Tag: Russia

Eurofragility

SHOT: French demand for Russian natural gas has been on the rise for the last four years. The upward trend continues in the current year as well. From January 1 through June 5, 2019, Gazprom’s gas supplies to France totaled 5.8 billion cubic meters, an increase of 5.6 per cent from the same period of 2018. In 2018, Gazprom supplied to France 12.9 billion cubic meters of gas, an increase of 5.4 per cent against 2017 (12.3 billion cubic meters).

CHASER: Russian natural gas flows to France via pipeline from Germany have ceased. Russia’s Gazprom will reduce gas supply to Italy by 50 percent today, says the energy company Eni.

I wonder how the politicians in Finland, Switzerland, and Sweden who threw away their nations’ neutrality in order to participate in those stunningly self-destructive sanctions are feeling now? The presumably unintended consequences have boomeranged so horrifically on the neoliberal economies that they could not unreasonably be charged with being Russian agents.

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Running on Empty

The Tree of Woe contemplates the global economic order and the reinvention of the Third World in a four-part series.

Part I of this series explained that the US dollar is the world’s first reserve currency that is not backed by precious metals. Instead it is backed by other people’s oil. Because of a secret treaty between the US and Saudi Arabia, petroleum can only be purchased with dollars. Every country needs oil, so everyone country needs dollars and sells imports to the US to get them. Demand for dollars has made the USD the primary American export, allowing the US to deindustrialize and financialize its economy.

Part II explained how the petrodollar has grossly enriched American asset holders (stocks, bonds, and real estate) and painfully impoverished American wage earners. Under the petrodollar system, dollars are created by private banks for profit. These dollars are recycled into the economy by OPEC nations, causing stocks, bonds, and real estate to rise. This profitable exchange is enforced by American military might, which punishes any country that seeks to exit the petrodollar system.

Part III explained that for the petrodollar system to function, America needs to be able to project power worldwide to secure international trade and enforce the system. America secures global commerce and projects military power by commanding the World Ocean, by which 90% of all goods are trafficked. To overcome America’s naval supremacy, both Russia and China have sought to establish control of the World Island, the Eurasian supercontinent that houses most of the world’s population and resources. The Russo-Ukraine War is a proxy war between the uncontested master of the World Ocean (America) and the would-be masters of the World Island (China and Russa).

In Part IV, we’ll discuss how faulty expectations by both sides in the Russo-Ukraine War have led to sanctions of such severity might cause the petrodollar system to break down.

It’s an excellent series, and you’d expect, although my perspective on the military situation is a little bit different. I don’t think Russia expected to quickly knock Ukraine out of the war. I think they hoped to do so with their opening gambit that included the lightning light infantry assault on Kiev, but that Operation Z never depended upon it.

The relatively small number of troops utilized, the way in which Russia has not heavily utilized its air and sea superiority, the second-rate units utilized, and the way Russia has methodically focused on attrition warfare in the Donbass all demonstrate that Russia has been holding its forces in ready to take on NATO directly. Just as the Germans were surprised by Russian manufacturing capabilities, Russian shell production has resulted in NATO complaining about Russia’s overwhelming artillery advantage, with the Russian forces able to fire up to 60,000 shells and rockets per day several months after we were informed that Russia was going to run out of ammunition within two weeks.

However, this doesn’t undermine Tree of Woe’s case so much as it underlines it. Russia has clearly been planning for a long and unrestricted confrontation with NATO and the USA from the start, one which includes both the military and the economic conflicts. Which is precisely why I think it is highly unlikely that the special military operation is going to end with a Ukrainian surrender and a negotiated settlement that brings Russia back into the neoliberal economic order.

While the World Ocean would cheerfully settle for that now, both Russia and China are obviously aware that it would merely mean putting off the larger conflict for a few years and giving their adversaries time to better prepare for it.

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The Battle of Ukraine is Over

“The battle of Helm’s Deep is over; the battle for Middle Earth is about to begin.”

