After watching the vacillating performance of talking head generals on TeeVee over the Ukraine matter, the question arises as to whether or not they are being “pumped up” by the Pentagon on a regular basis.
In the Rumsfeld era this was routinely done. Some people were briefed in private, but others were invited to meetings with 20 or 30 others. These were presided over by Rumsfeld himself backed up by a couple of advisers. I was invited to one of these. I asked a couple of awkward questions to which Rumsfeld replied that he did not know the answers. I was not invited again, but that was all right as a number of those briefed talked to me regularly.
Kellogg, Keane, Clapper, Petraeus, etc. IMO these people are probably on the briefing list.
BTW Jennifer Griffin of Fox should really be paid by DoD rather than Fox. Her enthusiasm for “the narrative” is impressive. pl
The American media of our day makes 1930s Pravda look objective and balanced. As bad or worse than using CIA chiefs on CNN are instances of consulting people like Ian Bremmer as CBS news does regularly. Head of “Eurasia Group” a “political risk research and consulting group.” Yes indeed, ask a guy who leads a business which specifically thrives and profits from conflict in say Eurasia, anyone, about Ukraine, Russia, Turkey etc. Hmm. Where’s Eurasia I wonder? No wonder the poor unwashed have been seduced by tales of Lizard people ruling the planet. In fact their Intuition is in good working order.
Regardless of the full court information war press from America/UK, if I were the Russian leadership, I would welcome maximum sanctions from the West.
Back in the very early 2000s, Russia really was just a frozen Saudi Arabia with nuclear weapons. The Russian elite was content with making very easy natural resource money and dissipating it living the high life in Western Europe. It is the sanctions (and government initiatives) which helped drag the Russian business class, kicking and screaming, into developing the economy to the point where it is now. Further sanctions, if handled well by the government, will drag a business class which I would describe as still having creaky joints, into creating a full-spectrum industrial and consumer product economy.
If you look at Japan and S Korea during their high growth phases, they effectively put “sanctions” on themselves and closed off their economies to imports in order to develop their own industries. This import substitution worked in Japan/S Korea where it failed in Argentina or India because Japan/S Korea worked to insure competitive domestic markets (the magic of capitalism is the competition) without monopoly producers, and with an export focus as a way of disciplining domestic companies to become world-class. If Russia ensures domestic competition with a robust anti-monopoly policy, sanctions could be the best thing that ever happened to it. Russia can always sell to the enormous Chinese market, not to mention the other BRICs as well as the entire developing world.
Another thing Russia could do, and I have no idea why it hasn’t already done so, is insist on using the ruble or gold as the settlement currency for its exports. Coupled with an alternative to SWIFT, this would 1) force many countries to hold ruble reserves, boosting the value of a currency that is currently under American threat, 2) establish the ruble as a reserve currency on par with say the Swiss Franc within a year or two, and 3) be a huge shot across the bow of the USA. China doesn’t want the yuan to be a settlement currency. Why not use the ruble?
Russia is deliberately keeping the rouble very low. This is a good export policy. Japan did the same for the Yen before the Plaza agreements (1985).
Wkipedia notes, among the Plaza agreements, this goal:
“To decrease Japan’s trade surpluses, and to stop the worrying growth of its investments, especially real estate, in the US.”
They traded a plate of lentils for the security that the US could, still, secure for them.
Russia is much less aggressive and much less integrated into the world market than pre-1985 Japan. And they have, of course, other exogenous brakes.
Having a domestic market 4-5 times cheaper than world prices is also a good policy to deceive the enemy. Some believe that the Russian GNP is on the same level as Spain or Italy!
Both Russia and China are undertaking a (very) slow dedolarisation. And indeed, they could choose Euro or Yuan.
Japanese and S. Korean corporations also created many joint ventures with their US counterparts, the sole purpose of which was to transfer technological know-how and ease access to US markets (many industrial processes that they utilized had been invented in the US but due to lack of competition, hadn’t been employed, one example being in the automotive sector). That in combination with FDI and a “well-behaved” workforce, helped ensure their success.
Many of those things aren’t true for Russia. There is little value-added that the Russians can sell easily beyond China (or even to China). The US/UK, with its continued choke-hold on international finance (though it is weakening each year appreciably), can increase counter party risk to the point that 3rd countries will prefer dealings with European or American firms to Russian firms, even if they are sympathetic to Moscow.
As Putin mentioned, the West has already been curtailing and stifling the growth of the Russian economy; treating Russia truly as an enemy, even before the seizure of Crimea.
That said, the tightness of international markets for many basic products has led to a situation that even a marginal shift in availability can cause a drastic increase in prices. Since Russia is quite well endowed in terms of food/energy/ and other natural resources, restricting their export (voluntarily, or effectively with sanctions) could easily cause double-digit spikes in inflation, especially in food and energy, a very real trigger for unrest.
