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Friday, 21 July 02:39 (GMT -05:00)



Business And Politics News

American roller coaster or why the U.S.A. prospers while the rest world expects the default of the last super state.


 Analytical department of the “Market Leader” magazine and the U.S. Association of traders and investors headed by Rasul Zhalalov are investigating the situation to find out the main issue – will the U.S.A. collapse? On the one hand, mass media all around the world anticipate the coming default. On the other hand, the world community is fighting the second wave of crisis by helping the U.S. first of all. This is achieved by devaluing the national currencies. May be the scenario of the American economy that getting into dust has no alternative?

 
In the recent years it has become an old story to speak about the forthcoming economic collapse of the U.S. Dozens of books like «Deny of the empire?” or “End of American era” and movies (the brightest one by Peter Joseph “Zeitgeist”) has recently become public.
 
 
 
 
 
 
Some prophets like a British columnist Chen Akia foreseeing the nearest default of the U.S. that is to follow the way of the U.S.S.R. or Igor Panarin, a Russian professor, who anticipates the U.S. to be divided into six parts and 0.67 ruble per USD in 2010 were discussed by the professional traders and investors of Masterforex-V Academy not long ago.
And so, every year the U.S. is forecasted to follow the way of the super states like the Rome Empire, Holland and the U.K. And now, the U.S. President Barak Obama stated his nation should be cautious in order to not lose the world leadership.
 
Bad times. No doubts, the U.S. is not living in its best times now:
- increasing unemployment above 10%,
- budget deficit of $1,400 billion (10.8% of GDP, a possible critical line of the debt),
- tremendous inland debt (the Government debt of $12,000 billion, or 88% of GDP) which is growing by a quarter per annum, which turned the state into the largest debtor. Every U.S. citizen is owing 40,000$ to the rest of the world,
- significant devaluation of USD. It lose a quarter of its value since 1973,
- banking sector troubles. Effective as of 9M2009, number of banks in troubles tripled y-o-y,
- demand for real estate declines from 2007,
- speed of economic growth lowers. It was -2.4% GDP growth in 2009 (frankly, the EU experienced even larger drop in GDP levels: EU at -4.2%, Germany and Japan had – 5%),
- industrial output sectors are replaced by a sick financial industry. The U.S. became a leading industrial importer, and its financial sector’s share in GDP is larger than industrial’s one since middle 1990s.
 
The worst has gone.
Ok, The U.S., as many others, is in trouble. Firstly, we would like to mention that this process in not irreversible. The States were in even worse situations during the Great Depression or at the Vietnam campaign but managed to hold the leading position in the world. Secondly, Barak Obama Administration is working hard on its way to fight the crisis. Probably the results do not always fit the expectations, but the official statistics show the U.S. start growing.
The fundamentals of the rescue plan of the economy are the following:
- Government support of the financial and industrial sectors by $787 billion. This led to a great rise of the monetary base.
- Tax facilities of $38 billion. 95% of the U.S. households noticed a reasonable decline in tax pressure last year.
- new jobs are created.
- large banks have to support the small businesses. Obama initiated a $30 billion transfer from the Wall Street to the local banks in order to provide loans to local businesses.
- medicine and education expenditures raised.
 
The experts stated the U.S. economy leave the recession and start growing by 3.5% in 4Q2009, the recession lasted two years. The main reason of the good news is consumption growth, the household expenditures increased by 3.4% which is great fact for the last two years.
Barak Obama said he was full of optimism and the worst for the U.S. had gone.
 
