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

Thinking Out Ukraine Sanctions


If you could not buy anything you wanted using Western currency, why would you sell anything to the West?

Western sanctions on Russia are fairly close to: “You can sell us oil, wheat, and gas, but we’ve frozen all your foreign currency reserves we can touch (almost all of them), and we won’t sell you anything that’s useful to you. Anyone who tries to do so using our system is committing a crime, even if not in one of our countries, and we will punish them.”

It’s hard to imagine that Russia is going to keep selling us what they have. Naked Capitalism reprinted a good article by Olga Samofalova (second half, you can skip the first.):

Stopping gas supplies to Europe is even more disastrous in terms of consequences for both sides. Russia will not be able to transfer West Siberian gas, which goes through European pipelines, to other markets. There is no gas pipeline for such a volume to China or other Asian countries. To send gas by sea by tankers, it needs to be liquefied, but Russia does not have so many LNG plants for this, or gas carriers too. This means that Russia will have to stop production. ‘In the western direction, if without Turkey, there is about 150 billion cubic meters of gas from Russia. Where will we put so much gas if we don’t supply it to Europe? Nowhere. We’ll have to stop lifting the gas. This means that the world market will lose these volumes, and immediately there will be a large deficit of gas in the supply-demand balance of the European Union,’ says Yushkov.

‘No matter what anyone says, Europe will have nowhere to take such volumes of gas from. The world is not able to increase production by 150 billion cubic meters. Europeans will try to switch to other energy sources. An attempt to switch to coal will fail, since Russia is also the largest supplier of coal to the EU. The Europeans will try to launch everything that is possible: all the shut-down nuclear power plants [to reopen], the closed coal deposits in Germany and Poland.’

Now, this isn’t quite accurate. One of the main reasons that Iran is finally getting a renewal of the Iran deal is that the West needs oil and gas supplies from Iran back on the market. But even so, there will be a huge effect.

The core thing to understand here is that we in the West don’t know how to handle supply shocks. The last generation that knew how was the Lost, and they’re all dead. No one alive even remembers a properly-handled supply side shock, as we mishandled the OPEC oil shock catastrophically, and even those people are mostly aged out, unless they’re 80 and in Congress.

The Covid supply shocks have pretty much proved it. We could go into all the issues like price gouging, monopoly concentration, supply chain dispersal, just-in-time, consolidated shipping, the hollowing out of the trucking industry, and blah blah, blah, but it doesn’t really matter. Bottom line, we aren’t handling it well. All we really know how to do is raise interest rates and use central bank policy to keep wages below the rate of inflation, thus making the majority of the population even poorer.

So what happens when Russia cuts us off from a whole pile of minerals, hydrocarbons, and food that we need? Russia is the number one wheat exporter. Ukraine is #5. Gas we’ve already discussed. Oil will spike. Energy costs will go through the roof. Most titanium comes from Russia and is used to build planes, and if Boeing and Airbus have cut Russia off even from repair manuals and spare parts, why should they let the West have any?

I’m not 100 percent on this, but if Russia reacts the way I believe it would be rational for them to act, then we will have a supply shock bigger than the OPEC crisis, especially as it is being added to the Covid shock. Our companies will, of course, use the opportunity to increase their profits even more and price gouge (something they mostly didn’t do in the 70s), and we will get massive inflation.

I lived through the 70s. In the late 70s, during a period of about two years, the price of candy bars (you can tell how old I was) went from 25 cents to a dollar.

This is likely to be worse.

The Russians are also just not going to pay back their debts to Western countries in any form they can use. A law has already been passed where companies owing money to countries with sanctions can pay in rubles to the Russian government, who will then handle any negotiations, for example. More such measures will continue. Freezing reserves amounts to theft, and Russia is not going to pay back thieves.

Russia will probably also break all Western IP. With some under-the-table Chinese help, they’ll then set up production.

Meanwhile, China is thrilled — whatever they’re saying. Xi recently told the Central Committee that China could not rely on world markets for food security. But as a locked-in junior partner with a land border, Russia is a safe provider, especially since a lot of markets will be closed to it, and as we mentioned, Russia’s the producer of wheat. Oil and gas supplies can always be interdicted at the Straits of Hormuz by the American navy, but Russian land supplies are not so simple, etc, etc.

Now, let’s talk about the confusion of money for real economic goods. Money does a lot of things, but money cannot buy what a society cannot produce. Conversely, as Keynes pointed out desperately (and was ignored) anything a country can actually make, it can afford. So when you see things about money, or even stock markets, remember, China is the largest industrial state. Russia is the largest wheat exporter and a vast exporter of oil, gas, and minerals. Russia can survive this if they stop their economy from seizing up, because bottom line, they can feed and heat themselves. The food may be a bit boring, but it’s food.

China is hooking up Mastercard and Visa clients who were cut off with UnionPay and their Mir Card. This isn’t something that would happen if the CCP didn’t give the green light, not a chance. Russia’s SWIFT alternative and China’s are going to be hooked together. China’s banking system actually produces more loans than the US at this time, so they’ll keep the Russians afloat.

Many people think the Chinese will screw the Russians since the Russians need them so badly. They may, but I don’t think so. This is Western thinking, the same stupid, short-sighted greed that led us to ship the majority of our industrial base elsewhere, so a few oligarchs and politicians and consultants could get rich.

China needs an ally. They need good will. Give Russia cheap loans and help when they need it, be the country that helped them when almost no one else would or even could, and Russians will remember that for generations. China doesn’t need a resentful ally, they need a willing, happy, and healthy one. They don’t need an ally who they’re strangling with debt, and right now, loading Russia down with usurious debt in the middle of this crisis would make things worse.

Remember, people often fail to pay back debts they hate.

Contrary to Western propaganda, while there have been cases where China has loaned countries too much at too high rates, generally, Chinese development loans have been below market rates. This is because what the Chinese want isn’t a revenue stream, it’s resources. So they’ll build your mines, your factories, and your transportation networks, and throw in some smart cities, hospitals, and schools too, as a form of domestic subsidy. What they’re going abroad for is resources.