Turkey is the weakest link in Europe in this respect, and Erdogan’s earlier repetitive offers to be involved in negotiating with P and Z, in addition to inflating his ego, was likely influenced by his understanding of how difficult Turkey’s situation would become in the case war broke out between the two.
And if Turkey folds, in combination with self-harming EU sanctions against Russia, the EU market as a whole will probably witness a severe contraction…
Regardless of development potential along the lines of S. Korea and Japan, Russia is still in a much better position to weather the storm. Whatever it can’t get from the West, it can get a suitable substitute from China. If however much the Russian real-economy contracts, the west will surely do so by a multiple of that over the medium term.
Russia also has another weapon that it may play up (we see some talk of the Duma adopting some motions regarding it already). This weapon is bitcoin. It can throw much public support behind bitcoin, not because it truly needs it, but because it can win either way. Either it can begin to use it (or actors within it) to skirt financial restrictions, or the constant talk of how it might (or does) benefit from it, will trigger western countries to restrict the use of these crypto-currencies. If they take that step, the tulip-like bubble will most certainly burst, and the rest of the financial house of cards might come tumbling down. I’d bet we are much more likely to see bitcoin at below $4,000 after six months of war, than above $40,000.
This is, and has been, in progress:
https://katehon.com/en/article/armageddon-us-dollar-approaching
It would seem that calendar year 2022 will be some form of tipping point, perhaps in terms of majority/minority status for dollar transaction in various contexts. Perhaps one form of response to Western sanctions will be to replace dollar transactions with national currencies for certain energy accounts (e.g., Russian gas transactions), thereby increasing the percentage of overall non-dollar transactions.
This, with a progressive shift to non-SWIFT messengering, would erode and shift the balance of power, rather than abruptly disrupt it.
Harry,
There already are many bi-lateral inter-government transactions that are not intermediated by USD. For example India and Soviet Union and now Russia have had for over half-century Ruble-Rupee transactions. Just like the “petro-dollar” these are all shiny objects of distraction.
Very few understand the eurodollar markets. That’s the real big kahuna as even the Fed has no control over it. This market has all the elements of a banking system including credit creation.
Now it’s the Russian’s fault. Belligerence surrounding Donbas and Ukraine, raw materials and energy supplies to Europe threatened by Putin’s coiled bear. Why wouldn’t markets grow worried?
There’s always a reason why we shouldn’t take these things seriously, or quickly dismiss them out of hand as the temporary product of whichever political fear-of-the-day. This isn’t to write that these things aren’t important in any sense; no doubt anyone in or near Ukraine right now would have something powerful to say about these implications.
When the eurodollar futures curve first inverted back on December 1, it was quickly cast into the same light as oil prices then crashing, each alleged to be a reaction to the sudden appearance of omicron. The successor to devilish delta, the new variant was immediately declared the next big potential world-tanking coronavirus disruption.
Yet, here we are at almost the end of February, closing in on three months later. Omicron is nearly forgotten, never having come anywhere close to “achieving” its disruptive promise. Eurodollar inversion, on the other hand, it has only gotten more antagonistically uncomfortable as the weeks slide by.
https://alhambrapartners.com/2022/02/23/the-red-warning/
It always makes sense to pay attention to the Eurodollar curves. That’s the belly of the unfettered global financial system.
sir, it is important to distinguish between the use of dollars in transactions and the us dollar as the currency of choice for parking capital.
what gives the dollar such prominence is not the transaction part but the capital parking. because the us dollar bond markets and stock markets are so huge and because the usg has NEVER cancelled its currency the well of trust in dollars is huge going back many many decades.
clearly the usg has been abusing this gift from the world for a long time and in time by end of decade it will likely be over for the dollar as a reserve place to park money.
bilateral settlement though large is a small fraction of extant capital available for investment. it is washington that is destroying the trust the world has in parking money in us dollars. to see what is possible and how fast trust can be blown up look at what trudeau has done to global trust in canadian banks over the truck protests. no one with sense will trust canada with large sums of money now…….. open to seizure over trivialities.
You’re right about Jennifer Griffin.
I saw her on TV trying to kiss Milley on the lips.
Just another media shill.
Retired staff officers reading scripts. It is hard to imagine this crap is for OPFOR consumption. The present US military is a rainbow tinged tiger at best. Supply lines? Nope. Disciplined troops? Not hardly. Can’t wage a sustained campaign with light infantry, paratroopers and reserve/NG call ups. Can’t draft the third world and illegals, as without discipline they are unreliable at best, and mutinous at worst (and most likely). Green on Green all over again.
Biden is a weak sister and will lose more outposts of the Empire before his term is over, by whatever means his handlers use.
Well this is very disappointing but not unexpected. I can’t imagine how Ukraine will not become a running sore as NATO will continue to pour arms in. Is the end result of this Russia turning off the gas? Hard to see how anything good can come of this.