The Economic Integration of Russia and Ukraine

There will be a severe global market crash in about 90 days.

My contacts are very reliable and they are in touch with most global central banks. They are 90% confident that a major crash will occur in mid to late October.They believe the crash will be at least as bad as the 1929 crash. The USD will be obliterated, the Euro zone will be hit extremely hard, and most major governments are in the process of returning their currencies back to the gold standard.

 

This will change the entire global economy.

 

If you want to help other friends and clients, you should try to help them understand why they should be buying gold, silver and inverse ETFs for protection against a decline in the S&P, the Dow or the Nasdaq. Plus you can buy them to hedge against declines in various stock sectors.

Any investor can add inverse ETFs in any stock brokerage account; you purchase them like any stock. And you can often tailor your selects to approximately match the kinds of stocks you have left in your portfolio. The goal: The more your stocks fall, the more your inverse ETFs rise, helping to offset your losses and give you pretty good protection.

For the first time ever, dollar-denominated Chinese silver futures began trading on the Hong kong Mercantile Exchange.
This could spark the biggest silver price hike in history.
Soon after the news hit, Wall Street analysts predicted huge leaps in silver by years end.
Citibank now forecasts silver to more than double up to $100 an ounce.
If there was ever a time to jump on the silver bandwagon, it"s now while the price is still cheap, around $40 an ounce.

 

Urgent Self-Defense for Hazardous Times

All hell is breaking loose in the economy and the stock market.
So my inbox, Facebook page and blog are packed with emails from investors asking what they should do to protect themselves.

 

I understand your concern and confusion, and I"ll give you the urgent answers you need in a moment. But first a quick retrospective,...

Economic facts:

Slowing economy, accelerating declines in home prices, rising home foreclosures, increasing weakness in the banking sector, stubbornly high unemployment and the Fed"s attempts to gut the dollar of its buying power, the fact that the second phase of this great double-dip recession is clearly beginning. NOW.
And sure enough, the stock market is cratering.

Urgent Self-Defense

So what should you be doing now to protect yourself and profit as this great crisis returns to hammer Wall Street?

 

Step 1.

If you"re uncomfortable with the risk you"re taking, if you feel you"re overloaded with stocks, sell approximately HALF of nearly every stock position you have right away.
(There may be some exceptions. But I"ll leave that up to you and your advisor.)
One reason I don"t recommend selling entire positions right now is because you may be able to get better prices on an intermediate rally, which leads me to the next step.

 

Step 2.

Determine which stocks are probably the most vulnerable by checking their rating at .

• If it"s D+ or lower, I would seriously consider selling the rest on any significant rally in the market. But if it"s a B+ or better, it has a much better chance of holding up a lot better than the rest of the market.

 

Just be aware that the rating is not the ONLY factor to consider. There may be some exceptional stocks you may want to hold for special reasons.

 

Step 3.

No stock, no matter how highly rated or how special, is risk free.
All can be vulnerable to stock market crashes, as investors dump the baby with the bath water. So to protect yourself against that risk, consider inverse ETFs as a hedge.
You can buy inverse ETFs for protection against a decline in the S&P, the Dow or the Nasdaq.
Plus you can buy them to hedge against declines in various stock sectors.
Any investor can add inverse ETFs in any stock brokerage account; you purchase them like any stock. And you can often tailor your selects to approximately match the kinds of stocks you have left in your portfolio.

The goal:The more your stocks fall, the more your inverse ETFs rise, helping to offset your losses and give you pretty good protection.

Step 4.

Buy investments designed to multiply your money BECAUSE of this crisis:
Moving money to inverse ETFs, not just as a hedge, but as a major profit opportunity.
Given the chaos now all around you, I think it would be a huge mistake not to watch inverse ETFs from start to finish:

In 1991 "everyone" in Soviet Union (USSR, СССР) wanted Capitalism, now everybody complains about the crime, drugs, no jobs, corruption, too rich individuals, .... - the answer is "that is the package called Capitalism".
The crisis in USA (and EU) represents the failure of the system, it is not "financial crisis" as they like to call it. That part of the world is deep into the latest stage of Capitalism which is called Financialism - the stage where only profit counts.

For that reason they do not produce (or export) anything of any importance, as everything is more profitable to be produced in China or else.
Because of that millions of Americans and Europeans receive food coupons, and the rest of the population uses digital USD., EUR. which are made out of thin air.
America and Europe are BANKRUPT! It is a real DISASTER!

