The EU has unveiled its first tranche of economic sanctions on Russia for its invasion of Ukraine. EU leadership looks even more angry about this outcome than US leadership does. Here’s the article covering this tangled mess by Sputnik News.
We know that the EU is very dependent on Russian energy and the existing sanctions have hampered EU-Russian trade for years now. Europe is incredibly vulnerable here to any form of supply/demand shocks as their financial system teeters on the edge of the abyss.
There is no solidarity between the US and the EU on these matters, as I’ve pointed out in post after post here. So, the question now is, if Europe is targeting Russian energy exports and the ability of EU banks to do business to buy Russian gas and other export commodities why would they pick this fight?
The answer must be that this is exactly what they wanted in the first place.
In the US we call this ‘suicide by cop,’ which is exactly how I framed it when asked by Sputnik for my thoughts on the subject this morning. I was asked on Monday before Putin’s intervention in Ukraine, to answer the following questions. Events moved beyond them, obviously, but I publish them here anyway because they are still of some value. {current editorial comments in brackets}
According to recent research, US liquefied natural gas export capacity will be the world’s largest by the end of 2022. Could it be that part of the whole game around Ukraine was about the US petroleum sector benefitting from the current standoff in Ukraine?
Of course. That is a sub-plot in this very complicated story. There are many factors that went into this standoff over Ukraine, which Russia is now accelerating towards an end-game state {boy howdy was that an understatement 12 hours later}. LNG exports from the US is certainly one of them, but I think the bigger issues concern the future of NATO, the security architecture of Europe and who controls it.
I see this as much as a fight between the US/UK and the EU over security as much as it is about the US’s long-standing antipathy to Russian energy exports. These issues are, of course, all intertwined.
Is the current political battle over Ukraine just a pretext for the US to earn money via the energy sector, increasing supplies?
No, it isn’t. It’s much deeper and nuanced than that. There are future weapons contracts for US and UK military contractors at stake here, as well as France’s desires to become a major player in European arms sales.
Russia, I believe, is being used as a bogeyman to advance internal European and ‘Anglo’ political agendas having more to do with shifts in foreign policy focus than just the ‘follow the money’ angle here. ‘Following the energy and arms money’ is an important consideration but I think they are now downstream of a much different security landscape in Europe by 2030.
The European Union is looking for ways to assert its independence from Washington D.C. Downing St. is pushing everyone into conflict for its own selfish and historical reasons, clinging to outdated political theories about controlling the ‘World Island’ and driving a wedge between Russia and China, which is achieving the exact opposite result.
How likely is it that the US might now try to establish control over transit routes going through Ukraine? Will the “Russian invasion” narrative be used as a pretext for doing so?
The transit routes through Ukraine in the minds of the Russian leadership fully depreciated assets that they unfortunately still continue to subsidize. Putin mentioned the cost to subsidizing a hostile regime in Kiev during his speech announcing the recognition of the Donbass, $250 billion over 30 years.
If the US wants control over those transit routes, that’s fine. Russia will happily shut off the gas through them, since it costs Gazprom money to ship gas through them at this point. Putin has ordered Gazprom to keep those pipelines filled as a fig leaf to Europe who has continually bitten his hand.
I expect he won’t care to re-up the transit contract with Ukraine when it expires in December 2024.
So, if DC wants this, Putin will oblige and then stop transit all together, citing conflicts with Ukraine.
To what extent can the US indeed provide energy security for Europe by supplying resources?
The total US LNG output according to the EIA for 2022 is 11.5 bcf per day, which is 115 bcm per year, or roughly the capacities of Nordstream 1 and 2 combined.
Is there 55 bcm of spare capacity (the size of NS2) in the US system to feed a new market in Europe? No, not with demand rising at more than 6% annually and accelerating as the world comes out of COVID-19 lockdowns.
The demand for European LNG is so high that US and Russian suppliers both have massive market opportunities there. So, this isn’t about the money, in the end. With most of Europe ending its COVID-19 restrictions in a desperate attempt to stave off political unrest, demand is only going to rise further.
Moreover, US LNG is far more expensive than Russian piped gas. This is simply a fact. And with the Biden administration working with Davos to lean on banks to retard investment into new oil and gas projects, long-term supply of energy to Europe from the US is limited anyway.
US exports will go to where the bid is the highest and with Europe’s terrible future prospects, massive debt overhang and lack of economic dynamism they will not be capable of outbidding other global customers for gas. That’s been the reason for the insane prices in Europe this winter, competition for limited gas supplies driving prices up, despite rising global capacity.
