RUSSIA, UKRAINE ET AL: WHAT NEXT? by Patrick Armstrong

To Moscow, Ukraine is not the problem, Washington is. Or, as Putin might put it: Tabaqui does what Shere Khan tells him to and there is no point in dealing with him, go straight to Shere Khan. That is what Moscow is trying to do with its treaty proposals.

For the same reason, Moscow is not much concerned with what the EU or NATO says; it assesses that they are Tabaquis too.

The current propaganda meme in Washington is that Russia is going to “invade Ukraine” and absorb it. It will not: Ukraine is a decaying, impoverished, de-industrialised, divided, corrupt and decaying mess; Moscow does not want to take responsibility for the package. Moscow is fully aware that while its troops will be welcomed in many parts of Ukraine they will not be in others. Indeed, in Moscow, they must be wishing that Stalin had returned Galicia to Poland rather than giving it to the Ukrainian SSR after the War and stuck Warsaw with the problem. This does not, however, rule out the eventual absorption of most of Novorossiya in ultimo.

The second delusion in Washington is that if Moscow did “invade Ukraine” it would start as far away from Kiev as possible and send tank after tank down a road so that the US-supplied PAWs could exact a heavy cost. That is absolutely not what Moscow would do as Scott Ritter explains. Moscow would use standoff weapons to obliterate Ukrainian troop positions, C3I assets, assembly areas, artillery positions, ammunition dumps, airfields, ports and the like. At its choice. It would all be over quite quickly and the Javelins would never be taken out of their boxes. But that is the extreme option as Ritter explains.

Unfortunately the Blinkens, Sullivans, Farkas’, Nulands and others who seem to be driving USA policy don’t understand any of this. They remain convinced that the US is a mighty power, that Russia is feeble and fading, that Putin’s position is shaky, that sanctions are biting, that Russia’s economy is weak and so on. And that they understand modern warfare. Everything in the past twenty years contradicts their view but they hold to it nonetheless.

Take, for example, Wendy Sherman who was the principal American negotiator in Geneva this month. Look at her biography on Wikipedia. Social worker, money raiser for Democratic Party candidates, political campaign manager, Fanny Mae, Clinton appointee to the State Department, negotiator with Iran and North Korea. Is there anything in that record to indicate any knowledge or understanding of Russia or modern war? (Or skill at negotiations for that matter?) And yet she’s the one on point. Jake Sullivan: lawyer, debate preparer, political advisor, ditto.

Perhaps there’s an American general officer who sees reality – certainly there are those who have spoken of Russia’s formidable air defence or EW capabilities; others understand how weak NATO would be in a war on Russia’s home field. But, as Colonel Lang points out, maybe not.

Overconfidence rooted on nothing is the problem. Moscow has made a proposal that is based on the undeniably true position that security is mutual. If one side threatens the other, then the threatened one will take steps to shore up its position and the threat level will rise and rise. During the Cold War both sides understood that there were limits, that threats were hazardous and that negotiating prevented worse things from happening. But Washington is lost in its delusion of everlasting superiority.

The so-called “Thucydides trap” is the name given to a condition when one power (Sparta then, USA now) fears the rising power of (Athens then, China and Russia today) and starts a war because it fears its position can only weaken. The brutal truth is that that point has already been passed: Russia+China are more powerful than the USA and its allies in every measurable matter – more steel, more food, more guns, more STEM, more bridges, more money – more everything. NATO/US would lose a conventional war – American military wargamers know this to be true.

In short, how can Moscow compel these people to see reality? This, in a word, is the problem: if they can see it, then something better is possible; if they can’t, then it’s the worse. For everybody’s sake – Washington’s too – Washington has to pay attention to Moscow’s security concerns and dial down its aggressions. Moscow has asked – demanded really – and it’s not yet clear that the attempt has failed. The negative reaction of the Tabaquis doesn’t matter – Moscow only talked to them as a matter of form – it’s Shere Khan’s answer that matters. And we haven’t had it yet.

Perhaps the aborted colour revolution in Kazakhstan was an answer from some portion of the US deep state/Borg but, if so, it was a swift and powerful demonstration of how poor an understanding of the true correlation of forces the US deep state has.

We await Washington’s final answer but the prospects are not very encouraging at the moment: the cheap threats and bragging op-eds pour out. So what is Moscow’s Plan B?

