Russia's Actions

Russian president Vladimir Putin spoke at the 43rd Munich Security Conference. He spoke to many of the world's assembeled political leaders. He hit on a main point that I have been preching about for a while. He said that the United States is trying to establish a "uni-polar world," which he defined as, "one single center of power, one single center of force, and one single master." He went on to say that this is a "formula for disaster."

He discussed how the Bush's Regime ability to rage war is dependant upon foreign financing. It is financed with red ink. By financing our debts, foreign nations are paying for our war efforts. The U.S. government can't borrow from American citizens because they spend more money than they earn. The U.S. savings rate was negative 1% this last year. That's the lowest number since the great depression. I would note that, it's definetly an interesting coincidence.

Basically by financing our debt, they are basically going along with the whole war in Iraq. The final most important item that Putin spoke of, is that if foreign governments stopped buying U.S. bonds and treasuries, and flooded their USD denominated forex reserves into the market, they could create an economic crisis here in the U.S. and eliminate the U.S.' ability to wage war.

Like I have said before, this is the biggest weakness of the United States of America. Because when one of these countries floods there USD reserves the USD's value will begin to decline forcing all the other countries who hold the USD to follow suit creating a snowball effect. I feel the spark that could set this all into motion could be the Fed's reaction of lowering interest when recession comes later this year.