Can Europe survive without Russian energy supplies, if they were to be disrupted now due to the standoff and sanctions?
No. It simply is not possible especially with Germany shutting down perfectly good nuclear reactors this year. The big winner will actually be France in the short term who can sell excess electricity capacity to Germany for outrageous prices thanks to its massive nuclear footprint.
What’s happening now is Germany going along with the political flow, slowing the certification of Nordstream2 in the hope that something can be done to keep the worst-case situation unfolding in Ukraine.
It’s too early to tell how violent things will get in the Donbass {very, apparently}, but it’s possible Russia’s recognition of the Donbass inspires other regions to declare their independence, pushing the UAF back towards Kiev. {all it will take is Russia’s full blow invasion of the country} Politically, the Germans will eventually have to make a choice. Russia and independence themselves or continued subordination to D.C.
{So far Germany has chosen poorly. This speaks to how surprised even Europe was by the size and scale of Putin’s move into Ukraine was. The reactions today by the EU and NATO scream that Putin promised them he wouldn’t do this and he did is anyway. Knowing Putin, the EU likely broke some other backroom deal.}
Is the fate of Nord Stream 2 at risk yet again amid recent developments?
Not likely. {this didn’t age well. It’s possible now that NS2 is abandoned by Russia in retaliation for NATO and EU stupidity.} The nomination of former German Chancellor Gerhard Schroeder to the board of Gazprom tells me that this is his reward for shepherding the project to this point and its eventual completion.
That said, Russia’s trade surplus is so high that they hold the cards on trade. No matter what sanctions packages are put in place, if the world wants what Russia sells, which goes far beyond oil and gas, they will eventually have to deal with Russia on her terms, not theirs.
For example, the recent announcement by China and Russia to expand gas sales by another 10 bcm per year and settle the trade in euros can easily be amended if the EU oversteps here with sanctions over Ukraine.
I’m sure if the EU tries to change the terms of the existing contracts currently settled in euros thanks to unilaterally imposed sanctions Russia will simply say, that’s fine, pay us in Rubles. And then let’s watch to see what happens after that.
The lesson here is that balance sheets matter. Russia’s is clean, with low debt, high reserves, a trade and current account surplus and plenty of policy room for its central bank to respond to sanctions. Sanctions against her targeting the ruble under these conditions are toothless, in fact, more toothless now than in 2014.
Is LNG a viable alternative to less expensive Russian gas speeding over to European countries?
As a stop gap, anything is viable. The LNG tanker market is a mess right now but that should revert back to normal soon. When you see current conditions in a market like that of LNG carriers, negative charter day-rates, it isn’t sustainable, any more than oil pricing in May 2020 going negative.
So, it’s only a viable alternative for a certain amount of time. In the long run, high energy prices for Europe are simply a drain on potential growth, or in Europe’s case, recovery. Absent a massive spending blitz by the EU, which it will never agree on in any reasonable time frame, Europe’s energy future without Nordstream 2 and the now canceled East Med pipeline from Israel, is bleak.
The setup now is for a complete collapse of European capital markets as the Fed moves to raise interest rates in March, further putting stress on the euro and Europe’s ability to pay for its import needs.
What’s clear from my responses to Sputnik and even from their questions is that neither side of this exchange expected the type of military move by Putin when these questions were formulated and responded to.
But much of the framework of these questions is still in place. The EU is in serious trouble.
Now that things have progressed in Ukraine far beyond what everyone thought, including many members of the political brass in the EU, the question now is whether the sanctions war will escalate from here.
And that’s where my ‘suicide by cop’ analogy is relevant:
[Sputnik asks about Europe’s energy security]
It all comes down to whether the EU decides to destroy its economy by doing what we Americans call ‘suicide by cop.’ That’s where someone wants to die and picks a fight with a policeman in order to get the cop to shoot him.
Europe is staring at a complete collapse of its economy if they sanction Russia’s energy sector and shut down her ability to do business with their banks. The question no one is asking is, “Did they provoke this fight on purpose to do exactly this?” From where I’m sitting, it looks to me like their insistence on zero diplomatic concessions to Russia led directly to this outcome. So, the answer to my question is ‘Yes, it was deliberate.’
But, even if I’m wrong and there are other unstated reasons why Russia blitzed Ukraine’s military installations off the map last night, the fallout from this will be far higher energy prices than the weak coalition governments will be able to sustain. I expect the map of Europe will look very different by the end of 2024 than it does today, reaching far beyond Ukraine.
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Thank you for another clarifying post! In following the rapidly unfolding events in this story, I’ll now be watching through the lens of ‘suicide by cop’ along side of ‘The Mouse That Roared’…seems the EU is now incapable of saving itself through any self-directed means. I’ll be expecting extraordinary implications to kick in! Thank you again for your great work!
