The horizon is not so far as we can see, but as far as we can imagine

“Consequences” for Russia over the Ukraine

Obama and Kerry have both told Russia there will be consequences for their actions in the Ukraine.

The question is “what consequences?”  The only thing the West can do which would really hurt Russia and Putin is strong financial sanctions: freeze Russian accounts, institute a trade embargo, etc—the full Iran treatment.

The problem is that Europe needs Russia’s natural gas and oil and Britain, aka. London, aka. The City, needs Russian money.  London is awash in Russian cash, and the London Real Estate market would most likely crash if real financial sanctions were put on Russia.  Since real-estate and financial games are the only thing keeping Britain afloat, this is a total no-go: completely unacceptable to Britain.

Germany, meanwhile, will find any sanctions on energy completely unacceptable.  They can’t replace all that natural gas before next winter, even if the US agrees to sell American natural gas to Europe.

The Russians, to put it crassly, have paid their bribes.  They have made the right people in England, and Europe, rich.  On top of that they supply something Europe absolutely must have: hydrocarbons.

Further, if real sanctions, like the Iranian ones were applied to Russia, the price of oil and natural gas would spike so high the world economy would go into a tailspin, even before one considers the spin-off financial effects.  Russia would then orient hard to China, who in no way would go along with such sanctions, and while the initial affect would be massive, in time, all that would happen is that Russia would now firmly be a Chinese client state.

Many have noted that the ruble is dropping relative to the dollar and the Euro and say that “markets” are punishing Russia.  They aren’t, because oil and natural gas prices have increased, and Russia doesn’t get paid for hydrocarbons in rubles.  In fact, the crisis will probably make Russia money.

The intermediate sanction would be Visa restrictions on Putin’s closest associates, along with freezing their accounts.  The problem with that is that Putin has plenty of ways to retaliate, starting with not letting the US get its gear out of Afghanistan when the Afghan government kicks the Americans out.  (Getting that gear out through Pakistan will be much harder, dangerous and much more expensive.)

China, of course, is the actual threat to American hegemony.  It is also the country that the Ukraine should actually be going to for help, not to the West.  More on that in future posts.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.


The 2012 IMF/Ukraine Negotiations


The Chinese Solution to the Ukrainian Problem


  1. bob mcmanus

    I’m thinking Agadir Crisis, in a kind of reverse timing with Balkan Wars (MENA). I think we are in trouble. I think Russia getting in Obama’s way on Syria was a very big fucking deal.

    Wilder over at CT also has lots of Edwardian allusions.

    The kleptocrats have no decent historical memory, and are crazy with greed and hubris.

  2. S Brennan

    Dunno Ian, one bard has credible evidence that Obama plans to come down hard on Putin

    According to what he said; Obama could go so far as to De-Friend Putin on Facebook…this could get nasty

  3. Bruce Wilder

    All the talk of sanctioning Putin is just nonsense. I am still betting that he can put the EU and US into a position of having to choose between abandoning the Ukraine or staging a “rescue of Ukraine”, which pays the Russians a lot of cold, hard cash.

  4. S Brennan

    Notice the (R) behind this man’s name. Remarkable to hear a Politician give a grown-up perspective, in contrast to the childish babeling of both National Parties.

  5. bob mcmanus

    Notice the (R) behind this man’s name.

    This is very definitely a liberal/neo-liberal/Democratic operation. I lost track of all the connections the Ukrainian oligarchs and Kiev elite have with US oligarchs, especially the Clintons and global energy. Obama’s are to the banks and then energy, not necessarily in that order. This could explain Armstrong.

    Very little out there can be trusted, but there is a report that the Svoboda and Prevy Sektor shock troops of Kiev were trained in Canada.

