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Can Russia Initiate Another Major Crisis?

11 June 06:35 AM

The current economic instability seen around the globe suggests that another major crisis may break out in the near future. According Elliot’s wave theory, another wave of the crisis should start in 2015-2017. However, today we can see the eurozone crisis escalating. Russia’s economy oriented toward exporting energy carriers is at risk as well.

Can Russia Initiate Another Major Crisis?

According to Masterforex-V Academy, the Russian stock market lost 15% in early May. It is about to hit the 2-year low. The market declined on lower oil prices and poor economic performance in the USA.

5 years later, the Russian stock market is still below the levels seen in 2006. It suggests that there is no positive dynamics. Russian stocks usually act as leading indicators predicting crises as there are few investors who are willing to buy Russian stocks during a downtrend. The situation with European and US stocks is different.

S&P500 went 15% down from the 3-years high. The Russian stock market lost over 50%.

According to pessimistic forecast, Russia will start feeling the pressure of another major crisis after a major commodity market collapse (including crude oil). Since early May 2012, the Russian Ruble has already lost 4.5% against the currency basket and 7% against the US Dollar. Some pessimists anticipate a major collapse down to $25-35/b.

Despite the global criticism, the Russian authorities fell optimistic and say the country is ready for another global crisis. However, the Russian economy is still too dependent on the export of crude oil and natural gas.

The strengthening of the US dollar is an early sign of the forthcoming crisis. The Euro currency started depreciating against the US dollar after Greece started seriously considering the possibility of leaving the eurozone. At the same time, the entire global financial system is under the threat of collapsing.

Why Do Investors Flee Stocks?

According to Masterforex-V Academy, globalization has made all the markets around the globe over-dependent on each other. A major rally or downtrend of a major index instantly influences the stock markets of most countries around the globe.

Even though Russia’s stock market is one of the world’s 20 biggest markets in terms of capitalization, foreign investments account for a big share of this market because foreign investors strive to diversify risks by investing in emerging fast-growing economies.

Another peculiarity of the Russian stock market is the fact that it is mainly represented by oil-and gas and banking sectors. That is why major changes in these 2 industries have a considerable impact on the entire market.

If to consider the fact that oil prices haven’t shown significant growth over the last 12 months while the US and European banking sectors are not in perfect shape (the eurozone crisis, various scandals etc.), we can conclude that the Russian stock market has no grounds for a major rally.

Now let’s have a look at the events of May 6^th 2010 (the so called “flash crash”), when the US stock market initiated a big-scale sharp collapse, by that time, the Russian stock market had been declining for 3 weeks. By the way, it started recovering much earlier than the US market.

The bottom line: Russia’s stock market is not subject to artificial economic stimulation like in the US one. Therefore, it shows the real state of affairs in the global economy and can be used as a leading indicator to anticipate another major crisis.

Market Leader and Masterforex-V Academy would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:

Do you think Russia’s stock market can help us to anticipate a major crisis?

You are free to discuss this article here: forum for traders and investors

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The Washington Post On European Crisis and Euro

Over the last few years, the word collocation “European crisis” has turned into a set expression. It’s been almost 5 years since it began. Europe seems to have suffered most of all form the global crisis. 2 years ago a new wave of crisis broke out, thereby turning into a severe debt and banking crisis in the EU and the eurozone.

Good news are scanty while bad news keep coming from Europe almost every day. Yet, the world cannot ignore it because Europe accounts for nearly 20% of the entire global economy. Even though everyone seems to get used to unexpected (sometimes shocking) and controversial news from the area, they are still worried about the destiny of the Old World? A complete downfall or a renaissance?

Publication date: 13 May 12:48 PM

The latest opinion polls conducted in the EU show that more and more European citizens show distrust in the EU and the eurozone. The biggest decline was seen in the EU’s 6 biggest countries. In particular, in Spain , the distrust increased up to 72%. For comparison sake, it used to be just 23% 5 years ago.

Publication date: 02 May 11:43 AM

The purpose of fighting is to win, as the well-known saying goes. At Forex market traders, no matter whether they want it or not, have to fight not only for profits, but also... between themselves. In order to succeed, one has to manage his emotions, resisting panic, act on the basis of competent full-scale analysis of current and perspective situations, know and understand own trading strategies, based on numerous technical and fundamental components.