S&P Downgrades U.S. Credit Rating from AAA

Dow plunging! Banks crashing! What to do?
Bank stocks are crashing!
And remember: This is AFTER the hundreds of billions of dollars the government has wasted bailing out these banks. It’s an epic disaster!
Junk bonds imploding!
European stocks, currencies, and bonds tanking! The apocalypse is not just American — it’s also European. The sovereign debt crisis is exploding, and attempts to contain it are a TOTAL failure!
ECB President Jean-Claude Trichet tried to calm investors, but they responded by dumping the euro like there was no tomorrow. Spain and Italy are blowing up. Their interest rates skyrocketing.
The entire European continent is coming unglued, and now the contagion is breaking out on BOTH sides of the Atlantic at the same time!
That leaves you just two choices: Sit idly by while your wealth is destroyed. Or take urgent action to protect it — and PROFIT from the disaster striking all around you.

 

The Economic Integration of Russia and Ukraine

 

Recommendations :
The first step that the Government of the Russian Federation and the Government of Ukraine should take, to facilitate the continued integration of their economies, is to jointly adopt President of Russia Dmitry Medvedev"s 10-Point Modernization Plan outlined in his speech to the World Economic Forum in Davos, Switzerland on January 27, 2011.
In some of these 10 areas, Ukraine already has a corollary to Russia"s , and in some of these 10 areas, Russia and Ukraine are already coordinating their respective activities.
However, what is needed is an integration of Russia"s and Ukraine"s economic modernization plans that is so seamless that Ukraine functions as Russia"s 84th federal subject.
Russia should offer Ukraine 100% inclusion in its modernization plans, never failing to do so in an effort to promote Russia"s prestige above that of Ukraine"s.
It should be left entirely up to Ukraine"s domestic political calculations whether Ukraine can participate in 25%, 50%, 75% or 100% of a joint Russia-Ukraine modernization plan.

 

Detailed recommendations in each of the 10 points follows:

1. Privatization
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Shares worth a total of tens of billions of dollars in leading banking, infrastructure and energy sector companies will be privatised over the next three years."24
Ukraine: In September 2010, it was reported in the Kyiv Post that Ukraine had received less than $53 million from privatization, far below its projected revenue from privatization of $820 million in 2010.27 In October 2010, President of Ukraine Viktor Yanukovych stated that he intends to accelerate the privatization of industrial enterprises, such as telecom providers, power utilities and power distribution companies, chemical manufacturers, and seaports.28
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to compare the list of enterprises targeted for privatization by Russia and by Ukraine, identify potential synergies from mergers of Russian and Ukrainian enterprises, merge the lists of enterprises to be privatized into one list, and then hold a joint Russia-Ukraine Privatization Forum for international investors.

 

2. Sovereign Fund
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia "will soon establish a special sovereign fund that will share the risks with foreign investors by carrying out joint investment in economic modernisation projects in Russia."24
Ukraine: In December 2010, President of Ukraine Viktor Yanukovych issued Decree of the President 1119/2010 which calls for the Cabinet of Ministers to issue financial support to a domestic enterprises development bank within one month.29
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to create a joint Russia-Ukraine sovereign fund that will match the equity investments of foreign investors, and to create a joint Russia-Ukraine domestic enterprises development bank.

3. Financial Sector
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia plans to "develop Moscow as an international financial centre that will become not just the nucleus of Russia"s financial system but also a catalyst for developing financial markets throughout the post-USSR region."24 Back in July 2010, President Medvedev had signed a decree instituting a working group to
establish an international financial center in Moscow, which Moscow authorities indicated at the time would require $150 billion in investment.30
Ukraine: In April 2010, it was reported that there were 10 Ukrainian companies planning an IPO, and that only 22 percent of companies in Russia and CIS including Ukraine that were planning an IPO had chosen one of the two Moscow-based exchanges (MICEX or RTS) as a preferred destination.31
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to encourage companies in Russia and CIS to select either a Moscow-based exchange or a Kiev-based exchange (PFTS or Ukrainian Exchange) for their IPO, and to determine means by which Russia and Ukraine can cooperate to increase the competitiveness of the Russian and Ukrainian financial markets and attract more foreign and domestic capital to the national economies.

