BRUSSELS, Belgium--Following is an excerpt from a recent company press release:

Novolipetsk Steel (LSE: NLMK), the leading Russian steel producer, has signed a definitive agreement to acquire U.S. steel pipe and tube manufacturer John Maneely Company (JMC) from a shareholder group including global private equity firm The Carlyle Group and the Zekelman family for US$3.53 billion, acquiring the company on a debt free, cash free basis. The transaction is subject to customary regulatory approvals and is expected to close in the fourth quarter of 2008.

It’s business as usual while politicians try to revive old rhetoric that didn’t work then and won’t work now. No one can seriously support the idea--while some of the biggest investors on earth, who also sport great political connections, continue to do business with the “foe”--that the recent political developments in the Caucasus would change things radically.

And why should they? There’s no reason why the US would go to great lengths to engage in some kind of military confrontation with Russia on account of a megalomaniacal creation of PR firms.

True, the Georgian president has been useful to certain people in the power corridors of Washington and London, but at the end of the day no superpower goes to war over a country the size and importance of Georgia. Just ask the Taiwanese.

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Secretary of State Rice said as much in a July 10 press conference during a visit to Tbilisi: “The violence needs to stop…And whoever is perpetrating it--and I’ve mentioned this to the president--there should not be violence.”

Obviously the president wasn’t listening; maybe he was engaged in one of the numerous interviews/press conferences he held at the time. A month later, as the opening ceremonies of the Beijing Olympics got underway, he launched his attack.

But maybe this should have been expected from the man who, in a speech 19 March before the Atlantic Council in Washington, declared that the Russians “are not capable of enforcing the Taiwan model in Georgia. Their army in the Caucasus is not strong enough…to calm down the situation in their own territory. I don’t think they are ready for any kind of an adventure in somebody else’s territory. And hopefully they know it.”

No comment is required here.

The problem, therefore, isn’t whether Russia or Georgia is right or which country was more aggressive. The problem is that an insignificant leader of an insignificant country--though Georgia has been openly supported by the US--can create such havoc.

It seems unconceivable that US leadership would allow such an unintelligent action, unless there’s really a belief in Washington that Russia will never react to any provocation because it needs the West.

Commentators on this side of the pond have been saying for some time that the expansion of NATO shouldn’t be the sole focus of US policy in Europe, and that Russian concerns should be taken into consideration. Many still think the same way.

During the NATO summit in March, when President Bush brought up the subject of admitting Georgia and Ukraine, America’s real European allies, among them Germany, said clearly that this was “not the right time.” Maybe European advice shouldn’t always be dismissed out of hand.

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At any rate, the issue has become a media circus, with misinformation the game of the day. Headlines such as “The EU Condemns Russia” have also seen the light. Never mind that leaders of the EU countries will meet in Brussels on Monday in an effort to issue an official statement; the decision will also need to be presented by French President Sarkozy (France now occupies the rotating presidency of the EU) and the minister of foreign affairs to the EU assembly.

After talking to a couple friends in fairly high posts in Brussels, it seems that no one is certain yet as to how severe the official response will be. As they put it to me, the numbers are clear: Trade between Europe and Russia amounted to USD284 billion in 2007, making Europe Russia’s biggest trading partner, and Russia supplies 25 percent of Europe’s gas. One has to be careful.

But no matter how Monday’s statement reads, the important date is in October, when a new, 10-year agreement between the EU and Russia is to be negotiated here in Brussels. We’ll know then how important today’s headlines are.  

Russia has been a very profitable investment opportunity the last six years, and I expect it will remain so for the foreseeable future. I’ve discussed my reasoning in greater depth in my premium service, The Silk Road Investor.

Russia has the same risks that every other emerging market has, and incidents of the Georgian kind shouldn’t alter the economy’s strong growth prospects. Concentrate on the known risks and look out for any improvements in infrastructure, the legal system, corruption and the like rather than paying attention to insignificant actions of “minute maid” leaders.

The risks are real, but Russia will continue to reward long-term investors.