So my guess is that China doesn’t screw Russia to the wall, helping cripple them further and making Russia resent them during their moment of need. They aren’t modern Westerners. That doesn’t mean they don’t expect things in return, they sure do, but what Russia needs and wants to sell them, lines up perfectly with their needs, and there’s no need to screw Russia. In fact, I expect Chinese technicians to flood Russia and help with their infrastructure issues, oil industry, and so on. It’s enlightened self-interest and enlightened beneficience. To use econospeak, this is a positive sum game.

China and Russia have issues, sure, but they need each other massively, and each of them almost perfectly fixes the other countries weaknesses and needs. Russia will definitely be the junior member of the Alliance (and Russian tendencies to think in realpolitik geopol terms mean they get this and won’t even even resent it, as long as they feel fairly treated.)

The wildcard here is India. India and Russia have had good relations, indeed, have been friends, since independence. The Indian people themselves have genuinely fond feelings for Russia that they don’t have for the West or the US. But Indians hate the Chinese because of their territorial disputes.

If I were China, I’d just go to Modi and settle the territorial disputes generously. Give them a bunch of land, lay it on thick. I don’t expect them to do this, because it’s an emotive issue, but most of the land the countries dispute is basically worthless. It just doesn’t matter if India has that land. If China were to do this, it could probably move India into its alliance group, or at least keep it neutral.

So, let’s assume that Russia survives sanctions. Western elites don’t think it will, but Western elites are used to sanctioning powers like Iran and Venezuela, not a great power that China needs in its pocket, which has a huge land border with China. It’ll be ugly.

Assume Russia retaliates and there’s a big inflation shock. The West tries to get China to enforce sanctions, China says all sorts of mealy-mouthed stuff, but basically doesn’t do anything. The West then has three options:

  1. Full scale sanctions on China. If they do this, the OPEC crisis will look like a walk in the park. It will be a great depression. China is the world manufacturing center and the West cannot, yet, decouple.
  2. Targeted sanctions, like the chips sanctions that damaged Huawei so badly. These won’t make China change its mind, but it’s what Westerners do, especially Americans, so I assume this is the default.
  3. Try and cut a deal.. “All sanctions off and some stuff you want if you cooperate.” This is probably the best option for the West, but I don’t think China will go for it, because ever since Obama, the US has said that China is actually enemy . They’ll probably figure (I would) that once Russia is taken out, all deals are off and China is next in the crosshairs.

So what happens is probably #2 (targeted sanctions), at first. The West hurriedly moves some production back home (but not much, rentier societies are too high-cost for manufacturing) and a ton to low cost western allies, like Mexico. Once it feels confident, it ratchets up the sanctions, and we are in full cold war. I’d guess four to eight years, but it’s really hard to time these things. You can know something is inevitable, like this cold war, and not be sure when. I’ve been talking about this for years, and now it’s started. The Cold War is on: It’s just only with Russia right now. It will spread to China. If the West gets too emotional and foolish and tries to force China right now, it could happen with a year.

So we move into a new Cold War, in the middle of terrible inflation and possibly even a depression. One can expect most of the South to go with China/Russia. They may have voted against Russia in the UN General Assembly, but their arms appear to have been twisted hard. As soon as its credible to move to the monetary area China and Russia are setting up, they’re going to move their monetary reserves en-masse — unless they’re a Western client state, because the West has now repeatedly stolen other countries reserves.

This means most of Africa. Most of South America will want to, as China is their primary source of development loans, but they may be too scared. Any Asian country which isn’t an American ally will go. India is an unknown.

But at the end, you have China which is world’s most populous country, with the biggest industrial base, and even (in purchasing power parity terms) the highest GDP on the other side, along with Russia, and the Number 2 nuclear power, likely still with a massive military, and a ton of southern resource states, all oriented around China. (Though some, like the oilarchies, will try to remain neutral.)

I don’t see this as a competition in which we are the top-dog. Feels like a 60/40 thing to me, and we’re the 40. For too long, we have thought that money and financial games were the same thing as an economy, and that we could just buy whatever we wanted so it didn’t matter who made it, grew it, or dug it up. That world is ending. It was killed by us, with our sanctions, ironically.

Welcome to interesting and shitty times. Put aside  your belief in our superiority: We’ve been top dogs for about 200 years now, in some places 500 years, so it’s hard. But all periods in which one group is dominant end, and we’re probably living through that end.



Week-end Wrap – Political Economy – March 6, 2022


Guerrilla Warfare: The Way of the Weak


  1. Keith in Modesto

    “Money does a lot of things, but money cannot buy what a society cannot produce.”

    As the kids say about memes (on Twitter, Reddit, etc.), I’m going to have to steal this.

  2. William Reeves

    It would not surprise me if countries cut off from Swift payments start demanding gold for their products. Most countries have only a few hundred tonnes and would very quickly be unable to pay for imports. I lived through Thatcher’s de-industrialization and it was not nice and the consequences for Britain will be worse.

  3. Z

    The upcoming tsunami of inflation is the clearest cost that U.S. foreign policy has had on the U.S. working class so of course our rulers’ media is working non-stop on the obfuscative Putin is the new Hitler narrative.


  4. Z

    At least the battle lines between the U.S. working class and their rulers is being drawn clearer as well. Our rulers won’t want to raise wages to cover the inflation, or they will try to keep the consumer price inflation increases above wage increases, and the U.S. working class will be forced to confront that.

    Of course the Federal Reserve and Larry’s and Stanley’s Asset Inflation Factory BlackRock stand at the ready to keep the values of our rulers’ assets, and hence economic power, supreme over the working class.


  5. Dan Lynch

    Excellent essay by Ian and I will only add Bernhard’s comment about the Iran deal: “The attempt by the U.S. to rush towards a new Iran deal to get Iranian oil flooding the markets has failed. Russia, together with Iran, has successfully blocked that move. Sanctions on Russia mean that Iran can not export its enriched uranium to Russia to be turned into nuclear fuel. No Iranian export of enriched uranium means no JCPOA deal. Secretary of State Blinken has failed to understand that. The supposedly ready to be signed return to the nuclear deal is now in jeopardy.”