  6. Celsius 233

    What ever else Putin is; he’s not a fool.
    Obama is one of the most inept foreign policy presidents we’ve ever had.
    Who the hell are his advisers? A dying empire is tragic to watch…

  7. profan

    “The intermediate sanction would be Visa restrictions on Putin’s closest associates, along with freezing their accounts. The problem with that is that Putin has plenty of ways to retaliate, starting with…”

    I think the weakness of this argument is that Putin’s closest associates may want to continue to travel abroad freely and might not want their accounts frozen. They might dislike the possibility of the western sanctions strongly enough to revolt against Putin. If he loses support from Russia’s “elites” domestically, he may not last much longer, and an “Orange revolution” would be coming to Russia this time.

  8. Troy

    > If he loses support from Russia’s “elites” domestically, he may not last much longer, and an “Orange revolution” would be coming to Russia this time.

    Sounds like hope and a prayer type thinking considering it has been said here and elsewhere Putin is popular in Russia. He’s been elected in spite of the Russian elite, not because of them.

  9. Julien

    The only half-decent idea I’ve read about has been to try to lower oil prices, to undercut Russia’s primary revenue stream. This guy’s idea is to release 500k bpd of oil from the strategic reserve and to convince Saudi Arabia to maintain or increase production levels.

    While I think that’s a good idea on paper, I’m pretty sure any extra oil surplus would be gobbled up pretty quickly by the market and prices would barely budge.

  10. I asked Ian this over Twitter but I’ll ask the commentariat here. Is Roman Abramovich one of Putin’s pals? He’s a super rich Russian oligarch who owns Chelsea FC, in case you don’t know. And Chelsea is presently leading the EPL. Cameron has pissed off enough people as PM. Does he want to add Chelsea FC fans to the list?

  11. @Julien: releasing oil from the strategic reserve would be massively illegal, not that such an issue would bother BHO very much, and you are correct that the minor amount involved would not affect prices. Sanctioning Russia, on the other hand, would send oil prices through the roof.

    A CBS pundit, a former CIA ass’t Director, said that Russia is trying to rebuild the Soviet Empire by regaining dominion over all of the former Soviet satellites, and that Ukraine was just the first step in that process. I was laughing so hard I almost missed the part where he made sense, saying that there are no military options, no political options that are other than trivial, and that all of the economic options have “huge downsides” for Europe and the US.

  12. Dan H

    So Chelsea players will reverse their performance under Abramovich’s orders? Does this mean Torres will start to score again?! Fans might end up happy… he was a world beater under Benitez and there’s not much left in the league…

  13. jonst

    Ian, whatever else you have right here…and I think you have a ton of things dead on, you have one thing wrong. To the very limited extent said “gear in Afghanistan” ever got to that place, exists now, or will exist for a bit longer, it is not getting out of Afghanistan. Short of their being some IP protection schemes that will see it through. We (the States) always do our best to protect IP rights. As to the rest of the property, IMHO its gone, and may have never existed. Except on paper or in digital format. I have a wee bit of experience in this…albeit long dated experience.

  14. rumor

    Your last paragraph is a bit of a cliffhanger, and certainly piqued my interest. Looking forward to your next post on that, Ian.

    What do you make of the apparently rambling, half-mad interview Putin gave today? How does that affect analysis from our end of the rationality of Putin and/or Russia’s approach?

  15. Dan H:
    You’re missing the point. I’m talking about sanctions and freezing the bank accounts of Putin’s pals. Meaning, could Abramovich be in danger of not being able to pay Chelsea FC’s bills? Obviously, sanctions and stuff look less likely today. I’m just wondering if Abramovich is considered a Putin pal and if that could endanger Chelsea should things escalate later on.

  16. Dan H

    That’s why I was joking that Abramovich would order his players to slump, as retaliation for sanctions against Russian oligarchs… wether he is close to Putin, I dont know.

