Intel report predicts U.S. decline, Russia's rise

[peejay 327]

Intel report predicts U.S. decline, Russia's rise

U.S. trend analysis cites Moscow oil boom, dollar woes and al-Qaida's decay

Associated Press

WASHINGTON - Global warming could be a boon to Russia, a European country could be overrun by organized crime and the U.S. and its dollar could further decline in importance during the next two decades, says a U.S. intelligence report with predictions for the world in 2025.

The report, Global Trends 2025, is published every four years by the National Intelligence Council to give U.S. leaders insight into looming problems and opportunities.

The report says the warming earth will extend Russia and Canada's growing season and ease their access to northern oil fields, strengthening their economies. But Russia's potential emergence as a world power may be clouded by lagging investment in its energy sector, persistent crime and government corruption, the report says.

Analysts also warn that the same kind of organized crime plaguing Russia could eventually take over the government of an Eastern or Central European country. The report is silent on which one.

It also says countries in Africa and South Asia may find themselves unstable and ungoverned, as state regimes collapse or wither away under security problems and water and food shortages brought about by climate change and a population increase of 1.4 billion.

The potential for conflict will be greater in 2025 than it is now, as the world's population competes for declining and shifting food, water and energy resources.

Al-Qaida's decay

Despite a more precarious world situation, the report also says al-Qaida's terrorist franchise could decay "sooner than people think." It cites its growing unpopularity in the Muslim world, where it kills most of its victims.

"The prospect that al-Qaida will be among the small number of groups able to transcend the generational timeline is not high, given its harsh ideology, unachievable strategic objectives and inability to become a mass movement," the report states.

The report forecasts a geopolitical rise in non-Arab Muslim states outside of the Middle East, including Turkey and Indonesia, and says Iran could also be a central player in a new world order if it sheds its theocracy.

Decline in America's global power

The report, a year in the making, also suggests the world may complete its move away from its dependence on oil, and that the U.S. dollar, while remaining important, will decline to "first among equals" among other national currencies.

U.S. global power also will likely decline, as Americans' concerns about putting resources into solving domestic problems may cause the United States to pull resources from foreign and global problems.

http://www.msnbc.msn.com/id/27835353

[Laura+Tom 2]

I saw the same report on the BBC website in the last sentence was 'And, our correspondent adds, it is worth noting that US intelligence has been wrong before.'

[Otto 83]

Their job is to 'predict' worst case scenarios - not a 'bed of roses'. Look up historical (NIC) reports and see..

[mawilson 2,133]

Er.... Russia's "rise"??? What rise? Russia is fukced!

Russia acknowledges financial crisis has hit hard

MOSCOW (Reuters) - Russia had convinced itself -- and the outside world -- that its huge oil

wealth and vast foreign exchange reserves made it much less vulnerable than others to the

global financial crisis.

But after weeks of virtual silence by state media about the effects the crisis has had on Russia,

President Dmitry Medvedev has suddenly acknowledged the extent of the damage.

"In all likelihood, the crisis is going to spread. Here we have to face reality," he said on Tuesday.

Top bankers and businessmen say Medvedev's words amounted to an official acknowledgement

of what they have sensed in recent weeks -- a sudden, dramatic slowdown of the economy as

credit dried up, sales slumped and factories laid off staff.

"We had thought that Russia would be far less badly hurt by the crisis than other major

economies," said one leading Russian banker, speaking on condition of anonymity.

"Now it is clear that Russia will be much worse affected by the crisis than other major

economies and will be affected for much longer."

The government is still officially predicting growth of 6.7 percent next year but the World Bank

this week halved its growth forecast for Russia to 3 percent and many businessmen and bankers

say privately growth will be at best zero.

Underlining the fresh sense of urgency felt in the government, Prime Minister Vladimir Putin on

Thursday announced a $20-billion package of tax cuts and extra spending to help pensioners,

companies and the unemployed. This was on top of $200 billion of financial aid already pledged

by the Kremlin.

REASONS FOR THE GLOOM

The reasons for the sudden gloom, bankers and analysts say, are four-fold:

• economists had highlighted negligible government debt but ignored the fact that Russian

  oligarchs built up huge foreign debts by buying assets at home and abroad whose stock market

  value has now collapsed. Since the assets are in many cases key national companies, the

  Kremlin has to bail the oligarchs out

• the country's once-mighty gold and foreign exchange reserves, which peaked at $597 billion

  in August, have slumped to $453 billion and are dwindling at a rate of $22 billion a week

• prices of Russia's main exports, energy and metals, have collapsed in recent weeks to levels

  nobody anticipated. Russia's benchmark Urals crude was trading at $44 on Friday, less than half

  the $95 level anticipated in next year's budget

• many small and medium-sized Russian companies are poorly capitalized and relied on easy

  bank credit; they have found themselves too short of cash to continue normal operations

The Russia country manager of one leading European consumer sector company, speaking

anonymously because he is not authorized to talk to the media, said his sales boomed through

the year until: "In October, they just fell off a cliff."