OOh… the Mouse that Roared! Great reference.
Disagree — with the suicide by cop part anyway.
Wall Street balance sheets are stuffed with US Treasuries, and the deadbeats in DC are going to inflate a lot of it away. Maybe Wall Street can get the Fed to raise rates *some* to cover stated inflation, but they will not get a real return.
What if Canada did something stupid, like destroy the rule of law? A lot of international investors would dump Canadian bonds and divide the allocation between China and US Treasuries…
ECB bonds are no longer money good, even if the ECB raises rates slightly (its not clear EU members are able to pay if they did). Each and every spare Euro earned in the EU will soon go to Gazprom. That leaves negative for European retirees, and even less for Bunds or other Euro debt holders. So once again, international investors will be reducing their allocation to losing eurobonds, and dividing that allocation between “safe” assets like Chinese bonds and/or US Treasuries.
It works out nicely if you have lots of trash US Treasuries on your balance sheet, like say Wall Street has now.
Wall Street slashes their Treasury holdings to the minimum, and invests in the post lockdown recovery.
Wall Street’s puppets (Yellen, Powell) can unload some of the worthless crap on the Fed’s balance sheet, and finance the deluge of Congressional spending — by selling Treasuries to folks running away from Canada and EU debt.
Beijing wins too, albeit they have less need for external capital. They might want external capital to put the petro-Yuan on par with the petro-USDollar.
As for western Europe… who gives a #&$* ?? European banks are all insolvent already.
What do you make of the theory that the Americans struck a deal with the Chinese a decade ago – “We need to print lots of new money to keep our Cloward-Piven scheme going, but we understand that as a massive holder of Treasuries you would consider that debauchment of your assets to be an act of war, so we’ll use some of the new money to short paper gold and enable you to cover your TSY losses by buying physical cheap”?
It takes about 18 months to two years to build a LNG ship… assuming one has spare capacity at ship yards. The US Navy can attest that the US has a shortage of ship yards.
It takes 18-24 months to build a ship *IF* ship yard capacity is available. it takes much longer to build a ship yard and get enough qualified welders and metal workers to actually build anything. Again, the US navy is already battling with this problem. Any extra LNG ship building demand would effect the navy’s ability to procure ships.
Once an LNG ship is built, a properly trained crew is required. Maritime crew (with experience on large vessels) is a lot like the trucking industry. Its been neglected for decades. Its a lot of old guys near retirement, and a small handful of young guys. Until recently, ship companies claimed ships would all drive themselves very soon.
Turns out computers can (and already do) drive a ship under “normal” conditions. In a storm or in a congested waterway, they fail. And when a ship system breaks (normal wear and tear) — a human engineer has to be on board to fix it.
Maritime crew are in short supply right now. It would take quite a few years to train up people and get them experienced enough to pilot a ship full of highly explosive cargo under enormous pressure.
Europe might buy more LNG going forward, but in the next ten years it won’t be anything close to existing pipelines or Nordstream II.
Europe will pay whatever Russia tells them to pay, denominated in whatever currency Russia tells them to pay in, and via whatever payment system (SWIFT, CIPS or other) that Russia tells them to use.
Alternatively, Europe will freeze to death in the dark.
The US doesn’t have spare supplies of natural gas because of Joe Biden. Even if we had a different president, the US does not have and cannot build (in a timely fashion) enough LNG ships.
I hail from a maritime family. Big business in Panama. LNG tankers are also subject to catastrophic explosions whether structureal,accidental or sabotage. There has been a movement to prevent their movement tthrough the Canal. So far, huge money has kept this at bay. Now, that we are entering into a world-wide energy war this may fear may pick up steam.
Even though the Fed needs to quell inflation — now because of this war they’ll have to launch another round of quantitative easing so that the American economy doesn’t collapse.
Gas prices, food prices, and inflation are about to go parabolic.
It’s entirely our fault. We’ve played games for far too long in America. We’re spoiled, fat, narcissistic, hedonistic, stupid, delusional, and sanctimonious to a fault
I think they plan to switch it all off – a large scale cyberattack.
They just needed a patsy to blame it on.
They chose Putin and set about provoking him.
And here we are.
I suspect that Russia with China backing her will tell the West it is disengaging from Swift. Then watch the proverbial fly.