    Plus, even if sanctions are lifted on Iran, Iran is friendly with Russia & China and may collude with Russia to keep oil prices for Western customers high. Why not?

    The West has shot itself in the foot, and people in the West have been thoroughly brainwashed to hate Russia and support Ukraine. Even if some brave Western politician wanted to mend relations with Russia, I don’t think the brainwashed public would go along with it. We’re talking a McCarthy era witchhunt mentality, except maybe worse.

    Germany may be an exception, because German industry is screwed without Russian resources (and Russian buyers of German products). At the moment German politicians are U.S. puppets and the German public has bought into the Western anti-Russia, pro-Ukraine propaganda, so a political shift in Germany may take a few years, but nonetheless seems likely to me.

  6. Mark Pontin

    Ian: ‘One of the main reasons that Iran is finally getting a renewal of the Iran deal is that the West needs oil and gas supplies from Iran back on the market.’

    Hilariously, the US is now trying to talk to Venezuela, too.

    It’s not clear cut that Iran any longer wants — let alone “needs” — a deal with the US on any terms the US will like.

    Ian: ‘What happens is probably #2 (targeted sanctions) at first. The West hurriedly moves some production back home (but not much, rentier societies are too high cost for manufacturing) and a ton to low cost western allies, like Mexico. Once it feels confident, it ratchets up the sanctions and we are in full cold war. I’d guess 4 to 8 years, but it’s really hard to time these things.’

    I dunno. I wouldn’t be so sure that in 4-to-8 years there’ll still even be a US stable or wealthy enough to enact this scenario. There’s a reason I moved out and it’s that the US has many markers of a collapsing state like the USSR — and I’m someone who was interested in Soviet history and then had the chance as a journalist to talk with people who’d been high up in the Soviet bioweapons program and thus also in the KGB (it seemed like almost anybody with a high enough managerial position in the USSR was also required to be a reporting KGB officer) about what had happened. There’s a lot of similar dysfunction.

    What the US has that the USSR didn’t is that the globally dominant tech companies like Apple, Google/Alphabet, Amazon, MS are American — but only nominally so, since they can have their headquarters for tax purposes in, forex, Ireland. Point being, those companies can float free to some lesser or greater extent from America, while still maintaining a base there. And this is generally true of tech money. As with Microsoft and Alphabet/Google’s CEOs, too, so with the populations of many of the VC companies: when you go around them these days there are surprisingly few white American partners, and when they are white they’re Jewish white Americans; a lot of folks with backgrounds in East Asia, the Asian sub-continent; some Armenians and Nigerians; and plenty of whites other than Jewish Americans, yes, but they’re often Brits, Australians, and continental Europeans. Such people can live overseas from the US in their home countries or New Zealand, and report in in person only once a month.

    So I can envision the SF Bay Area, Boston (for biotech), maybe NY, parts of LA and San Diego, and Chicago, remaining functioning enclaves of wealth in a continental US Federal state increasingly in a state of collapse.

    Ian: “For too long we have thought that money and financial games were the same thing as an economy …That world is ending. It was killed by us, with our sanctions, ironically.”


    The “wealth” of the “richest country in the history of the world,” is in large measure composed of IP rents, financial assets and extraction schemes, and artificially inflated real estate prices — artificially inflated by the Fed and the banks even as there are 17 million vacant homes across the U.S., according to the Census Bureau. It’s Maya — illusion. And this historical moment feels like the moment when the coyote or Yosemite Sam has already run off the cliff, but hasn’t looked down yet so the illusion ends

    That is, if the historical moment isn’t 1914.

  7. Z

    The upcoming inflation was sooooo worth appointing Blinken, Nuland, and Haines as the top three people at Weekend at Biden’s State Department. A small price to pay for such competence and integrity!

    Without those three misrepresenting U.S. interests this situation would not exist.

    Perhaps Tony, Mrs. Robert Kagan, and Avril can explain to the U.S. working class why refusing to guarantee that Ukraine would not be part of NATO was in our best interests and why it was so f*ing important that hundreds of millions of people across the world will have to suffer … and many of them starve … over it.


  8. someofparts

    I’ve been thinking that our leaders must be centipedes, because as many times as they have shot themselves in the feet, they must have more than two of them to still be walking.

    I am considering asking the investor I have parked by piddle of inheritance money with to just switch my holdings to gold. Any opinions on that would be welcome.

  9. someofparts

    Also, off topic but not too much out of line I hope … I realize that close moderation of comments is a lot of hard work. Just want to say that I think it is really paying off. The quality of commentary here has just been outstanding lately.

  10. Lex

    The end of the essay is important. This is beyond the end of the American century or empire. It is shaping up to be the end European global dominance going back to the 15th century. (Aside, the recent book “born in blackness” presents a good summary of how European power and wealth is derived from finances and Africa primarily, Asia a bit later but not the book’s focus.)

    It is now clear that “the whole world” consists of europeans and the rest of the actual world is turning away. There are no other conclusions from who abstained and who isn’t implementing sanctions. I’m with Ian that this was going to be a much longer process but the US shot itself in the foot.

    I’m having a hard time imagining a scenario where Europe and the US are not destabilized over the next couple of years. Europe now has something like 17,000 stinger and javelin missiles that are completely uncontrolled, they’ve invited far-right militants (and others) from all over the world and are likely to see economic dislocation. The US barely avoided a coup / color revolution a year ago and Covid revealed the extreme fragility of the US economy.

    My only disagreement might be the reliability of Mexico as a location for restoring manufacturing to the Western Hemisphere. Is Mexico a US ally? Can the US actually control Mexico?

  11. Z

    Perhaps Tony, Mrs. Robert Kagan, and Avril can explain to the U.S. working class what the upside was to the U.S. in refusing to guarantee to Russia that Ukraine would not be part of NATO …


  12. Soichero Rocks

    Russia is one guy — Putin. Down goes Putin, down goes Russia. Not so with America. America has shown the system runs itself on autopilot and it matters not who is at the helm because the helm is largely symbolic and a joke at this point, starting with Reagan and it’s gotten more so with every POTUS since. Trump? A clown. Biden? A clown. And yet the beat goes on even despite a pandemic. And the beat goes on. Putin goes down, the beat in Russia is not going on. That’s the problem with putting all your power eggs in one basket.

