Putin positioned for Peace Prize? - The Honest Truth By Ajit Dayal
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11 SEPTEMBER 2013


What a fall the US has taken.

Twelve years ago on September 11, 2001 the world empathised with the US after 3 coordinated terrorist attacks on US soil.

And, today, the empathy has been downgraded to sympathy. There is a nagging distrust of the US as the sole arbitrator of global affairs.

In 2009, President Obama won the Nobel Peace Prize nominations for which had closed 11 days after he was sworn in as President. Clearly, President Obama won on expectations of promoting peace rather than on any concrete results of delivering peace. If President Obama won in 2009 on mere expectations of doing something good, should President Putin - czar of all that is Russia - win the Peace Prize in 2013 actions, such as:

  1. Suggesting a diplomatic solution to the Syria crisis, even as Obama's sole response was a convoluted "limited military strike" without "putting US boots on Syrian soil", and

  2. Granting asylum to Eric Snowden, the employee of a US defence department sub-contractor, who leaked information on the US government's systematic spying on its own people.
Not that the granting of any peace prize to Putin will make anyone decide to immigrate to Russia. For all the disappointments of the US on privacy and the increased role of the US government in daily life, the US is still the undisputed leader on where most people wish to live. How many of us wish to retire in China or Russia?

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A set of self-serving policies?
When arguing for the limited strike on Syria, President Obama conjured up the images of children dying from the dastardly gas attacks.

The specific reference to "gas" attacks led many to ask: what about deaths from other forms, by other regimes? While two wrongs do not make a right, was the USA's desire to strike on Syria a reaction to a fear that gas could be used on American soil on Americans or was it a more global human rights issue? A regime that used sticks to beat up children and women was presumably safe from a US strike since the sticks would not pose an immediate and imminent danger to the American people.

Whereas gas could be smuggled in and used on US soil.

And what about the repeated attacks on the US population by the Wall Street financial firms? Sure, there are no images of children gagging to death but it is hard to imagine there were no suicides, implosion of families, and decimation of a way of a life by the decades old practices of "where is my bonus" battle cry crusades of the financial armies. Those were on US soil and those were pretty horrific.

As President Obama noted, the US is not a "global policeman" and it is "beyond our means to right every wrong". By inference, the US government will be there to right every wrong that could have an impact on US citizens - except those caused by large political donors. God is omnipresent and all-hearing - but selective.

This subtle political message comes at a time when the US has sent out a blunt, strong economic message.

The US Dollar is still the undisputed, reserve currency in the world.

For decades the US has enjoyed what President Valery Giscard d'Estaing of France coined as "exorbitant privilege": the ability to issue US Dollar bills to a world that wanted and trusted these US Dollar bills as a means of exchange for global trade and as a store of value; as a reserve currency.

For decades, it suited the US to issue these US Dollar bills to fuel global trade and as a means to finance its own expenditure and debt-heavy lifestyle.

Cushioned by this continuous flow of US Dollars many emerging market economies, including India, ignored the need to build a structural defence of their economies by insulating them from an eventual reversal of this tide.

That tide may now be reversing. In the clear words of some of the governors of the Federal Reserve, the US central bank, their mandate as central bankers is to look after the needs of the US citizens. Not after the needs of people in other countries. Based on analysis of their economic data, it now suits the US to issue less of its own currency. The impact of this new US monetary policy on the world is of little consequence when making such decisions. Sorry, of no consequence.

Over the past few months, the emerging markets have seen dislocations in their currencies, their interest rates, and their stock markets from such a tighter US monetary policy. Countries, including India, will need to readjust their policy making in light of the new path chosen by the US central bank. The RBI has already announced a shift in the date of its monetary policy review meeting from September 14 to September 21 - three days after the September 18 meeting of the US central bank.

"The burdens of leadership are heavy", said President Obama, as he delivered his speech to justify his modified view on Syria.

Indeed they are.
And sometimes, in a replay of the Peter Principle, people get promoted to their highest level of incompetence. Their shoulders are not broad enough to bear the burden of leadership. The US was promoted by many of us to be our conscience keeper. It may not have been a role that the US wanted, but that's the responsibility they got.

The US Dollar was promoted as a reliable currency issued by a reliable central bank. It may not have been a role that the US wanted, but that's the responsibility they got.

And it is a sorry state of affairs that Putin, however fleetingly and selectively, seems to be better at being a conscience keeper.

And it is more worrying that Putin, a ruler of a country that has a closed and corruption-riddled economy, declared a few years ago that gold should be given a more important role in the global economy. The Russian Central Bank has been the largest buyer of gold in the past decade, having purchased over 550 metric tonnes of gold - more than that of China.

No, I have no desire to move to Russia and live in what seems to be a cold and depressing environment.
But I am glad that someone - for whatever reason - is fighting (selectively) for freedom.
And is also buying gold.

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Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site. To write to Ajit, please click here.


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3 Responses to "Putin positioned for Peace Prize?"

Bharat Shah

Sep 12, 2013

Excellent article. A small correction.it is not Murphy's Law but Peter's Principle that states,"In a hierarchy, every one is promoted to their level of incompetence".Murphy's Law states," "Anything that can go wrong, will go wrong".
For India it is necessary:
1. An economic powerhouse that is self sufficient and has big consumption base.
2. It is a world that is interdependent, our CAD position should be balanced.
3. In order to achieve that the mind set of politicians from a ruling mindset should turn to a facilitator's mindset.
3.Creativity & innovation should be encouraged as it in the US. We have even our research& educational institutions mired in Babudom.

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Mithun

Sep 12, 2013

The Russian govt. is controlled by the Mafia.The American one is controlled by the Banksters.
America wants continuous war for continuous profits for it's military-Industrial complex.
War is bad for people but good for business.Just look at the US's track record after WWII.Korea-Vietnam-Iran/Iraq-Kuwait-Iraq again-Afghanistan.Add the small ones in Haiti-Granada-Somalia etc. and what is the picture?
So,the only question is whether it will be Syria next or Iran.My money is on Syria as Iran is a tougher nut.
All that talk of WMD is just BS.

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harri

Sep 11, 2013

"in a replay of Murphy's Law, people get promoted to their highest level of incompetence". This is not a replay of Murphys' Law but the Peter Principle. Please be correct when quoting what has already been said.

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