war

Ukraine War: Russia Survives, EU Dies, China Gains, and USA Wins Big

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Six months into the Russian invasion — “Special Military Operation”– of Ukraine, we are in for a myriad of surprises and geopolitical revelations. The winners and losers are quite the opposite of what the mainstream consensus was back in February. Russia has done much better than any Western geopolitical expert had predicted; and Europeans wouldn’t have supported the war if they knew the calamity that awaited them. China couldn’t be happier for reasons discussed later. And the biggest geopolitical winner so far is the USA. However, US elites might have accelerated the transition to a post-dollar world.

Russia Survives (and Thrives)

What happened to Russia was unprecedented and it’s amazing that Putin is still in power. The West’s financial shock-and-awe attack included confiscating $400 billion of Russian foreign exchange reserves, kicking Russian banks out of SWIFT (the global transaction system), and imposing countless sanctions. All the major Western corporations quickly exited Russia. Europe said it will soon stop buying Russian oil, gas, and coal. “Ruble will turn into rubble,” thundered Joe Biden. The West also confiscated the assets of Russian oligarchs, hoping to instigate a coup against Putin. America claimed that Russia has been turned into a global pariah.

Amazingly, Putin thwarted all those efforts. With capital control and demanding Ruble for Russian oil and gas, Putin not only rescued Ruble but also made it as strong as it was eight years ago (about 60 Rubles per $1).

As a Wall Street Journal article indicated, Russia’s exports in August was 7.4 million barrels a day, merely 8% less than the pre-war level. At the same time, Russia’s revenue from oil and petrochemical products is now 40% higher than it was before the war! Numerous countries stepped up to buy Russian oil and gas, including US allies like India. China, the world’s largest importer of energy, greatly increased its purchases from Russia.

As for consumer products (and possibly military needs), China has stepped in to capture the Russian market. Russians are now buying Chinese cars, Chinese smartphones, Chinese diapers and so on. Win-win.

And Putin did not become a pariah. Indonesia’s leader flew to Russia and invited Putin to the G20 meeting in November. The suave Russian foreign minister, Sergey Lavrov, flew to Africa and made deals with numerous countries, who ignored American threats.

As for the war in Ukraine, while it’s not going as fast as hoped, Russia will win eventually for the simple reason that it is fighting existential threats. Ukraine becoming an extension of US/NATO presents serious security and geopolitical dangers to Russia. On the other hand, about 40% of Ukraine’s population are ethnic Russians and are thus pro-Russia.

As for the Ukrainians who truly hate Russia, they are a minority. Like the Azov Battalion or the Neo-Nazis at a football stadium in Ukraine, shown in the video below:

Within a few months, Russia will capture all the regions where majority of people are ethnic Russians. There will be referendums and those regions will join Russia — just like Crimea did in 2014. It will be the death knell for Ukraine, since all the Russian-majority regions are the most industrial and productive areas. Also, Ukraine will be completely cut off from the Black Sea.

The colored regions are majority ethnic Russians

The Western propaganda has been beyond ridiculous. Every day, there were sensational claims like “Russia’s military is running out of ammunition”…”Russian soldiers are demoralized and are defecting”…”Numerous Russian Generals have been killed” and so on. The pro-Ukraine propaganda is straight out of Hollywood. Cocaine addict and comedian Zelensky was turned into a modern Churchill. Nazis in Ukraine were turned into heroes; cartoonish stories like “Ghost of Kiev” were fabricated; and the US sent tens of billions of dollars of cash and weapons into Ukraine. However, fantasy cannot change reality.

Former British PM Boris Johnson bravely asserted that EU sanctions on Russia will crush the Russian economy. Six months later, food prices in the two countries tell a very different story — up 10.5% in the UK and down 11% in Russia.

Bottom line: Russia is doing fine, at least in the short term. The US hopes to create a long war of attrition to drain Russia’s resources and determination. If Russia can quickly end the war and annex large parts of Ukraine, then Russia will come out of this ordeal as an undeniable geopolitical superpower.

Europe is Dying

Restaurants in Italy light up candles to save money

No hot shower, no heating for the homes, no electricity, no food in supermarket shelves, and no toilet paper! This is the dreadful reality facing Europe. (Germany’s toilet paper company Hakle just declared bankruptcy).

