Biden’s Folly in Ukraine

Guest Post by Douglas MacGregor

President Biden and the foreign policy uniparty are restoring the strategic condition Washington feared in 1940.

Americans find it difficult to determine whether the Biden administration’s policy decisions regarding Ukraine are the product of a deliberate strategy, extraordinary incompetence, or some combination of both. Threatening Russia, a nuclear armed power, with regime change and then annunciating a nuclear weapons policy that allows for the United States’ first-strike use of nuclear weapons under “extreme circumstances”—responding to an invasion by conventional forces, or chemical or biological attacks—suggests President Biden and his administration really are out of touch with reality.

American voters instinctively grasp the truth that Americans have nothing to gain from a war with Russia, declared or undeclared. A short trip to almost any supermarket or gas station in America explains why. Last week, inflation hit its highest point in nearly 40 years and gas prices have skyrocketed since the conflict in Ukraine began.

Thanks to the Western media’s non-stop dissemination of unfavorable images of Russia’s leaders and its military, it would appear that President Biden is able to espouse any narrative that suits his purpose. Obscuring the true origins of this tragic conflict, however—NATO’s eastward expansion to include Ukraine—cannot alter strategic reality. Moscow can no more lose the war with Ukraine than Washington could lose a war with Mexico.

Ukraine’s proximity to Russia gives Moscow unconstrained and immediate access to Russia’s reserves of military manpower, equipment, and firepower. Notwithstanding Moscow’s determination to avoid unnecessary collateral damage to Ukraine’s population and infrastructure, Russian Air and Ground Forces are at liberty to methodically destroy Ukrainian resistance in detail.

Russia’s commodity-based economy, with its abundance of food, energy, minerals, and other resources, creates enormous strategic depth for Moscow on the Eurasian landmass. These resources make Moscow Beijing’s natural strategic partner, thus securing Moscow’s Asian border. Moscow’s role in stabilizing Central Asia also makes Russian strength indispensable for the success of China’s Belt and Road Initiative rooted as it is in the historical Silk Road, linking the economies of East Asia to Europe, Africa, and the Near East.

At the same time, Washington’s frequent use of financial sanctions have severely weakened, if not wrecked trust in the U.S. led global financial system. It is far more likely that countries in Europe, Asia, and Africa will either bypass sanctions to buy discounted Russian and Belorussian commodities or simply refuse to enforce them.

To minimize the impact of financial sanctions imposed by Washington and the European Union, Russia began “de-dollarizing” its economy years ago. Unburdened by the kind of odious sovereign debt that plagues Washington, Moscow has been able to stabilize the ruble with interest rate increases, and links to gold reserves. Now, de-dollarization is spreading. China, India, and Saudi Arabia are introducing de-dollarization policies as an anti-sanction measure. Saudi Arabia’s offer to sell oil in Chinese yuan raises real questions about the future of the petrodollar.

Despite Japan’s public display of solidarity with Washington, Tokyo really made its bed with Eurasia when Tokyo signed on to membership in the Regional Comprehensive Economic Program (RCEP), the world’s largest trade bloc. Predictably, Tokyo already declared it will not ban Russian oil and natural gas imports and Japan will continue to work with Russia on important joint economic projects.

Europeans breathed a huge sigh of relief on April 1, when the Russian Government announced that Moscow will not cut off sales to European buyers of Russian natural gas, as long as buyers set up accounts with Gazprombank, where payments in foreign currency will be converted to rubles. Still, Europeans will soon have to decide whether to reject trade and cooperation with governments in Eurasia that resist Western liberalism, with its universalist pretensions, or confront the specter of civil unrest at home.

Russia’s enormous share of energy and food in European and global markets always meant war between Russia and Ukraine would be a nightmare scenario. It was no surprise when German Chancellor Olaf Scholz warned on April 2 of the serious worldwide consequences of the Russian war in Ukraine, saying, “We must ensure that this war comes to an end quickly.”