Ukrainian troops are suffering massive losses as they are outgunned 20 to one in artillery and 40 to one in ammunition by Russian forces, according to new intelligence painting a bleak picture of the conflict on the frontline.

A report by Ukrainian and Western intelligence officials also reveals that the Ukrainians are facing huge difficulties responding to Russians shelling with their artillery restricted to a range of 25 kilometres, while the enemy can strike from 12 times that distance.

For the first time since the war began, there is now concern over desertion. The report, seen by The Independent, says the worsening situation in the Donbas, with up to a hundred soldiers being killed a day, is having “a seriously demoralising effect on Ukrainian forces as well as a very real material effect; cases of desertion are growing every week”.

At the same time, as the Russians capture territories in the east, and consolidate their control over the seized cities of Mariupol and Kherson, the bargaining position of the Ukrainian government is being weakened by acute disparity in the numbers of prisoners being held by each side.

The total number of Russian soldiers being held by Ukraine has fallen to 550 from 900 in April after a series of exchanges. Moscow meanwhile has more than 5,600 Ukrainian troops in captivity, the figure enlarged by the surrender of 2,500, including members of the Azov Battalion, in Mariupol.

Business Insider, 11 June 2022

The battle of Ukraine is over. The outcome – always predictable from the start – is certain, which is why the media is now filled with accounts of various globalist figures very cleverly suggesting that giving Russia what it already has might buy more time for the failing neoliberal world order. It won’t, because there was never any real war between Russia and Ukraine, which was why the Russians very carefully described their actions as a “special military operation”.

It was just a battle, and not a particularly big battle in historic terms at that. It was the first phase of a much larger military conflict.

The Russians know very well that the war isn’t over. Ukraine isn’t their primary enemy anymore than Austria or Poland were the primary enemies of Germany in the 20th Century. 2022 is more akin to 1939 than 1940, much less 1941.

The battle of Ukraine is over; the battle for world order is about to begin.

A battle which some observers, such as Karl Denninger, suspect is already lost:

The so-called Russian Sanctions have blown up spectacularly in the western world’s face. Russia now has a stronger currency than it did before the war we instigated began. Oil and Natural Gas, never mind things like fertilizer, are nice and expensive which suits Putin just fine. He has negotiated long term interchange with China for both and is building out the capacity to wildly increase same. Europe is fucked down the road as a result and in the meantime they got nothing for all these “sanctions.”

For that matter so are we. We’ve sequestered our inflationary deficit spending overseas via the China/US (and other nations, including India) trade deficit for the last two decades. That’s over and will never come back because none of the nations that we were doing it with have any reason to allow it ever again and they don’t need to. Not a single member of the Fed or other “economic punditry” has said one word about this although I sure as Hell have.

At the same time Russia is shipping oil to these nations who then cross-ship it back, some refined first, and there’s absolutely no way to do anything about that since we’re incapable of sanctioning either without instantly detonating our supply chains, offshored labor or both. As a result we can no longer spend in deficit without it reflecting back into inflation which means the “free ride” gave has been terminated and while this was always eventually going to end we did this to ourselves and thus the inflation you’re seeing and will continue to see was and is caused directly by our policies and our government.

The outcome isn’t absolutely settled. But the smart money is betting on the eventual victory of the Silk Road Alliance. There is a reason they call it Clown World and not Rocket Scientist World or Smart, Sensible, and Sustainable World, after all.

Quote of the Day: “You cannot appease Russia with some territory that they already have, or will take. Its not yours to give. Russia will decide exactly what happens to the Ukraine, how, and when.”

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So That’s Settled

ITEM: Ukraine’s president says the outcome of the battle for Sievierodonetsk will “decide the fate” of the entire Donbas region.

ITEM: Ukrainian troops may soon have to retreat from a key eastern city, the region’s governor and Western military analysts have said, as Russian advances force them back.