I have elsewhere listed some responses that I can imagine and others have done so too. I am thinking that Moscow has to do something pretty dramatic to shatter the complacency. I see three principal fronts.

  • The United States has not been threatened with a conventional attack on its home territory since 1814; Russia has several ways that it can do so. The problem will be to reveal the threat in a way that cannot be denied or hidden. A demonstration of Poseidon’s capabilities on some island somewhere followed by the announcement that a significant number are already deployed near US coastal cities?
  • Washington must be presented with a demonstration of Russia’s immense destructive military power that it cannot pretend away. Ukraine is the obvious field for such a demonstration. (See Ritter).
  • A world-changing diplomatic move like a formal military alliance with China with a provision that an attack on one is an attack on both. This would be a demonstration of the correlation of forces that not even the most deluded could miss. Mackinder’s Heartland plus population, plus manufacturing, plus STEM, plus resources, plus military and naval might joined in a military pact.

We shall see. The negotiations are not over and something better may come from them. Doctorow, a capable observer, gives some hope. But to get to a better result would require a pretty major change in attitude in Washington.

We can hope. The stakes are high.

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86 Responses to RUSSIA, UKRAINE ET AL: WHAT NEXT? by Patrick Armstrong

  1. RZ says:

    Is the West hoping for some significant but limit war to avoid dealing with an impending financial collapse? Is anyone flying the plane?

  2. English Outsider says:

    Mr Armstong – I don’t believe President Biden wants war. What is wanted is to stop the Europeans “trading with the enemy”. What is needed for that is some Russian action that can be portrayed as sufficiently aggressive.

    The EU Parliament – not a body with any real power but indicative of European opinion in this case – has already voted to cut Russia off Swift should there be such action. That would render EU/Russia trade difficult to impossible. It’s also voted not to use Nord Stream 2 – “The resolution urges that the Nord Stream 2 pipeline should not be made operational, regardless of whether it at some point fulfils the provisions of the EU Gas Directive.”

    https://www.europarl.europa.eu/news/en/press-room/20211210IPR19223/russia-must-immediately-withdraw-its-forces-threatening-ukraine

    Germany has already undertaken not to use NS2 if necessary. The recent disruption in the flow of natural gas via the Yamal pipeline is portrayed in the press statements I read as due to hostile Russian intent. In fact at least in some cases it’s not due to the Russians refusing to sell. It’s due to the Germans and French refusing to buy.

    I don’t believe all this is merely so Ted Cruz can sell LNG to Europe, though that’s no doubt a factor. The scene is set for far greater disruption of trading relations between Europe and the RF. In all this Europe is merely a passive “lever” in the conflict between America and Russia –

    https://youtu.be/zzCCQ633pkk?t=214

    Europe seems willing enough to be the “lever”. Eager even. We’ll all look great fools if we turn out to be the battleground instead.

  3. walrus says:

    Thank you Patrick Armstrong for cogently elucidating Moscow’s problem. I like many others have tried many, many times and failed to even scratch the surface of American hubris. All my well meaning efforts are either ignored or misinterpreted as hostile. It is now Moscow’s turn.

  4. walrus says:

    RZ, I think the answer to your question is that the Swamp is trying for a rerun of the glory days when America was “the arsenal of democracy” and financially very well rewarded for it. Europe in ruins is a feature not a bug in this scenario. The swamp is already thinking of the economic pickings of a victory over Russia.

    • There is always Friedman’s statement that the “primordial” interest of the USA is to keep Germany and Russia apart to consider.
      https://www.youtube.com/watch?v=yHn0IVqDGOA

    • Claudius says:

      I think the grand poohbahs of the DC foreign policy establishment are simply incapable of thought and ideas outside of their Ivy League bubble. Massive group think, very insular, independent thought seen as heretical. They have no ability to adjust to changing conditions.
      Like French generals before WW1 nattering on about elan carrying the field, or Brit WW1 generals who never seemed to grasp warfare concepts beyond human wave attacks on dug in automatic heavy weapons.
      Like WW1, others will get the bill for this incompetence.

      • I think the grand poohbahs of the DC foreign policy establishment are simply incapable of thought and ideas outside of their Ivy League bubble. Massive group think, very insular, independent thought seen as heretical. They have no ability to adjust to changing conditions.
        You nailed it, plus do not forget ethnic lobbies.