I cannot understand what Putin was thinking here. His motivation for the invasion, the need to demilitarize Ukraine etc. I do understand. However, why didn’t he – a few weeks ago (whenever it was he delivered his ultimatum, which was completely ignored) – cut off the oil and gas exports to the EU? Europe and the entire West would have been thrown into a massive crisis, especially with this occuring during winter. It would have been impossible to continue ignoring Russia’s concerns. Even after the invasion, they would probably have thought twice before launching the very far-going sanctions (including even a cruel and despicable ban on exports of aircraft spare parts to Aeroflot, as with Iran’s airlines) that they did launch now.
On the contrary, during the last 24 hours Russia massively increased the gas flow to Europe. Apparently, Putin’s overriding concern is not appearing like an unreliable trade partner and not having Europeans freeze or be inconvienced. (I live in Germany by the way, so it’s not like I take the threat to Europe lightly.) But then a few weeks later he launches a massive invasion and cruise missile strike, that supposedly is going to be less damaging to the trade relationship with Europe?
He is certainly providing the Davosians with their patsy.
They have been following him around the field of play like an Italian footballer, pinching him and spitting on him and calling his mother a whore, in the hope that when he finally reacts they can throw themselves to the floor and roll around in the hope he will be sent off.
Well, now he has reacted.
If they ever wanted to shut down their sclerotic monetary system and perform a Great Reset. they can now do so and blame it on a Russian cyberattack.
And who would disbelieve them at this point?
If you really are from Germany (anyone can say anything on the internet) — you might want to read a history book or two. And stop watching TV news. TV news is about getting viewers for advertisers. Crisis get eyeballs, calm rational coverage does not.
Russia attacked Ukraine. Not Putin alone.
“The next Hitler” meme is so ridiculously over-used its amazing anyone still buys into this.
Russia doesn’t want NATO on their back porch anymore than JFK wanted Soviet missiles in Cuba.
Imagine if Khrushchev had threatened Kennedy with economic sanctions if Soviet missiles werent allowed in Cuba?
Cuba was/is a sovereign country and officially doesn’t need US permission to host Soviet missiles. But practically speaking, no American president can allow it to happen. It doesn’t matter if its JFK or humpty dumpty. The US has its Monroe doctrine and we will never allow an adversary to place missiles right next to the border.
Its a bit hypocritical for us to complain when Russia announces that NATO missiles will not be tolerated in Ukraine. It doesn’t matter if its Putin or Khrushchev or humpty dumpty — NATO forces in Ukraine is not happening if Russia can stop it, which they can.
As for you folks in Germany… I suggest you learn to speak and write in Russian. You will be sending all your savings to Gazprom soon. Gazprom owns you. You collectively voted for Angela Merkel… Merkel wanted to get some Green votes a couple elections back and panick closed nuclear and coal plants,
Merkel got the votes, you were told the bill would come in a few years to you and your children…. Guess what? its now a few years later. The bill for Merkel’s election is due. You are now Gazprom property whether you like it or not.
Press the button Chris Akers, you are over the drop zone.
The idiots running the USA right now are begging for the same thing and are cut from the same cloth as Merkel. The Davos bunch have outsmarted themselves and they will have no where to hide when Russia and China own the world. Then, history will repeat. The part where tyrants solve their problems without interference.
At this point everything is just speculation. I think after all that the Russians, and Putin had to put up with. Think Clinton, FBI, CIA colluding against Trump and Alfa Bank pointing to Russia in meddling with U.S.elections.
Putin has this planned out, and wants to make his point from high up, like looking down at Davos from a white horse.
Something like “I don’t want your swift, your dirty euros our bloody dollars, pay me in Bitcoin or no gas, oil or wheat for you!”
There would be more value in selling their resources and products for gold. Then, you’d see a wild-eyed frenzy in the western central banks like you never saw before. Synthetic currency, paper promises and receipts won’t cut it.
Gold absolutely is an option. But, with the sanctions on Russian banks and the Russian central bank, if they demand Rubles then they have to kill the sanctions to get rubles on the Forex markets…. and that ends the ‘isolation’ threat.
If you really want to see them sweat he takes bitcoin.
“Good Cop, Bad Cop” looks more plausible.
The Davosians in the West (Good Cop) pretend to care about humanity, print money, and bring the global monetary system to the brink of collapse. Then they provoke their counterparts in the East to get the ball rolling on a crisis event.
The Davosians in the East (Bad Cop) pretend to have been provoked into action and begin the crisis event, enabling the Davosians in the West to switch off the global monetary system and call it a cyberattack by their counterparts.
We all freeze in the dark and beg for their Great Reset. They declare peace and invite us into their technogulag.
Consent, manufactured.
Oooo, that’s ugly.