Soon, the average European family is expected to spend €500 a month! And Europe will spend stunning 15% of its GDP on energy.

European leaders must really have bought into the wild American promises. Without preparing for alternative sources of oil and gas, the EU foolishly joined the war against Russia. Now the EU is turning into a third world country, as inflation and unemployment skyrocket, while the Euro has weakened significantly.

Electricity bills have gone up sixfold or more in many countries, imposing tremendous burdens on ordinary people and small businesses. The price of natural gas in Europe is up more than tenfold. Very likely, more Europeans will die due to lack of heating this winter than from COVID over the last two years.

Even large steel, aluminum, chemical, paper, and fertilizer factories all over Europe are being shut down due to lack of natural gas, oil, and electricity; and auto manufacturing — a big component of German GDP — is down significantly. 60% of British factories may go bankrupt.

Germany, the economic powerhouse of Europe, is experiencing the biggest collapse of its industrial base. A country known for its exports and trade surpluses is now having trade deficits.

The devastation to Europe is real and may be long lasting.

Europe’s prosperity was based on cheap oil, gas, and coal from Russia. For two decades, Russia and the EU worked together to build thousands of miles of pipelines, including the Nord Stream. But now the entire infrastructure and partnership are being discarded just because the West is adamant about Ukraine, whose neutrality would end the war.

Russian oil/gas pipelines powering Europe

Sadly, as a willing puppet of NATO and the US, the Europeans are committing economic suicide.

Look at France, where wages have been shrinking and the middle class has already disappeared. Half of all French workers earn less than €2000 a month. Rather than fixing this, President Macron simply lectured that the “era of abundance is over.”

China is not too Unhappy

China will benefit in numerous ways:

  • China can get bigger discounts on Russian oil and natural gas.
  • China will now capture the consumer markets in Russia.
  • The death of European industries will mean bigger global market share for China.
  • The internationalization of Yuan has accelerated.
    • Russia is adding Yuan to add to its foreign exchange reserves, bringing the total to more than more than ¥1 trillion;
  • If the conflict continues, it will distract the US and will give some geopolitical breathing room for China.
  • The Chinese government is also studying the US playbook against Russia to better understand how the US will react in case China invades Taiwan.

America, the Happy Big Slayer of Eurasia

The instigator of all this chaos is the US, which spent billions of dollars over two decades to pull Ukraine into its orbit. Now, the US is sitting back and enjoying the destruction of Eurasia.

The US military industrial complex is happy to sell billions of dollars of weapons to Ukraine, all subsidized by American taxpayers. US oil and gas companies are selling stuff to Europe at exorbitant prices. And the chaos around the world has strengthened the dollar, cementing its position as the global currency and making imports cheaper.

More importantly, the US is eliminating the biggest threat to its primacy — Eurasia. You see, if Russia, China and Europe all got along with one another, they will be prosperous and will make America more and more irrelevant. Eurasia’s GDP is $60 trillion, which is 2.6 times the US GDP!

Hence the divide and rule playbook. By creating a EU-Russia conflict, the US has ensured a weak and crippled Europe. The next attempt will be to isolate Europe from China. Right now, more than 1000 freight trains travel from China to Europe every month. If the US can disrupt that, it can weaken Europe and China at the same time.

Sabotaging Eurasia will prolong the American Century well into the 21st century.

Conclusion

America’s grand strategy seems to be working reasonably well so far. However, it may backfire.

In the worst case scenario for the American Empire, the following things will happen:

  • Russia comes out as a winner by annexing the rich regions of Ukraine.
  • Massive protests and economic devastation in Europe force the leaders to make peace with Russia. (Like this recent protest in France). Remember that winter defeated Napoleon (1812) and Hitler (1941). It looks like winter will defeat Europe for the third time in 2022.
  • China joins with Russia, Iran and other countries in BRICS — which is expanding its membership now — to create a robust and global alternative financial system to circumvent SWIFT and the US dollar.
  • Chinese Renminbi (RMB) goes international; and countries like Saudi Arabia start to sell oil and other commodities for Yuan. This will weaken the Petrodollar, the foundation of American hegemony. US sanctions will become meaningless.

There’s a lot at stake. The next six months will be extremely consequential and will reveal a lot about the future of the world.