Nuclear Politics

India is apparently not very happy with the U.S. position on Iran's nuclear policy. I don't know a whole lot about South Asian politics (and apparently neither does the State Department), but I find this to be interesting. It seems that India and Iran are getting on pretty well. One suspects that China may also want to make friends with Iran, as Iran is in need of friends these days, and China could use some oil partners who aren't too far under the sway of the U.S. Russia has also had good relations with Iran, as they've been the ones setting up the Iranian nuclear program. If these guys are willing to back Iran at the U.N., that's a pretty formidable coalition, one that the U.S. and Europe may have a hard time overcoming. This could be very interesting.

A Rival to NATO?

There's an article on CSM about the Shanghai Cooperation Organization, a military alliance potentially involving China, Russia, India, Pakistan, Iran, and the various -stans. It's an interesting idea, but do these countries have anything in common other than an interest in increasing their influence? It would be an extremely potent group, one that probably could rival NATO in power in coming decades, but I have a hard time seeing any coherent policies or positions that these nations could all agree on.

More Questions on the Dollar Decline

There is a fascinating article on Asia Times by W Joseph Stroupe predicting doom for the dollar. I'm not sure who the guy is, and his web site looks pretty sketchy. But he throws out a ton of data, I just wish he would have cited his sources. Some of the interesting bits apparently come from this Japan Times story, but even there are only cited back to Morgan Stanley analyst Stephen Roach. So, while I take little of this at face value, the article suggests a number of interesting points to investigate.

• Stroupe asserts that the Fed is printing $1.5 trillion per year. This seems like an absurd amount of money. Is it true? How much does this vary from traditional levels?
  
• Stroupe adds $44 trillion in obligations to Social Security, Medicare, Medicaid, and other government spending to the existing $7 trillion national debt to come up with a "total national debt" of $51 trillion. He cites this number to Fortune magazine. I posted a story here some time back about a treasury department study (initiated by Paul O'Neill, before he got the boot) which found that the US had $44 trillion in unfunded obligations over the next four decades or so, which is probably where the $44 trillion comes from. This is a frightening number, but it strikes me as unfair to count long term obligations directly as existing debt.
  
• The article states that including off-budget items the current federal deficit is nearly $1 trillion per year. That sounds high to me. My impression has been that this number would be somewhere in the $500-700 billion area.
  
• Mentions heavy investment ($180 trillion) in derivatives as unstable investments. I have no idea what he's talking about here, but I'd like to find out.
  
• The article states that US consumer debt is $8 trillion. I was searching for this number myself a couple weeks back, without success. I'm curious where he got it.. Also what is the level of US commercial and business debt?
  
• Then there's the quote from Stephen Roach stating that the US currently has $38 trillion in debts. What exactly is being counted in this number?
  
• The article states that Warren Buffet has mostly pulled out of the US stock market. I know that he published an article a couple years back explaining, in great depth, why he was for the first time investing outside the US, citing many of these concerns about debt and the trade deficit. But has he really pulled out all of his US investments?
  
• One of the best parts of the article was the discussion of Russian economic policy. Here he talks about the possibility (which has been discussed here before) that the global oil market may shift from dollars to euros, with disatrous effects on the value of the dollar. Stroupe makes assertions about statements by Vladimir Putin hinting that this change is imminent. I should certainly like to see those statements. He also asserts that Russia has substantially shifted their currency reserves out of dollars. It would also be nice to verify that..
  

Anyway.. there are some very powerful numbers and assertions here, and if this guy is not a complete nut (which it's quite possible he is), disaster may be nearer than I expected.. There are also numbers published in another Asia Times story showing US personal savings as a percentage of income dropping over 15 years from about 7% to 0.2% (again without any cited source). Consumer spending may have kept our economy afloat so far, but that ride looks to be nearing its limit. We live in interesting times...

Update: I went hunting for more info on Stephen Roach's $38 trillion figure, and while I didn't find it, I did find an insightful recent column by Roach analyzing the economic prospects for the Bush administration's second term.

Putin To Scrap Democracy In Russia

Vladimir Putin has for some time held nearly supreme power in Russia, controlling the executive, the legislature, and the press. In the aftermath of the school attack, he has decided to drop the facade of democracy and just take power outright. He announced a plan today to eliminate the elections of governors and parliament members stating the country must be unified to deal with the terrorist threat. Putin himself would name the governors, and the parliament members would be appointed by the political parties. This plan will need to be passed by the parliament, but as they are already in his pocket, this is not viewed as a major obstacle.

What's the Deal With Chechnya?

Slate has an excellent background article on the conflict between Russia and Chechnya. It's fairly short and succinct, and it's remarkable that after years of following this conflict I've never seen it described in as much depth before. It's a phenomenally sordid tale, from start to end. But then, that's true of most Russian history...

Article: Guerrilla Warfare is the Life For Me

Posted on the CS Monitor today is this article, welcoming back our friends the Taliban. I had to laugh a bit at the part where Salam mentions that Russia supplies them with weapons and money. Highly unlikely, but an amusing thought nonetheless. I don't doubt there are people in the Russian military who'd like to.