Global economy

Russia needed USA for cash and support


Over the last decade, the United States has expanded its influence into what was for centuries  the Russian sphere of influence. In the post-Cold War era of American dominance, Moscow acquiesced. It need Washington for cash and support. But by 2008 Russia was a revived power. In mid-February 2009 the Kyrgyz Republic was finalized its decision to close Manas Air Base, a U.S. base providing essential air support for operations in Afganistan, which was particularly important after the 2005 closure of another air base in Uzbekistan. The motivation was money. The United States had been paying $55 million a year to lease the base and had indicated a willingness to pay $100 million a year. The Russian government, inimically opposed to the idea of a semipermanent U.S. military presence in its backyard, offered a $2.3 billion aid package that dwarfed the American financial support and included $180 million debt cancellation, $150 million in aid, and a $2 billion loan to complete the construction of a hydroelectric power station.

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Can EU helps Ukraine if Russia-Ukraine war starts?

Can European Union come face-to-face with Russia? If Russia-Ukraine war starts EU have two options: supporting Ukraine or staying outside.

If EU opposite to Russia and if Russia stops to provide Europe with gas, can Europe stay without gas?

Let`s look at statistics.

In 2007, 38.7% of the European Union’s natural gas total imports and 24.3% of consumed natural gas originated from Russia.

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Insurance Market Activity Promote Economic Growth


Insurance market activity, both as a provider of risk transfer and indemnification, may put up to economic growth by allowing different types of risks to be controlled more efficiently and by mobilizing domestic savings. During the past decade, there has been faster outgrowth in insurance market activity, particularly in emerging markets given the process of liberalization and financial integration, which increases questions about its influence on economic growth. The author tests whether there is a causal relationship between insurance market activity (life and non-life insurance) and economic growth. Using the generalized method of moments for dynamic models of panel info for 56 countries and for the 1976-2004 period, he finds robust evidence of a causal relationship between insurance market activity and economic growth. Both non-life and life insurance have a positive and substantial causal effect on economic growth. The results were driven in the case of life insurance by high-income countries. On the other hand, both developing countries and high-income drive the results in the case of non-life insurance.

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Free Trade Area of the Americas


“Never in America has there been a matter requiring more good judgment or more vigilance, or demanding a clearer and more thorough examination.” So said Jose Marti, Cuba’s independence hero of the first effort by the United States to unite the two halves of the Americas in 1889. By the early 2000s, the region’s governments were still stumbling on toward that goal, but hardly in step.

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Culture is central conservative truth

The central conservative truth is that is culture, not politics, that determines the success of a society. The central liberal truth is that politics can change a culture and save it from itself.

Daniel Patrick Moynihan

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Nonmarket parasites on a market world


“Robost growth has also produced a number of anomalies. Within an increasingly globalized and disciplined world, certain countries – those endowed with natural resources, especially petroleum and natural gas – are getting free rides.

They are surfing the wave of global growth, getting rich without having to play by most of the rules that govern the global economy. This phenomenon is the strange but inevitable outgrowth of the success of everyone else. These countries are the nonmarket parasites on a market world.”

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Inequality of Wealth in America

us inequality

Video showing through the awesome graphic truth about the distribution of wealth in the United States.

According to Wikipedia, in 2007, the top 10% wealthiest possessed 80% of all financial assets. In 2007 the richest 1% of the American population owned 34.6% of the country’s total wealth, and the next 19% owned 50.5%. Thus, the top 20% of Americans owned 85% of the country’s wealth and the bottom 80% of the population owned 15%. In 2011, financial inequality was greater than inequality in total wealth, with the top 1% of the population owning 42.7%, the next 19% of Americans owning 50.3%, and the bottom 80% owning 7%. However, after the Great Recession which started in 2007, the share of total wealth owned by the top 1% of the population grew from 34.6% to 37.1%, and that owned by the top 20% of Americans grew from 85% to 87.7%. The Great Recession also caused a drop of 36.1% in median household wealth but a drop of only 11.1% for the top 1%, further widening the gap between the top 1% and the bottom 99%.

According to PolitiFact and others, in 2011 the top 400 Americans “have more wealth than half of all Americans combined.”
In 2013 wealth inequality in the U.S. was worse than in most developed countries other than Switzerland and Denmark. In the United States, the use of offshore holdings is exceptionally small compared to Europe, where much of the wealth of the top percentiles is kept in offshore holdings. While the statistical problem is European wide, in Southern Europe statistics become even more unreliable. Less than a thousand people in Italy have declared incomes of more than 1 million euros. Former Prime Minister of Italy described tax evasion as a “national pastime”.

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