The Russians have been much too quiet of late. The airport bomb is a political statement by terrorists who have a beef with the state over old wounds. As much as it is a terrorist issue, which means it is our problem also, it is the new brand of capitalism that is growing in Russia and is something we all should watch closely. The reason for this watch listing is due to the less than capitalist approach to big business that is becoming more evident with the passage of time.

Over the past few years the Russian government has taken over large profitable companies under the guise that the companies were defrauding the state. It has become obvious this new Russian capitalism is functioning KGB style. Many of the businesses the government has taken over or closed down were started and were being operated by former KGB officials. These individuals used money from the former Soviet Union to establish and buy into the businesses and then used their connections to grow them. It was not a level playing field for anyone competing with them. The playing field has become less even as we speak.

The problem is the Russian government does not feel like they have done anything wrong. It has even stated that shareholders in the suspect companies were not even entitled to compensation for their losses due to the takeovers because they supported an illegal operation which cost the government several huge revenue shortfalls over time. The government and the courts said it was irrelevant that the shareholders were not necessarily Russian and had no internal knowledge of the supposedly illegal operations. This highlights the fact that there is no legal protection for outsiders who hold equity positions in Russian companies. To that end I guess the best thing is to be sure not to invest in Russian business from any direction.

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For the moment China has cornered the market on rare earth materials. They have, with out warning, cut the volume of materials normally traded around the world by 35%. They want to be sure they will not run out of materials they may need in the near future. They have announced that they will be cutting back additional amounts in the future. With China one must always be careful as to what they say and when they say it because they rarely reveal the true reasons for what they do when they make public statements. I believe the underlying reason for the 35% pull back was to raise the prices on the rare materials. This is purely a play to raise money on the products they are selling. The percentage of pull back will raise the price of these materials by an average of 40% in a short period of time. That means China will be selling 35% less material to the market but the return they will reap will be 40% plus over the original price before the cut.

Now if that does not seem to be a capitalist approach to the market then nothing is. In the long run they wish to make the cost of these materials extremely high as they pull more of the product back from the market. The Chinese, and those in power in the rest of the world, know that these materials are not truly rare but they are found in places where it is hard to extract them. In addition the processing of the raw material to create the appropriate end product will be expensive for others to set up. This is another area where the Chinese have moved to protect themselves in the long and short run. When all is said and done the Chinese will most likely not sell any of its material out of its borders so it can control its supply. This is part of its overall plan of being self sufficient and protecting its supply lines. That is the reason they are building up their navy and their air power.

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We all speak of and, on occasion, even think to ourselves about the world coming to an end. The funny thing is that everyone has a different vision of the end of the world. The different vision of the world's end that each person has represents a good thing. If we all had the same vision we would be quite sure the end was near. The fact that all the people hold different visions bodes well for the longevity of human kind. The bad sign would be if we all thought that we were going to come to an end because of a specific comet impacting out planet or even a nuclear war. The short and long of this is if we do see the end approaching the collective mind will have the same view of the end. In the long run it means mankind is still optimistic about the future and that is the best we can presently ask for.

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Our nation had a new government sworn in today. Everyone is excited that this may be the change we all have been looking for. This is the first day of a new season and I hope that the changes everyone is talking about will come to pass. I also hope that the changes, as they are presented for debate will be bathed in good old Yankee trading tradition and let the debate fly strait and true. It is time to do away with twisted words and phrases that have double meanings. Most of all I hope the new Congress will keep reminding it self of the promise taken today and of the promise made to those who elected them. If they go with good old Yankee trading methods they should be right on target to cut to the bone and make wise decisions based on the real needs of the people and not on behalf of their next election campaign.

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