The new mantra of the ruling American elites, of the heads of the two branches (Republican & Democrat) of the One Party Police State is to embargo Russia as punishment for Georgia's war of aggression and extermination upon the Ossetian people.
Yes, dear reader, this makes about as much sense as cutting off one's nose to spite one's face. Not only is America, yet again and again, taking the side of mass murderers (I could write a very long article listing all the sociopaths that the US has backed in the past 50 years), but it is willing to damage its own critically ill economy to make symbolic gestures at Russia. Why?
An intelligent person would consider that maybe there is some deeper plan, some darker conspiracy going on, but no, there is none of either. What Russia is facing is pure American stupidity and vindictiveness, driven to such a degree, that it no longer recognizes when the real damage will be to its own people and its own interest, or for that matter really cares.
The modern America has no substance, only show. Glitz and mindless action is much more important than contemplation and planned movement or even the weighing of resources. Simply put, if Russia wants to understand America , think like a Caucasian (note: not a white person as most American readers will think I'm referring to, but a person from the Caucasus ). In other words: all emotion, no brains.
As such, what will the results of this be?
For Russia , there will be a loss of business, sure, but it is a minor loss, as the US still employs the Jackson-Venik Act to block most Russian imports into the US . However those that do come through, tend to be the most critical varieties.
By 2007 statistics, America is only 4.8% of the Russian export market of $365 billion dollars, of which most is petro products and Americans love paying more for their gas. This comes out to a bit more than $17 Billion. Now, Russia will of course retaliate with its own embargo in this new US trade war, which will cost $9.4 billion or so to America . The key difference here is: most of what Russia exports to the US is oil/petro products, Russian finished goods are minimal to America, again under the Jackson-Vanik Act. These petro products have a huge world wide market and are assured to sell instantly.
The US , however, exports finished goods and the only sector of the US economy, besides government of course, that has not suffered from the US recession, has been export manufacturing.
Lets be more specific. The US imports from Russia:
Oil & other petroleum products …US$10 billion
Aluminum … $1.8 billion
Semi-finished iron & steel products … $1.5 billion
Nuclear fuels … $866.3 million
Finished metal products other than steel … $852.9 million
Precious metals … $697.6 million
Nickel … $645.3 million
Steelmaking materials … $635.6 million
Fertilizers, pesticides & insecticides … $395 million
Fish & shellfish … $375.3 million
Military aircraft & parts … US$10.4 million
Railway transportation equipment … $50.3 million
Civilian aircraft parts … $42.4 million
Generators, transformers & accessories … $8 million
So, from a US import ban on Russian products, who will be directly affected? First and foremost, US drivers and consumers of petroleum products, such as the heating oil this year in the NE...but they enjoy being cold and broke and deserve it for living in the cold...or so many of the pundits defending this stupidity will say. The airline companies should really love this, especially when they have to pay more for parts to.
Next will suffer US manufacturing, export manufacturing to be exact, with a loss of $5.4 BILLION in high quality, cheap priced imports of metal and metal products. That should hit them right in the nads. But don't worry, Europe will more than happily suck up that additional capacity and further out compete the US.
Next will be the American drive for nuclear power and additional electrical capacity, or where did all those American earth lovers think their power for their future electric cars was going to come from? That'll be a loss of a combined: $874 million.
Than there's the US farmers, who are loosing their farms at the fastest rate in the past 70 years. They will be happy to hear that their cost of fertilizer will go up quite a bit, as the Chinese or Europeans will happily buy up the extra capacity created by the US embargo of $400 million.
On top of this, what is not mentioned is:
1. The loss of Russian transport planes to fly US/NATO troops, equipment and supplies to Afghanistan .
2. The loss of Russian sea transports that carry more than half of the US military equipment world wide...that's right, the US would have had a hell of a time even getting to Iraq without Russian companies...no one ever thought that through, right?
3. The US nuclear industry has already lost the ability to partner with Russia and will instead have to compete against Russia on the world market for nuclear power generators. Allow me to make this more clear: the last generator Russia built was last year, the last one America built was 25 YEAR AGO. Whom will consumers trust?
