The west will continue to isolate Russia. This means reducing purchases of Russian energy and other commodities. Russia will of course become desperate for foreign reserves. The ruble does not buy that much.
China is sitting on top of a very large amount of US Dollars and other hard currencies as well. They clearly need commodities and will do business with the Russians after extorting some excellent pricing. Continuing on this diabolical thread the Chinese will only be too happy to supply Russia with goods that Russia can no longer import. All at a substantial mark up.
If its good enough for Wal-Mart it probably will be welcomed in many parts of Russia. What China cannot manufacture they will import and sell to Russia.
So commodities exporters may find some unusual competition that they cannot match. Also China after decimating western manufacturing with cheap labour will market to Russia. If production bottlenecks develop the Chinese will increase prices to the west and suck more hard currency out.
China will also benefit from cheap Russian oil and gas. A cost advantage that western economies will not have. This will be a strategic advantage.
George Gutowski writes from a caveat emptor perspective.
The Muslim/Arab/Oil world is experiencing cataclysmic change. Well if you are a ruling dictator it looks bad. In the meantime investors can trade OIL an ETN that trades on NYSE ARCA (NYSE ARCA: OIL) Trading seems fear based. The Saudi’s say do not worry we will sell oil and stabilize Western Oil addiction. Like I said the trading seems fear based.
What changes can you foresee? Are we just changing dictators? Will the new power élite understand they need to do things differently?
Libya accounts for 2-3% of known oil reserves. They have a population of of some 3.5 million. No accurate census data is available.
Egypt accounts for no significant oil reserves. The revenue of the Suez Canal is maxed. The Egyptian population stand at 81-82 million.
Libyan oil revenues would go a long way to help Egyptian rulers solve many many many problems. Egypt has learned to co-operate with the west. Libya has been nothing but a problem for the West.
A population of over 80 million can crush the Libyan 3.5 million and present the west with stability. As Moammar Gadhafi becomes increasingly more bizarre and irresponsible the west may even suggest the invasion to Egypt.
Disclsoure: “George Gutowski” writes from a “caveat emptor perspective”. I hold no positions in any stocks mentioned in this post. I have no plans to initiate new positions withing the next 72 hours.
Guggenhein Shipping ETF (SEA) popped Friday because of the Egypt thing. The media wants investors to be scared and stay tuned. CNN keeps speculating that the Suez Canal may shut down. Here is the prediction.
The Suez Canal will stay open.
The revolt is from the street not from Al Queda/Extremist Islamic Groups which seeks to harm the west. Look at Iraq. Warfare, suicide bombers and every imaginable form of violence. They continue to pump oil because it generates cash every day. Same thing with the Suez Canal.
They will fight, riot and even loot a little. but they will not be allowed to fool around with the money.
Disclosure: “George Gutowski” writes from a “caveat emptor perspective”. I hold no positions in stocks mentioned in this post. I do not intend to establish new positions within the next 72 hours.