Apparently, on Russian TV they are predicting the fall of the USA. Putin even has recommended that the Russian Ruble become the global currency of choice instead of the USD. There are quite a few posts on LiveJournal about the takeover of the US interests in the world by Russia.
But not so fast! A quick look at the numbers shows a different picture. While our market indices are down year-to-date, the Russian index is down, too. The S&P 500 is down about 26% YTD. RTS, the Russian index, is down about 50% YTD. Of course, RTS has had a fenomenal growth since 1998 (up about 1,200% since 1998 compared to the dismal 9% rise in S&P 500 during the same period). But the collapse of RTS this year continues despite a $200 billion injection by the Russian government. Our market collapse continues despite a $700 billion injection by our government.
So, is Russia going to take over the US? Since the communists came to power in that country, their dream was to catch up and surpass America. They've been trying to do that for the last 90 years. I don't think they will be able to do it in the next 90 years either. While Russia has grown prosperous since 1998, the country still remains an economy with underdeveloped technologies and industry. Its main engine remains the export of raw materials. That's not a formula for growth.
The US is not an industrial nation either but we have the technologies and knowledge. What's more dominant, an economy based on knowledge or raw materials? At this point in time, I think knowledge is still superior.
Above is the year-to-date comparison of the S&P 500 and RTS in percentage change.