Publication date: 26 April 09:49 AM

Today anyone may earn money at international currency market Forex, provided that a trader has the necessary knowledge and, what is more important, has good understanding it. As far as this financial market is the largest according to daily money turnover (several trillion dollars), as well as one of the most progressive ones (there regularly appear innovative technologies), opportunities of successful work at it are available even for people that do not possess a considerable capital.

Publication date: 18 April 10:22 AM

China is reporting about another epidemic of the so-called bird flu (also known as virus H7N9). It has already suspended the domestic poultry trade. Numerous markets are closed in Shanghai, Beijing and other big cities. Chinese bloggers keep posting shocking footage showing dead birds.

At the same time, top-ranking Chinese military officials put the blame on the USA. They say this is some kind of a secret biotechnological weapon developed and used by the Americans.

Russia takes urgent steps to prevent the epidemic from spreading over its territory. Russia’s chief medical officer urges people to abstain from visiting the neighboring Asian country. There are temporary limitations for those who arrive from China. Russia may eventually close the border with China until the situation stabilizes.

What is really happening in China? How dangerous is the current epidemic? Can the USA be involved?
Let’s try to answer these questions together…

Publication date: 17 April 07:08 AM

The USA seems to threatening Russia not only with a shale revolution but also with a shale war. The North-American shale boom seen in the region over the last few years, has been treated as the end of Russia’s oil and gas industry. Everything started from shale gas, which allowed the USA to turn from an NG importer into a net exporter of this energy carrier.

Yet, US officials do not conceal the fact that they are going to use this trump card to free Europe from the dependence on Russian energy carriers. Now American observers and analysts are discussing the gloomy prospects of Russia’s export of energy carriers caused mainly by the shale boom in the USA and worldwide.

What is really happening inside the US shale industry? Is Russia’s export of energy carriers to Europe doomed? Let’s have a closer look at the situation.

Publication date: 16 April 02:58 PM

Western mass media are actively discussing Russia’s external policies. There is a lot of information published on this topic recently. There are countless articles devoted to Putin and Russia.
If to try to sum up all the information on this topic, it turns out that there are 2 groups with different attitude towards Russia’s external policies.

The bigger group thinks that Russia’s external policies are unpredictable and may be dangerous to the West. Therefore, they urge Western politician to exert pressure on Moscow in effort to restrict its tough external policies.

The minor group views Russia as a potential partner, thereby calling its external policy rational and pragmatic.

The confrontation between the 2 groups can be considered on the example of an article written by Mark Adomanis and published by Forbes. It is called Is Vladimir Putin's Foreign Policy Unpopular? Not So Much.

Publication date: 16 April 11:07 AM

These days it is difficult to surprise people. However, there are exceptions. In particular, Zbigniew Brzezinski, a Polish American political scientist, geostrategist and statesman, managed to surprise us.

Some 15 years ago, he used to diminish Russia’s role in the international arena, thereby calling it a defeated opponent of the West. This is not a long time in historical terms. However, Mr. Brzezinski seems to have changed his mind and attitude towards Russia and its geopolitical and economic role in the world.

In his recent book called “Strategic Vision: America and the Crisis of Global Power” (2012), Zbigniew Brzezinski ponders upon the ways of uniting Russia and the West. Moreover, he tries to prove the inevitability of this process. He assumes that the world’s center of gravity is shifting “from the West to the East.” Therefore, the West will have to unite with Russia in order to avoid global isolation.

The West may well avoid the destiny of the frontrunner. However, it is necessary to work out a new strategy. The new strategy should imply the plan aimed at integrating Russia and Turkey into the international system of the West. This sounds strange if to consider the fact that this was told by a Russophobe and a Pole. This looks like a major change in his views. What are the real reasons behind his sudden love for Russia?

Publication date: 15 April 07:03 PM

Until now community continues arguing for and against reality of earning money via Internet. Extremely hard are disputes whether Forex market may be considered a true effective means of gaining stable profit.

Some people think that Forex is a mere means of “deceiving you into party with money”, another fraud. However, they do agree that “such means” is more sophisticated than the famous “Mavrodi pyramids”, for here one needs to have knowledge and skills.

Publication date: 14 April 10:46 AM

George Soros, the world-famous investor and billionaire, urges Germany to make a crucial decision. In particular, he says German authorities should change their attitude towards common Eurobonds or quit the eurozone.

Publication date: 11 April 07:26 AM

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