, foreign investment had already dwindled in Bolivia and Ecuador, where governments flush with revenues before commodities prices began declining had nationalized foreign companies and clashed with multinationals. Argentina, still weighed down by debt, saved much less than Brazil or Chile during its economic expansion. Now it faces declining commodity prices, especially for soybeans, its main export, and will have less flexibility to infuse cash into its industries, analysts said. In recent weeks, the Argentine government, realizing it may face a fiscal shortfall, has been focused on international investors to gain new funds, and has leaned on Venezuela to refinance billions of dollars in debts. But with oil prices plummeting, Venezuela may impose harsher conditions on lending to Argentina. Even before the Wall Street meltdown, the region’s Achilles’ heel — high inflation — was rearing its head in several countries, notably in Venezuela, Bolivia and Argentina. Economists had been warning for months that Argentina could be headed toward a financial crisis of its own if it could not get rising inflation under control.

One silver lining for some countries could be China, which has become a strong export partner for South American soybeans, oil and other commodities. If China’s growth remains robust, the country will continue to lean on Brazil and Argentina for the crop. By traveling to China last month to sign a deal aimed at tripling oil exports to the country, Mr. Chávez may end up reducing his country’s dependence on the American market. “The world will never be the same after this crisis,” Mr. Chávez told reporters in Brazil. “A new world has to emerge, and it is a multipolar world. We are decoupling from the wagon of death.” Other leaders, like Mr. da Silva, have gone from being dismissive of the crisis to outright incensed at Wall Street and Washington for it. “We did what we were supposed to do to get our house in order,” an angry Mr. da Silva said Monday. “They spent years telling us what to do and they themselves didn’t do it.”

Source: http://www.nytimes.com/2008/10/03/wo...l?ref=business

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Dear reader,

Arevordi will be taking a sabbatical to tend to personal matters. New blog commentaries will henceforth be posted on an irregular basis. The comments board however will continue to be moderated on a regular basis.

The last 20 years or so has also helped me see Russia as the last front against scourges of Westernization, Globalism, American expansionism, Zionism, Islamic extremism and pan-Turkism. I have also come to see Russia as the last hope humanity has for the preservation of classical western civilization, Apostolic Christianity and the traditional nation-state. This compelled me to create this blog in 2010. Immediately, this blog became one of the very few voices in the vastness of cyberia that dared to preach about the dangers of Globalism and the Anglo-American-Jewish alliance, and the only voice preaching the strategic importance of Armenia remaining within Russia's orbit. From about 2010 to 2015 I did monthly, at times weekly, commentaries about Russian-Armenian relations and Eurasian geopolitics in general. It was very difficult for me because I had no assistance from anywhere. The time I put into this blog therefore came at the expense of work and family. But a powerful feeling inside urged me to keep going; and I did. When Armenia joined the EEU and integrated into Russia's military structures a couple of years ago I finally felt a deep sense of relaxation, as if a very heavy burden was lifted off my back. And when Prime Minister Karen Karapetyan reemerged in Armenian politics, I finally felt that my personal mission was accomplished. I therefore felt I could take a step back as I really needed the rest.

Simply put: I have lived to see the institutionalization of Russian-Armenian alliance. Also, I feel more confident now that Armenians are collectively recognizing the strategic importance of Armenia's ties with Russia. Moreover, I feel satisfied knowing that, at least on a subatomic level, I had a hand in the outcome. As a result, I feel a strong sense of mission accomplished. I therefore no longer have the internal urge to continue as in the past. In other words, the motivational force that had propelled me in previous years has been gradually dissipating because I feel that this blog has lived to see the realization of its stated goal.

Going forward, I do not want to write merely for the sake of writing. Also, I do not want to say anything if I have nothing important to say. I feel like I have said everything I needed to say. Henceforth, I will post seasonal commentaries about topics I find important. I will however moderate the blog's comments section on a regular basis; ultimately because I'm interested in what readers of this blog have to say and also because it's through readers here that I am at times made aware of interesting developments. To limit clutter in the comments section, I kindly ask all participants of this blog to please keep comments coherent and strictly relevant to the featured topic of discussion. Moreover, please realize that when there are several anonymous visitors posting comments simultaneously, it becomes very confusing (not to mention extremely annoying) trying to figure out who is who and who said what. If you are here to engage in conversation, make an observation, express an idea or just attack me, I ask you to at least use a moniker to identify yourself.

Please appreciate the fact that I have put an enormous amount of information into this blog. In my opinion, most of my blog commentaries and articles, going back ten-plus years, are in varying degrees relevant to this day and will remain so for a long time to come. Posts in this blog can therefore be revisited by longtime readers and new comers alike. I therefore ask the reader to treat this blog as a depository of important information relating to Eurasian geopolitics. Russian-Armenian relations and humanity's historic fight against Globalism and Westernization.

Thank you for reading.