Russian President Vladimir Putin is a busy man. He’s found time to prop up Syrian dictator Bashar Assad, negotiate a face-saving chemical weapons deal with President Obama and support violence against Ukrainians, all while overseeing the construction of the most expensive Olympic Village in the history of the games.
The Olympic Village at Sochi had a projected cost of $12 billion. The actual cost was $50 billion. So no more complaining about The Big Dig. It could have been worst.
And, like The Big Dig, all that money failed to buy quality construction. Stories abound of shoddy construction and faulty work. The Olympic Village is more like a Potemkin Village.
At the Olympics, color, pageantry and the world’s best athletes draw the television cameras, while a few hundred kilometers away, the Ukrainian government, with help from the Russian government, is killing its people. This week, violence in Ukraine was the worst it’s been since the breakup of the Soviet Union.
As with Syria, the U.S. is leading from behind. While the European Union has at least announced sanctions, the U.S. is only considering sanctions. President Obama denounced Ukraine violence “in the strongest terms,” but talking is the weakest action.
President Putin and Ukrainian President Viktor Yanukovych must be shaking with fear over the possibility of another tongue lashing from President Obama. But at least the U.S. is “deeply engaged” with its European allies in trying to end the violence.
The U.S. will likely be as successful in negotiating over Ukraine violence as it’s been with negotiating over Syrian violence. We can expect an agreement over the use of chemical weapons in Ukraine any day now.
Going For the Gold
Olympic athletes have an added incentive to go for the gold in today’s economy. If the economy continues to worsen, gold prices could soar again.
Just as the Olympics are distracting from violence in Ukraine, they are also distracting from the economic stagnation of Olympic proportions that is gripping much of the world. Apparently, stimulus spending and bond buying hasn’t been working miracles in other countries, either. But maybe, as Bank of America’s economists determined, its America’s cold, snowy weather that’s dragging the world economy down.
Or maybe there are other reasons. China’s fast-paced economic growth of the past 20 years, it turns out, has created a great deal of debt (maybe if America pays its debt to China, China will be able to pay its debts). Some experts are comparing China today with the U.S. in 2008. And just as the bursting of the U.S. bubble affected the rest of the world, an economic meltdown in China would have global repercussions.
Then there’s Japan, where, as Zerohedge noted:
- Fifty four nuclear plants have been shut down, leading to insufficient energy
- Largely because of energy imports, Japan has a trade deficit for the first time in decades
- The budget deficit is 56% larger than revenues
- Total debt is 235% of gross domestic product
- A recession is shrinking Japan’s economy at an annual rate of 2.3%
- Renewed efforts are underway to debase the yen
And while Europe hasn’t been in the news much recently, that doesn’t mean its economy is improving. A sign of continuing economic misery is that German’s economy grew at a rate of 0.4% in 2013. At least that makes U.S. economy look like its booming.
The strain of carrying the rest of the continent on its back may be showing, but if Germany can no longer afford to bail out the rest of Europe, who can?
It’s too bad the Olympics ends this week.