Oh how much they hate and fear Russia and Putin

Guest Post from Vineyard of the Saker

A (well anonymized) anonymous reader sent me a very interesting link today.  It is an opinion piece by Strobe Talbott for Reuters entitled “In 2015, Vladimir Putin may witness his empire’s death knell” in which Talbott predicts that:

The year ahead could see the outbreak of the third Chechen war, which, in turn, could be the death knell of the Russian Federation in its current borders. (…)  For the past five years, the situation has been more or less quiescent, though neighboring republics have been rocked by violence. The lull in Chechnya, however, ended in early December with a series of bloody incidents in the Chechen capital of Grozny.   The group behind the resurgence of unrest is advocating a “Caucasus Caliphate,” with ties to al Qaeda and, more recently, Islamic State. There is at least an indirect tie between outside support for Islamic radicalism in the Caucasus and Putin’s sponsorship of Russian secessionism in eastern Ukraine.   By proclaiming ethnicity and religion as the basis for Russian statehood and aggression against its neighbors, Putin is inadvertently stoking the forces of secessionism in those parts of Russia that are historically and culturally Islamic.

Needless to say, Talbott, himself a former Deputy Secretary of State under Bill Clinton, member of both the Council on Foreign Relations and the Trilateral, married to Brooke Shearer, also a member of the Council on Foreign Relations and a senior aide to Hillary Clinton with links to banks Commission, is the archetypal US “deep-stater”.  He is also considered a “Russia specialist” which, in Foggy Bottom parlance means a rabid russophobe.  A person like Talbott is very much “plugging in” the US deep state and if he says that next year there will be an insurgency in Chechnia, we can be darn sure that the US will try to create one.

Of course, this does not at all mean that they will succeed.

In fact, I am quite sure that there is zero chance of overthrowing Kadyrov, nevermind of Chechnia breaking away from Russia.  If only because there is overwhelming evidence that the Chechen people want nothing to do with Wahabi terrorists and that they in fact form a very strong power base for Putin.  Not only that, but Russia truly has formidable military capabilities in and around Chechnia.  They keep a low profile and do not get involved in law enforcement or counter-insurgency operations, but only because the Chechens handle these tasks superbly.  But make no mistake, Russia can flush at least 100’000 highly trained, motivated and superbly equipped men into Chechnia drawn from the 58th Army of course, but also from various special forces, Internal Ministry and State Security troops.

The weak link in the Russian Caucasus in Dagestan and the border with nearby Georgia from which attacks could come.  Could the US at the very least rekindle the Wahabi insurgency (possibly supported by Nazi units from the Ukraine)?  Yes, of course.  But their chances to succeed in anything more than one or several truly ugly terrorist attacks are very, very slim.

I think that Talbott probably understands that, but he just cannot help by daydream out loud being, as he no doubt is, aware that if Russia prevails in her defense against the AngloZionist Empire this will mean the end for the latter.

The US deep state is simply saturated with russophobia, phobia in both the sense of “hate” and “fear”, and so it should.  Just like all the other western invaders of Russia in the past, the AngloZionist Empire has completely cornered the Russian Bear which now has to fight for its very survival.  Neither side will back down and only one will prevail.  And my money is not on the US, neither is Talbott’s, at least now deep down.  He must realize that the writing is on the wall.  Hence the hate and the fear.

The Saker

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John
John

I really don’t think folks hate or fear Putin much. Irritation maybe, they all would like him to cooperate with the US led incorporation of the planet, but at the end of the day he isn’t enough mad dog to pay all that much attention to. Russia is a one trick pony when it comes to its economy, and we are seeing the Achilles heel of his entire “friends of Putin get the cash” scenario. And it is a good thing that the US has helped participate in this by providing two of the largest producing oil fields in the Western Hemisphere.

Westcoaster
Westcoaster

Admin, I think you would agree this “shale boom” would never have occurred if not for zero interest rates. I agree Russia may just benefit from the Ruble crash in making their output more competitive.