Hi Tom,
I agree with you that Brussels is making their lives more difficult with this absurd non negotiating position.
However, suicide by cop? This is illogical and goes against self preservation.
What is the benefit to the EU for pursuing such a strategy especially if Russia is holding a powerful hand?
By destroying their financial markets they can default on the debt and remake Europe. It’s a planned destruction and Putin is the agent. The question now is, “Dis he go further than they were expecting??”
If so then suicide by cop is a kindness
Ok, debt restructuring is one variable.
Another variable is the EU’s ability to pay for energy, the most fundamental element of the economy and people’s ability to live.
If this is truly Brussel’s strategy, then have they factored in the blow back from the public?
Sure, Europeans for the most part are docile as long as homes are heated and food is on the table.
Will Davos ignore Maslow…?
Brussels isn’t too smart.
“Does Putin go further than they were expecting?” — if Donbass region can declare independence and then invite Russian peace keeping troops to come in, then why couldn’t Ukraine invite NATO under the same pretense?
Obviously the Russian peace keeper thing was just a ruse to placate the pencil pushers at the UN. Russia is not going to allow NATO forces on their back porch.
But Putin knows the same stupid pretense could be used by Kyiev to invite NATO, and keeping NATO away from Russia’s borders is the real objective.
I don’t know what the Russian equivalent of the US Monroe doctrine is… but that.
The US won’t allow adversaries to put missiles (or any substantial force) on our back porch. Neither will the Russians.
NATO is not going to be in Ukraine. Bet the lives of every Ukranian on that. Russia already absorbed Crimea and now Donbass. Ukraine will be ruled by a government that is neutral to Russia, NATO will not be allowed.
If Ukraine doesn’t accept that, it will be turned into a bomb range.
It was stupid, **REALLY stupid**, for Obama to stage the Maidan uprisings and install a nazi / pro-NATO regime in Kyiev. Now Obama’s little dementia patient is in the White House and poking Russia in the eye.
I am surprised Russia didn’t destroy Ukraine months ago.
If this were happening to the USA (eg adversary forces in Cuba or Mexico) — we would never allow it. Our navy would be blockading Cuba at the very least, and if that didn’t work we would be invading Cuba to stop the missiles before they became launch ready.
Obama is a stupid stupid man. His foreign policy team is a menace. Let’s not pretend like Biden wipes his drool off his own face, Biden is not really in command.
What does remade Europe look like then? Are you basically saying that they just want to get out of euro and back to
their national currencies?
Not all EU countries are in the Euro zone (although the ones
that matter are), so the impact may be different on non-Euro countries.
No doubt the US will tell their EuroDumplings, ’tis but a scratch’….
What a sad crazy mess.
This is a civilizational war. Russia and other areas in Asia have developed the capacity to control their own economies and have rejected the liberal values of the US and EU which have been cultivated to an extreme level of degeneracy by Davos. The whole neo-Marxist “ own nothing and like it” mantra is as absurd as their devotion to renewable energy despite it not being able to provide the capacity to reliably power an industrial economy. The anti-white cultural Marxism on every program on the tv is also disgusting and not impressing upon these other societies any sort of logical, responsible values. The western countries have been invaded by global Zionism. Global Zionism is bankrupt and nobody will be begging for it after a cyber war or otherwise. They will be thrown out and the US will return to an economic level of the 1950s where real output matters instead of fake financial gimmicks and debt slavery.
Be careful about assuming that the attitudes of Washington DC and London are reflective of the broader USA or UK.
The political class has their own agenda, and they don’t care about anyone else.
If Europe is shocked by Russia’s actions, wait until all the followers of the “Religion of Peace” start making noise.
If Obama hadnt tried to assassinate Erdogan (ok, sure… via proxies), then NATO “peace keepers” might now have a base close enough to bomb the peace out of Crimea and Donbas
Weapons manufacturers around DC suburbs are pissed!!!
Profits are down! We need a new war to replace Afghanistan!
Bombing Donbas from Turkey, no way that would have never gone through. “The world is bigger then five” sad Erdogan before the U.S. coup attempted.
@RoboTamer — “peace keepers” don’t bomb anyone from anywhere.
I am ridiculing the stupid that is the US/UK military. They are too far away to be effective in Ukraine, even if it made sense to do so (which it doesn’t).
This war was started by “NATO” (US/UK) not by Russia.
Its embarrassing to be an American right now. We are supposed to be the global leader that everyone looks to in times of crises. Instead, our government is causing the crises.
Very Good Billy, they are watching! And watching closely. They already occupy Europe!
Obama seems to have a plan for user he wouldn’t be talking so much.
