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Stu255's avatar

If you try and look at the situation with Russia objectively then the West is in a fairly terrible position.

There seems to be some kind of consensus that Zelensky + sanctions can actually defeat Putin and return Europe to a land of milk and honey where we can return to backslapping our wonderful virtues by having lower emissions than other places.

The reality is horrific. Consider the following points:

1). Russia's main income is oil and gas exports, the value of these have increased dramatically since war broke out. Big motivation for Putin to continue war. It virtually pays for itself. Sanctions smanctions who needs to buy cuckoo clocks and yachts when you have the whole world as a toy.

2). China has not and will not sanction Russia. In fact they came out this week and declared Russia their #1 strategic ally. China who made most of the goods in your house, like Russia more than they like you. Let that fact sink in for a moment as we cheer ever more sanctions on Russia. China will never sanction Russia. Trade between these two countries will flow freely. They have a huge land border far away from Western missile reach, China can freight trillions of dollars and millions of tonnes of hardware into Russia together then can move hardware from Shanghai to the front lines in Europe free from molestation by Western warships or aircraft.

3). Gazprom sales to Europe are €1 billion per day. This figure is already set to rise by almost 60% as supply contracts roll on to new price terms and that extra 60% will be all profit. Prices could go much higher yet. Expect Putin to put a huge windfall tax on Gazprom revenue possibly collecting €100's billion extra funds. Russia has almost no debt (20% to GDP) and actually runs a budget surplus. In spite of sanctions and Western media claims Russia is making hay.

4). Putin can buy whatever he needs from China, just like America does. As Russian manufacturers have struggled to produce some of their most modern weapons systems like the Armata T-14 line of tanks, I expect Putin will simply subcontract this to China. China would love to gain weapons technology from Russia and they both benefit from combining Russian designs with Chinese manufacturing. This is terrifying.

5). Russia needs silicon chips for weapons and missiles and these are sanctioned by the West? BS. Putin can buy them from China. Even the iPhone is made in China by Chinese subcontractors. Even with all the sanctions of the West, Putin can still order missile guidance chips from the same factory that makes iPhone. What do we actually sell to Russia? It's mostly things like handbags, perfume, software applications, mostly things that are considered a decadence and not really necessary for waging never ending total war.

6). Russia is a huge country, oil is not the only commodity we depend on Russia for. e.g. half of the whole world's Nickel supply is mined in Russia. The price of nickel has risen 10 fold this week as it's now impossible to ship nickel out of Russia. Nickel is necessary for making stainless steel and you need stainless steel for oil and gas pipes. This means it is actually impossible to replace Russian oil on international markets because Russia owns one of the main precurser commodities necessary for to producing oil. Nickel is also essential for making... batteries. Without nickel the world cannot replace Russian oil and we cannot transition to EV alternative.

We have sanctioned ourselves. It will take a month for anyone in the West to realise this. Sad to say I often notice things like this a full month ahead of our press.

There is a very powerful capital dynamic forming here and it's going to accelerate and then run it's natural cause until it finds an equilibrium. People who think this is a 1-2 month war over Ukraine and then sit down to talk, are missing a lot of important factors that are not covered by our press.

In the 90's we had the petrodollar with Gulf States buying US assets with their oil revenue. Then after 2008 we had two global capital dynamics i). the petroyuan ii) US/China trade flows. Putin has just created a third capital dynamic and is about to start funnelling huge volumes of money from EU to China.

Money and power will flow from West to East

Weapons and energy will flow from East to West

This would give China centre stage as it would be only China who had a presence in each of these 3 major capital dynamics. That would allow them to play each against the other. I would guess USD will lose reserve currency status in around 5 years and America will no longer be able to export inflation.

I find it really curious that you never see any full holistic explanation of events. I don't know if this is because the West is so focused on the quarterly business reporting of our markets? But we really have no strategic vision whatsoever. It's completely absent. I find this really weird.

It means we rush into tit for tat things and bad ideas like trying to sanction Russia to death in the hope that someone in Moscow starts a coup against Putin (how is a coup even possible when the military is deployed in another country!).

Six months from now people will whisper "maybe those sanctions actually helped Putin". Sanctions hold Russians together in collective suffering. In the absence of sanctions Russia would have a much more mixed and fragmented view of current events in Ukraine.

Russia v's Ukraine is a very complex internal matter in the minds of the Russian people. Russia v's the West is a very simple matter and is exactly the framing that Putin needs to stabilise his support. Our sanctions just solved Putin's biggest problem for him.

Yet we are still adding sanctions, still fusing the Russian people together, still driving up the price at which Gazprom can sell oil and gas internationally to EU and China, still squeezing Putin and Xi closer and closer together forcing them to build more cross border infrastructure to support a long war where lots of equipment needs to be replaced.

I don't think we will fix any of this any time soon. Our institutions are chocked full of idiots, careerists and people who can't see past their own 5.5inch screen. The macro picture is dire, we aren't even in the game.

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RockyLives's avatar

There is irony in the way that much of the mainstream media has been describing Putin as "unhinged," "mad" or "lunatic," while at the same time expecting him to act as they would expect to act ("they" being Western liberal intellectuals).

My reading of the situation is that Putin is far from mad and that his actions can be considered entirely rational in the context of what he hopes to achieve (namely, an expanded Russia and a neutral Ukraine, as well as leverage over the weak West on other issues through having shown willingness to use force).

None of this takes away the risk of accidental escalation and the potential catastrophic consequences thereof, but right now I'm more worried about this being initiated from "our" side than from Putin's.

The people calling for a no fly zone are some of the most dangerous and deranged people in the world at the moment.

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