Are our rulers beginning to realize the position they’ve landed themselves—and us—in? It’s LCD government, divorced from reality, up against a guy who’s acutely aware of reality, and resolved to face it.
The Globalist West seems to have thought they could wage a sanctions campaign of ‘shock and awe’, launching a barrage of ill considered actions. Apparently those in charge had never heard of the concept of pushing on a string, but that realization is starting to come home:
“With regard to financial sanctions, of course, you can always go further, but we have already reached the limits of what we can do. We did our best"
It seemed so clever to call Russia a “gas station with nukes” and to say, as Obama did, that Russia’s economy “doesn’t make anything anybody wants.” It turns out that’s not true. Beyond their mineral wealth—not just gas and oil—the Russian economy makes hypersonic missiles, which we don’t (more on that later). Consider this—which our rulers, the best money can buy—seem not to have done:
Q: I wrote a couple days ago that I thought Russia and China could be looking to form a new economic system backed by gold. I know you read that article - what are your thoughts on that thesis? Real possibility or conspiracy theory?
This is not a conspiracy theory. It is more of a speculation. It makes perfect sense.
The United States has militarized the dollar by restricting its use by countries the administration wishes to punish, such as Iran and Russia. A reserve currency is supposed to be available to everyone, not just the nations we choose.
This is the death knell to the dollar. Countries around the globe are coming to realize that the U.S. cannot be trusted and that anyone can be locked out of the swift system at a whim. China and Russia hold the most gold in the world, after the U.S., but that is if you believe that we still actually have the 8,000+ tonnes at Fort Knox and that our gold is not incumbered – pledged to other countries - and that is a big “if.”
We are now facing World War III, but this time the odds are it will be an economic war, not a shooting war. The phrase, “the enemy of my enemy is my friend” is taking place before our eyes. We have driven Russia into China’s arms and we are their common enemy. If they released a gold-backed Ruble/Yuan, it would spell the end of the dollar as the world’s singular reserve currency.
Not smart. We thought our sanctions would crush the ruble overnight, but it turns out that fundamentals matter:
Having got that out of the way, stocks, bonds, and commodities were all hit hard this week as financial conditions tightened and geopolitical risks surged (mixed with some optimism of a peace deal in there somewhere)... oh and because "Putin" went full 'Leeroy Jenkins' and everyone knows you never go full 'Leeroy Jenkins'...
Some are getting the message—the world may not be revolving around the almighty dollar for much longer:
"We’re there to support our clients. And so, for practical purposes, that isn’t an option that’s available to us. Nor would it be the right thing to do in terms of managing those client relationships and helping them to manage their situation," James von Moltke said.
Von Moltke added that the bank would be willing to reconsider its position should the political situation escalate further and its clients in Russia - mostly multinationals - cease their operations in the country.
The Federalist tries to put it all in perspective in an analysis of a WSJ article:
The Federalist article has sub-headings like these:
D.C. Elites Don’t Know What They’re Doing
What a concept, hey? Those are the same folks who thought Zhou and Kama Sutra were good enough for you and me. What could possibly go wrong after all those mean tweets? they asked. LCD government.
Here’s another one:
Impact on Americans
The impact for normal Americans is complicated. The dollar’s reserve status has been a drain on Middle America and a boost to D.C. elites, because it means D.C. politicians can overspend and boost the financialization of the economy even while America’s manufacturing base has atrophied since the 1970s (which happens to be when the current system of the fiat dollar, not backed by gold, was started).
…
… they are rushing Americans toward less purchasing power and massive shortages and price increases here at home. It’s incredibly dangerous and shortsighted.
Go figure, right?
Here’s another concept that seems obvious enough, but apparently is beyond our elites:
If Russia is disconnected from SWIFT, then we will not receive [foreign] currency, but buyers, European countries in the first place, will not receive our goods — oil, gas, metals and other important components.”
I think he’s on to something!
Friend George has news for all those companies who broke their contracts and rushed out of Russia, thinking that was the smart thing to do. This time looks to be different, because Putin is playing for all the marbles. Just as he told Zelenskiy that delaying tactics will only cause Russia to up its demands:
The companies that retreated from Russia think it will all blow over in 3-6 months, then they can come back and everything will be fine. Well, the backbone of European economy and industry are now in the same conundrum as Zelensky: surrender first, then we talk. The Russian decision about who can come back and who not will be based on calculating where and how fast Russia can unleash a mammoth wave of import substitution, which means producing products themselves which were previously produced by foreigners, patent rights be damned, and so now free of contractual obligations which the western companies did not honor.
Finally, I want to draw attention to an article by David Goldman, which addresses that whole business of hypersonic missiles which, as we’ve pointed out previously, explains: Why now? The answer is really basic: Because—just as Putin stated back in 2018—Putin believes Russia has the strategic advantage, both economically as well as militarily. Where it matters. It’s like playing chess and sacrificing multiple pieces to end up with the crucial advantage the gives you checkmate:
American elites have squandered our technological and manufacturing advantage over both Russia and China.