I think Putin is trying to thread the needle. His invasion thus far has been described as soft, as per Scott Ritter and others. The internet is on, Ukrainians have not been subject to shock and awe. Clearly he is attempting to coax as much Ukranian military personnel as possible to surrender.
If he shuts off gas to Europe he gives his enemies a gift to blame all of Europe’s woes on Russia. Putin values stability. He want to destroy the security threat in Ukraine very quickly, then begin on reconstruction of the Eastern Ukraine.
If he succeeds he can score the political victory he needs to ensure stability in Europe for a long time. I think if he mimics the victory he achieved in the Crimea its a huge win for Russia and the multi polar world was a whole.
JFK could have launched bombers and taken out Soviet missiles in the shipping containers by force. Lucky for the world he didnt.
Its a mad mad world that this time, the world is counting on Putin to be the adult in the room.
It is supposed to be the President of the USA. We are supposed to be the shining beacon on the hill. The Russian president is supposed to be beholden to warmongers.
Its a mad mad world
Russia hasn’t shut down water, electricity, internet, TV stations
and cell towers. They could have pulverized the infrastructure.
They want a functioning country with a functioning military after
they install a new government.
The question is whether they are running out of time
before the EU/US escalate.
The war is costing Russia $20 Billion per day. Russia has $600 Billion foreign currency reserves. Putin expected a four day war would capture all of Ukraine. Putin is a clever politician but he is ignorant of war and economics. His war plan failed. His economy is a shambles. He sued for peace and Zelenski said not in Minsk. The Red Army is short of conventional ammunition and food. Attrition is ~500 men/day. The army cannot survive 100 days in Ukraine. Rather than turn around and go home they may resort to thermobaric weapons or nuclear weapons. The gamble would be that Ukraine does not have nuclear weapons targeting Moscow. A better option would be a Kremlin coup and a frank apology to Ukraine. The oligarchs need a new man, and a new currency.
This is nonsense. These are talking points which bear no resemblance to reality. Please refrain from parroting inanity and look at what’s actually happening, which is a nearly complete victory over the areas of Ukraine that matter… the east and the coast. That’s where the industry is, that’s where the cauldron forms.
The west of Ukraine is not Putin’s objective. He’ll add the eastern and southern territory to the effective productive capacity of Russia… The Rump will be divvied up.
Tom, the problem is that idiots like @KGB were advising Obama back in 2015 when the US de-stablized Ukraine and Vicky Nuland told Europe to go F themselves.
And the same delusional people are now running things in Washington DC.
Its embarrassing to be a US citizen right now. Obama foreign policy morons have caused nothing but carnage.
Russia won this war before it started. Germany will end up paying the entire financial costs (for both sides). Ukranians and Russians will suffer casualties.
Putin doesnt want an unstable mess and millions of refugees after he wins. Otherwise he would destroy Kyev’s water and electricity and bridges. Not thinking things through is Washington DC’s M.O.
The whole fiasco would have been avoided if the criminals in Washington hadn’t tried to expand NATO.
And the US will suffer long term because the same Obama idiots undermined the foundation of SWIFT, and the USdollar status as reserve currency / petro-dollar king.
Agreed Chris. Watching this unfold in real time tells me Putin is going to secure the Industrial East and South of Ukraine, control the BlackSea and begin the process of subverting the EU east of Berlin.
Lviv will be dangled in front of the Poles
Transcarphia in front of Hungary.
The EU is now on a fast track to collapse. Germany will now lead the way.
Whatever the myriad of scenarios for Russias actions, I agree with the above comments, a cyber attack coming to be blamed on Russia. Let’s not forgot cyber polygon was lead by 2 major Russian banks. Remember that classic SNL skit with Jon Lovitz, the master thespian…”Acting!” They’re all in on it.
The President of Ukraine was an actor in a show called Servant of the People. It was made by his production company. In the show he played a man who became President of Ukraine.
In 2018 his production company formed a political party and he ran for President in 2018 and won. “Acting!”
What an amazing response …..
https://www.reuters.com/technology/musk-says-starlink-active-ukraine-russian-invasion-disrupts-internet-2022-02-27/
Ukraine President Volodymyr Zelensky speaking at WEF 2020: “We propose to all of you to be the stakeholders, shareholders of the new Ukraine…”
He’s a puppet for Schwab.
Everything that is taking place in the US, EU and throughout the western world, from economic destruction to climate change and now the Covid pandemic, is made to look like suicide but is in fact part of a globalist/banker plan to destroy the west and make China and the CCP the new center of globalist power and control. Where Putin fits into all of this remains a question but keep in mind that Putin like Macron and Trudeau is also a graduate of the WEF’s Young Global Leaders program. All the major players in the west, including Biden and the “leaders” of the EU and all western governments are little more than puppets that do not represent We The People but the powerful Money Powers who installed and control them.
