Russia In The Driver's Seat

Plus, What I'm Reading Today

Tom Luongo did an interview with Sputnik TV just before the Russian invasion of Ukraine. The interview focused almost entirely on energy—unsurprisingly. While Luongo modestly admits that he never expected the invasion (I didn’t, either), his observations hold up very well. What he has to say is especially important with regard to the sanctions bandwagon that the Euros are climbing aboard. Luongo is basically saying—none of that matters. Russia is in the driver’s seat and the Euros are huffing and puffing behind. This is the bigger picture, and one you’re not likely to get elsewhere.

What I’ve done here is reproduce the Sputnik questions in their entirety, but just enough of Luongo’s responses to whet your appetite for more (at the link):

EU Sanctions on Russia Equal ‘Suicide by Cop’

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?

...

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 ...

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Washington D.C.  Downing St. is pushing everyone into conflict for its own selfish and historical reasons, clinging to outdated political theories about controlling the ‘World Island’ and driving a wedge between Russia and China, which is achieving the exact opposite result.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.  ...

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 demand for European LNG is so high that US and Russian suppliers both have massive market opportunities there.  ...

Moreover, US LNG is far more expensive than Russian piped gas.  This is simply a fact.  ...

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.  ...

Can Europe survive without Russian energy supplies, if they were to be disrupted now due to the standoff and sanctions?

No.  ...

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. 

...

Is the fate of Nord Stream 2 at risk yet again amid recent developments?

Not likely. ...

That said, Russia’s trade surplus is so high that they hold the cards on trade.  ... the world ... will eventually have to deal with Russia on her terms, not theirs. 

...

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, ...

Is LNG a viable alternative to less expensive Russian gas speeding over to European countries?

As a stop gap, anything is viable.  ... 

So, it’s only a viable alternative for a certain amount of time.  ...

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.

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What else am I reading today? All sorts of stuff, most of which takes on added interest in light of the crisis with Russia. In no particular order.

In case you were wondering:

British Spy Boss: ‘LGBT+ Rights’ Are What ‘Distinguish Us from Putin’

By the way, Zhou’s polling keeps getting worse. He’s currently in Delaware being prepped for the SOTU—probably meds as much as anything else. Also, inflation is a figment of your imagination.

These guys are hoping there won’t be a ceasefire before they can see some action against the Cossacks:

CaucasusWarReport @Caucasuswar

Huge Chechen special force convoy part of the Russian Armed Forces inside the territory of Ukraine.

This also distinguishes Brits from Putin.

Two good general political science type articles:

The Fantasy of Anti-Democratic Threats

The elite rhetoric about “democracy” is just a ploy to dupe middle Americans into accepting permanent leftist rule.

A Movement That Must Invent Its Enemies To Exist

If there is going to be a new dark age, it will likely be the result of the antifascist state collapsing under its own contradictions.

And since I talk about this from time to time:

Why I'm Not a Libertarian

The reason I'm not a libertarian is because I'd like to be free. The libertarian says he does, too, but is living proof that wanting something and getting it are two completely different matters — and his theory stands directly in the way of his practice.