 

4. Trade Organizations
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia plans to join the WTO, join the OECD, build a Common Economic Space (CES) with the EU, and advance the Customs Union with Belarus and Kazakhstan to a CES.24
Ukraine: In November 2010, President of Ukraine Viktor Yanukovych stated that Ukraine, already a WTO member, may join the Customs Union of Russia, Belarus, and Kazakhstan.16 In December 2010, President Yanukovych signed a Presidential Decree ordering the Cabinet of Ministers to take additional steps toward Ukraine"s signing Free Trade Agreements (FTA) with the EU, Russia and CIS, and Canada.32
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan for Ukraine"s geopolitical support of Russia"s accession to the WTO; Russia and Ukraine"s joint building of a CES or joint establishment of an FTA with the EU; and Ukraine"s subsequent accession to the CES, or joint establishment of an FTA, with Russia, Belarus, and Kazakhstan.

 

5. Innovation
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia is continuing its "active efforts to develop new possibilities for innovative business and venture investment," of which "the Skolkovo Innovation Centre is our biggest project+"24
Ukraine: The Chairman of the Kiev Regional State Administration, Anatoly Prisyajnyuk, stated in July 2010 that Ukraine was planning to construct a Technopark in Borispol, Kiev Oblast.33 In January 2011, Prime Minister Mykola Azarov indicated that Ukraine will create a University of Innovation and Nanotechnology20; President Yanukovych promised to apply the best practices of Silicon Valley and Skolkovo in a National Innovation Project in Ukraine21; and President Yanukovych created a new Council of Domestic & Foreign Investors that includes the CEOs of Microsoft and other multinational corporations.22
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan for the integration of Russia"s and Ukraine"s innovation initiatives as they relate to Universities, Technoparks, laws, and attracting foreign corporations, investors, and scientific and managerial talent.

 

6. Renewable Energy and Energy Efficiency
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Given Russia"s important place in the energy sector it is essential too to make this sector one of the main driving forces behind innovation."24 Back in May 2010, President Medvedev had directed the Government of Russia to develop incentives for renewable energy development and use.34 In June 2010, it was reported that the Federal Grid Company of Russia sought to invest $30 Billion in a smart grid for alternative energy and energy efficiency projects.35 In August 2010, Russia"s renewable energy and energy efficiency road map was revealed.36
Ukraine: Ukraine already has incentives in place to attract investment in renewable energy projects, including a Green Feed-in Tariff that provides one of the highest returns in the world for generation of energy from renewable sources, VAT exemption for importation of capital equipment used in renewable energy projects, membership in the EU Energy Community, high average wind speeds, good solar radiation profile, plentiful biomass raw materials, numerous dams on the Dnieper River, and so on. The largest impediment to energy project development in Ukraine is the nation"s continued distressed
sovereign debt rating and plans to assume more public debt, and the resultant unavailability to private developers of international sources of finance for large infrastructure projects in Ukraine.
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan wherein Russia"s and Ukraine"s renewable energy and energy efficiency road maps can be integrated; the optimum blend of energy from all sources including coal, gas turbine, natural gas, CHP, nuclear, wind, solar, hydro, and biomass can be determined; Russia can adopt laws and incentives for renewable energy comparable to Ukraine"s; and financing for development of energy projects in both Russia and Ukraine can be provided.

 

7. Joint Ventures
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We will make full use of technology transfers to modernise our industry. Joint ventures and technology exchanges are important in all sectors+"24 In October 2010, Russia and Ukraine signed 10 contracts, and discussed the prospective Gazprom-Naftogaz merger, during the visit to Kiev of Prime Minister of Russia Vladimir
Putin.14 Specifically, Ukraine and Russia agreed to projects in nuclear, oil and gas, aerospace, aircraft, shipbuilding, transport, and agriculture.15
Ukraine: In November 2010, Ukrainian Deputy Economy Minister Valery Muntiyan stated at a meeting of The Intergovernmental Committee on Russia-Ukraine Cooperation that Russia and Ukraine agreed to a 10-year program on economic cooperation. He further stated that the program might include 19 joint projects costing a total of $48 billion.17
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to ensure that JVs and technology transfers involving either Russia or Ukraine separately benefit both nations; that all potential JVs and technology transfers between Russian and Ukrainian enterprises have been considered and agreed to when feasible; and that insufficiently funded JVs between Russian and Ukrainian enterprises be presented to international investors at a joint Russia-Ukraine Investment Forum.

