Riot police face off against protesters in Vladivostok.(Photo from Radio Free Europe)
From Newsweek:
What happens if Russia's and China's economies and governments lose their footing?
The symptoms of financial meltdown so far—emaciated 401(k)s, bankruptcies, layoffs—haven't been easy to handle in the U.S. But Americans aren't the only ones feeling the pain. Anger over the worsening global economy boiled over last week resulting in protests in Greece, France, Latvia and Britain. At issue are rising prices, shrinking incomes and the disappearance of jobs. Fears that economic unrest will lead to political instability are widespread, says Ian Bremmer, president of Eurasia Group, a political-risk consulting firm, and Russia and China figure prominently in many forecasters' nightmare scenarios. In his forthcoming book, "The Fat Tail: The Power of Political Knowledge for Strategic Investing," Bremmer connects the dots between political disaster and economic turmoil and posits new ways to analyze and prepare for doomsday scenarios. He spoke with NEWSWEEK's Barrett Sheridan from his hotel in Moscow, where he was attending the Russia Forum, a conference for investors hosted by investment bank Troika Dialog. Excerpts:
Read more ....
My Comment: China holds an incredible amount of U.S. debt. If China starts to unravel, this money is going to be dumped. The consequences for the U.S. credit and debt markets will result in a complete collapse of the banking system. Think 1929 - 1933.
But I do not think this is going to happen. The Central Government and the military are not only very strong in China, but they have the will to use force to preserve their position. ... dissent that threatens their rule will never be tolerated.
Russia is different. If people are starving .... the military and internal police forces are very leak .... revolution will be in the air.