4. US commercial satellites will now cost almost double as much to send to orbit, riding on the EU rockets, instead of Russian rockets.
5. US cosmonauts will continue flying the space shuttle with it's now 1 in 12 chance of exploding, rather than on Russian rockets. What dear reader do you think will happen to the US space program if/when another one or two shuttles explode? Furthermore, the more and more expensive shuttles (maintenance on old equipment is a upward curve)
6. The US satellites will no longer get Russian ion engines and thus NASA's bills for engines will more than double in price.
These are just the economic costs, there will be plenty of political costs, such as everything to do with the war on terror.
Now lets us see what US suppliers to Russia will loose. Note, the lack of goods from the US will not hurt Russia, as there are hundreds of European and Japanese suppliers biting at the bit to suck up US market share, what little there is.
Meat incl. poultry … US$636.7 million (poultry has already fallen victim)
Passenger cars … $399.3 million
Civilian aircraft … $384.3 million
Oil field drilling equipment … $319.6 million
Excavating machinery … $170.7 million
Computer accessories … $155.1 million
Agricultural machinery … $148.1 million
Service industry machinery … $125.2 million
Trucks, buses & special purpose vehicles … $117 million
Materials handling equipment … $98.6 million
Iron & steel products … US$2.9 million
Railway transportation equipment … $18.7 million
Engines & parts … $70.1 million
Coal … $3.8 million
Synthetic rubber … $3 million
So, first off, the struggling US auto industry is set to loose a further $490 million in exports. But since they will be getting bailed out for $50 billion in US taxpayer monies, they can just add this right on top of it.
Airbus will also be kind to thank America for giving them an extra $340 million in business. As a matter of fact all US provided goods are absolutely substitutable for European goods, with the loan exception of possibly coal, but Abkhazia has large coal deposits and will be more than happy to export to Russia .
Furthermore, Europe has flatly showed the blind fools in DC that they will not follow America into idiocy, with the as always exception of the Anglo Lapdogs in London. There's a nice doggy, there's a nice doggy...now bark at the bad Russians on command...good neutered English pup.
But beyond all this is even a greater issue for America . It would seem that Russia is the 8th largest financier of America . That's right, America is now threatening its own financiers, a beggar with pride is a hungry beggar.
As such, the Russian government, never mind the billions extra held by Russian companies, holds $65 Billion in US government debt. The most obvious thing that the Russian government should than do is liquidate this debt. If nothing else, a fire sale of this proportion will have a major down ward pressure on all other US debt, costing the US far more than those $65 billion and throwing into doubt their ability to finance further without seriously raising interest rates and thus squeezing their serfs even more. Do you understand that US taxpayers? Your government is about to make your difficult lives much worse, and by the time you grow up to be adults and realize this, it will be to late.
The final card in the Russian economic arsenal, is of course the most devastating. This card can fully damage the entire US financial sector right from critically injured to mortally. Russia, as the world's 2nd largest oil exporter and the world's largest gas exporter, can refuse the US dollar, outright.
This will have the effect of removing the only reason why the US dollar is a reserve currency: to buy and sell petroleum products. All those European, Japanese, Chinese and other customers will no longer need the dollar, thus will sell it. This will have a sharp impact on dollar demand and with all those dollars flooding back into America , will drive inflation well past the US government's ability to lie about it. With Iran already refusing, the 3rd largest, the renewed US inflation caused by the explosion in inflation will have the same effect upon any nation whose currency is linked to the USD.
Of all such currency Saudi Arabia's is the key. Already SA is facing almost a 30% inflation and the serfs are angry as the cost of imported rice, a main dietary staple, has more than doubled. What will happen if inflation really accelerates? Either Riyadh will leave the dollar or face revolution. Either way, the dollar will loose its final anchor and its status as reserve currency. With this blow will go what is left of America 's economy and empire.
So, when US politicians are mouthing off and taking trade war steps, maybe they had best stop, for once in their lives, and actually do the math as to whom will be the real loser.
Note: sums by category were quoted from: Top Russian Exports & Imports
The article reprinted with the kind permission from Stanislav Mishin and can be found on his personal blog Mat Rodina