RESPONSE TO: 'Putin’s Approval in Russia Soars to Record; America’s Plunges to Near Zero'
Rocky Montana / Wolf Richter
Wolf Richter / July 18, 2014
[Emphasis and comments added by R. Montana.]
Don’t let a good crisis go to waste – that appears to be the newest slogan of Russian President Vladimir Putin, as his approval rating in Russia soared from 54% a year ago to 83% now, matching the record of the data series in 2008, when he switched roles to become Prime Minister. The rating was, as Gallup put it, “likely propelled by a groundswell of national pride with the annexation of Crimea in March on the heels of the Sochi Olympic Games in February.”
By contrast, President Obama’s job approval rating in the US, according to Gallup’s daily tracker, languishes at a miserable 42%. Bad, but still head and shoulders above the most despised tax-and-retreat French President of the Fifth Republic, François Hollande, whose approval rating has finally stopped plunging once it got to about 20%.
But it’s not just Putin
Russian’s confidence in their military jumped to an all-time record of 78%, up from 65% a year ago, wowed perhaps by the military’s awe-inspiring performance in the Crimean debacle.
Confidence in the Russian government skyrocketed from 39% in 2013 to 64% now. And that at a time when the US Congress is mired down in a well-deserved or perhaps too generous job approval rating of 15% by the hapless American voters who just can’t seem to figure out how to throw the rascals out.
The crisis also has given the Russian government a boost overall: 73% of Russians believe their government is leading them in the right direction, a majority for the first time since 2008, when Putin left the presidency. Russians really do have confidence in him, and they miss him when he’s gone. Yet, their economic outlook, while up, remains crummy: only 35% see conditions getting better, but 19% see them deteriorating.
And even Russians’ confidence in the elections has soared, albeit from an abysmal 23% in 2013 to a somewhat less abysmal 39%. That’s more than double the terrible level of 2006 and 2007, during Putin’s first reign, when only 17% of the Russian were confident in the honesty of their elections. Well, OK, honest or not, but at least they got their Putin back.
Here is Putin’s all-around triumphant chart, where everything has soared since last year:
And what do Russians think about America?
Man! First the good news. For China, that is. The $400 billion holy-grail natural gas deal Russia inked with China, with money flowing one way and gas the other, and all the hope and hype that came along with it have endeared China to the Russians. Their approval rating of China jumped on cue, from 25% last year to 42% now. The fact that China had Russia in a vice when the final touches were put on the deal and was thus able to extract pricing that would be good only for China has been lost somewhat in the shuffle at home. But hey.
Instead of offering Russia some kind of holy-grail deal on energy, the EU and the US have engineered an ingenious sanction spiral that so far has done wonders. In return, Russians’ approval of the EU swooned from 21% to 6%, and of America from the already awful 16% to 4% (not a typo). The diametrically opposed movement of China and the US looks terrible:
But it might even be worse: Given the survey’s margin of error of ± 2.7 percentage points (at a 95% confidence level), the approval rating could actually be as low as 1.3%. That’s as close to zero as you can get in a survey!
So if our local heroes, Obama and Congress, with their phenomenally well-thought-out reactions to the fiasco in the Ukraine, are trying to win the hearts and minds of the Russian people so that they could apply some pressure on Putin (LOL), they have abysmally failed. And in regards to his standing in his country, Putin is once again grinning his wicket triumphant smile. So far for him – at least through the period when the survey was conducted – the crisis has been a flawless success.
Capital flight, particularly from the vast underground economy, is Russia’s most pressing economic problem. And Putin’s angle of attack has been, well, brutal in its own way. Read…. Sanction Spiral Hits London, Plays Into Putin’s Master Plan , below:
London is, according to Bloomberg, “the undisputed foreign hub for Russian business.” That’s where Russian companies hire law firms and investment bankers to handle takeovers. That’s where rich Russians like to live with their families or just hang out and have fun. That’s where they like to spend lots of money.
But the sanction spiral has already – and very inadvertently – accomplished one of the big goals, not of President Barak Obama or Chancellor Angela Merkel, but of President Vladimir Putin: encourage Russian money to stay in Russia, and perhaps even bring back some of the hundreds of billions of dollars that have washed offshore over the years.
Capital flight, particularly from the vast underground economy, is one of Russia’s most pressing economic problems. And Putin’s angle of attack has been, well, brutal in its own way:
The spectacular collapse of the Cypriot banks last year took down much of the “black money” Russians and their mailbox companies – there were over 40,000 of these outfits in Cyprus – had on deposit there. Instead of bailing out the cesspool of corruption that these banks were, or even the nation, with another emergency loan as Russia had already done before, he just smiled and let it happen. [This is what America should have done in 2008, with the Wall Street Bank Bailout, just let them fail.] And much of the [funny] money of his compatriots was allowed to evaporate.