This latest crap with Ukraine and Syria is just a further chapter in the PNAC playbook General Wesley Clark mentioned, what 7 years ago? Russia, then China are next.

overthecliff
overthecliff

Russians know how to fight. War in Chechnya will not be like Afghanistan. No sanctuaries. Russian tactics will not be likke American tactics . Ineffective drone strikes and precision bombing will be replace by massive area bombardment. Torture that does not yield useful information will be replaced by humane sophisticated interogation that will yield all the useful intelligence there is. Mohammedan resistance will be crushed with brutality and ruthlessness. Fighting Russians on their turf is not a smart thing to do.

Southern Sage
Southern Sage

FYI, Strobe Talbott was thought by most in the U.S. intelligence community to be a Soviet agent. It was Talbott who begged and pleaded for President Clinton to issue a pardon to former CIA Director John Deutch, 15 minutes before Clinton left office. As one prominent senator in the know once said, “We should consider ourselves lucky if Deutch was only working for the Israelis”. Deutch, a Belgian Jew, was closely tied to Israel and, of course, had plenty of Soviet sympathizers in his family. He was a spy and a traitor from day one, put there by the usual suspects.

John
John

The shale fields of Ohio began production between about 1860 and 1880, and were still in production as late as the 1995 dates referenced in the Appalachian Basin Gas Atlas. As far as “best” locations, well how many MORE rounds of “best” are possible within any one play? The “best” Bakken began production in 1956 or so. And then Elm Coulee was better by about 2000. And then Parshall was even better in 2008. And Sannish better in 2009. And at each point along the way the scientists were proclaiming the end, everything had been found, and people kept finding more anyway. Those shale wells producing for a century in the Appalachian Basin devonian sections certainly didn’t need $80/bbl to stick around, and what was once the worlds largest known accumulation of natural gas (DEVONIAN SHALE gas) in about 1920 didn’t need $10/mcf either.

The “best” spots are entirely the combination of TWO things….and only one of them is price. The other is the thing that operators can control much better, and are always lowering, and that is cost. Once upon a time the horizontal wells I drilled cost $20 million a piece and took a month. Now Chesapeake can knock these things out in 9 days and get the cost down to $7 million in the Point Pleasant in Ohio.

Things change all the time, and the “best spots” become yesterdays crappier spots, and the industry just keeps doing what it does, and in the case of increasing oil production in the US faster than at any time in its history (so sayeth Adam Sieminski, King of Who Should Know) it isn’t even deniable that such things are possible, the only question being how many more of these jewels are lurking in the claims of those who always think the LAST one was the best?

In either case industry shakeouts are nothing knew, they are often the victim of their own success, whether it was East Texas in 1930, the shale “revolution”, or what will happen the day after some enterprising engineer gets the cost of supply curve on hydrates to the right point. Nothing in this debate is new, and all of it has happened before, in one way or another. Russia is not much different of a paper tiger than the USSR was, and for pretty much similar reasons. Sure Putin can stamp his feet and invade the occasional country he wishes he could get back, but in the greater scheme of things his one trick pony economy (how much of the total government revenues are oil dependent?) just can’t hold up when the Saudi’s decide to put the kibosh on Iraq and them at the same time. Certainly doesn’t hurt the consumers of the 800# consumer gorilla in the background either.

Stucky

“Russia is a one trick pony when it comes to its economy” ——— John

Russia is the 5th or 6th largest economy in the world. If it is due to only/primarily oil …. why isn’t Saudi Arabia in the Top 20? Russia leads the world in production in several food items.

Do your homework, John.

Anonymous
Anonymous

“Isolated”? China Officially Offers Help To “Irreplaceable Strategic Partner” Russia

Submitted by Tyler Durden on 12/22/2014 12:12 -0500

Just a week ago we detailed how China was preparing to bailout Russia’s liquidity crisis via the 150 billion yuan swap line the two nations agreed in October. Today, as Bloomberg reports, we got confirmation as two Chinese ministers offered support for Russia. China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying; and Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia. The Global Times (mouthpiece for the Comunist Party) wrote in an editorial this weekend, “Russia is an irreplaceable strategic partner on the international stage.” Isolated?