The World leadership or what’s the fundamentals of the financial centre of the world?
In fact, the States have indeed very few common with a dying super state despite the forecasts of the analysts who never denies a business trip to the U.S. before writing their apocalyptic reports.
Pasul Zhalalov thinks that the States are still the major player in a wide range of basic vectors that can allow them to stay as the leader. The informational and analytical Department of Materforex-V Academy focuses your attention on the fact that the U.S. will be the super state until it controls for these factors.
Rasul Zhalalov suggests that the military and political leadership is the first factor. By now the U.S. has the most powerful army with an expected military budget of $700 billion in 2011.
- The defense budget of the EU is only 60% of the U.S. and its potential cannot reach 10% of the States level.
- The U.S.A. has 11 aircraft carriers (in contrast to 2 for Italy of the U.K., 1 for France, Spain and Russia) out of 285 marine ships of different types in the U.S. Navy. Its sky forces have 4000 aircrafts, 2000 cruise missiles and 450 intercontinental ballistic missiles.
Its possible enemies like the EU army are too young whereas the Russian army is too old to speak about them as competitors.
The Russian Federation is increasing its power but cannot compete with the U.S. fairly. It has 39% less of strategic bombardiers, 58% less missiles and 80% less submarine missile crafts than the Soviet Union had. It still has 608 carriers with 3000 nuclear missiles in the Navy and 367 silos with 1248 nuclear missiles in the land. It has also 23 thousand tanks.
China cannot be a reasonable competitor as well. It is only the third after the U.S. and the R.F. in terms of military equipment units with 1700 aircrafts, 240 nuclear carriers, 7500 tanks and 8 nuclear submarines. China has 144 marine ships but it is the only super state that has no carrier aircrafts. It will be possible to have the first one (aircrafts are the attacking military units) by 2020. It is the first in only the population of the Army – 2.3 million of officers and soldiers compared with 1.5 million U.S. warriors.
The second factor to keep the U.S. leadership is the scientific achievement. The U.S. admits it loses its leadership in this field, and Asian researchers have 2-4 times more investment in the technical progress. But still the States remains the leader in finance, research, software and internet, airspace, medicine and pharmacy, and a number of other industries.
The economic development is to be the third factor. The EU is the leader in GDP with $18 trillion, $14.4 trillion of the U.S. and $4 trillion for China in 2008, and the RF gained the second place among the European countries in 2009. At the same time we should keep in memory the fact that the EU is a union of 27 mostly developed states. This is just a union (applying the experience of Greece, Spain and Baltic countries that may collapse) whereas the U.S., the R.F. and China are unitary states with a defined vertical line of power.
The standards of the American miracle are to be the fourth factor.
The American miracle is the stylized fact in historiography. But the question of the fundamentals of the miracle is still open. The U.S. has:
- benefits from geography. The enemies are too far from the States.
- friendly neighbors. It has never increased its defense power by the expense of living standards as European and Asian countries did in the 19th and 20th centuries.
- rich mineral resources. The U.S. owns large deposits of ores, gold, oil, gas, coal and other resources.
- demographic policy. Its economy grew by inputs of cheap workers. It has 31 millions in 1860 and 300 million of habitants now. The population is growing and it is getting old slower than the European countries’ population. Its policy is targeted to increase population to 500 million in 2050.
- spirit of entrepreneurship and mind of novelty. A German sociologist M.Veber stated that the development of capitalism in the U.S. is due to Protestant faith of the colonists. This confession sees work as the action honored by the God.
- high industrial concentration. Banking capital in the U.S. is linked with the industrial plants.
- developed infrastructure. The government spends money on roads and railroads, electricity lines, phone lines etc.
- highly qualified high education.
- stable political system.
- democratic traditions that create a spirit of freedom and opportunities for the self-actualization. This all helps to solve the hardest questions by conversation.
- “ethnic house” as a result of cultural interactions. The Americans managed to accumulate the cultural experience of the former homeland citizens to solve the nation’s question (well, some extra efforts on the afroamerican questions were documented).
- federal state. A powerful federal government do not intervene significantly to the interstate problems and allow the local governments to run their policies.
 
What do we expect the U.S. dollar to be in the nearest future?
Analysts of the Masterforex-V Academy of trading, the best educational sourse of Forex trading in Europe according to ShowWorldFX 2009 exhibition, think that the USD is likely to go on gaining its value versus the rest world currencies at the second wave of the global financial crisis. The reason is that dollar remains the major currency in the unidirectional world with the centre in the U.S.
 
euro vs. dollar graph,1989-2010. “B-Yearly” wave is in process
 
dollar index graph, 1985-2010. a new bullish wave A-Mn3-4 after 93.0 level is crossed.
 
Long live the USA?
Well, there’s nothing eternal in this world. And the U.S. is not a unique chosen by the God state. One of fundamental principles of nowadays is rapidly changing forces in the world arena. The world leadership for ages cannot exit today. The CIA report “The major trends till 2025” says that the power of the States will eventually decline. And it has to leave the throne of the power one day.
The Association of Traders and Investors of Masterforex-V Academy suggests that the U.S. collapse forecasts of the experts will become true one day but it is a long way to that date.
 
The American Association head Rasul Zhalalov told that the U.S. is a weak super state only comparing to itself of the end of the World War II, but not weak comparing to its competitors. It looks as a falling empire to the only experts who never lived in the U.S. One can witness long lines to the U.S. Embassies all over the world, and the ambassadors can easily choose the best brains to work for the States economy. And the investors who collect data not talks on the U.S. should keep the last fact in mind.
 

The nearest followers (The EU, the RF, China and Japan) of the States just approach it, and fail to win in the branches which the U.S. remains the major leader in. And then, there is no alternative of the super states other than the U.S. by now.

 

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British Start Getting Disappointed with Brexit, Soros Says

Last year’s Brexit referendum has become a major challenge for the British government, George Soros says. He says that more and more British citizens start getting disappointed with the Brexit.

 

 
The world-famous financier and CEO of Soros Fund Management assumes that now the economic reality starts revealing the real state of affairs and debunk their delusions related to the happy living outside of the European Union. More than 12 months ago, the advocates of the Brexit scenario were trying to persuade people that this choice won’t affect people’s standards of living. Well, since then, the government has been trying to implement this promise at the expense of increasing the internal debt.
Publication date: 14 July 02:40 AM

Two Reasons Why Russia Keeps Losing Influence Over Post-Soviet States

After the USSR ceased to exist, the Kremlin was counting on retaining their influence in the region. However, the truth is that Russia as the major successor to the USSR has been losing its influence over the remaining post-soviet states. There are 2 reasons for that.

