The Shirtless, Cornered Russian Bear

Is Russia’s Vladimir Putin losing his shirt? In more ways than one!

Consider this: the ruble has lost half its value in the past year, oil exports – critical to the Russian economy – have plummeted since the slump in oil prices, and now S & P has cut Russia’s credit rating to junk status (see: Russia Rating Slips to Junk, and the Ruble Takes a Beating). At the same time, the economic sanctions by the west against Russia over its surreptitious incursion into Ukraine last year, which are being tightened even further, have reportedly begun to have an impact on the quality of life for Russians.

One might think that under such conditions, the Soviet style mafia leader of the motherland would have approval ratings from his “electorate” on a similar downward trajectory as his economy. Think again. Since comrade Vad controls the state-run media, the perceptions of Russians have not waned.

In a survey of 2,000 Russian last month, Putin’s approval rating was at 81% (see: Poll: 81 percent back Putin even as ruble falls). So strong is Putin’s stranglehold on the media in Russia, it makes one wonder how the other 19% got away with expressing their disapproval.

So, what is a dictator to do? If you consider that when a Russian bear gets cornered then it will attack, what does all of this mean for peace in Ukraine and in the world?

Earlier this week, Putin referred to the Ukrainian army as a “NATO foreign legion” in the face of new western sanctions. Not a good sign indeed.

In the near term, Putin has nothing to worry about on the home front because of his control of the media. In fact, many Russians remember the economic struggles of the 1990s so well, and the way that Putin built their oil export economy starting in 2000, that they can only see Putin as their solution and not the problem. Clearly, mass brain washing is still a reality in the motherland.

However, anonymous surveys can reveal some truth about public perceptions, and if that 81% starts to drop as the Russian economy worsens, then Ukraine will surely be in Putin’s crosshairs in a far more threatening manner. The full spectrum of possible attacks on the sovereignty of Ukraine should be anticipated this year as a result of all of these dynamics.

At a minimum, watch for heightened mischief with the Russian-backed rebels in Ukraine. Since most Russians believe that the former Soviet satellite states are rightfully Russian territory, we should also watch for a possible outright invasion of Ukraine by Putin to rally the homeland behind him.

Under these circumstances, any US company doing business in Russia should be very wary of maintaining a presence there. You can watch my commentary on this topic regarding Putin shutting down McDonalds restaurants in Russia on false pretenses last fall as the western economic sanctions started to take hold: Biz Blitz: McDonald’s: Putin’s Latest Target and Rising Airline Fees.

Also, watch my comments on FOX Business’ Cavuto about Putin and the threat he represents this year with a worsening economy here: Russia’s struggling economy all about low oil prices?


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