Monday, October 13, 2008

Bear on the prowl.

No, I don't mean the stock market.  I mean Russia.  

They've paused on their way to the Caribbean to play with Venezuela, with whom they want closer ties, docking in Libya.  It's a little rediculous for them to try to dock there--the harbor isn't big enough for more than one of the three ships making their way toward our back yard.  

They've also test-fired a ballistic missile to the middle of the Pacific, near the equator.    According to the news article, this is the first time they've test fired a missile anywhere except their own proving grounds.  

This, combined with their belligerence over our involvement with Georgia, the Ukraine, and Poland, along with their increased meddling in Latin America, and in the Middle East, is extremely worrying.  Especially when one considers that their main source of new wealth--the chokehold they have on Europe with their oil production--is endangered by the current economic conditions.  

As of Friday, oil prices had plunged to extreme lows--$77.70-- considering what they had been.  Though they've come back up a bit, with Russia's oil companies cost of doing business, it's not quite enough to help them do more than just break even, and their tax rate--the government gets about $47 per barrel in taxes.

When it falls too low, it's likely that the re-awakening communist government will seize the companies that have to shut down because they're losing money.  At that point, the government's revenue from oil production will fall, because the government is always less efficient at doing jobs than private industry (An elephant is a mouse built to government specifications--Robert Heinlein).  They'll be likely to become even more belligerent as Europe starts looking elsewhere to buy oil.

At that point, the bear won't be just prowling, but hungry.  It's possible that a cold war could heat up fast, in those circumstances.

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