Sasha Cekerevac writes: Having been relegated to the history books, the Cold War between the West and the East appears to be heating up again. On one side, we have increasing tensions with China; U.S. politicians claim that China is a currency-manipulator and China has massively increased its spending in defense, which is threatening the security in that part of the world. If we look to the Middle East, tensions are now rising with Russia.
The recent hostilities between Turkey and Syria are now putting U.S.–Russian relations in the spotlight. Essentially, America is supporting the Syrian rebels and looking to oust their leader, believing this will free the Syrian people of the tyrant. Russia has been a long-term supporter of Syria, and has continued to provide military weapons to suppress the uprising.
In a recent interview in German newspaper Der Spiegel, Vladimir Yukanin, who is a close confidant of Russian President Vladimir Putin, made some remarks that certainly will affect market sentiment. (Source: “Russia and the West are Drifting Apart,” Der Spiegel, October 11, 2012.)
While Yukanin states that there are many common problems between Russia and America, he was extremely critical of U.S. support in the region. He stated that people in the Middle East don’t want to be dominated by Western nations, as he said the failed attempts by the Soviet Union didn’t work; he doesn’t believe promoting democracy in the region will be any better. He also hinted that the West is hypocritical in promoting democracy, as evidenced by U.S. support of Saudi Arabia, which clearly is not a democratic state.
The most worrying statement was his comment, “Russia and the West are drifting apart.” This cannot be seen as helping oil prices remain stable. Market sentiment will continue to be on the edge, as developments in the Middle East shift with each new uprising or revolt.
Full article: Is the Cold War Heating Up? (The Market Oracle)