Here’s the basic lay of the land:
With an economy smaller than the state of Texas, Russia has built strategic weapons superior to many in the American arsenal. These include land as well as submarine-launched hypersonic weapons that can carry nuclear missiles past any American defense, as well as the world’s best air defense system, the S-500. … A Russian sub lurking a hundred miles off the American coast could nuke Washington in a flat minute.
...
In August 2021, China circled the globe with a low-flying hypersonic glide vehicle. Its DF-ZF hypersonic glide vehicle has been operational since October 2019. ...
We do not know how effective the new offensive and defensive weapons are. Russia conducted these tests in full view of Western observers and disclosed their alleged capabilities in public statements. The key questions remain open. Is Russia bluffing, or is it giving the West fair warning of its new capabilities?
You first?
As Goldman writes, the US had warning long ago that Russia was seeking to redress the strategic imbalance that existed when the US nuked the INF Treaty and began developing dangerous new strategic weapons. So what did we do? We launched wars around the globe in countries that Donald Trump would probably characterize as sh*tholes. Wasted our resources, spent wildly, exported our tech and manufacturing sectors. What could go wrong? We were believers in American exceptionalism, even if Putin wasn’t. In fairness, Goldman was very much in favor of all that, at the time.
Goldman has lots to say, but what I want to do here is to focus on Putin’s point of view, which Goldman inserts. Anyone who’s stupid enough to think that Putin—a world class leader—invaded Ukraine as an exercise in “territory grabbing” rather than as the result of acute strategic, existential considerations needs to read and reread what Putin said:
Second, what is America’s national interest in the expansion of NATO? Is Ukraine’s prospective accession to NATO an attempt at an end run around Russia’s new generation of missile defense, by making it possible to station missiles close enough to Russian cities to get under Russia’s defense umbrella?
That, apparently, is what Vladimir Putin believes. He said on February 23, on the eve of his invasion of Ukraine:
The Alliance, its military infrastructure has reached Russia’s borders. This is one of the key causes of the European security crisis; it has had the most negative impact on the entire system of international relations and led to the loss of mutual trust.
The situation continues to deteriorate, including in the strategic area. Thus, positioning areas for interceptor missiles are being established in Romania and Poland as part of the US project to create a global missile defense system. It is common knowledge that the launchers deployed there can be used for Tomahawk cruise missiles – offensive strike systems.
In addition, the United States is developing its all-purpose Standard Missile-6, which can provide air and missile defense, as well as strike ground and surface targets. In other words, the allegedly defensive US missile defense system is developing and expanding its new offensive capabilities.
The information we have gives us good reason to believe that Ukraine’s accession to NATO and the subsequent deployment of NATO facilities has already been decided and is only a matter of time. We clearly understand that given this scenario, the level of military threats to Russia will increase dramatically, several times over. And I would like to emphasize at this point that the risk of a sudden strike at our country will multiply.
I will explain that American strategic planning documents confirm the possibility of a so-called preemptive strike at enemy missile systems. We also know the main adversary of the United States and NATO. It is Russia. NATO documents officially declare our country to be the main threat to Euro-Atlantic security. Ukraine will serve as an advanced bridgehead for such a strike…
Finally, after the US destroyed the INF Treaty, the Pentagon has been openly developing many land-based attack weapons, including ballistic missiles that are capable of hitting targets at a distance of up to 5,500 km. If deployed in Ukraine, such systems will be able to hit targets in Russia’s entire European part. The flying time of Tomahawk cruise missiles to Moscow will be less than 35 minutes; ballistic missiles from Kharkov will take seven to eight minutes; and hypersonic assault weapons, four to five minutes. It is like a knife to the throat. I have no doubt that they hope to carry out these plans, as they did many times in the past, expanding NATO eastward, moving their military infrastructure to Russian borders and fully ignoring our concerns, protests, and warnings.
Putin’s reference to interceptors in Poland and Romania refers to American remonstrations that the missile sites only provide a defensive shield against Iranian missiles. According to a document first published by Spain’s El Pais and later verified by U.S. sources, the U.S. offered to allow Russia to inspect the sites. According to the U.S. Naval Institute, Putin is correct that the installations “can field a variety of missiles.”
It should now be obvious to all logical observers of history that the continued existence of NATO after the Soviet collapse in 1991 was the 2nd greatest strategic blunder in recent memory. The worst strategic blunder was the eastward expansion of NATO.
It should now be obvious to all logical observers of history that the continued existence of NATO after the Soviet collapse in 1991 was the 2nd greatest strategic blunder in recent memory. The worst strategic blunder was the eastward expansion of NATO.
The Western entities that boycotted Russia for virtue signaling, have done a great job of for Putin, removing their influence on Russia.