  13. someofparts

    Responding to the comment from Z about the battle lines between workers and rulers becoming sharper, I would say that watching the way the workers of Ukraine have been manipulated has given me a lot to think about. Of course Ukraine is just a version of what we have done in so many other countries we destabilized, but those took place in different cultural circumstances which muted my understanding of the process, given the inevitable western lens through which I view things.

    Even now, before widespread domestic hardship has started to bite, the blitzkrieg of propaganda about Ukraine has been astonishing. The degree to which everyone around me in the real world has succumbed to it is also startling, despite being expected.

    Imagining how our leaders will deal with matters as the vise grip of hardship tightens, I worry about the possibilities. If the volume of propaganda and censorship even can be escalated, it will be. Beyond that, I would expect the number of police to increase as well as the volume and ferocity of weapons at their disposal.

    These are things I have always expected. Now, in addition to all that, I am wondering if eventually they will recruit and train some form of fascist domestic jihadists. The good old-fashioned practice of pitting elements of the population against each other will always be one of the tools in their devils’ toolbox. I just fear that as circumstances in the country devolve beyond anything we could have ever imagined, the day when fascist death squads are inflicted on our communities may arrive.

  14. Z

    As badly as the Iraq War went, the way the geo-political pieces laid on the global chess board back in 2003 there was a stronger case to be made that invading Iraq was in the U.S.’s ultimate amoral interests than us prodding the Russian bear into China’s arms in 2022. This here is an easily predicted colossal diplomatic f*up in that the downsides to the U.S. clearly outweighed the upsides with the ultimate upside I suppose being regime change in Russia and having a country with the most nuclear weapons in the world placed into a very uncertain and potentially volatile internal power struggle. Even if Putin was ousted, the Russian people are very unlikely to allow a Larry Summers and the Harvard Boyz reunion tour in their country.


  15. anon

    I agree with Dan Lynch’s assessment. I have assumed that Iran would join the Russia and China alliance. The Middle East and Latin America should have figured out by now that the USA cannot be trusted, which is why none of these countries should go for the third option of trying to cut a deal with the USA. As the saying goes, fool me once, shame on you; fool me twice…

    As for the McCarthy era brainwashing, watching the anti-Russia/anti-China propaganda on the news is unbearable. I only participate in the torture because I have an older Baby Boomer relative staying with me who watches the news ritually every night. If only the media had been so dedicated to reporting the truth on Iraq and Afghanistan every night for the last twenty years.

  16. ptb

    Sanctions not going quite as planned, I think. Third world openly casting doubts on the selective outrage, but more importantly, countries like India and Pakistan are unwilling to starve their people to punish Russia and and defend US hegemony. China, sitting pretty as the strategic winner without having to do a thing. Announces situation is provoked and continually inflamed by US. EU energy markets in complete panic.

    Hints being given that we’re now setting up for more traditional methods of exercising global leadership – active US/NATO military involvement. Started now with reports of UK mercenaries and addition (probably already there under the table) of assistance via comm/intel/targeting services.

    Russia proceeding full steam ahead – somewhat inexplicably to me, as they’ve secured some big victories on the ground, probably more than can be defended for any length of time, and really ought to be cooling things down. Ukraine, on the other hand, trying every trick in the book to draw NATO into the war.

    I’m now expecting Vietnam-like stepwise increase in US force commitment.

  17. Mark Pontin

    Dan Lynch: “German industry is screwed without Russian resources (and Russian buyers of German products).”

    Lex: “Europe now has something like 17,000 stinger and javelin missiles that are completely uncontrolled, they’ve invited far-right militants (and others) from all over the world and are likely to see economic dislocation.”

    As Henry Kissinger once said: “To be an enemy of America can be dangerous, but to be a friend is fatal.”

  18. bruce wilder

    For decades, those who try to understand the world thru reference to its architecture, structures and functions, have been producing warning critiques: “this is what is happening and there will be consequences of necessity that follow”. These may have been accompanied by moral admonitions derived from humane good will. Or, simply pragmatic recommendations of a utilitarian or “realist” character.

    It has not mattered to the conduct of policy in the Anglo-American dominated world. Policy —foreign policy, economic policy — has been in neoliberal/neo-conservative hands. They have told their stories, of righteous intent, of virtue, of techno-wonders, shaping reality (consensus reality at least) to their own satisfaction. To my mind, their use of “morality” is twisted and I suppose so cynical that “hypocrisy” cannot be applied as a characterization.

    This divergence in views really has evolved into virtual “worlds”, reinforced by the guardians of social media platforms and “communities”, in which prior belief justifies filtering out evidence as well as alternatives.

    Somehow, I think, Ukraine may be the crisis that cracks the egg. The power of “sanctions” to compel states as opposed to immiserating peoples has never been shown to my satisfaction. Now, as Ian suggests, the scale and breadth of sanctions, combined with the capacity of this particular sanctioned state to retaliate, suggests the immiseration of home peoples may become acute enough to matter. Again, the argument is, “reality strikes back.”

    But, before the egg cracks, the story-tellers may have their day once again. It is really hard to see how Putin’s venture can be managed to a settlement with so many of the principals enveloped in the virtual world. In story-telling world, the invasion is a colossal blunder with no good outcome on Putin’s terms, no victory possible that I can see.

    Putin may, indeed, fall from power — sacrificing him may become a path out for Russia, a story that could quell / short-circuit the Ukrainian insurgency / quagmire and NATO rearmament so ardently wished for by the ghouls of No Virginia.

    But, the shock of Ukraine and the threat of cutting off Europe from Russian resources is a bell that cannot be unrung. The U.S., dominated by globalist financial elites heavily invested in the Anglo-American hegemony, with all its accommodation of rentier predation and corruption, seems unlikely to adapt to the changed global landscape. Their neocon servantry pay no attention to feedback from reality themselves, so if the paymasters refuse to do anything sensible on behalf of the country, well, a last “victory” for the old order may be their final undoing as well. We live in hope.