  17. markfromireland

    I think it’s very important for Westerners — in particular western civilians to understand the importance of military security to Russia and to Russians. Ranging from the ordinary civilian, to military officers, to policy makers. Russia famously has very porous borders and has paid the price for this again and again over the centuries. They are not repeat not going to let you Americans and your British/Canadian catamites sidekicks. Get away with fucking them over again. Here are some recent examples of American viciousness as seen from Russia:

    1. The Americans and their allies in NATO promised Gorbachev that they would NOT expand NATO. Then the Americans and their allies went ahead and did exactly that.
    2. The Americans and their allies in NATO promised Gorbachev that under no circumstances whatsoever would they place nuclear capable missiles in former Soviet bloc countries. Then you Americans and your allies went ahead and did exactly that.
    3. They remember how you Americans and your allies bombed and invaded Kosovo and Bosnia and how you Americans with help from your allies set up a spectacularly corrupt criminal linked regime in Kosovo.
    4. Their military and their civilian defense establishment have neither forgotten nor forgiven how General Wesley Clarke the American SACEUR (Supreme Allied Commander Europe of NATO) ordered a direct attack on Russian troops at Pristina. That American thug damned near started WWIII and only the fact that the British Officers and soldiers whom Jackson was ordering to attack the Russian troops decided to obey their own general (Mike Jackson) who ordered them under no circumstances should they do what the American SACEUR was ordering to them to do.
    5. Their military and their civilian defense establishment have neither forgotten nor forgiven how the same General Wesley Clarke ran for President and is heavily involved in the Democrat politics to this day.
    6. They remember what you Americans and your Israeli frontmen did to Lebanon — repeatedly.
    7. They remember how the government and people of the USA first devastated Irak with sanctions and then invaded and laid waste to the place having first taken care to demolish every single social and legal institution in the place.
    8. They remember the war on Libya.
    9. They can see what America and its frontmen are doing in Syria.
    10. They also have neither forgotten nor forgiven American support for the Chechen rebels.
    11. Hell will freeze over before they forget or forgiven remember Sakashvili’s attack on Russian peacekeepers and the people of South Ossetia. For those Americans who’ve forgotten the Georgian troops who did that were American and Israeli trained. Their tactics and military doctrine were American. As were there weapons and Ammunition for the most part. (The rest of their weaponry was supplied by the Israelis).
    12. Furthermore they also have neither forgotten nor forgiven remember how the Americans government and people alike went out of their way to kick them when they were down including very vocal American support for the most corrupt of their oligarchs such as Boris Berezovsky.

    I could go on but why belabour the obvious?

    And now America (with help from Turkey, and Israel) are trying to screw then over in Ukraine and The Crimea. Any halfway competent military officer can see where that will lead. They can and have concluded — in my view entirely correctly, that they’re next. And they’re having none of it. At present there’s a debate going on in Moscow as to whether it wouldn’t be more sensible to abandon all restraint and invade Ukraine in its entirety.

    Doing so, the argument goes, would give them time to hunt down and destroy, those elements inimical to Russian security and I include amongst those elements those Ukrainian officials who opened the door to American and Israeli ‘trainers’ of their armed forces and those politicians who opened the door to NATO.

    Those making this argument point out that no matter what Russia does in response to this direct threat to their security by America they’re going to be ‘punished’ given that fact, it makes sense for them to go ahead and eliminate the problem actors.

    It’ll in the interesting — in the Chinese sense of the word, to see whether Putin accepts this argument and acts upon it.


  18. markfromireland

    And a Post Script:

    It’d be hard to overstate the fury and outrage expressed by my contacts within Russian officialdom and the Officer Corps since this crisis blew up. They say — that under Obama the policies of encirclement and of ever more direct threats to Russian security have intensified. It’s hard to disagree with somebody when they point out a blindingly obvious fact.

    They also say that ever since Russia stopped America and its front-men from starting yet another of their wars of aggression in the Middle East that American (and allied) activities that are directly inimical to Russian interests and security have intensified — another blindingly obvious fact.

    Russians in my experience epitomise the American proverb ‘don’t get mad get even’ or to put it another way I expect that a tactical group within the Kremlin is even now preparing retribution.



