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For your edification, an assessment of the geopolitics of Ukraine. Niall Ferguson offers an analysis of a possible world where the Biden administration actually has an idea of what it is doing. This may or may not be the case, but it is worth some attention:
The Biden administration not only thinks it’s doing enough to sustain the Ukrainian war effort, but not so much as to provoke Putin to escalation. It also thinks it’s doing enough to satisfy public opinion, which has rallied strongly behind Ukraine, but not so much as to cost American lives, aside from a few unlucky volunteers and journalists.
The optimism, however, is the assumption that allowing the war to keep going will necessarily undermine Putin’s position; and that his humiliation in turn will serve as a deterrent to China. I fear these assumptions may be badly wrong and reflect a misunderstanding of the relevant history.
So, the Biden administration is letting the war go on, and it is not using its leverage to ask the Ukrainian president to find a negotiated way out of the carnage. It is sacrificing human life and human property because it believes that it will thereby overthrow the Putin presidency-- and pave the way for more liberal democracy:
Prolonging the war runs the risk not just of leaving tens of thousands of Ukrainians dead and millions homeless, but also of handing Putin something that he can plausibly present at home as victory. Betting on a Russian revolution is betting on an exceedingly rare event, even if the war continues to go badly for Putin; if the war turns in his favor, there will be no palace coup.
As for China, I believe the Biden administration is deeply misguided in thinking that its threats of secondary sanctions against Chinese companies will deter President Xi Jinping from providing economic assistance to Russia.
Ferguson posits that China will be undeterred by the power of Western sanctions. As the old saying goes, time will tell.
In the meantime, allowing the war to continue risks producing worldwide famine-- a minor detail-- since Ukraine and Russia provide so much of the world’s grain and fertilizer.
As for the damage the Biden policy might be doing to the dollar, we have already reported, as have many others, that Saudi Arabia is considering selling oil to China for Petroyuan, not Petrodollars.
Now we learn, thanks to David Goldman, that India is colluding with Russia to evade the West’s Draconian sanctions regime:
India and Russia will have currency swaps in place to finance trade in rupees and rubles, bypassing the US sanctions regime against Russia, the president of India’s export association told CNBC Wednesday (March 23).
Several of India’s state-owned banks will execute the swaps under the supervision of the Reserve Bank of India, starting as early as next week, according to A. Sakthivel, president of the Federation of Indian Export Organizations (FIEO).
Although the volumes of prospective trade to be financed under this swap arrangement are small, the India-Russia agreement, if executed, would be the first open departure from dollar-based system of international trade financing.
The US sanctions regime doesn’t extend to Russia’s oil and gas shipments to Europe and Asia, which earn Moscow more than $1 billion a day, and Russia customers do not need to seek alternative financing mechanisms. The India-Russia swap, though, is an open break with the dollar regime.
So, a crack in the sanctions regime. A crack in a policy that seeks to punish and to cause pain, but not to solve a problem. Keep in mind the human cost of what we are allowing to happen in Ukraine, and then move on to imagining what will happen if the American dollar loses its place as the world’s reserve currency.
3 comments:
Excellent post/. You echo my sentiments on the St. Zelenskey situation as well. Putin could bomb Ukraine into the Stone Age or turn the country into a piece of glass if he wanted to, thereby preventing Russian casualties. He’s not doing that. Sure, I think Putin’s an asshole, but he’s a predictable, rational one. This is geopolitics. Is the U.S. or NATO’s desired outcome to turn Ukraine into Afghanistan? If yes, that’s really sickening. Not only for the Ukrainians living in a war zone, but the millions who will starve without Ukraine’s wheat — compounding food disruptions after two years of asinine COVID panic.
The most urgent item in all of this is preventing alternatives to the dollar as the world’s reserve currency. Few people seem to be talking about this. Trying to make friends with Iran, while pissing off Saudi Arabia, is not smart geopolitics. China has insatiable needs for resources, while the Saudis need to build a post-petroleum economy. It’s a match made in heaven. Meanwhile, we prattle on about Khasshogi and executing homosexuals. The Chinese will not do this. MBS is an asshole, but he’s a predictable, rational one.
I’m tired of “narratives.” Narratives are tools of control. This magical thinking about electric cars without nuclear power generation, digital currencies, vaccine passports, climate change initiatives, and really really smart people running it all (who are unquestioningly honest, reliable persons) sounds a lot like the agenda of the World Economic Forum. The WEF advocates for a corporatist, socio-techno-bureaucratic bunch of really really smart people running the world. That’s who Western leaders are following, and the future the Biden Administration seems to want. What could possibly go wrong?
If the dollar ceases to be the world’s reserve currency, our $30 trillion national debt goes from an economic abstraction to something punishingly real for every American. Be very, very afraid. This is much bigger than any other issue the outrage news media points the spotlight at. This is the manifestation of crippling economic pain. This us when the shit becomes real.
https://www.usdebtclock.org/
We’ve lost our sense of the dark side of human nature. We are an unserious nation. We elect morons who vote on legislative bills written by lobbyists. We are governed by an overpaid, bloated army of bureaucrats. Our “intelligence community” effectively runs the country using a recipe of blackmail, manipulation and subterfuge. We fawn over celebrity. We are, at present, the most powerful nation on earth — yet we desperately want people to like us, as though geopolitics is like Facebook. We’re not accumulating wealth, we’re drawing on it. Our present geopolitics is irrational, naive and idealistic. That’s dangerous.
- IAC
Thank you-- excellent comment.
"The optimism, however, is the assumption that allowing the war to keep going will necessarily undermine Putin’s position; and that his humiliation in turn will serve as a deterrent to China. I fear these assumptions may be badly wrong and reflect a misunderstanding of the relevant history."
Have we learned nothing in the last 10 years? The assumption that our reaction to Ukraine is all about foreign policy is risible. Doesn't anyone recall "never let a good crisis go to waste"? The Democrats didn't cause the financial crisis, the Covid pandemic, or George Floyd's death, but they certainly amassed political power by managing the resultant hysteria to their advantage. A compliant and supportive media played a starring role in ramping up hysteria through their constant coverage. The "tell" now is that CNN reports virtually only on Ukraine throughout the day and night and dismisses inflation, the border, gas prices and other topics that put Democrats in a bad light.
I suspect the Ukraine crisis will be "solved" when Democrats have decided they've raised their poll numbers to a point where they can avoid an electoral disaster.
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