A week ago we noted the movements and tone from China suggested a ‘bailout’ was coming for Russia, and it appears the market is starting to realize that Russia is not so isolated…

It seems CNBC and the mainstream media are oddly quiet about the 31% surge in the value of the Ruble in the last 6 days…

Which is not entirely surprising as, for those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.

As Bloomberg reports,

China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying in Bangkok in a Dec. 20 report by Hong Kong-based Phoenix TV. Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia, according to the broadcaster.

“Many Chinese people still view Russia as the big brother, and the two countries are strategically important to each other,” said Jin Canrong, Associate Dean of the School of International Studies at Renmin University in Beijing, referring to the Soviet Union’s backing of Communist China in its first years. “For the sake of national interests, China should deepen cooperation with Russia when such cooperation is in need.”

De-dollarization continues…

China and Russia signed a three-year currency-swap line of 150 billion yuan ($24 billion) in October, an agreement that can be expanded with the consent of both parties. The People’s Bank of China published a chart detailing how such an agreement works in a microblog dated Dec. 19 and the official People’s Daily newspaper said today that the explanation was provided to address concerns the nation could suffer losses if Russia used the facility to obtain funds.

“As all we pay out and receive in return are renminbi, we don’t have to bear exchange-rate risks,” the PBOC said in the microblog, using an alternative name for the yuan. The swap amount can be adjusted to allow for changing circumstances and prevailing exchange rates, rather than pre-determined, are used, it said.

China is promoting the yuan as an alternative to the dollar for global trade and finance and the PBOC has signed currency-swap agreements with 28 other central banks to encourage this. The nation’s foreign-exchange reserves of $3.89 trillion are the world’s largest and compare with Russia’s $374 billion.

And Russia is not so isolated after all…

“Russia is an irreplaceable strategic partner on the international stage,” according to an editorial today in the Global Times, a Beijing-based daily affiliated with the Communist Party. “China must take a proactive attitude in helping Russia walk out of the current crisis.”

John
John

Dear Administrator…the very ORIGIN of natural gas production in the United States began, in 1825…in a shale.

Upper DEVONIAN no less….as opposed to the Marcellus…which is lower DEVONIAN. Just another shale that keeps on giving.

http://www.searchanddiscovery.com/pdfz/documents/2014/70168lash/ndx_lash.pdf.html

I have no objection to folks doing their own conclusions, but they don’t get to make up their own facts.

The Bakken began development in 1956 in the SWEETEST OF SWEET spots…these were developed using vertical wells because the sweetest of sweet spots had a wonderful natural fracture density that was not available elsewhere. This information, and the EURs of those wells, were used as an example by the scientists of the U.S. Geological Survey during a meeting in Alaska a few years back at the Pacific Alaska University. This isn’t a conclusion, by them or me, the multiple sequences of development of gas or oil shales in the US is not in dispute, nor are the facts contained within the Appalachian Gas Atlas that many are familiar with. The Atlas of Major Appalachian Gas Plays.Page 87. Figure Dbg-2a-b if you have an honest interest in these facts, first paragraph on that page. Completed in the LOWER Devonian (otherwise known as Marcellus) in the late 1800’s.

People have been taking the “under” on US production of various hydrocarbons since 1886, let alone since Hubbert’s peak was reached in the early 70’s, and guess what happened when the price and technology arrived at the right place? Fastest growing oil production in the history of the United States, making the followers of Hubbert more than a little disappointed. Again.

In terms of what position I would take, it should be obvious that I took the over position…in 1986…and I bet my lifestyle and career on it. I did not buy into the all declinefools being refuted by time, price and technology AFTER the fact…I bet on that profile BEFORE it happened. Decades before it happened, and then went out and became one of those persons who MADE it happen.

John
John

You wish to discuss oil? Sure. The Devonian shale oil boom of the late 1800’s near Macksburg Ohio, when OPEC “countries” were called Pennsylvania, Ohio and West Virginia? Shale oil is not new.

World oil production was claimed to have peaked in 2005 (Deffeyes and Simmons), 2006 (Fatih Birol of the IEA), 2008 (TOD) and it turns out that..well..it didn’t.

