One picture truly is worth ten thousand screams as the Russian stock market closes this week. The RTS index is down over 6.5% on Friday, just one day, barely above 1400, down one thousand points or an astonishing, appalling 40% down since its summer high of 2400.
Yes, you read it right. In just the last few months of truly crazed, epically barbaric “leadership” by Vladimir Putin (a proud KGB spy who has no economics training and has never run a business), the Russian stock market has lost nearly half its value even though the price of oil has spiked to record new levels. Recently, though, the price of oil has receded significantly from its historic highs, and the burden of the increased price has dragged down Western markets (yesterday, the Dow Jones average took a significant hit, but far smaller than Russia’s).
Russian policy has clearly shown the world it is not a reliable source of fossil fuels; Russia has done nothing to try to control the price of oil — instead, it has repeatedly shown it intends to weaponize its natural resources – and in so doing has killed its golden goose, failing to realize how badly its economy needs foreign purchases to survive. At the same time, the barbarically aggressive foreign policy of Vladimir Putin, combined with his draconian crackdown domestically (he continues to savage private business, following the Khodorkovsky precedent) serve to put the markets in a wicked vice.
If things are this shockingly bad now, do you dare imagine how bad they would be if Russia didn’t have its oil reserves?
This demonstrates how utterly false it is for Russians to claim they derive some sort of power from their oil resources or are somehow independent of the global economy. In fact, exactly the reverse is true. Russia’s dependence on fossil fuel makes it weak, and its economy depends utterly upon the vicissitudes of the global market.
When Russia attacks America and the West, in other words, it attacks itself. It’s just that simple, yet it’s something Russians will never understand as they plunge merrily into yet another neo-Soviet void.