  19. Celsius 233

    @ mfi;
    Thanks you for that great summation of the last 25 years of dangerous broken agreements.
    Frankly I see Putin as a rational player and interestingly, Merkel was mis-translated in her comment about Putin “being out of touch with reality”. He seems to be very much in touch.
    Link here;

    To what Merkel really said when properly translated. Which does raise the issue; was it intentional (the mis-translation)?

  20. markfromireland

    While your attention was elsewhere. America’s front-men in the Middle-East bombed Hizballah targets including what they say was a depot for STS missiles. If you toddle along to Al-Rai (the report is here ) you’ll see that the Hizb publicly confirmed that the Israeli attack did take place. This is unusual as the Hizb’s policy regarding Israeli attacks on Hizb targets inside Syria is to refuse to discuss them.

    So what makes this particular Israeli attack different? Well for a start the Jenta attack was an attack on a depot rather than a convoy. There is a big big difference between attacking a convoy and attacking a piece of military infrastructure. You only attack infrastructure when you’re about to escalate or are thinking of so doing. And this is how the Jenta attack is seen by the Hizb. Their analysis is that what Israel is two-fold:

    1: They want to create a buffer zone between them and Syria (similar to what they did with Lahad).
    2: They want to see how far they can push the Hizb.

    The fact that they have a fairly small number of fighters in Syria has led the Israelis (Hizballah’s spokesmen say) to believe that the Hizb are less-prepared, and less strong in Lebanon than they would be otherwise. Israel is therefore probing to see what it can get away with.

    Irrespective of whether Hizballah analysis I have outlined above is correct what Israel is doing is akin playing with matches while sitting on a petrol-soaked sofa. Based on what I’ve seen with my own eyes in Syria the Hizb fighters there are third-echelon troops sent there to be blooded. Other than a very small number of trainers I haven’t seen either first-echelon or second echelon troops Hizb troops in Syria. They keep those in Lebanon for obvious reasons.


  21. markfromireland

    @ Celsius 233 March 5, 2014

    Yeah I saw the Die Welt report (Ukraine-Krise : Merkels Drahtseilakt zwischen Putin und Obama – Nachrichten Politik – Deutschland – DIE WELT). The American (mis)interpretation doesn’t sound like Merkel at all.

    Pressure Rising as Obama Works to Rein In Russia –

    Chancellor Angela Merkel of Germany told Mr. Obama by telephone on Sunday that after speaking with Mr. Putin she was not sure he was in touch with reality, people briefed on the call said. “In another world,” she said.

    The Die Welt story does sound like her – very like her. The American government are telling lies again. “Fuck the EU” and “Fuck Germany” too. Very clever.

    If you read the Die Welt report:

    Es entspricht allerdings nicht der Wirklichkeit. So ist man im Kanzleramt über den Bericht der “New York Times” nicht glücklich. Merkel habe mitnichten ausdrücken wollen, Putin verhalte sich irrational. Sie habe Obama vielmehr gesagt, Putin habe eine andere Wahrnehmung der Lage auf der Krim. Deshalb drängt Merkel ja auf eine “Fact-Finding-Mission”.

    It’s very clear that Merkel is unhappy with being used in this way saying first that what somebody has said “does not correspond to reality (Es entspricht allerdings nicht der Wirklichkeit) is diplomatic speak for “that’s a bare-faced lie”. And the next sentence emphasises that she’s unhappy about it. So ist man im Kanzleramt über den Bericht der “New York Times” nicht glücklich. (the Chancellery is not happy about the NYT report).

    Now the thing is that Die Welt is very close to Merkel and her party if they wrote that you can be damned certain that they did so with Merkel’s very explicit approval. For such a cautious, restrained, and calculating politician to ‘go public’ in that way. She must be absolutely furious.

    Even more interesting are the comments on the piece from Die Welt’s conservative party supporting readership. They’re even more annoyed than Merkel – and fed up to their back teeth with America and Americans.