No, nobody wants China to run the world, not even actually specially not the wealthy.
Davos played their hand with Covid, and it blew up. With the finances going belly up in the U.S. and Europe they are just reacting at this point. This war is nothing but a distraction from the FED and the Covid disaster.
Add Results: NATO is dead. Putin sees an opportunity to solve his problem. EU will be beholding to the Russian pipelines for 250 years or so, finishing as a vassel. Australia and Canada are left damaged and rudderless for some time and the US????
Tom,
You touch on a lot of different things with regards to this crisis.
But, there’s a lot of things that are very murky or inconsistent.
I hope you address or expand on these issues in your future
posts / podcats:
1. Despite all the hostile actions of the US/Europe, Russia has
consistently assured that they will keep providing gas to Europe.
EU/US Sanctions have been designed so that oil/gas is largely
exempt. Is there a circumstance where Russia decides to shut off
gas supply to Europe?
2. You touch on this subject in your Italian situation podcast.
Could you expand on what is EU really trying to achieve and gain?
What is the European end-game here?
The US end-game is more or less clear:
a) diversion from internal problems (midterms coming up,
Durham probe, etc.)
b) long-standing hostilty towards Russia
c) selling LNG to Europe
d) selling weapons to Europe
But European picture is not so clear. I hope you can provide some more insights.
Honest question….
Assuming that @ some point Russian energy sales are banned from SWIFT settlement AND Europe is forced by dire need to continue buying, what does Russia do?
Price energy in Rubles? And demand buyers acquire Rubles from Russian CB?
Price energy in Physical Gold and demand payment in gold vaulted in Russia?
Price energy in BTC? Is BTC settlement for a very large transaction volume feasible? Seems like BTC settlement pipes are really slow and clunky compared to SWIFT or visa cc network. Can BTC be made to work?
Something else like CIPS?
All of the above, Finn. That’s the next step.
Putin will wait to pull that trigger, using continued inflows and gas sales to keep the hope of diplomacy alive.
While this happens, Russia will receive foreign currency. If the EU/US block the transfers back to Russia, then he will cut off the gas.
He will wait for them to prove to him they are liars. So that when he wins, he has all the evidence to present at the surrender talkss.
Do not kid yourself, Putin plans on breaking NATO and winning this war.
> Putin plans on breaking NATO and winning this war.
It seems that the longer this goes on, the higher the cost
for Russians. But, the cost of doing nothing was also high
if not higher.
What is the situation where Russians stop selling gas to Europe?
Is there a point when Europeans stop buying Russian gas?
Isn’t demand for gas much lower in summer in Europe
(no heating, Europe is on reduced acitvity in June – August
due to vacation)? Obviously this would only work for a very
limited time.
But there’s already sanctions against the Russian CB and ECB
is already talking about regulating crypto (so that Russians
don’t “evade” sanctions).
There used to be “middleman trade” in the 70s and 80s:
https://www.jstor.org/stable/27749178
Doesn’t crypto work only if Russians can convert it back to rubles
(or whatever currency they need)? Can they buy anything of
value within Russia (or elsewehere) with crypto? I don’t think so.
Plus, crypto is not that great a store of value. Do you want to have
lots of reserves in something that has huge swings in “value”?
This is why the Russians fast-tracked ‘Bitcoin regulations’ as a currency to allow its banks to conduct exchanges in it.
This was a pre-war sanctions-busting move. Inflows in bitcoin, converted to rubles for domestic use, the bank builds bitcoin reserves. Volatility at this point is everywhere, there are no good volatility-mitigating arguments right now.
But, bitcoin can be exchanged for currency-adjusted stablecoins, like the plethora of USD denominated ones…etc.
plenty of ways now to lay off currency risk with bitcoin.
This will only get interesting if/when NATO attempts todeliver the weapons they have promised to the Ukies or, as one wag suggested, they let Ukie forces fight from within a NATO country, e.g. Poland. BTW, Article 5 doesn’t really cover NATO members that bring troubles upon themselves.
Most likely case remains that the periphery NATO countries become a DMZ of sorts. Core NATO will default on oil & gas payments, and deliveries will shift to Asia denominated in something other than Euros and Dollars as the Russians realise they too have the exhorbitant privilege to print their own currency and a sufficient degree of self-sufficiency to make it possible.