  19. Lex

    I don’t think Russia stops until it has eliminated the forces in Donbas and Mariupol at least. Odessa and complete control of the Black Sea coast seems like a second goal. My understanding is that a tactical victory on the north side of the Donbas cauldron was achieved today. If that’s true, the bulk of the Ukrainian military is trapped. Mariupol still has many civilians. Russia is attempting to do what it has done in Syria: surround the city, evacuate civilians and then mop up. It appears that Ukrainian nationalist battalions have blocked civilian evacuation. Supposedly the French were going to monitor the next humanitarian corridor out of Mariupol. There’s no reason to think that Russia has blocked these evacuations, though US media claims otherwise. If Russia had no concern for civilians, the passenger trains, internet, phone etc would be destroyed. Russia has the firepower to do a US style “flatten everything” assault and has not.

    My expectation is that Russia wants control to Kiev (roughly) and to degrade beyond the point of reconstitution the significant military capability of Ukraine. All reasonable accounts suggest that the total Russian troop levels for the initial operation were <80K. That explains the “set backs” given that it is rare to enter another country with fewer attackers than defenders. I assume Russia hoped that the Ukrainian army would have good sense, but there are reports that it no longer has full command of militants.

    But, I also think that barring a significant escalation we will not see Russian strategy or tactics change. If the reports are true, the major objectives of Russia are now a matter of time/cost rather than success/failure. That said, significant escalation is certainly possible and the behavior of the west is disturbing. My assumption is that Russia is holding back to counter the escalation of it comes.

    I’m no military analyst, but I am able to get some primary source, original language news (Russian is rusty these days) and have followed Russia deeply for 20+ years, including living there years ago. I don’t “trust” Russian information but so far it has been far more reliable than that coming from the west. My read is that Russia is trying to avoid the escalation and it’s important to remember that mass Ukrainian casualties will not be popular in Russia. Families have intermarried for hundreds of years now. In real terms this is closer to a civil war than a foreign one.

  20. Z

    All it would take to end this IMO would be for Russia to “accidentally” shoot down one of Israel’s military planes dropping bombs on the Syrians.

    Zelenskyy would then be given the green light by his benefactors to come to a peace agreement with Russia largely, if not completely, on Putin’s terms.


  21. ptb

    Lex, I agree with much of that. The propaganda is pretty thick on all sides.

    I’m also not a military analyst, but don’t share the interpretation of the gung-ho pundits on the Russian side – e.g. actually discussing what they claim is a realistic possibility of occupying half of Ukraine. And the Ukraine side media, plus the US puntitry echo of it, is off on another planet entirely.

    I agree that disarming the Ukrainian military formation adjacent to DNR/LNR is a key goal for Russia. That was the expectation since last year. Very much hoping it becomes a stopping point. Hope the Kiev region is not an end goal for Russia – don’t see how that line played out to its conclusion can possibly end well at all. Besides that, IMO Ukraine is very unlikely to accept loss of most of their coastline and biggest electric plant. At this point the most overzealous nationalistic elements of their government are running the show, insofar as the government has control.

  22. boots

    Your argument reminds me of Giovanni Arrighi’s in the book “The Long Twentieth Century.” The book’s argument is explored in this book discussion by the Trillbilly Workers Party podcast:

  23. Z

    Zelenskyy’s brave war cry for Ukraine: Give us NATO or give us death!

    If he ain’t bought-and-paid for he must be one of those rare NATO zealots you sometimes hear about. The transnational patriot types that have NATO tramp-stamped on their lower back.

    I love him, ma. He’s a really nice guy. But all he ever talks about is NATO!


  24. Z

    This guy has got it right.

    Europe won’t stand with the U.S. much longer on this. If they do they risk social, economic, and political instabilities in their countries.

    The eco-cidal idiocy of using one of the world’s greatest grain belts as a war ground has to concern them as well.


  25. someofparts

    Craig Murray has a post up saying that Putin’s determination to protect civilians and not take a shock and awe approach has been taken advantage of by the Ukranian neo-Nazis and the American press. He suggested that if the objective has been to make it clear to Nato and the US that they must back off, shock and awe might have been a better strategy. I have no idea if he is right or wrong about that, but it was an interesting idea that I hadn’t heard from anyone else.

    The news tonight talked about expanding sanctions to include oil, but it sounds like they are just making an official statement to cover their tushes for something that is actually already out of their control. I heard that, because they have been spooked by the other sanctions and the seizure of Russia’s assets, oil tankers will not approach Russian ports and banks will not insure them even if they do. So it sounds like the US has inadvertently triggered oil sanctions anyway, and now they are just trying to make it seem like they did it on purpose.

    M. Pontin – Thanks for that link on Venezuela. I envy you being able to escape this place. Wish I could follow your example.

    Earlier tonight I read that Hillary may be planning to run again in 2024. You can’t make this stuff up. Guess she thinks ratcheting up hysteria against Russia to the point that we are on the brink of WWIII looks good on her resume. Someone in NC comments said that it feels like we are watching the Monty Python crew act out Guns of August. Amen to that.

  26. different clue


    Whatever I may “think” about things and stuff, my inertial behavior says I am invested in the ongoing survival of Snivelization as We Know It. My job, my little co-op townhouse dwelling unit, my little stockpile of cans of canned food in cans, etc. My little hobby garden.

    If you think gold is the thing to hold, who am I to say otherwise? You might want to be in physical possession of the gold somewhere well hidden within your own dwelling unit. If we have a real financial-economic hiccup and you suddenly need that gold instantly, will you be able to pry it out of whomever’s strong hands are wrapped tightly around it?

  27. VietnamVet

    WWIII has started but we are in the initial stages like WWII before Poland was invaded. The corporate controlled West is pulling out all stops to get Russia mired in a guerrilla war in West Ukraine. Western oligarchs desperately want control of Russia’s resources to make a profit.

    Except the world is igniting. A stake has been driven through globalism. Western government is totally dysfunctional. The 7 day average daily deaths in the USA is 1,436 and stealth omicron is increasing exponentially but mask mandates are ending. Congress just passed a bill out of committee that will ban Russian oil. The cutoff of Russian oil, natural gas, grains, and metals plus the missing workers will trigger a western depression. The reigning western Neo-liberal-conservative leadership is a death cult — profits over human life.

