September 26, 2008:  Even before Russia invaded Georgia in August, the Russian stock market was falling sharply. This was because the Russian government was intervening in business affairs, brushing aside the rule-of-law that is so essential to economic growth. The Georgian invasion made foreign investors even more nervous, and they began pulling their investment funds out of the country. Some wealthy Russians moved their money out as well. This caused the Russian markets to fall even more, so that they have lost over half their  value in the last four months. Many Russians blame this on yet another U.S. conspiracy to humiliate Russia (as the Americans did in 1991 when the Soviet Union fell apart and Russia "lost" the Cold War.)

The EU has looked at its armed forces (about two million troops) and realized that, although twice the size of the Russian armed forces, the EU probably has less combat strength. The EU armed forces have been allowed to run down since the Cold War, too often becoming a bunch of aging civil servants with obsolete weapons. The Russian invasion of Georgia, and the inability to muster enough troops for peacekeeping in Afghanistan, has finally motivated Western Europe to improve their defenses. In effect, a new arms race is stirring in Europe.

The Czech Republic and Poland have refused Russian suggestions that Russian military personnel be stationed at the new U.S. anti-missile bases on their territory. Russia insists that these bases are an act of aggression against it. The U.S., and Europe, insists that the bases are to protect Europe from Iranian, or other Middle Eastern, missile attacks. Czech counter-intelligence officials also accuse Russia of funding Czech groups that oppose the missile bases.

Russia is cracking down on Western media appearing on Russian television. The government controls most of the mass broadcast media, and wants to remove "decadent" U.S. stuff like South Park and the Simpsons, and replace it with more patriotic shows. Just like in the good old days, before the Soviet Union disappeared. The government has had some success in manipulating public opinion, usually by exploiting existing attitudes (anger at the loss of empire and hostility to the United States).

September 24, 2008: A Russian military museum in Moscow has been displaying American military equipment, taken from Georgia, and portraying military operations in Georgia as a victory over America. The American gear was material provided to Georgia over the past few years as part of a training program for Georgian troops headed for peacekeeping duty in southern Iraq.

September 22, 2008: The Russian nuclear powered battle cruiser Peter The Great, and  support ships (a destroyer and two supply vessels), have set off from Northern Russia for Venezuela, where they will show the flag for their ally, and arms customer, Venezuela.

September 21, 2008: Israel accused Russia of supplying Syria with satellite photos, and other intelligence. Russia has long done this, as part of arms sales or diplomatic deals. Russia always denies it.

September 18, 2008: Another successful test of the Bulava SLBM (sea launched ballistic missile) was conducted. This missile will be used on the new Borei class SSBNs (SLBM carrying nuclear subs). The Bulava is a version of the successful land based Topol ICBM. The Bulava has a range of 8,000 kilometers and can carry up to ten warheads.

September 14, 2008: Under strong pressure from Western Europe and the U.S., Russia has withdrawn its troops from western Georgia, including the port of Poti. The EU (European Union) has been humiliated by the Russians, who treated demands to get out of Georgia, with disdain. The EU has handled Russia carefully, despite warnings from East European members that this just encourages the Russians to be more aggressive and belligerent.

September 13, 2008: Russia will increase its defense budget 26 percent, to about $50 billion, next year. There is some doubt that the Russian defense industry will be able to meet the new demand, unless they divert equipment from export customers. In any event, export customers are getting harder to come by.

September 12, 2008: South Ossetia announced plans to formally join Russia, thus leaving Georgia without a chunk of its territory.

September 11, 2008: Russia has sent two Tu-160 heavy bombers to visit Venezuela. This pleases the anti-American government of Venezuela, and plays well at home, where the government is pushing anti-Americanism in order to increase patriotic feelings.