      • walrus says:

        There is another important group of idiots – mainly female. These were taught on their grandparents knee about how their family was once Polish / Austrian / European nobility who had a castle or two until the dastardly Russians came along. The little girls were taught that they were really princesses but for Russia and they still dream of recovering the family fortunes. They sometimes even have hyphenated names or a “Von” because they refuse to let go of their alleged heritage and they have a visceral hatred of Russia. I know one or two with this affliction. I wonder if Farkas, Nuland, etc. or their backers fit this template?

      • Ghost_Ship says:

        That might have been the position at the start of WW1, but towards the end the French and British Armies including colonial forces were highly capable, even of combined arms operations and drove the German Army to its “Black Day”. Unfortunately, after the war, France hid behind the Maginot Line and Britain just ignored all the lessons it had learnt.

  5. wtofd says:

    Patrick, thank you. Regarding paragraph 3–my understanding of the geography is shaky–would this absorption land-lock the Ukraine? Is that feasible without prolonged nastiness?

    • The Ref gives the rough map. But yes, pretty much landlocked — maybe a little bit in the west would reach the Black Sea. (Assuming that, in the coming collapse of “Ukraine”, Romania doesn’t choose to take it back.)
      Novorossiya (“new Russia”) is the name given to that part of the “Russian lands” (A very old concept, BTW, pre-dating any European notion of such) re-conquered by Katherine from the Ottomans who had inherited it from the Mongols. Crimea was the very last area ruled by a direct descendant of the Chingizids.
      BTW it should be understood that AT THE MOMENT Moscow regards the Donbass as part of Ukraine. This could suddenly change. What we now see as Ukraine is a rather arbitrary construction of Lenin, Stalin and Khrushchev (the last’s decision having been cancelled.)
      The Galicians driving today’s Ukraine were part of Austria-Hungary and then Poland until 1939.
      More here https://patrickarmstrong.ca/2014/05/27/the-destruction-of-ukraine/ All drearily predictable

      • Deap says:

        Sounds like the mish-mash of Ukraine is Yugoslavia on the Eastern Front.

        Can Donbass region vote themselves out and return to their Russian roots? Not unlike the sentiments of Russian client state Crimea.

        • They’ve indicated their willingness several times but AT THE MOMENT Moscow’s line is that they are part of Ukraine and that the Minsk Agreements provide a settlement of their problems. But that could change given that 1) Kiev has never done anything to follow Minsk and 2) its controllers haven’t pushed it to do so.
          Recognition/defensive alliance/incorporation are possible Moscow reponses.

        • Philip Owen says:

          Russia wants them in Ukraine to block any moves to NATO membership. The views of the inhabitants are totally secondary.

  6. Hugh Midas says:

    Ignore all the silly rhetoric coming out of DC and NATO, simply watch what they do…..

  7. And what is Russia economically today. Can it thrive in a situation of severe economic isolation by the West and western allies/vassal states ?

    While Patrick already answered you, it is impossible to explain to people like you what economically Russia is–let me put it it this way, NYC and Chicago look like third world s..t holes comparing to Russia’s major cities. In other indices, Russia produces as much steel as the US, she dwarfs the US in terms of shipbuilding and in terms of education… I don’t even want to go there. If you want to see what modern Russia is, try this:

    https://youtu.be/ElKYy9nA74E

    Times change, this is the idea which US propagandists don’t get. Incidentally, these are the same people who killed everything there was about the US.

    • Deap says:

      Correction: NYC, Chicago, LA and SF are major third world sh*t holes. Sad, but true and there are others in equal competition.

      Too bad Trump got such negative pushback in his Inauguration Speech in Jan 2017 when he promised to address the ravages of our urban corps. Once again, Trump’s gut instincts were right.

      Once again Democrat and deep state’s pushbacks against Trump, doing what he knew needed to be done, only made things worse. Our inner cities are a global embarrassment. Yet they are more social malaise than anything a government can fix; though government certainly set them on this course of generational failure when they tried to fix them.

      I can only hope you never have to face similar devolution of national dreams like we are currently facing in too many of our urban cores. No, they are not who we are. Yet, they are as you describe.

