Russia: How the US Might Save Itself

Russian news is still dominated by discussion on how the United States will rescue its own economy - and what that means to Russia. Business daily Financial News published a panel discussion by Russia's leading economists who proposed very different solutions - from Indo-Pakistan war to confiscation of $100 bills from circulation.

One of the experts, Vladislav Inozemtsev, Director of Center for Post Industrial Research, put the blame for the global financial crisis at the feet of the United States, Arab countries and BRIC members (Brazil, Russia, India and China): "The main problem was that Americans over-consumed, while the rest of the world under-consumed. ... I don't think that this crisis was created on purpose - Americans followed their own policies, seeing that the rest of the world does not want anything in return."

He and one of his colleagues remained optimistic that US economy will recover. Inozemtsev is convinced that Americans will emerge from the current recession in 2009, while Alexei Golubovich, Chairman of the Board of Directors of Arbat Capital Management said that American economy can adapt very quickly to changing circumstances.

However, Igor Panarin, Professor of Diplomatic Academy at the Russian Ministry of Foreign Affairs, is convinced that Americans cannot save themselves or their country from the crisis because of overall fear: "Fear is gripping the country, and with the crisis in the background, such situation can actually lead to civil war. ... President-elect Obama stated on Dec. 7, 2008, that in 2009, 41 states are going to have budget deficits. That means that nine "rich" states like Texas and California are going to have to "feed" the rest of the country. This is dangerous in crisis situation. I consider the US's chances of falling apart at 55%."

(Editor's note: Panarin's statements mirror internal political debate in the USSR on the eve of the breakup of the country. In 1991, Russian leadership, with Boris Yeltsin as the leader of the Russian Federation, no longer wanted to "feed" the rest of the country, as the Soviet economy slowed down considerably with the onset of economic reforms launched in 1986-1987. In Moscow's eyes, it was best to keep its economic resources to itself rather than to send them to Central Asia, the Caucasus or Baltic republics. Therefore, present Russian leadership tends to view the US through the prism of USSR right before December 1991, with one or several American states having predominant roles in the union, with the rest of the states being "fed" by either Texas, California or New York.)

Panarin further stated that in 2009, the dollar's crash is inevitable, "... but Americans are trying to stave that off any way they can. It is also possible that several powerful regional currencies will appear. East Asia will have its own; Middle East/South Asia will have dinar, to be used by Saudi Arabia, India and Iran. Russian rubble can also become a powerful regional currency - for that, we must make Eastern Europe buy our oil and natural gas and pay us in rubles."

Both Inozemtsev and Golubovich thought that a war between India and Pakistan can benefit the US economy, because "... just like Europe used to do, warring countries need weapons and financial credits, and such fighting historically weakened America's economic competitors."