 

 
According to the related report recently published by private American analytic company Stratfor, there is a range of new tendencies making it difficult for Russia to stay influential in the post-soviet region, especially when it comes to Ukraine. The two major reasons for that are believed to be the declining role of the Russian language in the region as well as the existing threats of mass protest inside Russia itself.
Publication date: 06 July 01:42 PM

Business with China: New Reality after Blocking Yandex and VK in Ukraine

Ukrainian President Petr Poroshenko has expanded the list of sanctions against individuals and legal entities from Russia. To be more specific, Ukraine imposed sanctions on several Russian online companies, including Yandex, which is Russia’s biggest IT company, as well as some other popular web services like VK, Odnoklassniki, and Mail.ru Group. According to the presidential decree, Ukrainian Internet providers are forbidden to grant access to those blacklisted websites.

Publication date: 06 July 01:13 AM

China Doesn’t Need Russian Gas and Pipelines

Don’t you remember how a couple of years ago Gazprom cut natural gas supplies to Ukraine a number of times. By the way, Ukraine alone used to buy 55 billion cubic meters of natural gas back then. Now Ukraine buys no natural gas form Russia at all. Apparently, Moscow keeps on looking for other outlets. There has been a lot of buzz about China as a new big outlet for Russian natural gas and crude oil. It turns out that two new pipelines should have transferred to China some 38 billion cubic meters of natural gas every year. Yet, this was the maximum amount, and it couldn’t clearly make up for the export of natural gas to Ukraine.

Publication date: 05 July 11:15 AM

Mass Media on Forthcoming Trump-Putin Meeting

For those of you who don’t know, the first official meeting between Donald trump and Vladimir Putin has been confirmed. It’s planned for July 7, during the G20 summit in Hamburg, Germany.

 

 
Some observers say that the White House did the Kremlin a favor by being the first one confirming the official meeting during the G20 summit. This announcement helped the sided to get of the rumors around the situation and helped Moscow to save face in the Russian media space.
Publication date: 05 July 06:24 AM

Putin and Trump Part Ways

According to The Daily Telegraph observer Con Coughlin, even if Donald Trump used to seek ways to improve the relations with Russia, today he is probably going to really abandon this idea. The thing is that not so long ago, the U.S. hit a Syrian fight jet, the one belonging to Bashar Asad’s troop. Since Putin and Asad are allies, this fact is definitely going to affect the process of improving the U.S.-Russia relations, and probably suspend this process for the near future.
 
Publication date: 29 June 11:50 PM

What’s New in New Anti-Russia Sanctions?

Today, the Russian political establishment and media are glad that the Senate of the U.S. Congress has recently postponed their voting on new sanctions against Russia. However, this is just the so-called “calm before the storm”, Western experts say.

 

 
The new sanction mechanism developed by the Senate is fundamentally different from the sanctions imposed on Russia previously, under Obama’s administration. The experts say that unlike Obama’s isolated decrees, the Senate has come up with a whole new mechanism taking into consideration the whole seriousness of Russia’s crimes in the global geopolitical arena. This mechanism will prevent the U.S. authorities from being able to cancel those sanctions gradually. So, the only way out will boil down to Russia leaving Donbass, the Crimea and Syria. So, this will be the only opportunity for Russia to see the Western world cancel those sanctions.
Publication date: 26 June 01:26 AM

Fed Raises Key Interest Rate. How Will This Affect Russian Economy?

The federal Reserve has raised the key interest rate by 0,25%. According to international experts, this may well make foreign assets (including Russian ones) less attractive in terms of investing.

 

 
The decision was made as the result of the recent 2-day FOMC meeting. The interest rate was raised up to 1-1,25%. At the same time, it’s interesting to note that the actual decision matched expectations, both from the international expert community and financial markets.
Publication date: 20 June 05:12 AM

Why Did British People Punish Theresa May During Parliamentary Election?

During the recent parliamentary election in the UK, the British Conservatives failed to gain public support required to get the absolute majority in the British parliament. Now, the international expert community is discussing the reasons why Theresa May failed on her expectations.

 

 
Publication date: 20 June 03:09 AM

Why Does Trump Fail to Be a Good President?

As you probably know, the scandal around Donald Trump’s decision to fire FBI Director Comey is just one of the unpleasant incidents in his presidential career started in early 2017.

 

 
The truth of the matter is, after the investigation against Michael Flynn started, Donald Trump asked FBI Director Comey to let the investigation slide. While Director Comey didn’t dare object to President Trump openly, he didn’t do that. On the contrary, the investigation got even more intensive.
Publication date: 16 June 01:46 AM