    Every once in a while a drastic shift in alliances and perspectives takes place. One such was the creation of the Berlin-Paris axis. It’s often forgotten that the primary purpose of the EU was and remains to tie the two regional superpowers together so closely that they would never even contemplate going to war again. And it’s worked.

    The intriguing possibility now exists of a Berlin-Paris-Moscow axis. This is a consummation devoutly to be wished as it would ensure that the Americans would be excluded. It was an American founding father who commented that if they didn’t hang together they would assuredly hang separately. More and more people in Moscow and Berlin are starting to think he was right.


  22. markfromireland

    Oh and for the record under the Treaty with Ukraine by which Russia uses Sevastopol as the home port for the BSF they’re entitled to have 15,000 troops in the Crimea on a regular ‘business as usual’ basis and up to 3o,000 if they have any concerns whatsoever about the security of ANY of their military facilities in the Crimea. So far from what I can make out they haven’t come even close to 30,000 troops in the Crimea as a whole. So all that crap about an invasion and forces ‘massing’ is just that – mendacious American State Dept crap.


  23. jonst

    Every time I see the word “rambling” to describe an interview I hear ‘not like our soundbites, talking points, cliches’ I’m used to hearing in the Western Media.

  24. S Brennan

    MIF, it’s a tiny, tiny, tiny group of Americans who do this shit. And as I have pointed out earlier, these actions are against the USA’s long term interest.

    Citizens of the USA, swim in a deep well of propaganda…they are lied to daily. For example; “INVASION”…sounds awful doesn’t it? But not a single shot has been fired, no resistance, nope, just joining forces with the INVADERS, who have concerns about the Brownshirt takeover of the Ukraine. Just last night, I was on the phone with an old friend walking her through the propaganda…it took a while, but eventually she came around.

    Again MFI, if Americans were given truthful information, they would do the right thing, but they are lied to day & night 24/7/365 by their rulers. The “elite” rule this country with a velvet fist…and they are first class idiots.

  25. markfromireland

    @ S Brennan March 5, 2014

    1: Tell it to the Vietnamese, Cambodians, Afghans, Lebanese, Irakis, Iranians, Syrians, to say nothing of the citizens of South and Central America, the citizens of Various Balkan countries, and now the Russians.

    2: I’ve been hearing that singularly feeble excuse all my life and am no longer prepared to give it credence – and yes it is an excuse nothing more.

    No matter how inexcusably shittily Americans behave somebody like you invariably pops up bleating the talking point about how it’s “a tiny, tiny, tiny group of Americans who do this shit” they do it and get away with because and only because their fellow Americans either approve and encourage it at worst or because their fellow Americans acquiesce in it at best.

    To hell with them, to hell with those who actively engage in this shit, to hell with those who make excuses for it, and to hell with those who let them get away with. It is way past time that they reaped some of what they’ve sown.

    3: C’est entièrement faux de dire «tout comprendre c’est tout pardonner», «tout comprendre n’est pas tout pardonner».

    Believe me when I said that my Russian friends and contacts were seething with rage at yet more shitty American behaviour I was engaging in a considerable degree of understatement.


  26. Brian M

    Mark From Ireland makes a good point.

    There is a vicious circle here. The American people is bloodthirsty, complacent, and perfectly ok with raining death around the world. So yes…we are to blame also. But, part of the reason for that (only part*) is the oozing sea of sophisticated propaganda we live within.

    We are guilty, but some are indeed MORE guilty.

    * racism, inertia, and toxic levels of religiosity contribute to the miasma in our culture.

    As with the pious platitudes from Europeans, though, I am not sure “the Russian People” have any more grounds for self righteoussness, though. MarkfromIreland’s reflexive hatred of the United States conveniently allows him to ignore the behavior and history of other world actors. Like the Russians. Or the Germans, for God’s Sake! I expect him next to intone piously about the virtues of Germany (who are at least partly responsible for crashing the South Euro Zone economy for their own benefit)

Powered by WordPress & Theme by Anders Norén