The Saudis are flooding the world with cheap petroleum. Nice for us with the low gas prices but many of the oil companies that were drilling in the Dakotas are now closed as it costs about $65/barrel to extract and the Saudis are now charging about $30/barrel.
This is hitting Russia too - from Bloomberg:
Russia's $59 Billion Budget Cushion May Not Last the Year
Russia’s Reserve Fund, which it uses to plug gaps in the budget, has slumped 30 percent since the start of last year. Finance Minister Anton Siluanov warned Wednesday that the buffer may be depleted entirely in 2016 if the government doesn’t enact bold spending cuts.
The fund, which was built from windfall oil revenue, stood at $59.35 billion at the end of November. That compares with a five-year high of $91.72 billion in August 2014. Russia’s budget is based on an average oil price of $50 per barrel, while Brent is trading near the lowest level in 12 years, slightly above $31. December fund figures are due to be released on Wednesday.
Two things come to mind. I like that Russia does not run a national debt. We didn't either for a long time and now we owe foreign nations over 18 Trillion dollars. We are making payments on the interest but not the principal. Time to change. Second, the USA and Russia now have a common enemy. We were close friends once - before the communism stupidity - and can be again. The followers of that false prophet need to have a reformation of their own. Christianity used to be a lot more rough and tumble until we had ours - they need to step up to the plate.
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