    If there is no written peace treaty partitioning Ukraine and if Russia requires payments in gold, late next winter, with Europe freezing to death, Russia will invade NATO states that have not joined the Russia-China-Iran Axis (i.e. Poland) that are still resupplying Ukrainian Freedom Fighters/Neo-Nazis. The only way to halt the invasion is with tactical nuclear weapons.

  28. different clue

    Another video from Beau ( what . . . . again?) Well . . . yes.

    It is called ” Let’s talk about Biden, Congress and Russian oil . . . “. He discusses the just-forming drive in Congress to forbid import of oil from Russia to America. Congress may well be thinking about how to try making it difficult for Russia to sell oil anywhere else too, I don’t know. Biden doesn’t want to do that. Beau thinks such sanctions against Russian oil would be a very bad idea and he says why.

    About the new rising tide of McCarthyism 2.0 . . . is it ironic or does it just seem that way that the screechiest loudest most committed McCarthyists are the Pink Pussy Hat Clintonites?

  29. Oregoncharles

    (After briefly consulting Google Maps) Probably a quibble, but Russia does not have a long land border with China. The only place they connect is Manchuria (some of which Russia took from China), and possibly a tiny stretch between Kazakhstan and Mongolia. Manchuria is a very long train ride from Moscow.

    This becomes moot if Kazakhstan and/or Mongolia cooperate; since they’re sandwiched between the two great powers, that’s pretty likely. But they could also sabotage the connection, making it less secure.

  30. different clue

    Here’s something unintendedly funny in that it might have been a kind of accidental classification error on the Russiagov’s part . . .

  31. someofparts

    I am embarrassed by my own foolishness here, and by the foolishness I encourage in others. My apologies Ian. You deserve much better. I’m going to lower my profile for a while and try to be more circumspect in what I say in this community going forward.

  32. Soichiro Rocks

    Watched an NBC news clip on YouTube where the reporter was interviewing, in Poland, recently arrived Ukrainian refugees. A number of them were Russian-speaking Ukrainians from the east and southeast of Ukraine which is heavily dominated by Russian-speaking Ukrainians. One female refugee with a child informed that she is Russian-speaking and has traditionally watched Russian television as her go-to source for news and information. She’s had it with Putin. She said he is a liar. The news on Russian television is a lie. Putin does not care a wit about Russian-speaking people and instead is using them as foils as he is using “neoNazis” as foils to invade and occupy Ukraine. The woman said, “look at me, I have had to flee Ukraine and I’m a Russian-speaking Ukrainian. Putin is not saving me. I’ve fled the country to save myself and child from him.” I guess that was Fake News, right? NBC coached the woman to say that? She was a rare exception and most all Russian-speaking people in Ukraine have welcomed Russia with open arms, hugs & kisses and beds of roses, right?

    Putin’s invasion of Ukraine has nothing to do with his stated reasons. NATO is not a threat to Russia proper. It is a deterrent, and a weak one at that as these past years have proven, to Russian expansionism. NATO would never invade Russia. Never. It is absurd to claim such a ludicrous thing. Hell, NATO is pooping its pants over the possibility of a nuclear exchange with Russia, hence no No Fly Zone, and Putin is taking advantage of NATO’s cowardice in confronting him as NATO refuses to act under the aegis of level-headedness.

    Putin’s invasion of Ukraine is one of two things and I can’t be sure which at this point and in fact it may be both.

    1. It’s about resources, plain and simple. Ukraine is rich in resources. Just ask their oligarchs. Resources, not money, equals power and Putin is about power if nothing else.

    2. Putin has truly lost it. He’s gone insane and he’s so powerful within Russia no one in Russia, not even the oligarchs who have prospered and thrived during his reign as the Don of Russia, can influence him let alone depose him.

    Until Putin’s recent invasion of Ukraine, I was dubious about 2. above , but now I’m not so doubtful. I think Putin may in fact be insane but this would not necessarily preclude the reason for invading Ukraine being about both a naked resource grab and Putin’s megalomaniacal campaign for a lasting legacy alongside some of the greatest Tsars in Russian history.

  33. Soichiro Rocks

    Western government is totally dysfunctional. The 7 day average daily deaths in the USA is 1,436 and stealth omicron is increasing exponentially but mask mandates are ending.

    Yey! The “neoNazi” Trucker Convoy has been successful in having basic pandemic containment measures lifted. Putin is happy, happy. The American Chamber of Commerce and the American oligarchs it represents is happy, happy. More dead Americans and America’s “neoNazis” are more than happy to oblige him. Those truckers sure do wish Putin was their president. For all intents and purposes, he is their leader.

  34. Mark Pontin

    z: “Europe won’t stand with the U.S. much longer on this. If they do they risk social, economic, and political instabilities in their countries.’

    Tony Blair is now worth $60 million –a man who couldn’t use a computer to send email last I heard — because he sent UK forces into Iraq for Gulf 2 alongside the US military. This despite massive resistance against it by much of the UK population.

    Gerhard Schroder is now worth a mere $20 million, conversely, because — having resisted the US on the same war — he had to get his payday from the Russians by being chairman of Russian gas giant Rosneft and, as of last month, was in line to join the board of Gazprom.

    The interests of EU elites and EU populations do not necessarily align.

    Yes, in the medium term those nations’ populations will be screwed by their elites’ alignment with idiot US policy elites — as will be the US population — but as with the 2008 banking crisis, “IBGYBG” (“I’ll be gone, you’ll be gone”). Because the Liz Trusses, Jen Stoltenbergs, and Ursula von der Leyens on the world are not very bright people — where and how else are they going to get their paydays.

    So, even though the US is clearly a collapsing hegemon, while it can print dollars to buy these people and those dollars have worth in the bank, EU political elites will largely carry out US policies at the expense of EU populations.

  35. Lex

    Soichiro Rocks,
    Putin is a terrible human being, just like every other world “leader”. But have you considered many of your statements? You’re drawing conclusions of mass opinion from one interview that may be random or may be chosen for its content? I wouldn’t expect anyone to be happy with war; and that’s the difference. People who experience it directly cannot be happy with it. People who read about it on the news seem to enjoy at as a blood sport pastime with which they confirm their ideology.