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LIQUID crude oil has nothing to do with what consumers demand…consumers don’t care if their gasoline, diesel or jet fuel is manufactured from dirt, natural gas or marshmellows. Which is why natural gas does matter…because when you can fly THIS on natural gas derived products…

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or one of these:

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then obviously you can power these right from the same line you use to heat your hot water:

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and those who have produced oil and gas in the oil field have been running THESE for more than a century now:

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and if you need to lubricate all these moving parts with…natural gas…you can get that at Walmart!!

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I was producing shale oil at $30 bbl in the mid 80’s, and making money on doing recompletions in Devonian shales in the late 80’s. No crickets, I could even round up the permit numbers if I felt like it. The Transmission Company of Ohio bankruptcy from the early 90’s completely incorporated the idea of shale oil and gas production from hundreds of producers…no crickets…just billions in lost revenue because of the same cyclical business as we are seeing today.

Industry has always been a victim of its own success…but there was something those of us who bet on, and won big, back then are also betting on, big…today. You, the average American consumer, your friends and neighbors, they aren’t about to give up on their gasoline, diesel or jet fuel habit as long as people in industry can continue providing it.

When your “facts” on price incorporate the knowledge and understanding of how oil prices through the centuries have worked, sure, I’ll pay attention. But this isn’t my first boom and bust cycle, and I bet far more on being right during the others without skin in the game, and I haven’t gotten it wrong yet. I might in the future, but that would require Americans waking up to their habit…and even if they do…there is yet another powerful component to this issue, and just as I relied on dropping reservoir pressure to build a career on long ago, I can always count on it being in my corner…forever.

John
John

Peak oil in 2013 isn’t 2005, and never will be. Harold Hamm, and others, choosing to keep their oil in the ground in the near present doesn’t mean they won’t bring it out later. They are betting on bringing it out later, and how fast they do that will determine future production increases. And don’t get me started on countries with functioning industries deciding to do the same.

http://www.eia.gov/analysis/studies/worldshalegas/

Many things matter, including the history of how these boom and bust industry cycles have played out before, and how this one resembles them. How much does it cost to produce a barrel of shale oil today? The amount of electricity it takes to make the pumpjack go up and down, pro-rated insurance per well, chart fee’s, lately about $600 month for some guy to go check the well? $1000/month? I give up 1/8th of the revenue for the landowner, so I need maybe 20 barrels a month net to my interest to pay OpEx? There is overhead back at the office associated with that, but I don’t have a single well making 20 barrels a month, or 20 barrels a day for that matter. I’ll let you know when oil prices are low enough to force me to start plugging wells.

Now those with large debt burdens…well….in the industry we are just drooling to buy their production at current reduced prices to save the energy lending division of some bank or another. It is going to HURT some of those boys, and some of us are already calculating the size of the haircut we are willing to give them to take these “distressed” properties off their hands.

As far as natural gas…I can only say from such small beginnings we have seen what oil has done to the world..natural gas is no different. My Christmas packages are now being delivered in natural gas powered UPS trucks, the hybrid buses at the airport all use CNG, so do about 1/2 of the local mass transit. The good news of course is that there is so much oil yet to be produced that this doesn’t have to happen quickly, and will need to happen even LESS quickly as long as the current buildout of new nukes and CCS equipped power plants continues.

And it isn’t a billion dollars of infrastructure, that is a ridiculously small number, more akin to what Americans spend 7 billion on HALLOWEEN, oh my no, the natural gas buildout will probably require decades and maybe a 200 billion to fully a matching infrastructure to traditional liquid fuels? Depends on whether or not every interstate stop requires CNG, or if we just do it all in homes. $2000 home setup for 100 million Americans is what, $200 billion? Not even 1/2 of the countries military spending, chump change compared to bailouts and whatnot.

And I haven’t said anything about “shale” glory, I just find it amusing that people don’t understand how substantially shale has added to past production volumes in the US, when they have been using it all along and only recently noticed. Oil is oil. I can sell 42 degree API oil from sandstone or 42 degree API oil from shale oil for the same amount of money, I could care less about the rock it comes from other than any differences that might entail in terms of drilling, completion or production techniques.

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