NEW YORK (TheStreet) -- A persistent shadow drops now over prospects for economic growth in America and Western Europe, where most public companies have a concentration of customers and assets.
It is not simply that populations across Western Europe are too old and or are growing too slow. It's that Russia is decidedly on the move while America unwisely retreats from a once commanding position of geo-political influence worldwide.
Russia's unrelenting advance and America's sloppy, ambivalent response so far raise ghosts and worries in western Europe that already are heightening anxiety in capitals and households grown accustomed to a peace kept at comparatively low cost, under America's increasingly porous defence umbrella.
At the same time, rumblings mount in Russia, China and the Middle East, plainly suggesting that foreign appetites for holding fiat currencies such as the U.S. dollar and the euro are waning.
These rumblings, once translated into alternative schemes supplanting use of the dollar and the euro as reserve currencies of choice, further threaten American and European multi-national companies and governments, long-accustomed to operating using priviledges that inevitably will disappear.
A one-two punch could soon be landing hard to pummel traditional, long-only investors: structurally driven constraints upon reported financial results from continuing operations, coupled with rising benchmark interest rates for U.S. and western European governments.
It is a mistake of enormous proportions to assume what plays out now involving Russia's annexation of Crimea and unfolding advance into eastern portions of Ukraine has to do only with territory or with tweaking the geo-political balance along an edge of the European continent.
It is an even bigger mistake to assume, as famed journalist Ambrose Evans-Pritchard does, that Russia has already lost much in Putin's Crimean gambit over continuing objections from key western powers.
Writing only last week in The Daily Telegraph, Evans-Pritchard argued Vladimir Putin trapped himself seizing Crimea. In his view, Putin picked the wrong moment to challenge the West -- badly needed capital could continue flowing away from Russia, just as energy from suppliers outside Russia's under-invested exporting complex reaches thirsty customers in Asia and in Europe.
There is a much larger game afoot, one that threatens the fragile integrity of the European Union, the decades' older North Atlantic Treaty Organization, and the once immutable article of faith that American multi-national companies hold ripest growth prospects in Europe and key international growth markets.
We know from Putin's public statements that he understands peace and prosperity are not won and preserved by smothering a nation's private sector in debt and government interference.
As Putin made plain at Davos in January 2009, America and western Europe are trapped in a structural crisis of our own making -- one that unravels chasing new depths now. So the time is opportune for Putin and Russia to press for strategic advantage against a weakened West, with greatly constrained options.
Since 2008, Europe has flirted with economic disaster and seemingly escaped on numerous occasions. Now in Spring 2014, receding snow and advance into spring and summer threaten to expose an underlying financial reality that is grim indeed, particularly for countries in western Europe.
As of Dec. 31, 2012, the most recent date for which comparable data is available, 19 western nations that are part of the European Union and/or part of Nato had external debt balances, net of foreign exchange reserves, totaling $ 39.3 trillion -- an amount of debt that was seven times exports generated during 2013.
Servicing an external debt balance that is seven times exports is no mean feat and leaves little room for miscalculation, assuming imports are just a small flow into these highly leveraged nations.
However, imports into Western Europe were quite large. In 2012, total imports were $ 5.2 trillion, compared to exports of $ 5.5 trillion. Therefore, these nations generated a tiny trade surplus of just $ 0.3 trillion that might have been available to reduce their towering external debt.
In addition to carrying dangerously high levels of external debt, western European nations have not been able to administer their governments without generating budget deficits. In 2013, 19 western European nations generated an aggregate government deficit of $ 500.8 billion, an amount equal to (2.9) % of their total GDP of $ 17.0 trillion.
This substantial deficit was lower than it might be, should these western nations be forced to increase their military expenditures as the United States reduces its military posture.
In 2013, western European nations spent $ 276.2 billion on their defence, or just 1.62 % of GDP. If they were forced to increase military spending closer to the proportion spent by Russia (4.47% of GDP) and by the United States (4.35% of GDP), then Western Europe's aggregate government budget deficit might soar still further.
In short, western Europe has much to lose siding with America and more to gain reaching accomodation with Russia.
Vladimir Putin has his eye on a prize whose value is not measured in monetary terms alone.
Now he will give erstwhile allies and rivals of Russia a simple choice: Loose your unwise bonds with a failing economic experiment in the debt- and deficit-laden European Union, and build out the promise of a rising and expanding Russian Federation -- or spend your future paying down trillions in overdue debt for the benefit of western European debtors.
Rising powers such as Russia do not fear losing access to investment capital that is denominated in fiat currencies. Vladimir Puin knows an historic opportunity when he sees one -- and he fully intends to push as hard as he can, weakening the West while preparing to build out infrastructure and industry in Central Europe, in India, and in other growing nations where Russia can hold sway.
In Cold War 2.0, Russia will act using economic policies that are far to the right of the United States and aggresive military moves against the paper tiger America has become as of April 2014.
Long-only investors should accelerate taking risk off the table.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.