ITEM: Ukraine’s fortunes in defending Sievierodonetsk took a turn for the worse Wednesday, with its troops forced to retreat to the outskirts of the eastern industrial city in the face of a fierce Russian attack.

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Starve Harder

It will be informative to see the extent to which Russia cares about “international opinion” in light of the death sentences announced for three mercenaries employed by Ukraine:

International fury as two Brits Shaun Pinner, 48, and Aiden Aslin, 28, are sentenced to death by Russian separatists after they joined the Ukrainian army and were captured during the siege of Mariupol.

Brits Shaun Pinner, 48, and Aiden Aslin, 28, were captured in Ukraine in April during the siege of Mariupol. The so-called supreme court of the Donetsk People’s Republic (DPR) issued the death sentences on Thursday. Moroccan national Saaudun Brahim has also been sentenced, reports said. Video showed the trio in a cage.

The trio were accused of being ‘mercenaries’ after fighting for Ukraine’s armed forces in the battle for the city. Russian media reported that they would appeal. The court is not internationally recognised, the BBC reported. UK Foreign Secretary Liz Truss condemned the death sentences as a ‘sham judgment with absolutely no legitimacy’. No10 said it was ‘deeply concerned’.

I’m just curious what sort of leverage the “international community” thinks it has at this point. What are they going to do, pile on a few more sanctions, further inflate the currency, raise fuel prices, and starve harder?

I assume Russia will swoop in and make a useless gesture of magnanimity by trading the three mercs for three Russian prisoners-of-war, but it will be telling if it simply washes its hands of the affair and permits the DPR to fulfill the sentence.

And it’s certainly interesting to read the comments from British readers who genuinely want war with Russia over this. They really don’t grasp the fact that it’s not the 19th Century anymore and Britain no longer rules the waves.

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Tactical Attrition Warfare

One of the reasons the media finds it so difficult to make heads or tails of which military is winning in Ukraine is the fact that the Russians are not attempting to hold any territory that is not strategic. Instead, they’re engaged in something that could be described as artillery maneuver warfare that is focused on eliminating the enemy’s infantry while minimizing the risks to their own infantry.

The main difficulty in carrying out offensive operations in Ukraine is that in fact our troops have to go on the attack when the enemy’s artillery is not suppressed. The reasons why we were not able to suppress the artillery:

1. the absence, or a critically small number, of artillery radars.

2. lack of effective reconnaissance of enemy artillery positions.

3. the absence or scanty number of strike UAVs or kamikaze drones to destroy enemy artillery, immediately after detection.

4. lack of organization of counter-battery combat.

5. after the discovery of an enemy mortar or artillery position, a lot of time passed when our artillery could begin to suppress it. Two factors influenced this: communication and, in fact, the qualifications of the servants of the guns.

6. the lack of a sufficient number of reconnaissance UAVs for round-the-clock hunting for enemy artillery.

Enough infantry can be thrown into battle, even with AK-12s, even with “mosquitoes”, but neither one nor the other will simply be able to reach the enemy’s positions if enemy artillery is not suppressed. Practically all the fighters of the assault groups, from different sectors of the front, note that the enemy, in 90% of cases, cannot withstand close combat, especially the newly formed units, and retreats. But due to the fact that the enemy artillery is not suppressed, it is not possible to hold the already occupied positions.

You can assemble as much infantry and equipment as you like, but the lack of an effective counter-battery fight will simply turn any, the bravest army, into “cannon fodder” and interfere with the solution of GEOPOLITICAL OBJECTIVES.

It is not a Masonic conspiracy that will stop our troops, but specific shortcomings in the combat work of each commander.

TatarZky says that Russian troops in fixed positions are also suffering from Ukrainian artillery. Maybe this is why Russians do not defend positions, but instead constantly move around. I have seen multiple cases, where some village is reported liberated by Russian forces, but next day on the maps it is again side to be under Ukrainian control. Unfortunately the Russian aim at this point seem not to be liberating territory, but to kill as many Ukrainians as possible. This is a direct result of the Ukrainian policy of holding on to every last inch of Donbass.