Scholz is right. Price surges in energy and food will now lead to expanded drilling for oil and gas around the world, as well as increased farming for wheat, barley, and corn outside of Russia, Belarus, and Ukraine. But these actions will not compensate for the looming structural commodity deficits or supply chain problems affecting fertilizer and metals.

Washington’s ruling class has a long record of misjudging strategic reality. Seeking to advance NATO through Ukraine to Russia’s western border may well be the worst blunder in American foreign policy since the end of World War II, but Washington learns nothing and remembers nothing. After the defeat of Anglo-French military power in June 1940, the combined power of Nazi Germany, Soviet Russia, and Imperial Japan was unassailable. Had the three remained in alliance, neither Washington, nor any combination of powers, could have challenged them for decades.

President Biden and Washington’s uniparty are fostering the domination of the Eurasian landmass by a collective arrangement of the world’s leading economic powers including Russia, China, India, Japan, Central and Southeast Asia, thereby restoring the strategic condition Washington feared in 1940. American voters would prefer that Washington focus on shoring up American economic prosperitycontrolling inflation and restoring the rule of law, not war with Russia.

President Biden would be wise to follow Scholz’s example and work to end the dangerous conflict in Ukraine. Even so, for the indefinite future the use of U.S. military power in the Eastern Hemisphere will now involve the potential for war with more than one first-class power in more than one region of the world at a time. Well done, Mr. President.

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5 Comments
Steve Z.
Steve Z.
April 6, 2022 4:36 pm

While absolute idiots outwardly run this country, Something bigger is afoot amongst those who really rule.
The Treasury has been drained of anywhere from $29 to 98 T-r-i-l-l-i-o-n dollars. That money has moved. The Vampire Squid will start sucking the blood from the Chinese for the next 100 years as this corpse has been fully exsanguinated .
The future victim is the East. The West can absorb no more debt.
I believe we are seeing the transition

bigfoot
bigfoot
  Steve Z.
April 6, 2022 5:14 pm

I like the way you think, but China has debt even greater than the US, plus its population is getting old fast and there is a ton of unrest in the hinterland as well as within the CCP. Still no middleclass and won’t be as the population is such that to afford a middleclass would take resources of astronomical size to supply. Of course, to feed its hoards even now would require US land and the starving of US pop. That’s the plan from that side of things. The West is controlled by the banking cabal. It’s not going away until . . . I dunno. It’s plan is depop, though, so we have two powers who want US pop to die one way or another. The only way out for the US is for its people to smarten up and realize what is being done to them. Carlin addressed that: “You know how stupid the average person is. Well half of them are stupider than that.” So hope is all we got?

m
m
  bigfoot
April 7, 2022 1:30 am

Stop parroting the MSM’s propaganda lines, unreflected!

Just because the US has a nominally almost self-sustaining birth rate, doesn’t mean those kids will be well-educated, bright, and able to carry on the country.
And then suddenly you say depop is on the plan for [West’s] TPTB – how does that fit together with your population concerns?

And this “China has debt even greater than the US” is the ultimate cop-out. Even if it were true, try debt-per-capita next.

m
m
April 7, 2022 1:45 am

Putin’s latest judo move:

“GAZPROM mother sells gas to the Russian GAZPROM EXPORT OOO (the Russian version of a GmbH) in St. Petersburg. This sells the gas to GAZPROM Germania in Berlin. This entity in turn sells the gas to a large number of smaller subsidiaries [e.g. Wingas] with their various customers. So far, this strong division has served to minimize risks and taxes.

Customers pay the gas to the subsidiaries of GAZPROM Germania in EUR/USD. These are the much-cited “supply contracts”. GAZPROM Germania aggregates these payments and transfers them via Luxembourg (GAZPROM Bank) to the Russian GAZPROM EXPORT.