  8. jim ticehurst says:

    just from very easy basic research Of The changes made in Russia ..When Vladimir Putin..came to Power..It was an immediate consolidation of Industry…Military..Economic…and Social Reforms..That were Efficient..Well Managed..With the Best Uses of The Money available ….And the Comments above..are Not Exxagerations..Only Authentic..and Reality Based…You can say what You want about Vladimir Putin…His Management has been Brilliant..and Dedicated..As an American…I feel very bad about the State of The Union..and Current Corruption..that makes Us look like those Old Days in Europe…As far as I can..Tell…U.S. Foreign Policy is determined by What They Owe…Quid Pro Quo Joe…and How Lucid He is..After Lunch..

  9. John Merryman. says:

    What needs to be understood is the common denominators are more physics and biology, than culture or politics, when it comes to something as broad as the current situation.
    Government is analogous to the central nervous system, while money and banking are analogous to blood and the circulation system.
    The problem of our system of democracy is that long term planning is impossible, so it has enabled the bankers to gain control of the political system. The effect is that the entire government has been totally emasculated. It’s not just that these people lack vision, but they are constitutionally incapable of vision. They are there for their malleablity, period.
    So the banks run things, but banking isn’t government. Long story short, banking is inherently centrifugal, while government is centripedial. So they have no centralized focus, only consumption and growth. They are like a fungus, or virus, that has no concept beyond racing across the Petri dish. Everything else is immaterial.

    • walrus says:

      John Merryman. you are correct. the financial types are interested in the next quarters results and nothing more. Their time horizon is at most the length of time till their options expire or their shares vest. This is always a reliable topic of small talk along with their next years budget target and the number of times Covid has caused their Aspen skiing vacation to be cancelled.

      I once was gullible enough to invest in a subscription to one of those wealth preservation newletters; this thoughtful publication consisted of a list of stocks to short or go long on the NYSE in the event of war with Russia. Enough said.

      • walrus,
        Money is a contract enabling society, but we treat it as a commodity to mine from society.
        Econ 101 says it’s both medium of exchange and store of value, but economists have little knowledge of basic physics, as one is dynamic, while the other is static. Blood is a medium, fat is a store. Roads are a medium, parking lots are a store. The hallway is a medium, the hall closet is a store. The average five year old can figure that out.
        As a contract, storing the asset requires generating the debt to back it. Which pretty much explains our country.

  10. Deap says:

    My guess Team Biden knows all of this, but are setting up the Macho Macho Man Biden made Putin blink and Biden made Putin back down on his “invasion of Ukraine” for their 2022 campaign ads.

    Biden has a lot to make good on after his perfectly terrible first year, so a “winning” a false flag in Ukraine, which no one cares about, is the best card they have to play. Plus being able to run cover for Hunter Biden’s misdeeds in Ukraine at the same time.

    The rest of us know any country that paid Hunter Biden one dime for access to Joe Biden is not worth remembering where it is on the map. Which raises another problem, maybe 00.05% even can find Ukraine on the map – so we are certainly not going to spill out blood and treasure to defend it from the Russki’s. Agree, you can have it.

    Maybe Biden is planning a raid on Ukraine just so he can get his hands on the Crowdstrike computer files apparently residing in Ukraine, that Team Biden tried to impeach Trump for merely mentioning them in the infamous Ukraine Phone Call.

  11. Russell says:

    A recent Belfer Center report cited senior retired military officers saying ignorance in military affaires was behind civilian enthusiasm for war. It also says that China has missiles that are a very credible threat to aircraft carrier groups. So I am convinced the US military at some level is well aware of the risks in facing Russia in the Ukraine as well.

    Russia has said it can no longer retreat. I think the center of the problem is the West can’t retreat anymore either. If they did, what would Iran and China (with respect to Taiwan) conclude? This is a real nail biter.

    • The West doesn’t have to “retreat”. All it has to do is stay home and tend to its own garden. Which, incidentally, needs a lot of tending because the gardener has been away from it so long.

      • TTG says:

        The West doesn’t have to retreat. Nor does Russia. Nor does Kyiv. Ukraine doesn’t have to official accept that Crimea is now part of Russia, but she must accept the current reality of it. Just as Russia must accept the current reality of Ukraine’s decision to be part of the West. The countries of eastern and central Europe are sovereign nations, not spoils to be divided amongst the super powers. Belarus threw her lot in with Moscow. Kyiv threw hers in with Washington. Decades from now, it might be totally different.

        Some of Moscow’s demands are ridiculously belligerent. Some are prudent and reasonable ideas for increasing the security of all the regional borders. Moscow’s demand to pull back any short or medium range missile systems out of reach of the border should be pursued… as long as it applies to both sides of the border. Prior notification of military exercises is also a good idea, again, as long as it applies to both sides of the border. Observers to such exercises may also be a good idea.