It’s interesting to learn that despite the Russian air superiority, they have not been able to suppress the enemy artillery. There are several possible reasons for this; perhaps the Ukrainian ground-to-air defenses make it too expensive to provide air cover, perhaps it is too easy to hide and move the artillery (see: Serbia), or perhaps the Russians are unwilling to reveal the full extent of their air capabilities to NATO forces given the probability that they will be fighting them soon.

However, there is no need for the Russians to rush the inevitable end or risk unnecessary casualties, as time is clearly on their side. The Western economies are crumbling, the Ukrainians are running out of infantry, weapons, and supplies, China, India, Iran, Brazil, Venezuela, and the Arab nations have all made it clear they are aligned with Russia against NATO, and even the neocons are starting to have second thoughts about the wisdom of war with the planet’s largest nuclear power.

Indeed, it appears that the globalists are now hoping that an early settlement in Russia’s favor will be enough to preserve their disintegrating Clown World empire.

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Yes, The Russians Will Win

Even the official broadcasters of The Narrative are beginning to recognize that Russian victory in Ukraine is inevitable, however unpalatable it might be.

At one point in the novel “Sign of the Four,” Sir Arthur Conan Doyle’s inimitable detective Sherlock Holmes explains and demonstrates to Dr. Watson his method of observation and deduction. Confronted with an apparently inexplicable circumstance, Dr. Watson is utterly perplexed. He simply cannot understand how the event in question came to pass, given the facts as he understands them and the laws of nature. Slightly irritated at his plodding companion’s bafflement, Holmes once again shares with him the methodological key to solving all such mysteries: “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”

And the truth is, once we have eliminated all the impossible scenarios, the least improbable outcome of the war in Ukraine is a Russian victory.

Note that I did not say such an outcome would be desirable. Russia’s inevitable victory is anything but. Nor did I say it would be total. The outcome of this war is going to fall far short of the Kremlin’s initial hopes and expectations. Nor, finally, did I say it would be without significant cost. Any conceivable Russian victory now will entail such a loss of blood and treasure that it will have to be judged Pyrrhic at best.

But it will be a victory nonetheless — and we in the West had better come to grips with that hard truth.

The fact that Russia will defeat Ukraine militarily is hardly news. That was always inevitable, with or without Clown World sanctions and weapons shipments, as I and many others have pointed out from the onset. But what is informative here is the fact that the Narrative has now shifted to accommodate this reality, which suggests that Phase One of the larger conflict between the Sino-Russian Alliance and Clown World is coming to a close.

My interpretation – and it is only that, an educated guess – is that the Clown World powers are desperately trying to convince Russia and China to return to the economic fold, and they are dangling the possibility of their acceptance of Russia’s gains as bait in order to prevent the systemic failure of their neo-liberal rules-based order that will take place when Russia and China actively reject the system.

Brussels is seeking to strike the right balance between hurting Russia’s economy as much as possible and minimizing the secondary effects on European economies.

Remember, all of the damage that has been done to the ex-West so far is self-inflicted. Neither Russia nor China are seeking to inflict economic harm, although they are both in excellent positions to do so at any time. So, will they take the bait, focus on internal development, and allow Clown World to survive until the inevitable next crisis? I would tend to doubt it, but we will have to simply wait and see.

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The Great Bifurcation Continues

ITEM: Russia is now SWIFT-free.

Russian banking giant Sberbank has been disconnected from the SWIFT global financial messaging system under a new set of sanctions approved by European Union leaders on Monday. “This sanctions package includes other hard-hitting measures: de-Swifting the largest Russian bank Sberbank,” European Council chief Charles Michel announced following the EU summit.

ITEM: The European Union has largely stopped importing Russian oil.

