- - Sunday, April 20, 2014


We learn this Easter Sunday from The New York Times that President Obama now embraces his inner ostrich — Russian President Vladimir Putin is but a pesky irritant, causing problems in just one region of a world that America still rightly leads.

Apparently, our cocksure Nobel Peace laureate believes it is cool under the sand, even as tectonic geopolitical plates shift underneath the creaky, man-made foundation “assuring” global security.

In real life, President Obama and his senior advisers are making gross mistakes of epic-defining proportions that will have profoundly negative consequences, particularly for the poorest among us.

They seem destined to prove the danger of seeing through lying eyes — America under Obamanism now approaches a harsh punishment Britain started suffering in 1940 with devaluation, one that haunts the United Kingdom to this day.

Come what may over Ukraine, Mr. Putin and Russia stand poised to use the towering external debt and bloated governments in the West as powerful arguments against continuing with the status quo in post-1991 Europe.

Like truculent drunkards on expense accounts not yet cut off, America and our Western allies are addicted to pursuits that hurt our own best interests, borrowing and spending too much on ineffective government.

As of December 31, 2012, 19 nations in Western Europe had external debt, net of foreign exchange reserves, that averaged $93,027 per person, according to the CIA World Factbook. By comparison, Russia’s net external debt was $690 per person.

Moreover, Western European nations spent an average of $19,559 per person on government, while Russia spent an average of $3,129 per person.

Hitting closer to home

President Putin has long been concerned about the credit standing of the West. As a vendor of natural gas, petroleum, and grains — commodities for which there is robust demand outside Europe — Russia has every right to take precautions to ensure it will receive payment in units of enduring value for the items it chooses to sell.

Confronting years of dependence upon Russia for energy and with limited capacity to defend themselves alone, America’s putative European allies have much more to fear than they stand to gain from an escalating battle with Mr. Putin.

Humbling President Obama again and again in the Middle East and in Europe, Mr. Putin will certainly press for advantage closer to America’s borders.

What will stop Russia from cementing closer ties with Venezuela and Nicaragua? How do we react when Russia supports Cuba in demanding that the U.S. give up our lease at Guantanamo Bay?

Who will suffer most as Mr. Putin resurrects Russia, while the West crucifies itself upon a cross of debt, pricked by intractable deficits, and wracked in deceit?

There will be blood in many places as Russia simultaneously dethrones the United States dollar, picks apart the European Union, and raises hackles among American allies everywhere.

For investors, this is a time to know what you own, and to own only what you know.

Charles Ortel serves as managing director of Newport Value Partners (newportvalue.com), which provides economic research to executives and to investment firms.

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