        • Ghost_Ship says:

          “Moscow’s demand to pull back any short or medium range missile systems out of reach of the border should be pursued… as long as it applies to both sides of the border.”
          Quite agree, United States should pull all it’s short or medium range missile systems back within its own borders.

      • Philip Owen says:

        That’s all NATO has done and is organizationally capable of doing. It’s treaties are set up for defence. The Eastern Europeans that requested to join had histories of being brutalized by the USSR or Imperial Russia.

        In the periods of office of the 12 (at least) senior politicians or officials who promised no NATO expansion, there was no NATO expansion. That’s as much as you can expect from a verbal promise. The former subjects of Imperial Russia have a right to seek self defence.

        Ein Volk, Ein Reich is the call from Moscow not Budapest or Kiev.

    • longarch says:

      I think the center of the problem is the West can’t retreat anymore either. If they did, what would Iran and China (with respect to Taiwan) conclude?

      If the USA decided to hand Taiwan intact to the CCP, Japan might worry that the USA would soon hand Japan to the CCP. I suspect some currently serving officers in the Pentagon would be willing to hand Taiwan to the CCP if all of Taiwan’s key factories were destroyed first. This would make Taiwan an expensive adventure for the CCP, but it would also make life very miserable for a lot of Taiwanese people, and it would not be auspicious for the Quad alliance of India, Australia, Japan, and the USA.

      Even if the USA could miraculously transplant millions of skilled Taiwanese workers to Arizona, and even if the USA could miraculously summon the political will to focus its national attention on manufacturing, it would still take years to re-establish Taiwan’s current semiconductor production in the USA. But those miracles are unlikely. For the moment, the whole planet needs Taiwan’s semiconductors flowing from Taiwan. However, Taiwan is dependent on Western countries (e.g. Netherlands) to make lithography tools necessary for microchips.

      Example:
      https://www.asml.com/en/company/about-asml/asml-at-a-glance

      President Tsai Ying-Wen has recently said that she hopes to encourage foreign companies to produce some of their tools in Taiwan. This might happen to a limited extent, but it is not likely that the Netherlands and similar Western toolmakers will disrupt the balance of power and give up huge profits by handing off crucial secrets. Taiwan can and will make heroic moves toward self-sufficiency in such tools, but it is not likely to achieve total self-sufficiency. This is just as well, because if Taiwan ever did become totally self-sufficient in industrial secrets, the CCP would redouble its efforts to steal Taiwan’s secrets.

      • Ghost_Ship says:

        “Japan might worry that the USA would soon hand Japan to the CCP.”
        Why? Has China ever declared that Japan is really Chinese. Except for a few rocks which may have been Chinese at one time, I’m not aware of any territorial claims by either PRC or ROC on Japan so what is there to hand back?

  12. Sam says:

    “It is my distinct honor and great privilege to introduce His Excellency Xi Jinping, president of the People’s Republic of China, to open the Davos Agenda”

    https://twitter.com/gladstein/status/1483208934273863683?s=21

    Maoism is what is intended. CCP is the instrument. At least Putin’s Russia is Orthodox Christian with that value set. We should know who can be an ally and who definitely is the enemy. The enemy has infiltrated and co-opted our ruling class.

  13. Leith says:

    P.A. – What are your thoughts on Russia-Taliban relations? Are they growing cold again? Kornet ATGMs & PG-7VR tandems are showing up in the hands of the NRF resistance in Afghanistan. Lots of finger pointing at Russia, and good for Putin if he is quietly supporting the resistance. At first I thought it was BS and that they probably came from Tajikistan or one of the other Stans. But ever since FM spokeswoman Maria Zakharova denied that those weapons came from Russia, I’m starting to think “Never believe anything until it is officially denied.”

  14. English Outsider says:

    On energy supplies, even if we get the behind the scenes settlement that David Habakkuk was I think hoping for when the confrontation was last discussed – me too! – the position with energy security in Europe will be less than satisfactory for some time to come.

    Over-reliance on the spot market, neglecting to maximise buffer stocks or in the case of the UK to make adequate provision for storage, and above all the dash for renewable, has left several countries less secure this winter on energy supplies than is quite comfortable. Add to that the elephantine waltz Brussels, Berlin and Gazprom have been engaged in for several years now and there’s not a lot of spare to tide us over.

