Imperial Desperation

I've featured articles by Alastair Crooke in the past, but somehow lose sight of his work from time to time. Yesterday Friend George drew my attention to his recent publications, which comprise to closely related articles. I think they're insightful for the big picture of where things stand for the collective West with regard to the war on Russia. For an idea of who Crooke is, I refer readers to his Wikipedia bio.

First things first: links to the two articles. I recommend reading them in this order. The first is more closely focused on the conflict in Ukraine, while the second branches out into broader--but related--geopolitical issues, as well.

‘Imperial Desperation’: Insisting on Deference, whilst Radiating Weakness

The Leviathan Super Cycle Ends; Western Leaders Pretend They Didn’t Notice

The articles revolve around Crooke's construct of three "bubbles" that are in the process of deflating. Before we get to those bubbles, I'll excerpt the introductory paragraphs to the first article, which set the tone for what follows:

Anyone visiting western Europe in recent days will have sensed its febrile cerebral quality. The overload of toxic, sneering propaganda against Russia, now fearmongered up to the threat of a tactical nuke ‘Armageddon’ against Ukraine, has taken collective Europe into a delusory trance.

In the US, the preoccupation with Ukraine seems to be fading (the ‘stats’ suggest), yet within a segment of the European leadership class, ‘war with Russia’ has ignited old revanchist passions (that would have been best left to their slumbers). Pulling Europe out of its deep Ukraine ‘trance’ will not be quick, or easy. Indeed, it may prove to be indeterminate in its outcome.

I doubt that there ever was any broadbased ‘preoccupation’ with Ukraine in the US, outside the limited Prog circle, but Crooke’s fears of reignited revanchist passions in Europe may be disquietingly close to the truth. We see building tensions between neighboring countries.

This Ukraine ‘bubble’, however, is deflating: It was always primarily ‘psy-ops war’ intended, at best, to fracture the Russian peoples’ resolve, and to trigger a backlash against President Putin; and at worst, to evolve into a protracted quagmire. Kiev now has sunk to terrorist-like, one-off military ops, and ‘show’ offensives, amidst implausible calls by Zelensky for NATO to bomb Russia. Dirty war however, exudes the whiff of weakness, rather than strength.

Yet, this alone does not account for the jittery atmospherics in Europe today. The temper is undercut by palpable, but largely unsaid, fears. For, it is not just the Ukraine bubble that is slowly deflating — there exist two separate other major bubbles which are bursting, too.

The three bubbles are, of course, closely related--especially the second and third.

The first bubble that Crooke describes serves as the subheading for the second article, and it highlights a fact that has been widely noted among knowledgeable military commentators, and is increasingly acknowledged even by the US military.

The Ukraine war ‘bubble’ is deflating as the U.S. and Europe reach the bottom of the arms ‘inventory barrel’.

Just The News cites Fred Fleitz for the serious consequences, but Fleitz is far from the only authority who is concerned by this:

Biden depleting weapons supply with Ukraine aid, hurting potential defense of Taiwan: experts

The warning comes as a new report assesses the U.S. military is at "significant risk" of being unable to win a single major regional war.

In a very real sense this phenomenon simply illustrates the a fundamental miscalculation underlying the structure of the modern US military--the assumption that we would never be called on to fight a major conventional war at short notice. The idea that that heavy lifting could be handled by “sanctions wars.” For practical purposes, our military is geared toward beating up on third world outfits and its budget is bloated with spending that is not strictly related to military priorities. Now we find ourselves trying to wage a proxy conventional war, and running out of expensive weaponry that is being irretrievably lost. Imagine if we actually ended up doing the fighting in a major way. If the cited report is accurate, the results would be dire. And if that's true for the US, imagine what the situation is for most of the rest of NATO--those countries that are actively engaged against Russia (Turkey excepted?).

So, as Crooke say, this bubble is deflating. It's inevitable in the literal sense. We will not be able to continue and, indeed, the flow of weaponry has changed from a flow to promises for the future. Once again, we’ll sooner or later be groping for an exit strategy, but against a resurgent Russia rather than the Taliban. It is no coincidence that the GOP is beginning to openly challenge Zhou's Ukraine policy. They probably have the tacit backing of the military, in its tug of war with the Neocons at the WH and State Department.

The second bubble--and one that is deflating with alarming rapidity--is the economic bubble. Europe's prosperity for decades has been driven by Germany as the economic engine of the EU. But the German engine was powered by cheap Russian energy. How cheap? American LNG is seven and a half times as expensive as Russian pipeline gas.

At the EU centre, is Germany. It has been the economic ‘engine’ ... keeping the EU financially ‘liquified’, ...

...

German high-quality export surpluses (which lubricated Brussels’ functioning) were only competitive because of the availability of cheap Russian piped Natural Gas. This is now gone (particularly after the sabotage of the Nordstream pipelines). And even were Germany to make a U-turn, it is not certain that Moscow would oblige by restoring the gas supply to Europe. Russia’s attention, maybe irrevocably, has turned East.