Yes. This is what I think Putin is inviting at this point…. forcing a NATO country to think they can come in to create a quagmire for Putin and he hen wipes them out, forcing a new round of spending the West can’t afford.
Rules are not really something NATO and the EU follow when
it’s not convenient for them. They like to change the rules
and the game, preferrably in the middle of it.
I have been puzzled by Russian’s insistence (in the past, maybe now is the turning point) to use foreign capital markets instead
of just printing rubles. It’s something that’s been puzzling me. Maybe their economists and CB have been drinking too
much Western economic kool-aid.
Last time I looked NATO was being run by some Norwegian clown. I wouldn’t be at all surprised if Putin had mentioned to Harald that NATO was going to cost him Oslo.
That Norwegian clown will become the new head of Norway’s Central Bank.
Do you not think Tom that Russia (& Asia) are detoxing the buffer zones and pulling up the draw-bridge? It’s just a full-on divorce isn’t it? A turf agreement – that’s your side, this is our side. That is what Alastair Crooke appears to be saying, and it seems to make sense. Leaving the gas flowing is like a callipygous woman walking off slowly after she’s ditched you.
The East wants a Multipolar world, and the West wants a Unipolar world, so I guess we must have ended up with a Bi-Polar world.
The Oliver Stone film on this:
Ukraine On Fire 2016
https://youtu.be/LHH10jIRJmQ
Is really worth the time and needs to be seen.
Some great and necessary background on what happened behind the scenes at the Euro-Maidan Protests in 2014, but …
The hypocrisy is just jaw dropping. In order to get rid of Assad the CIA began arming “moderate elements” of the anti-Assad militias, which turned out to be ISIS (Islamic State / Caliphate) And now, in order to get Putin they are / will be arming the Ukrainian Azov battalion. Which, I am not kidding, are real neo-Nazis, and it is a lot bigger than a battalion… I never believed neo-Nazis existed, except in some Hollywood kitsch B movie… but there they are, central players in Stone’s documentary. And if Zelensky goes down or falters, they will spearhead the fight… and if Putin prevails and there is a refugee exodus from Ukraine, Biden will be importing real neo-Nazis to the United States.
Stone made the film in 2016, but any observant watcher will see parallels between the machinations behind Euro-Maidan and Jan. 6th. And wonder how the Neocons (Cheneys, Nulands and Boltons, etc) ingratiated themselves into the progressive Left???
After watching that film, I was left with the impression that our government and elites are completely morally bankrupt and capable of anything. (sigh)
The other piece that hasn’t got nearly enough attention is the role that Nat Gas has in fertilizer production. I’ve seen a few reports over the past three months or so that claim that Russia is the ultimate source of between 20% and 50% (I know! who really knows?) of fertilizer production.
The Germans are in for a long cold hungry winter in 2022/3 and we’ll probably see a die-off unequaled since Eisenhower’s little genocide in 46-48.
India already announced they will continue to trade with Russia, and will settle said trade outside of SWIFT (in rupees mostly, and some rubles).
India has roughly 1.3 billion mouths to feed, and Russian fertilizer is how they (more or less) do it. Crop yields without fertilizer won’t feed the 1.3 billion populace.
Egypt and Turkey also (officially) rely on Russian fertilizer. Its a good bet that Syria does also. Will these countries go hungry or will they side step Washington DC’s edicts? Apply for a job at the US State department if it takes you more than a split second to dismiss Washington.
While we are on the fertilizer topic… guess where half of western Europe’s fertilizer comes from?
Farmers across the USA have been complaining that US fertilizer costs have more than doubled versus last year. US fertilizer is derived from US natural gas, which Biden has been attacking since taking office. There is no spare gas to send to Germany, and no spare gas to make extra fertilizer.
If NATO’s stupid war drags on into (northern) spring, huge portions of the Earth will be forced to choose between feeding people or telling Washington DC to mind their own business and stay out of Ukraine.
In the meantime, Russia is raking in extra revenue from higher oil prices. And BP abandoned their oil holdings in Russia — a $26 billion loss for BP shareholders, but a $26 billion windfall for Russia.
I look forward to seeing the CNN video of quiet peaceful protests as billions of people starve so Biden can expand NATO. Or is it to protect Hunter’s bribe money?
“The big winner will actually be France in the short term who can sell excess electricity capacity to Germany for outrageous prices thanks to its massive nuclear footprint.”
No: The big winner will actually be Norway in the short term who can sell excess electricity capacity to Europe for outrageous prices thanks to its massive hydrocarbon assets as well as oil and gas production. Norway virtually exports all its gas.
Fixed it for you ;).
VERY INFORMATIVE , SIR. 👍👍