Perhaps he’d read Global Financial Integrity’s report – designed to advise the Russian government on these issues – that called Cyprus “a Money Laundering Machine for Russian criminals.” And so the sanction spiral against Russian oligarchs and their companies fits neatly into his overall long-term isolationist design.
It includes the de-dollarization of world trade – an endeavor where he found new friends even in the French political class, after megabank BNP-Paribas agreed to pay a $8.9 billion penalty to the US Government. China has been working furiously to elevate its own currency to a world-trade currency to rival the dollar and the euro, though it still has a long ways to go. Putin has been eager to switch the oil and gas trade with China away from the dollar, and progress is being made on a daily basis.
And it includes getting Russian companies and rich individuals, by hook or crook, to leave at least some of their money in Russia and perhaps even repatriate some of the money now invested elsewhere so that it can do its magic in Russia and propel economic development to the next level. [Can you see that the U.S. government has done just the opposite, with creation of GATT and NAFTA, etc., which has induced large corporations to set up shop and use cheaper foreign workers abroad, thus throwing millions of Americans out of a job and/or a way to earn a decent living? You cannot increase America's economic wealth and standard of living by sending America's jobs, services and money abroad! That will only decrease the standard of living of Americans and increase the bottom-line of the large corporation's and their investors.] Once in Russia, the money would presumably remain more accessible to the Russian government, which these very oligarchs have seen is not a great situation to be in, if they end up on the wrong site of Putin. Russia’s legal system can be a hazard to their health and wealth, and banks can be iffy. Hence the prevailing wisdom to send overseas every ruble, dollar, or euro that isn’t totally nailed down.
So Putin has been pushing Russian companies to cut back on doing business with overseas banks and bring some of that business home. With some effect.
And London has suffered collateral damage. Takeovers involving Russian companies plunged 39% to $16.6 billion in the first half of 2014, Bloomberg reported. London being the “undisputed” center for Russian finance took much of the hit. Raising money in London is getting tougher too for Russian companies: two megabanks, HSBC and Lloyds Banking Group got spooked by the sanctions and the willingness by the US Government to exact its pound of flesh from banks that violate sanctions. They pulled out of a loan deal for as much as $2 billion for BP and Russian oil-major OAO Rosneft, “according to a person with knowledge of the matter,” Bloomberg reported in June.
The consequences are ricocheting through London, from law firms and investment banks to retailers of luxury goods and dealers of exotic cars. In another indication, the amount that Russian visitors spent in retail stores between January and May, according to tax-rebate services company Global Blue, plunged 22% from the same period last year.
It shows up in all sorts of venues: “We’re seeing a lot less Russian surnames on the booking sheet,” Michael Evans, creative director of a nightclub called Mahiki, told Bloomberg. A somewhat tony place where a bottle of Roederer Cristal Champagne will set you back $719, and I’d guess that’s what the girls like to drink. “It’s very easy to see what’s going on in the world from the markets we attract,” Evans explained.
And London real-estate insiders are fretting that Russians might no longer buy overpriced homes in ultra-pricy areas, and that there would be no one else to fill their big shoes and munificent habits. “The Russian market was like a Champagne fountain,” Peter Wetherell, CEO of real-estate agency Wetherell, told Bloomberg. “The money was coming into the top and flowing down.”
That appears to be over. The sanction spiral is having its effects. London is paying a price. Other cities too. Russia’s economy, short term, has been hit and may be slithering into a recession. Some companies are squealing.
But for Putin’s long-term master plan, it has been a godsend. If the collapse of Cyprus has demonstrated to his compatriots that their money and its legal status might be even less secure in overseas tax havens than in Russia, the sanctions spiral has introduced them to new risks and has made doing business with already frazzled Western banks more difficult. One more reason to use Russian banks and keep their money working in Russia. And if the sanction spiral can accomplish that, Putin will have another strategic trophy to hang on his wall.
“An epidemic of the world economy” is what Putin called offshore jurisdictions. And he must have sported his wicket smile when he said, “We Have to Think About How to Take this Money.”
[American's could learn a lot from the policies Pres. Putin is putting into action for his people and nation. However, he and the other BRIC Bank members are taking on an adversarial relationship of the satanic Globalist cartel. America had similar policies in the past, which was part of what made America a great economic nation, but we lost those policies to the Globalists who have hijacked our government and banking system and who are now in control the U.S. government and we-the-people. They are working to make America a third-world economy. Will we allow this to happen? The answer is YES, IF we don't wise-up and identify, and throw these criminal politicians out of office, nationally and locally. ]
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