Only crazy people would invest in Russia, right?

Wrong, says Smart Commodities UK editor Garry White. Now is a great time to snap up some Russian assets.

Although Russia is currently involved in fighting in Georgia, don’t expect it to last long. Russia has made its point. Georgia has been cowed. And there’s no reason to fear Russia’s brand of pugnacious capitalism – even authoritarian capitalists need customers to survive.

Here are Garry’s top five reasons to consider investing in Russia…

1. Russia has the largest natural gas reserves in the world.
2. Russia has eighth-largest oil reserves, and is the world’s second-largest oil exporter.
3. Russia has the world’s second-largest deposits of coal.
4. Russia has borders with both Europe and China.
5. Russia has the largest territorial Arctic waters of any country in the world.

I’ll explain the importance of this last point in just a second. First, take a look at the map below:

It was released by Durham University last week, and shows territorial claims in the Arctic. The huge green zone belongs to Russia.

When subsea mining in the Arctic becomes a reality – and I believe it will – Russia will benefit more than any other country. Do not underestimate this.

The skirmish in Georgia is a distraction

Stock market falls since Friday have created a buying opportunity in Russian stocks. Forget the headlines in the newspaper, what’s going on in Georgia is just a skirmish… a skirmish that was entirely predictable.

Many press reports have focused on the fact that Russia tried to bomb the Baku-Tbilisi-Ceyhan pipeline. They are implying that Russia has invaded the country as part of a resource war.

This is not the case. These people should read some history.

The pipeline is the only oil link between Europe and the East that does not go through Russia. This so-called “southern energy corridor” was seen as vital to the west when it was built in the 1990s.

Of course, the pipeline is an issue for Russia, but in this case it is a actually a side issue. They did not go into Georgia to attack the pipeline.

The South Ossetia problem is almost 100 years old.

The region has struggled for independence through most of the 20th century. The first time there was an uprising against Georgian authorities was in 1918.

The Russian attack was not a surprise. The Georgians have been warned over and over again.

When he was president, Vladimir Putin said on numerous occasions that if Georgia attacked South Ossetia, then Russia would fight to protect its interests. The Georgians thought the Kremlin was bluffing. Patently, it was not.

The majority of South Ossetians look to Russia rather than Georgia. They hold Russian passports and they use Russian banknotes.

So, after the Georgian government attempted to deal with the South Ossetian rebels they sealed their country’s fate. The Kremlin does not make idle threats.

Authoritarian capitalism is here to stay

Although the fighting is still continuing, I don’t expect it will go on for long. Russia has made its point. Georgia has been cowed.

I do not fear the Russian and their pugnacious brand of capitalism. Even authoritarian capitalists need customers to survive.

The Russians need the west as much as the west needs Russian energy. And, with the emergence of China, we had better get used to the new brand of doing business. Authoritarian capitalism is here to stay, but you have no need to be fearful. Be greedy instead.

PS: You can subscribe to Smart Commodities right here.

Source: Don’t Fear Russia: Get Rich The Putin Way