COVER: Cheap Oil Forever (All overseas editions). Contributor Ruchir Shamir examines the historic and current trends of the rise and fall of the prices of commodities, like oil, copper, grains and gold. There are many people who believe that last year's swoon in commodities prices represented only a short pause in the long-term bull market. "It's a view rooted in powerful and real trends, like the growth of China and India, the decline in global reserves ..., fears over resource nationalization ... and long-term underinvestment in energy and agriculture, which hampers supply. Yet the fact is that the world has faced all these issues before, and for the past 200 years, commodity prices have been trending downwards, thanks to new technologies, greater efficiency in extraction and the substitution of one commodity for another (which explains the high correlation between commodities prices)." As countries get richer, their per capita consumption of commodities in fact declines, thus it's a myth that the boom in China and India will inexorably drive up oil and other commodity prices, he writes. Yet markets are still betting that the price of oil is poised to spike again. "This bullishness is misplaced. The world is now in the biggest growth slump since the Great Depression, and the era of exceptionally high global growth that led to a surge in demand for commodities from 2003 to 2007 is unlikely to return any time soon."
http://www.newsweek.com/id/193499
Marry a Farmer. Legendary American investor Jim Rogers, co-founder of the Quantum Fund, talks to Newsweek about why oil is still black gold, even though, inflation adjusted, oil is the same price that it was in 1976, and in 1870. "It doesn't matter. It's also true that just about any stock you can think about is at or below where it was in the 1970s right now. So what? There are still 15- to 20-year periods when commodities, stocks and any other asset class goes up a great deal. In 1987 stocks collapsed by 40 to 80 percent. But people who were smart enough to stay in them made 1,000 percent returns in the next decade. The point is to take advantage of those periods and make some money."
http://www.newsweek.com/id/193500
A-Team in Blue Suits. Senior Writer Adam B. Kushner reports on the birth of one of Washington's wonkiest and most important new agencies since 9/11: the Office for the Coordinator for Reconstruction and Stabilization. After the embarrassment of bumbling in postwar Iraq, U.S. officials realized they had to come up with a better system for training and deploying seasoned civilians in future conflicts. The goal is to become the civilian equivalent of the U.S. military's Special Forces. The office has collected experts from throughout the federal government in a Civilian Response Corps (CRC). It's a kind of temp agency for specialists, deploying them whenever they're needed to help unstable governments.
http://www.newsweek.com/id/193505
'There Will Be Bankruptcies.' Moscow Bureau Chief Owen Matthews and Special Correspondent Anna Nemtsova profile Oleg Deripaska, who a year ago was Russia's richest oligarch with a $44 billion global empire and 290,000 employees. A few weeks ago Deripaska was facing the loss of his empire unless the Russian president got its creditors to hold off foreclosing $7.4 billion in urgent overdue loans -- less than half of his total indebtedness. The story of Deripaska's rise and fall is a window on money and power in post-Soviet Russia, showing the flaws that hid behind the nation's economic revival under Vladimir Putin -- and the dilemma the country now faces in the aftermath of the crash.
http://www.newsweek.com/id/192461
Partying Like It's 2008. European Economics Editor Stefan Theil reports that while Germany's economy is forecast to contract by 5.3 percent this year, Germans are remarkably angst-free about their prospects. Consumer spending has held up; March auto sales were up 40 percent over last year, thanks to the ยค2,500 government trade-in incentive that came with Germany's fiscal-stimulus plan. The main reason that most Germans have yet to feel affected by the crisis is, to put it simply, that they haven't been affected. And they have an attitude that whatever happens, they've probably been there before.
http://www.newsweek.com/id/193506
Fading to Black. Moscow Bureau Chief Owen Matthews reports on the outcome of Moldova's latest unrest, which he calls a key test of both Russia's soft and hard power in the region. Moldovan President Vladimir Voronin called the unrest, where students gathered in Chisinau to protest the ruling Communist Party's suspiciously large electoral victory, "an attempted coup d'etat" and accused Romania of fomenting the protests. Police quickly restored order after arresting more than 200. The aborted revolution revealed Russia's ability to project power and protect friends like Voronin. For at least four years, Moscow has mounted a campaign to woo Voronin away from the EU and NATO with offers of subsidized gas and closer economic ties.
http://www.newsweek.com/id/193438
With a Friend Like This. Newsweek International Assistant Managing Editor Jonathan Tepperman reports that it may be time for the U.S. to reconsider its alliance with Ethiopia. The Bush administration claimed the country was the linchpin of its regional counterterrorism strategy and a vital beacon of stability. But Prime Minister Meles Zenawi's ruling party has rigged elections, effectively banned independent human-rights groups, passed a draconian press law and shrugged off calls for an investigation into alleged atrocities in the Ogaden region. In the same period, the country has become one of the largest recipients of U.S. aid in sub-Saharan Africa, getting $1 billion in 2008.
http://www.newsweek.com/id/193503
WORLD VIEW: Is Robert Gates a Genius? Newsweek International Editor Fareed Zakaria is optimistic about Secretary of Defense Robert Gates' budget proposal because it focuses sensibly on the wars we are actually fighting, and makes sure the military is equipped to wage them successfully. "American military budgets should be based on two competing imperatives. The first is that we are likely to be engaged in small, complex conflicts... in which manpower and intelligence are key. The second requirement is deterrence." These imperatives can be satisfied with a "military that is leaner, more cost-effective, more efficient and does keep somewhere in mind the capacity of potential adversaries." Now is the time for Gates to take the opportunity and "move the United States towards a military strategy that is shaped by the world we actually inhabit."
http://www.newsweek.com/id/193487
THE LAST WORD: Georgian President Mikheil Saakashvili. President Mikheil Saakashvili sits down with Special Correspondent Anna Nemtsova and talks about the protestors demanding his resignation, his difficult relationship with Russia and how the West has largely abandoned him in recent months. He says he is not hurt by the criticism in Georgia, but "did not expect the West to put all relationships with us on hold, while waiting for this revolution." Saakashvili points out that "the problem is not about [Georgia], the problem is about [the United States'] own internal politics" and how Georgia has integrated into them. The policy with Russia remains the same. "We will handle the demonstrations as if the Russian issue did not exist, and Russia as if the demonstrations did not exist."
http://www.newsweek.com/id/193509
/PRNewswire -- April 12/
