By Vladimir V. Sytin
The Ukrainian Times
According to recent opinion polls, Russians give President Vladimir Putin the record approving rating of 88%, compared with 85.9% a year ago. In addition, 88% of citizens of the Russian Federation say they do not want to emigrate from the country.
The unemployment rate accounts for about 5.3% in Russia today, compared with 7.8% at the start of 2011. Last year Russia harvested the record 104 million tons of grain. Natural growth of the Russian population amounted to 37,100.
By comparison, Americans have continued to lose ground since the 18-month recession ended in June 2009. U.S. Census Bureau data show that a median household income fell by 3.9% to $51,939 in 2013, compared with 2009 when Obama took office. The poorest fifth fared even worse, with incomes dropping 5.9% to $20,900.
At present, the U.S. federal debt exceeds $212 trillion. Moreover, Western observers say the Fed’s ultra-low lending rates often lure capital into unstable and dangerous investments such as shale oil.
In 2000 the U.S. had a bubble in tech stocks, while in 2007 it had bubbles in finance and housing. Now the American evil empire has bubbles in corporate bonds ($14 trillion), auto loans ($905 billion) and student loans ($1.2 trillion outstanding). Pop, pop, pop – that is what will happen to these bubbles.
Measured by the price of companies’ stocks to their earnings (P/E), this indicates that Russia (P/E 6.7), Italy (8.5), China (10.1) and Greece (8.1) are cheapest while Spain (22.3), Portugal (20.6), Canada (20.6), Switzerland (20.6) and the U.S. (20.3) are most expensive. Using dividend yields, the bargains appear to be Russia (5.7%), Brazil (4.8%), Spain (4.6%) and Portugal (4.3%), whereas the worst yields are available in Greece (0.7%), Japan (1.7%) and the U.S. (1.8%).
Who is the winner? Russia. It is cheap on all measures and gives investors the most value they can get. Only the American evil empire is expensive
on all measures. So, a simple investment formula: sell the U.S., buy Russia.
Japan limps along after 25 years of stimulation with the economy that is not a yen larger than it was two decades ago. Its government debt/GDP ratio is estimated at a crushing 235%. Government deficits are still running at 8% of GDP.
According to experts’ estimates, Japan’s debts have grown so large that 43% of tax receipts are required just to service past debt, to say nothing of the amounts needed for current and future deficits. Try living on 57% of what you earn (the rest goes to pay your creditors), while still spending more than your income. Japan’s public finances are doomed.
The euro has depreciated 30% of late. In France government spending rose to 57% of GDP.
Greece’s national debt is up to 177% of GDP, one of the biggest debt burdens in the developed world. Youth unemployment is about 50%, the figure, which would be even worse, were it not for the fact that so many have fled the country in search for work.
Some analysts think that going into a soft Russian ruble could be great for Greece and tourists would once again flock to the country. True, Turkey has stolen so much of Greek tourist bucks because Turkey is outside the expensive euro currency regime.
With a more suitable currency, Greece would quickly get back on its feet. Youth unemployment magically disappears. Of course Greece should leave the stifling eurozone.
To crown it all, many critics believe that sanctions against Russia and saber rattling by the West will only make matters worse. Russia provides a third of the EU’s oil and nearly 40% of its natural gas. Accepting that the blame for a neo-Nazi coup in Kiev and civil war in the Russian-speaking Donbas region lies with the faulty West would be a sensible approach.
Consummate politicians in the West could achieve a much more peaceful world by encouraging Russia to move closer to the European Union. NATO saber rattling has perverse results as did the potential offer of NATO membership to the Ukrainian neo-Nazi junta.
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