    I’ll ask a couple of questions. If NATO is no threat to Russia proper, then what is the purpose of its expansion? Wouldn’t designation as a neutral country work better? Because the global condemnation of Russia for invading a neutral nation would be unanimous.

    Does Russia need Ukraine’s resources? Aside from agriculture, its resources are primarily coal and potential gas. If the world is turning away from those, and Russia has lots of that already, what’s the marginal benefit to Russia in controlling those resources?

    What evidence do you have that Putin is “insane”? It seems like a genocidal maniac invading Ukraine would have just leveled it with overwhelming fire power and wouldn’t announce cease fires every time there were diplomatic talks. Would an insane leader leave railroads, cell networks and other civilian infrastructure generally intact? Our “rational leaders in the west do not do that.

    Putin is no hero, not in any way, shape or form. But analyzing his behavior from your starting point (which is shared by western political leadership) is both counter-productive and dangerous. I concur with your opinion on NATO. Ukrainian political leadership is coming around to your point of view as well. Is it possible that part of Putin’s strategic goal is to clarify that point to Eastern European NATO countries? And if NATO won’t actually protect them, reason dictates that they find a different method of addressing their security. It’s interesting that the insane guy is the one suggesting they be neutral states, which is actually the rational position for these nations. So my final question becomes, why have they taken the path that they have? Who advised this path and why?

  36. Mark Pontin

    Nothing here that wasn’t explained in Keynes’s ‘How To Pay for the War’ in 1940, although the writer’s invocations of MMT will raise reactionary hackles

    The arrogance of the West’s policy makers is equaled — perhaps exceeded — only by their incompetence.

  37. Z

    Mark Pontin,

    Different times, Mark. None of those times you described necessitated sacrifices by the masses that could clearly be avoided by European leaders not betraying their citizens’ own interests for the U.S.’s. And when a certain threshold of citizens get priced out of living expenses the game changes. As I suspect you agree: life is analog, not digital, and amplitudes matter in real life. Not every situation is simply a one or a zero.

    Time will tell.


  38. Astrid

    Russia is selling natgas to Europe so far to 1) ease normalization with EU after end of active hostilities and 2) because they’re making so much freaking money right now, even if they can’t access or spend it immediately, it’s leverage for handling the nationalization of foreign owned property. Willingness to sell more will go away if 1) doesn’t happen in a hurry. Europe will buy Russian petroleum and natgas one way or another, but they’re setting themselves up for buying it very expensively through MEA and Chinese intermediaries.

    I just can’t fathom Europe on persistent natgas prices that are 16x or more than what they were a year ago. Yes, they have a smaller carbon footprint and northern European homes tend to be very well insulated, but how can any non-rich family afford that for any amount of time? And then the knock on effects on fertilizer and crops.

    MEA authoritarians get it and are doing everything they can not too break on Ukraine, are they now somehow better for their people than Western liberal democracies? Or just less secure about their bolt holes…

  39. Ché Pasa

    From far away in the wilderness, it seems to me that at least some of the Russian actions in Ukraine are revenge driven. Revenge for the Odessa Massacre of 2014, revenge for the Mariupol Massacre of 2014, revenge for the overthrow of Yanukovych in Kiev/Kyiv in 2014, revenge for the ongoing genocidal assaults on the Russian-speaking Ukranian populations of Donbas and elsewhere in the region. From the Kremlin’s perspective, there is always a Right to Protect Russians and Russian speakers in what was the Soviet Union, usually not through military means, but “every option is on the table.” The rightists/fascist/nazis in Ukraine have engaged in some truly grotesque and outrageous — and bloody — behavior toward the significant Russian and Russian affinity population of Ukraine, and I see a lot of the destruction going on now as “get back” for it.

    “You did this to us; now it’s time for us to do this to you.”

    It is a crying shame. All of it. Of course, what the rightists/fascists/nazis in Ukraine have been doing is totally airbrushed from Western propaganda. It never happened, or if it did, it wasn’t that bad, or if it was that bad, the Ruskies deserved it. Holomodor!!!1


    Yeah, no. How do you get past the need for revenge? Westward from the Russian border up to the Dnieper and much of the area beyond, the Ukraine is culturally and spiritually Russian. It’s not a bad thing, and up to the events of 2013-2014, there was little contention over it. After all, most of the Ukraine had been part of the Russian Empire and Soviet Union for hundreds of years. Those bits that had been Austrian until wrested from the Hapsburgs were not so easily integrated into the Ukrainian SSR, and it’s from there and from the formerly Polish bits that most of the anti-Russian fury and violence originates.

    Stamping it out this way, though, doesn’t make any sense. It just infuriates the nazis more.

    And I think it’s past time for Westerners (ie: USandNato) to understand that our elites, our governing class, our overlords, are fine with nazis/fascists/rightist authoritarians of all sorts, not just in Ukraine, but throughout the creaking, rotten empires they rule. They admire them, they use them, they are (for the most part) protected by them.

    Yeah, even when the overlords are… (shh) Jewish.

    The signs of catastrophic devolution from where we are today are everywhere. It doesn’t have to be this way, but there is not a whole hell of a lot that we can do about it, is there?

  40. Mark Pontin

    Astrid: ‘I just can’t fathom Europe on persistent natgas prices that are 16x or more than what they were a year ago.’

    EU neoliberal policymakers argued bitterly with the Russians — who wanted stable 30-year fixed-rate contracts — so as to get spot markets with the prices adjusted by demand.

    The West’s Dunning-Kruger elites in action, with their almost incomprehensible incompetence at every step of the way.

    Astrid: ‘And then the knock on effects on fertilizer and crops.’

    There, they may get a reprieve. It’s 2022 and cheaper, better biotechnological alternatives to Haber-Bosch-enabled synthetic nitrogen have emerged (though not as soon as necessary to not impact places like Egypt and Turkey this year) —

  41. different clue

    @Mark Pontin,

    A lot of material has been written about no Haber-no Bosch bio-nitro fertilization of crops with respect to their nitrogen needs in the pages of Acres USA. Certain farmers have been producing this way for years now . . . . names such as Gabe Brown, Gary Zimmer, Mark Shephard, and so few other farmers that they could all be named with enough research and patience.

