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A View From the Old World, by Alexander Privalenkov

[Editor's note from Daily Speculations: We are not expert on Russia and have have no idea whether the assertions contained in this article are true; nor do we know how they might be tested.]

"A near object is better seen from the distance," says the Russian proverb. It seems to me that American traders do not see all the considerable changes that happened in their country at the end of the millennium. Nonetheless, those changes greatly influenced world markets, American included. The only American who felt those changes and described them in his book was George Soros (The Crisis of Global Capitalism: Open Society Endangered. )I offer you a different view -- a view of a person who spent almost half a century in the country that was for many decades and unfortunately still is your ideological opponent. The collapse of the USSR in the interpretation that was presented to the world by Gorbachev and that was accepted with great joy by the Reagan and subsequent administrations -- and, as far as I know, by the American business community -- never happened.

Those who were at the top of the USSR ruling elite and a number of people from the academic world (namely Velikhov, Primakov, and Abalkin) held unofficial meetings since 1984. Their intentions didn't include the acceptance of defeat in the Cold War and in competition with the West; nor, of course, the acceptance of the failure to build a new society. They were mostly concerned about the growing revolution that could physically destroy them and the ruling nomenklatura.

Secondly, they could not and did not want to have double lives (i.e., to be humble and honest publicly and on the other hand to be extremely wealthy and to have the same qualities that were common to clans that ruled the country before the October revolution in 1917).

Thirdly, they owed it to those who put them into their chairs to fight against ideological enemies and to win that fight. They never mentioned that the vow was renounced and that the war was over.

You probably remember the theories about convergence and building bridges. On the other side of the river, people in various political institutes did not sit on their hands. Theories about convergence and subsequent decay were developed there. Since I do not have much room in this article to describe those ideas, I will just say that according to my observations those ideas are being now implemented. The Reagan administration and the following administrations were very naive in believing that all the battles were already in the past. As the result, the American elite that was previously united by the common goal of defeating the Soviet Union lost its common denominator and started a fight within itself.

As a further consequence, since 9/11 there has been what I call a "political problem of the United States."

Now I want to ask traders living in the US: "Is there a greater event in recent American history than that of 9/11 that influenced and still influences all world markets, including American? Can you easily open a position and go to bed and not think that somewhere, something might blow up and that it would cause severe casualties?"

Now when Paris has been burning, here in the Old World where I live traders do not feel as comfortable as they did in the previous century. That's why they (and you) became more aggressive and quicker. At the same time in the former Soviet Union certain processes have been under way. These processes are not visible on the other side of the ocean, but they have been seriously influencing the world. Hundreds of billions of dollars that were taken from the party's treasury, hundreds of billions of dollars that are received from the selling of oil, natural gas, steel, gold, aluminum, nickel, diamonds, timber, weapons and so on and so on do not find any sort of usage in the country where democracy lasted only for several days and where now the most cunning regime holds the power; that money is now moving to the West. Now it doesn't look like a joke that if all these trillions of dollars were brought to the US that this would be a huge bombing.

In the former Soviet Union, thousands of people from most countries of the world underwent serious training. Today many of those people are very influential and many of them work in secret institutions. I do not want to measure the influence of these people on the market, but it is substantial.

When I read in a newspaper that George Soros lost a lot of money in Russia, I did not believe it. Nor did I believe him when he repeated it in his book.

At that time Soros was supposedly losing all that money, I was in Moscow. Three months prior to the default, I received information to take all the money out of the bank. I never trusted the Russian banking system, because it was the continuation of the cunning regime. I used the information and converted all the money.

People say that the Russian default seriously influenced world markets. But the thing is that big players should have competent informants. In general, speculator doesn't care where the price goes. It's important for him to recognize the direction of the movement early. Of course, ethical problems will influence him but not to such an extent as to stop the trading.

The world is global. The world has changed. New players are claiming a place on the floor. America and its markets should adjust to the new rules of the game. If America does not want to give up its leading role, it should consolidate. Only after consolidation can the new trend begin.