"Consumers hadn't stopped buying," he said. "But our wholesalers and distributors ran out of

money and stopped placing orders."

ROUBLE'S FATE IS SIGNIFICANT

In a country where few hold shares but most watch the price of dollars, the fate of the rouble has

of huge significance.

Ordinary Russians, who have suspected for some weeks that the real economic picture may be

less rosy than the official one painted by state-controlled television, have been quietly

withdrawing large amounts of roubles from banks to buy dollars.

The central bank announced on Wednesday it had spent $57.5 billion of reserves in the past

two months selling dollars to prop up the rouble and analysts said that over the same period

savers had withdrawn a quarter of all their deposits.

After weeks of insisting that the rouble would not be devalued, the government now faces an

impossible choice: burn up the country's remaining vital foreign exchange reserves in what many

regard as a hopeless battle to defend the rouble, or let the currency go and face a collapse of

public confidence.

"It would probably be better from a macro-economic point of view to allow the rouble to float

freely," said one senior Russian government official, speaking on condition of anonymity.

"But if we do, there is a risk that it will overshoot, fall as much as 50 percent and trigger a

run on banks."

COMPANIES' WOES MOUNT

Problems continue to mount for key Russian companies. Used to years of steadily rising sales

and often heavily in debt, they are facing a sudden collapse in demand.

In a latest sign of trouble, electricity generators have seen a sudden rise in unpaid bills from

corporate customers.

For the past three weeks, 13 percent of industrial users have not paid their bills, compared

to about 8 percent before the onset of the crisis, industry regulator Dmitry Ponomaryov said

on Wednesday.

The latest Russian giant to hit the buffers is potash miner Uralkali, whose products are used

to make fertilizer.

Its shares, already weak after the government reopened an investigation into a mine accident,

crashed after it announced plans to slash production. The stock is now 96 percent down on its

June peak, on a par with Russia's distressed property developers who are sitting on thousands

of unsold flats.

As layoffs mount, the economic pain is posing a growing threat to the dual leadership of

Medvedev and Putin.

An opinion poll published this week by the independent Levada Center showed the proportion

of Russians who think the government is doing a good job handling the crisis had almost halved

from 13 percent in October to 7 percent in November.

Those saying it is performing badly rose from 27 percent to 33 percent.

In this environment, even the better-placed of the country's famed billionaire oligarchs are

feeling the heat.

One of Russia's five richest men, speaking on condition of anonymity, said many businessmen

in Russia simply wanted "to be alive, the longer the better."

"This crisis is hitting everybody, big business and small business," he said. "...but Russians

are really fighters. They will fight to the end."

link

[Ilya R. 0]

Er.... Russia's "rise"??? What rise? Russia is fukced!

Russia acknowledges financial crisis has hit hard

MOSCOW (Reuters) - Russia had convinced itself -- and the outside world -- that its huge oil

wealth and vast foreign exchange reserves made it much less vulnerable than others to the

global financial crisis.

But after weeks of virtual silence by state media about the effects the crisis has had on Russia,

President Dmitry Medvedev has suddenly acknowledged the extent of the damage.

"In all likelihood, the crisis is going to spread. Here we have to face reality," he said on Tuesday.

Top bankers and businessmen say Medvedev's words amounted to an official acknowledgement

of what they have sensed in recent weeks -- a sudden, dramatic slowdown of the economy as

credit dried up, sales slumped and factories laid off staff.

"We had thought that Russia would be far less badly hurt by the crisis than other major

economies," said one leading Russian banker, speaking on condition of anonymity.

"Now it is clear that Russia will be much worse affected by the crisis than other major

economies and will be affected for much longer."

The government is still officially predicting growth of 6.7 percent next year but the World Bank

this week halved its growth forecast for Russia to 3 percent and many businessmen and bankers

say privately growth will be at best zero.

Underlining the fresh sense of urgency felt in the government, Prime Minister Vladimir Putin on

Thursday announced a $20-billion package of tax cuts and extra spending to help pensioners,

companies and the unemployed. This was on top of $200 billion of financial aid already pledged

by the Kremlin.

REASONS FOR THE GLOOM

The reasons for the sudden gloom, bankers and analysts say, are four-fold:

• economists had highlighted negligible government debt but ignored the fact that Russian

  oligarchs built up huge foreign debts by buying assets at home and abroad whose stock market

  value has now collapsed. Since the assets are in many cases key national companies, the

  Kremlin has to bail the oligarchs out

• the country's once-mighty gold and foreign exchange reserves, which peaked at $597 billion

  in August, have slumped to $453 billion and are dwindling at a rate of $22 billion a week

• prices of Russia's main exports, energy and metals, have collapsed in recent weeks to levels

  nobody anticipated. Russia's benchmark Urals crude was trading at $44 on Friday, less than half

  the $95 level anticipated in next year's budget

• many small and medium-sized Russian companies are poorly capitalized and relied on easy

  bank credit; they have found themselves too short of cash to continue normal operations

The Russia country manager of one leading European consumer sector company, speaking

anonymously because he is not authorized to talk to the media, said his sales boomed through

the year until: "In October, they just fell off a cliff."