The likelihood is that, even if the US were to allow its European vassals to do an about face and try to kiss and make up with Russia, the new normal would be drastically different from the old normal. The collective West has only itself to blame.

The third bubble is closely related to the second. The European prosperity that was fueled by cheap Russian energy is what allowed Europe to buy cheap Chinese "stuff". That gave the illusion, cultivated by the financial wizards of Globalism, that inflation was a thing of the past. Now Europe is finding out the hard way (and America to a somewhat lesser extent) that inflation free prosperity was an illusion, and that Chinese "stuff" is no longer cheap when energy costs are through the roof.

It is the ‘zero inflation – zero interest rate – massive government spending’ bubble that has begun to burst. And it is huge.

For two decades and more, western economists believed they had both the bust-and-boom trade cycle and inflation licked.

It just required Central Banks to operate the monetary policy levers of interest rates, QE and QT appropriately to keep the ‘magic’ of endless deficits, financed through money printing (endorsed as Modern Monetary Theory), chugging the spending out.

It was great while it lasted, but inflation has killed it. ...

The reality is that this comfortable prosperity did not rest on Central Bank wizardry, but owed firstly to China’s cheap manufactures (its export model), and secondly, (for Europe) to Russia’s cheap energy. So when these two pillars fell, the inflationary monster was back.

The truth is that the bloated US military has also been supported by this economic regime. The US military will need to change and adapt--and retrench. It will doubtless remain formidable, but the scale will need to be walked back. All of this, says Crooke, is based on fundamental misconceptions on the part of a hubristic ruling class, which could lead to a great deal of unpleasantness among European nations:

... the war’s nature is misconceived in the West by being seen solely through the lens of the Ukraine conflict. The latter is but one small episode in the ‘long war’ waged by Europeans and Anglo-Saxons against Russia. This, in itself, has caused old revanchist ghosts of Europe to re-awaken – a fact that both aggravates tensions, and complicates any eventual resolution of the crisis.

One egregious misunderstanding and neglect, however, concerns the nature of politics and the role played by fossil fuels. Energy is in fact at the heart of this. How could the current Ruling Class in Washington ‘forget’ that the Western real economy is a physics-based network system, powered by energy? Modernity is contingent on fossil fuels. A smooth transition to green energy over time, therefore is too, largely dependent on the continued availability of plentiful, cheap fossil fuel. Without energy of the right kinds, jobs disappear, and the total quantity of goods and services produced falls steeply.

Yet, western leaders cast this basic understanding to the wind. …

In the second article Crooke offers this handy summary of the three deflating bubbles:

The Ukraine war ‘bubble’ is deflating as the U.S. and Europe reach the bottom of the arms ‘inventory barrel’; as Kiev’s finances tank and as its forces reel from heavy losses. Kiev and NATO face rather, the daunting prospect of a major Russian offensive maybe shortly – perhaps in early November.

The second bursting bubble is that of Europe’s ‘business model’. Much of EU industry simply is now uncompetitive, having ‘lost’ cheap Russian gas and oil. Simply put: the cost of energy is bankrupting Europe’s industry.

The third is the biggest of all: It is the ‘zero inflation–zero interest rate/QE’ bubble that has begun to burst. It is huge. And strategically, the Gulf represents the last pool of genuine ‘liquidity’ that historically has been a reliable purchaser and holder of U.S. Treasuries.

There are a lot of moving parts there, but as the unipolar world slowly winds to an end, to be replaced by a multipolar world, those moving parts will provide the dynamic that shapes the new order of things. Of course, different countries in Europe will be able to cope with the new reality to varying degrees, but no transition will be pain free.

One more excerpt, to serve as a conclusion and as a warning of what lies ahead for the collective West. For me it resonates deeply with the war of the regime against the American people that we see metastasizing. We have an opportunity to resist:

Today’s war (against Russia) is framed in the West in a childish-moral trope (which nonetheless seems to work for an anaesthetised public) – that of WWII: Every rival is another Hitler, any reflective comment, another Neville Chamberlain example of appeasement. A tyrant lusts for European land and domination, and the only question is whether the good and just can muster the resolve to defeat this evil ambition.

This simplistic meme plainly is intended to obfuscate from their electorates the significance of the underlying dynamics at work: Not only is a major political cycle in transition, but this is occurring precisely at a moment when the western hyper-financialised ‘business-model’ is cracking. Put simply: the narrative obfuscation (“we are winning”) hides risks (both political and economic) whose gravity, western leaders seem unable (or unwilling) to grasp.

... That cannot any more be fudged. Washington is haemorrhaging control over events and making strategic mistakes. A certain class in the western ruling élite however, seems stuck in a reading of history. An interpretation that sees ... any us vs them, whether real or abstract (such as war on poverty, drugs, the virus, etc.) – feeds centralisation and strengthens the totalising Leviathan. Indeed, even conceptualised as an internal ‘us versus the enemy within’ war, this too is seen as consolidating the Leviathan.