RUSSIA SAYS U.S. DEFENSE SPENDING WILL 'CRUMBLE'
'The American-military might is certain to last while the money is there for the borrowing'
image: http://www.wnd.com/files/2016/01/MoscowWhiteHouse.jpg
An analysis in a Russian state-run media outlet contends the economy will crush America’s military defenses through a domino effect stemming from a failure of the U.S. dollar, according to Joseph Farah’s G2 Bulletin.
“The American military might is certain to last while the money is there for the borrowing. But when the world stops lending, all bets are off,”political scientist Ivan Zadorozhny wrote in the government-run Sputnik International.
The analysis was noted by the Middle East Media Research Institute, which said the “ostensible economic analysis raises questions that it subsequently fails to address.”
“For example, if there is a capital flight from the U.S. in the event of war with Russia, to which country will the capital and assets move?” MEMRI said. “If the dollar collapses, what is the currency in which foreign trade will be conducted – wouldn’t the euro collapse as well? Furthermore, the Russian economy is in recession, and the ruble has plummeted; with the current global oil surplus, wouldn’t pressure on the price of oil be even greater if there is war? And what are Russia’s alternative sources of foreign exchange?”
MEMRI said such “talk of war in a Russian state-owned media outlet is in direct contrast with Russian officials’ statements about the Kremlin’s efforts to avoid conflict.”
“This article is clearly part of a propaganda campaign to frighten the West and to remind it that the world is no longer unipolar but is now bipolar.”
Zadorozhny, in an article headlined “Military Power Doesn’t Directly Correlate to GDP,” said that all the talk about Russia being militarily “outmatched” by the U.S. doesn’t translate into U.S. superiority.
“There are problems with GDP or military budget comparisons, particularly if these are applied to Russia. First, military power doesn’t directly correlate with GDP size. Second, in the case of Russia, the lack of any such correlation is glaringly evident. That Russia punches well above its economic weight is obvious to all,” Zadorozhny wrote.
He said it’s “fair to say that presently the U.S. assets are considerably overvalued.’
“That is mostly due to the huge amount of liquidity pumped by the Federal Reserve into the U.S. economy,” he wrote. “In most countries, the excess liquidity would have long destroyed the currency. That this hasn’t happened in the U.S. is explained mostly by the fact that the U.S. dollar remains by far the most popular world trade and reserve currency, making it possible for Washington essentially to export inflation without much consequence to itself.”
But he said that while the United States “is the world’s preeminent economic and military power, where there is trouble in the world investors seek safety in U.S. assets.”
“But once the security premium, the U.S. dollar’s world currency status, and the other factors propping up America’s asset values are stripped away, one is left with a dramatically shrunk GDP.”
Copyright 2016 WND
Read more at http://www.wnd.com/2016/03/russia-says-u-s-defense-spending-will-crumble/#YfRC7bH4qktUaSjg.99
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