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Russia: At War

The weekend hasn’t started out nicely for Russia. With a report that Georgia has shot down two Russian warplanes, the country’s major stock index is down 4.55%, and the Ruble is having its worst decline versus the Dollar since January 10th, 2000. Today’s decline in the Russian Trading System index is the 3rd -4% decline in 11 trading days. (Courtesy of Bespoke Investment Group)

The photo above is of Georgian troops firing rockets at a South Ossetian separatist territory a settlement in Ergneti, 59 miles from Tbilisi.

Eduard Kokoity, the president of South Ossetia, told the Russian news agency Interfax that hundreds of civilians had been killed in fighting in the capital, though the claim was impossible to verify.

Georgia is a strong American ally whose shift toward the West and pursuit of NATO membership has angered Russia. Washington said Friday that it would send an envoy to the region to try to broker an end to the fighting in South Ossetia.

The clashes raised the specter of a wider conflict in the Caucasus region, a key conduit for the flow of oil from the Caspian Sea to world markets and an area where violent conflict has flared for years along Russia’s borders, most recently in Chechnya. (Couresy of the New York Times)

Parts of Russia’s 58th Army — including 150 tanks and armored vehicles — reportedly were moving Friday on the capital of South Ossetia after Georgian troops entered the city in an attempt to crush separatist forces seeking to control the breakaway province.

Kakha Lamaia, a member of Georgia’s National Security Council, told Reuters the two countries are “very close” to war, if not already at war. (Courtesy Fox News)

Watch the video here:

http://www.timesonline.co.uk/tol/news/world/europe/article4486208.ece

Just cut/paste into your browser (Courtesy Times of London)

The ramifications for this could be huge if this is more than just an attempt to get into the spotlight by Georgia. Oil prices are ignoring this and have dropped to $115 per barrel, but if any supply interruptions occur, prices could easily head higher.

Mark