"Consumers hadn't stopped buying," he said. "But our wholesalers and distributors ran out of

money and stopped placing orders."

ROUBLE'S FATE IS SIGNIFICANT

In a country where few hold shares but most watch the price of dollars, the fate of the rouble has

of huge significance.

Ordinary Russians, who have suspected for some weeks that the real economic picture may be

less rosy than the official one painted by state-controlled television, have been quietly

withdrawing large amounts of roubles from banks to buy dollars.

The central bank announced on Wednesday it had spent $57.5 billion of reserves in the past

two months selling dollars to prop up the rouble and analysts said that over the same period

savers had withdrawn a quarter of all their deposits.

After weeks of insisting that the rouble would not be devalued, the government now faces an

impossible choice: burn up the country's remaining vital foreign exchange reserves in what many

regard as a hopeless battle to defend the rouble, or let the currency go and face a collapse of

public confidence.

"It would probably be better from a macro-economic point of view to allow the rouble to float

freely," said one senior Russian government official, speaking on condition of anonymity.

"But if we do, there is a risk that it will overshoot, fall as much as 50 percent and trigger a

run on banks."

COMPANIES' WOES MOUNT

Problems continue to mount for key Russian companies. Used to years of steadily rising sales

and often heavily in debt, they are facing a sudden collapse in demand.

In a latest sign of trouble, electricity generators have seen a sudden rise in unpaid bills from

corporate customers.

For the past three weeks, 13 percent of industrial users have not paid their bills, compared

to about 8 percent before the onset of the crisis, industry regulator Dmitry Ponomaryov said

on Wednesday.

The latest Russian giant to hit the buffers is potash miner Uralkali, whose products are used

to make fertilizer.

Its shares, already weak after the government reopened an investigation into a mine accident,

crashed after it announced plans to slash production. The stock is now 96 percent down on its

June peak, on a par with Russia's distressed property developers who are sitting on thousands

of unsold flats.

As layoffs mount, the economic pain is posing a growing threat to the dual leadership of

Medvedev and Putin.

An opinion poll published this week by the independent Levada Center showed the proportion

of Russians who think the government is doing a good job handling the crisis had almost halved

from 13 percent in October to 7 percent in November.

Those saying it is performing badly rose from 27 percent to 33 percent.

In this environment, even the better-placed of the country's famed billionaire oligarchs are

feeling the heat.

One of Russia's five richest men, speaking on condition of anonymity, said many businessmen

in Russia simply wanted "to be alive, the longer the better."

"This crisis is hitting everybody, big business and small business," he said. "...but Russians

are really fighters. They will fight to the end."

link

Its much easier to recover from already half broken system, than it is from a fully functional one.

[mawilson 2,133]

Its much easier to recover from already half broken system, than it is from a fully functional one.

Haven't we played this game before?

"Complete the Five-Year Plan in four years"

"Catch up with and outstrip America"

Didn't really work for the USSR, despite their best efforts.

[Ilya R. 0]

Its much easier to recover from already half broken system, than it is from a fully functional one.

Haven't we played this game before?

"Complete the Five-Year Plan in four years"

"Catch up with and outstrip America"

Didn't really work for the USSR, despite their best efforts.

Its much simpler than you seem to think.

[mawilson 2,133]

Its much easier to recover from already half broken system, than it is from a fully functional one.

Haven't we played this game before?

"Complete the Five-Year Plan in four years"

"Catch up with and outstrip America"

Didn't really work for the USSR, despite their best efforts.

Its much simpler than you seem to think.

Explain

[Ilya R. 0]

All I am saying is, if there is a collapse here and there, they'll recover much faster than we will.

[mawilson 2,133]

All I am saying is, if there is a collapse here and there, they'll recover much faster than we will.

I just don't see that happening.

The US will be the first to come out of this recession.

[Ilya R. 0]

All I am saying is, if there is a collapse here and there, they'll recover much faster than we will.

I just don't see that happening.

The US will be the first to come out of this recession.

If you had a complex structure, with lots of investments and tie ins from other places, and it collapsed, it would be much more difficult to rebuild than Rotting wood house. I dunno, thats the way I look at it!!

[mawilson 2,133]

All I am saying is, if there is a collapse here and there, they'll recover much faster than we will.

I just don't see that happening.

The US will be the first to come out of this recession.

If you had a complex structure, with lots of investments and tie ins from other places, and it collapsed, it would be much more difficult to rebuild than Rotting wood house. I dunno, thats the way I look at it!!

But Russia did have a lot of investments - investments that got pulled out as fear gripped the markets

and investor confidence evaporated. It will take years to restore that confidence.

At the same time, when push comes to shove, the US dollar (as well as the Japanese Yen) is considered

the ultimate safe haven currency. It may seem counterintuitive, but as the US and global economy

weakens, the US dollar strengthens.