Russia currently faces the prospect of major default according to a Fox News release. The current credit default swap crisis, a result of so-called toxic credit investments, continues to plague economies worldwide, and Russia faces imminent danger. With only $200 billion dollars left in reserves, the former soviet state faces economic collapse once again. If the price of oil falls below forty dollars for any length of time, the Russian government would likely default.

Since Russia has insured against default with Default Credit Swaps we should expect these contracts would be held by banks and financial institutions in both Europe and the U.S. I estimate these contracts would net at least several to $10 trillion. And because the world's banks have set a new mandate for valuing potential losses through the Stress Test, a revolutionized risk management program set apart from others, according to the Federal Reserve Bank of New York, by its ability to "measure directly" how economic events or crises will affect both an institution's profitability and viability at a specific point in time, the fallout from Russian default could cause banks to further tighten their lending policies, thus further weakening economies globally.

The tendency often times would be for nations to devalue their currencies in an effort to gain a trade advantage. However, the only investment that will prosper during this extreme economic environment would be gold and gold stocks. If you hold no position in any of these sectors, now would be a good time to buy on any dip.

The only check that would remain if the leading candidate is elected into office would be the Supreme Court. However, many members of the Supreme Court are old and will most likely have to be replaced in the near future. Therefore, the president will likely have the opportunity to appoint enough members to the court to displace the conservative majority, thus annulling the last check on the powers that be in Washington.

Sincerely,
Kenneth Coleman