After weeks of deliberation, EU member states have agreed in principle on a sixth round of anti-Russia sanctions, the bloc’s leadership announced after a meeting on Monday. Hungary and Bulgaria will keep buying Russian oil, but most other import routes will be blocked. EU Council President Charles Michel said the watered-down embargo will affect about 75% of Russian oil imports, with the percentage growing to 90% by the end of the year.

ITEM: India has replaced the USA as a primary customer for Russian oil. In 2021, the USA imported 6 million barrels of Russian crude per month.

More than 24 million barrels of Russian crude were supplied this month, up from 7.2 million barrels in April, and from about three million barrels in March. The South Asian nation is set to receive about 28 million barrels in June, data shows. Last year, Russian crude exports to India averaged just 960,000 barrels per month, roughly 25 times less than this month’s total.

ITEM: China has publicly denounced the “rules-based international order” as a “US rules-based international order”.

The “rules-based international order” it touts is actually the “US rules-based international order”, a hegemonic order to dominate the world with the house rules of its clique… The US places its domestic law above international law and international rules and willfully resorts to illegal unilateral sanctions and long-arm jurisdiction. Since the outbreak of COVID-19, Venezuela, Syria and Iran have been grappling with severe difficulties with a struggling economy and strained medical resources due to prolonged US sanctions. Under such circumstances, the US, rather than halting those sanctions, redoubled them, making things even worse for these countries. The international community sees with increasing clarity that the US only complies with the market competition principle and international trade rules it claims to champion when it suits US interests.

On the basis of these developments, I suspect that we are going to see China voluntarily and preemptively disconnect from the SWIFT and global trade systems later this year. China will likely be followed in this by India and a number of other anti-Clown World nations. This will not only trigger a serious financial crisis, if not a comprehensive banking collapse, but will likely lead to regime changes across Clown World.

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Unrestricted War on Russia

It appears the rulers of the Imperial USA have come to understand the Chinese principles of Unrestricted Warfare, or as the Russian Foreign Minister calls it, Total War.

The confrontation between Western nations and Russia amounts to “total war,” Russian Foreign Minister Sergey Lavrov said on Friday during a meeting with the heads of Russian regions. Russian society and major political forces support the government’s decision to face this challenge, he added.

Western nations “are doubling, tripling, and quadrupling their efforts to deter our nation. They use a wide array of tools, from unilateral economic sanctions to totally deceitful propaganda in the global media,” Lavrov said, noting that “low-level Russophobia, which to our deepest regret is promoted by a number of governments, has risen to unprecedented levels.”

“The West has declared total war against us, against the entire Russian world. Nobody even hides this fact now,” Lavrov stated.

Lavrov also noted that the crisis has exposed the true nature of the promises given to Russia 30 years ago, after the collapse of the USSR. “We now see the value of all the talk about universal values and the need to turn Europe into a common home from the Atlantic to the Pacific.” No one should have illusions about the attitude of the US and its allies towards Russia, he added.

I’ve repeatedly pointed out that the Russo-Ukrainian conflict is not merely about Ukraine’s designs on Crimea and the Donbass, or Russia’s designs on Ukraine, anymore than Nazi Germany’s conflict with Czechoslovakia was merely about the Sudentenland. The globalist imperials have been preying on Russia since 1991, and attempting to undermine its government since Putin unexpectedly took power in 2000. Putin and his generals clearly recognize that Ukraine is not the core problem, it is merely the most immediate manifestation of the problem.

Dmitry Trenin, a member of Russia’s Foreign and Defense Policy Council, clearly understands the scale and import of the situation:

The challenge Russia is facing has no equivalents in our history. It’s not just that we have neither allies nor even potential partners left in the West. Frequent comparisons with the Cold War of the mid and late 20th century are inaccurate and rather disorienting. In terms of globalization and new technology, the modern form of confrontation is not only of a larger scale than the previous one, it is also much more intense. Ultimately, the main field of the ongoing battle is located inside the country.

