Is Russia`s `Bullet Proof` Economy Ready to Blast Off?

Newsweek and other western mainstream media are turning the corner on anti-Russia unreason. The massive sanctions on Russia have led to a reversal of fortunes, but not the result western leadership envisioned.

Watching the tide of foreign policy, influence, and business turn concerning Russia, it’s a rewarding experience for all the moderates of the world. Bill Powell at Newsweek assures the journalistic faithful of Earth there’s even hope for mainstream media today. Despite US and EU sanctions aimed at crippling the Russian economy, Vladimir Putin’s economic endeavors of late have apparently saved the Russian nation’s day.

The Newsweek article, "What Sanctions? The Russian Economy Is Growing Again,” is symbolic of a break in the negative trend toward Russia in many ways. Powell takes something of a leap of faith and credibility in outlining how recent detente was "not exactly what the West was hoping for." Against what seemed like insurmountable economic odds, Putin’s ruble has rebounded, the stock market has out performed most competing ones, foreign exchange reserves are up, and the Russian government’s revenue has even exceeded expectations.

Russia May Be Bulletproof Economically

While crude oil and energy prices have hit Russia companies hard, they’ve empowered Russia industry to some of the highest profits in recent history. This and other "unexpected” stimulus as a secondary result of sanctions spell a kind of policy disaster in Washington, London, and Brussels.The meat of this story from Newsweek can be found in the MICEX index, as well as on the micro level with companies like steelmaker Severstal (New Renault-Nissan deal). For those unfamiliar with heavy industry, steel for auto makers and other markets depend, price-wise, on the costs of energy used to produce. When I was at Nucor Steel in America, other than the costs of scrap and other raw materials, the electricity to power steelmaking was enormous and critical, a make-or-break commodity. The long and short, in competitive manufacturing price, opens or closes markets. The dive in energy costs, combined with other cost/revenue benefits Powell describes, have helped Putin’s finance ministers’ make a fiscal shift toward growth.

Mainstream Media Cracked

While the Newsweek analyst falls short of being a moderate where West-East détente is concerned, his conclusion on "Putin” is sound. The Russian leader that western democracies have tried to destroy by hook or crook, is simply not going anywhere. What’s so interesting about the Newsweek piece is the contravening news from the likes of BBC and others in the same day. BBC’s headline reads: "Russians reel from economic crisis,” this from a diplomatic correspondent and award winning Russia expert Bridget Kendall. Given the disparity in the Newsweek/Bloomberg view on Russia’s resilience, and BBC’s take via Kendall, it appears journalistic competition may still be alive and well. For Kendall’s part, she’s clearly not looked at the economic data. Her article speaks of closed factories and shop owners in distress, when this is simply not the case. Even here in Germany one can find For Rent signs all over, dilapidated factories closed, and inefficiency rewarded with bankruptcy. It seems Kendall has fallen victim to BBC’s bias, or else she’s helping formulate it.