    Perhaps if natgas prices can be kept high enough long enough for Haber Bosch nitrogen to become unaffordable — as in farmers actually cannot afford to buy any — perhaps then the petrochemical cancer-juice mainstream farmers will swallow their pride and learn nitrogen bio-fixation from those who have made a successful business from eco-bio-correct farming for several decades now. If they are too proud to learn, perhaps they will all go out of business over the next decade or so and their land will pass into the hands of people who are smart enough to want to grow food without Haber and without Bosch.

    Question: How many psychiatrists does it take to change a light bulb?
    Answer: Only one. But the light bulb has to want to change.

    Acres USA . . .

  42. Trinity

    Mark, I’m not convinced it’s incompetence. The usual model is to set up deals where they can take a slice as the money moves or as a “finders fee”, and the extra money usually comes from the public or the government. When money is changing hands, and only then, the public and the government are one and the same. When it’s decision time, the government is NOT the public.

    So it just smells like a deal, and the public will pay the extra that will line their own pockets.

    On another note, it’s never pretty when sociopaths don’t get their way. Along with redirecting attention away from their poor decisions by inventing narratives, scapegoats will also be chosen to take the blame for any “negative” (from the sociopath’s perspective) outcomes. “Negative” means anything that threatens their fantasy of their own greatness, or reduces their power.

    They may eventually slink off, but they’ll be biding their time, like Hillary, until the moment is right and it’s THEIR boot once again on the neck of the world, choking out life, and making it really, really hard to breathe.

  43. Mark Pontin

    different clue wrote: “A lot of material has been written about no Haber-no Bosch bio-nitro fertilization of crops with respect to their nitrogen needs in the pages of Acres USA. Certain farmers have been producing this way for years now . . . . names such as Gabe Brown, Gary Zimmer, Mark Shephard”

    To be sure.

    Pivot Bio enables that on an industrial scale with — to be clear — microbes enhanced for the purpose beyond anything in nature. The farmer just releases them in their fields once annually and that’s it.

    Indigo treats seeds with microbes designed to enhance plant microbiomes — plants have microbiomes just like humans and every other eukaryotic cell-based organism — and as in every other organism the plant’s microbiome does much to dictate its overall health or lack thereof.

    “Perhaps if natgas prices can be kept high enough long enough for Haber Bosch nitrogen to become unaffordable ”

    See above. Pivot Bio is, simply, far cheaper, better, and easier than buying loads of current synthetic-nitrogen-based fertilizer and then spreading it on fields for every crop and harvest. The farmer puts them out there once a year and the bugs do the work without the environmental impact.

  44. Mark Pontin

    Trinity: “So it just smells like a deal, and the public will pay the extra that will line their own pockets.”

    There’s plenty of that, too: See my comment above about the interests of EU populations and ‘Atlanticist’ elites not aligning.

    And sure, it’s a great deal from the POVs of US energy companies and their execs and shareholders to force the EU off Russian gas and onto vastly more expensive LNG supplied by those energy companies. But it’s short-term, IBGYBG thinking, like the destruction of Boeing by its executives

  45. bruce wilder

    File this under “delusional weirdness”: the NY Times reports “Elena Branson was charged with violating federal laws requiring agents of foreign governments to disclose their official ties” (in absentia, apparently, as Ms Branson fled the U.S. some time ago in fear of this prosecution).
    Examples of this woman’s nefarious subversion include trying to arrange “a friendly hockey match” between Russian officials and NY Police and lobbying against taking “Russian” out of the name of an historic building in Hawaii.

    Nowhere in the article is there any indication of whether registering as “a foreign agent” for the many people who run similar organizations for, say, France, which funds a network of centers, libraries and institutes promoting French culture throughout the world.

    I take no brief for Russia, but I find the mentality that casts all Russian cultural promotion and propaganda as per se illegitimate to be kinda scary. It is very authoritarian.

  46. different clue

    @Mark Pontin,

    I am not a farmer. I am a semi-burbanite with a little hobby garden. I read about these things and try to understand them and apply some of them in my little hobby garden.

    From what I as a mere layman have read about mainstream farmers and farming, the fact that bio-pivot is cheaper than Haber-Bosch as a way to capture nitrogen for growing plants will make no difference to many mainstream farmers. They have their pride and their chemicals and they will not use any such hippie technologies. They will have to be price-unaffordability tortured into using Pivot Bio. If many of them would rather go out of business ( ” I’d rather fight than switch”), then out of business they will go.

    I have also read that many heavily indebted farmers are hostages to their lenders, who write out exacting and detailed prescriptions of every chemical they will buy and use at every point in their operation or else their loan will be called in. It is something like the “contract-enslavement” under which “independent chicken factory-farmers” produce chickens under contract to such black hat perpetrators as Tyson Foods.

    Decades ago I remember talking to a sugar beet grower who explained that the only places he could even send his sugar beets to for refining into sugar demanded that he grow very specific sorts of GMO sugar beets. I don’t remember getting into whether they prescribed what chemicals he would be forced to use if he wanted them to buy his beets . . . . but they wouldn’t buy his beets unless they were specific GMO beets.

    So powerful opposition forces and also powerful cultural inertia will have to be smashed down and crushed and blasted out of the way in order to force the use of, let us say, Pivot Bio upon a completely unwilling mainstream agribusiness sector and its master/owners.

    The only thing that we who would like to see something better emerge can do is to buy as much as possible only from the kind of farmers who would rather use Pivot Bio or Gabe Brown/ Garry Zimmer/ Acres USA methods and etc., to keep them alive as part of a parallel oppositional food system . . . . and hope the petrochemical GMO cancer-juice food system goes catastrophically and comprehensively extinct, and then hope that the parallel oppositional food system community is able to swoop in and pick up the pieces, decontaminate them, and put them into eco-beneficial use.

  47. Olivier

    This new development:, no less than an NYT editorial by an advisor to the Chines government, does not bode well for the steadfastness of Chinese support. They are clearly extremely reluctant to be dragged into this.

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