The asymmetry between the opponents is huge, particularly the imbalance between the forces and capabilities available to them. Based on this, the US and its allies have set much more radical goals than the relatively conservative containment and deterrence strategies used toward the Soviet Union. They are in fact striving to exclude Russia from world politics as an independent factor, and to completely destroy the Russian economy.

The success of this strategy would allow the US-led West to finally resolve the “Russia question” and create favorable prospects for victory in the confrontation with China.

Such an attitude on the part of the adversary does not imply room for any serious dialogue, since there is practically no prospect of a compromise, primarily between the United States and Russia, based on a balance of interests. The new dynamic of Russian-Western relations involves a dramatic severance of all ties, and increased Western pressure on Russia (the state, society, economy, science and technology, culture, and so on) on all fronts. This is no longer a source of discord between the opponents of the Cold War period, who then became (unequal) partners. It looks more like the drawing of a clearer dividing line between them, with the West refusing to accept even the perfunctory neutrality of individual countries.

China, India, Iran, and most of the unaligned nations now recognize both the evil nature of the corrupted West and its hostile intentions toward them as well, which is why they are also preparing for war against it. Note: I do not subscribe to what I consider to be the absurdly stupid idea that China is intending to invade the USA; the various numbers listed in the leaked transcript are simply not “too extensive” for an invasion of Taiwan and the disputed Senkaku/Diaoyu  islands.

Leaked audio that appears to have originated from a meeting of China’s top war generals [a regional government authority – VD] reveals elaborate plans for a land invasion in the near future, waged by the People’s Liberation Army and augmented with cyber warfare, orbital space weapons and the activation of CCP civilians currently embedded in corporations and governments around the world.

China’s war leader [provincial committee member] makes strong reference to the psychological operations that will be waged by their government to control the population as they wage war against the West:

First, we need to strengthen the protection in political field. Look at the recent several regional wars, especially the Russian-Ukrainian conflict war situation. If you look at the big picture, the United States and the West will try everything to slander us, smear us, in an attempt to confuse right and wrong, to shake our will to win a just and decisive battle. We must give full play to public opinion, legal struggle, psychological war and militia teams to strengthen the guidance of public opinion and psychological protection, and cohesion of patriotic support for the positive energy of the military front.

The fact that the author of the linked article doesn’t even understand that the meeting is of the Standing Committee of the Provincial Party Committee for Guangdong Province, not the Chinese military leadership, and that he clearly hasn’t fully read or understood the nature of the transcript, which clearly shows the regional authorities attempting to determine how to go about handling their various supporting roles when the invasion happens, doesn’t take away from the way in which the transcript – which Chinese experts have told me appears to either be genuine or a very convincing and detailed fake – indicates Chinese preparations for a major military effort that will soon open WWIII’s second front by bringing it into direct conflict with the US government and military.

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UKRAINE Shuts Off Europe’s Gas

Ukraine is proving to be a less-than-trustworthy ally for the European nations:

Ukraine’s operator OGTSU announced it would halt further deliveries starting May 11, due to the presence of “Russian occupiers.”

Gas Transit Services of Ukraine (OGTSU) declared force majeure on Tuesday, saying that it was impossible to continue the transit of gas through a connection point and compressor station located in the Lugansk area. As OGTSU personnel “cannot carry out operational and technological control” over the Sokhranovka connector point and Novopskov compressor station, the company cannot continue to fulfill its contract obligations, it said.

Gas from this connection will not be accepted into the transit system of Ukraine starting at 7 am on Wednesday, OGTSU said. Sokhrankovka accounts for almost a third of the Russian gas that transits through Ukraine to Europe – up to 32.6 million cubic meters per day – according to the operators.

This would appear to indicate either a) an increasing level of desperation on the part of the Ukrainians, or b) the determination of the neocons to trigger a hot war between Russia and the USA. Cutting off the supply of gas to Europe is supposed to one of Russia’s trump cards, so Ukraine preemptively playing it – if only in part – is surprising.

Sure, it’s only a third of the supply so far. But if the desired results aren’t achieved, it’s obvious that the percentage will rise.

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