 

8. Broadband Internet
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We are carrying out an extensive programme to develop broadband internet throughout the whole of Russia."24 In June 2010, it was reported that the Internet penetration rate in Russia had reached 37% overall; in Moscow and Saint Petersburg, over 60%.37
Ukraine: In July 2010, it was reported that Internet penetration in Ukraine had grown to 25%.38
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to ensure that appropriate incentives exist for telecom operators to provide affordable fixed and/or mobile broadband internet services to the entire populations of both Russia and Ukraine.

 

9. Talent
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Our task is to make Russia a more attractive place for the world"s brightest minds. This is why we are ready to take the unilateral step of granting automatic recognition to diplomas and degrees from the world"s top universities. I note too that we have simplified the immigration rules for highly qualified specialists coming to Russia."24
Ukraine: In 2005, in anticipation of an influx of visitors for the Eurovision Song Contest in Kiev, Ukraine took the unilateral step of repealing Cold War era immigration policy by allowing citizens of the following countries to visit Ukraine without a visa on short-term tourist, business or private travel of up to 90 days: USA, Canada, Japan, EU nations, Switzerland, Liechtenstein, Andorra, Vatican, Iceland, Monaco, Norway, San Marino, Mongolia, Lithuania and the countries of the CIS (except Turkmenistan). Although Ukraine"s immigration laws were tightened in Q4 2008 upon the onset of the global financial crisis to preserve jobs for Ukrainian nationals, it is still a relatively simple procedure to obtain immigration sponsorship for employment in Ukraine from a Ukrainian enterprise.
Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to discuss the possibility of further simplifying Russia"s immigration policy to make it aligned with Ukraine"s; and to acknowledge that attracting foreign talent and arresting the Russian and Ukrainian brain drain is as much a matter of perceptions and emotions as it is of Governmental policy, and to discuss the potential role of public relations in shaping perceptions and emotions to ensure that Russia and Ukraine secure the talent necessary to achieve their joint modernization plans.

 

10. Infrastructure Projects
Russia: President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We have begun carrying out big infrastructure projects, especially as we have been chosen to host major international sports events. These projects will all be carried out on a public-private partnership basis."24 In June 2010, it had been reported that Russia had embarked on 10-year, $1 trillion construction program to upgrade its infrastructure.39
Ukraine: Also in June 2010, It was revealed that Russia"s |2 billion high-speed electric train project would include the Ukrainian cities of Kiev, Kharkov, and Simferopol.8 In July 2010, it was reported that the heads of the CIS countries, including Russia and Ukraine, had agreed to cooperate on free trade, joint investment, transport and tourism infrastructure, and sports.40
Russia-Ukraine Integration Recommendation: The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan wherein Russia"s and Ukraine"s infrastructure development road maps can be integrated; Russian and Ukrainian enterprises can be awarded contracts for infrastructure development for UEFA Euro 2012, Sochi 2014 Winter Olympics, and World Cup 2018; and infrastructure projects can be financed by a combination of the joint Russia-Ukraine sovereign fund, the joint Russia-Ukraine domestic enterprises development bank, and international investors at the joint Russia-Ukraine Investment Forum.

 

Conclusion:
The premise promoted in Western capitals that Ukraine needs to choose between economic integration with the European Union, a trade bloc with a population of 500 million, or economic integration with Russia and the Russian-speaking nations with a collective population of 250 million, is a false dichotomy.
Ukraine can instead choose to both enter into a Free Trade Agreement with the EU, and join the Customs Union among Russia, Belarus, and Kazakhstan after Russia"s accession to the WTO anticipated to occur in late 2011.
Equally flawed is the Western premise that Ukraine must choose between modernization or return to the cultural and spiritual heritage it has shared with Russia since the 9th Century.
The better choice is for Russia and Ukraine to go forward together into the 21st Century, modernizing and integrating their economies to ensure their mutual prosperity, without ever compromising their common cultural and spiritual values that have made them great nations for over one thousand years.

 

Russian President Dmitry Medvedev delivers a speech during the opening ceremony of the 15th St. Petersburg International Economic Forum in St. Petersburg, Russia, June 17, 2011.