Therefore, only GAZPROM Germania (for Germany) is affected by the conversion of payments to GAZPROM EXPORT from EUR/USD to rubles. After all, end consumers in Germany do not buy from GAZPROM AG in SPB or from GAZPROM EXPORT in SPB, but from the subsidiaries of GAZPROM Germania. The new legal situation in the RF will not change anything for these end users with their EUR/USD contracts.

Instead of transferring the EUR/USD to Luxembourg, where these funds can be “frozen” at any time, GAZPROM Germania is now transferring the aggregated payments from its subsidiaries to Moscow, where they are forcibly converted and effectively revalue the ruble. To a certain extent, these funds are thus withdrawn from the EU’s options for sanctions. And [German Energy Minister] Habeck and Co. can (almost) do nothing about it.

But the west doesn’t want that. The idea of the western values is that GAZPROM Germania receives payments from the subsidiaries, but cannot pass these funds on. At the given moment GAZPROM Germania can then be confiscated as part of a further level of sanctions together with its considerable account balances. The RF would then have supplied gas without receiving any payment. The moral justification for such an expropriation would then be “reparations to Ukraine”. The USA in particular has experience in this. Private German companies were selectively expropriated after 1918 in order to “pay” for war damage by the German Reich.

What is the counter-strategy of the RF?

GAZPROM (mother) instructs GAZPROM EXPORT to liquidate GAZPROM Germania [that happened on 3/31 or 4/1]. This eliminates the commercially necessary intermediate step for gas trading, the trading chain is interrupted and the supply comes to a standstill. Not because someone turned off the tap, but because the importer is “bankrupt”. However, since this would be a quasi-hostile act by the RF (specifically planned insolvency of a strategic utility company), they do it more skilfully: GAZPROM Germania is sold. To shady offshore companies whose owners nobody knows and whose cash flows are as yet unknown. And these offshore companies first withdraw the capital from Luxembourg, leaving behind a GAZPROM Germania as an empty shell, which is then sent into insolvency.

Habeck wants to forestall this scenario. The BMWi places GAZPROM Germania under receivership [that happened on 4/4] in order to prevent GAZPROM Germania’s assets from flowing out to the new owners. And to prevent GAZPROM Germania from transferring the capital collected from the subsidiaries to Moscow for compulsory exchange.

Only GAZPROM EXPORT could now stop selling to GAZPROM Germania if GAZPROM Germany does not pay in rubles.

The only question now is how quick the “new owners” were over the weekend. Because GAZPROM Germania was supposedly sold on April 1, 2022. So now, four days later, it is unclear whether GAZPROM Germania is already insolvent. If so, then Habeck and Co. would have a problem. On the one hand, they would have to save the company with significant financial contributions, if necessary, and on the other hand, they would then have the buck in their hands. Because if you now instruct the management of GAZPROM Germania not to bill in RUB, as requested by GAZPROM EXPORT, then you are breaking the contracts, not RF. After all, GAZPROM Germania and GAZPROM EXPORT can specify any currency for internal settlement, and these are in rubles for GAZPROM EXPORT by [Russian] law.”

– – –
And that explanation even skips over a major point, I believe:
The famed long-term “supply contracts” with their fixed prices exist/existed only between German Companies/subsidiaries and GAZPROM Germania!
Contracts between GAZPROM Germania and GAZPROM EXPORT are unlikely to be present in a written form, so that Habeck now -after “nationalization” (i.e. expropriation) of the empty hull-GAZPROM Germania- could try to have them legally enforced.

So Putin with a swift move (out of the Atlas Shrugged playbook!)
made all famed “supply contracts” effectively null and void, without breaking a single law.
He lost the ‘value’ of the empty hull Gazprom Germania – and Germany “gained” some office furniture and an almost entirely empty gas storage facility [in Germany, that was owned by Gazprom Germania].

VOWG
VOWG
April 7, 2022 6:18 am

You look at that picture and realize Biden doesn’t have a clue. His mind is almost gone.