    But we’d be in that position anyway, confrontation with Russia or not. A few more nuclear power stations shut down for unscheduled repairs, unusually long periods of low winds – any unexpected events such as that and there could be local blackouts or at the least reduction of supplies to industry. The price rises are a different matter. Those seem to be baked in already and that they are unnecessarily steep is due more to an unsatisfactory energy policy in Europe and the UK rather than to a dramatically different Russia policy.

    All that, therefore, is business as usual. But it’s not a good time to be introducing added uncertainty since none, not the specialists here nor other sources one reads, can predict what Russia’s response will be if the Russians don’t get the assurances they want.

    • JerseyJeffersonian says:

      EO,

      I have drawn attention previously to President Putin’s policy pronouncement that, come sufficient provocation, Russia will react asymmetrically. Of course, of necessity what this might entail is left ambiguous; telegraphing what such actions might be would be the height of folly, and counterproductive in the extreme. (Not so the “West”, whose stratagems take basically two forms, either “sanctions”, or Color Revolutions; this makes for ease in planning for these ploys.)

      Let’s just speculate that Russia’s response might take the form of erection of a fully functional alternative to the SWIFT system, pulling most of the teeth of the “Sanctions” threat wielded so liberally by the “West”, facilitating an avoidance of the institutions such as the BIS and such. I rather suspect that multiple countries would be happy to escape that blackmail machine. Consequences might begin to flow from this development that would accelerate the dedollarization of large swathes of the global economy. Uh oh. So much of the “West’s” perceived power flows from the current economic hegemony. And I am sure that other disruptive steps could also be instituted beyond this.

      The burden of the song? It is indeed a multi-polar world, so act as if you understand it.

      • English Outsider says:

        Jeffrey Jeffersonian. I know little of Russia and less of military affairs. But I do believe there’s a long way to go before Russia can recover from the dereliction of the ’90’s and I doubt it’s looking for trouble as it does so.

        So I don’t believe it’s wanting any sort of a scrap, asymmetric or otherwise. Merely wanting to get clear of the European nuisance and fend off the neocons.

        Whether I’m right or wrong on that we in the UK should not be playing mini-neocon on the European mainland. Let Biden and his Euro pals go bear hunting if they’re fools enough. We have no business there.

      • ex-PFC Chuck says:

        You are on to something here, JJ. It’s my understanding Russia and China have been settling transactions between them in their own currencies recently and I presume they are testing their Swift alternative in the process. Given both of those countries have been accumulating gold reserves for years, it’s possible Alt-Swift will be gold-based. It would be extremely disruptive if China, in solidarity or alliance with Russia, announced that going forward from some future, not-too-distant date payment for all of China’s exports to the USA will have to be settled in the Alt-Swift, gold-based system. This would in effect revive the pre-1971 gold standard, with its deflationary downsides for those who are not awash in the metal. Given the USA’s trade deficit with that country, the truckloads of the yellow stuff exiting the NY Fed building frequently would put us in that position.

        • Jay bee says:

          Chuck, I understand that China will implement its new monetary system during thd Olympics. This might be the perfect time for the Alt Swift implementation.

    • TTG says:

      EO,

      You’re right about energy supplies and energy prices. It’s business as usual. Russia supplies a third of Europe’s gas right now. She can’t supply much more, even with the new pipeline. The last five years have seen a massive increase in LNG supply, transport and processing infrastructure worldwide. In most of Europe there is plenty of capacity to accept, process and transport more LNG. The big hit is in the price. Spot market speculation and Covid disruptions are the main culprits in that mess. Massive rise in Asian demand is also to blame. As far as I can see, Russia’s hands are clean in this matter.

      What does the future hold? I think Europe will wean themselves off Russian energy. Russia will turn even more to the Asian market Asian. The big loser will be Ukraine with the complete loss of transit fees and cheaper Russian energy.

      • Fred says:

        TTG,

        The price increase is driven by regulatory action in Europe.

        • TTG says:

          Fred, the prices are increasing worldwide, not just in Europe. I’m sure European regulatory action doesn’t help, but there are other sector-wide factors.

          • Fred says:

            TTG,

            Europe’s pricing issues are in the main due to the regulatory action to 1) close nuclear plants in Germany, 2) require minimum buys of ‘green’ energy, 3) Germany’s prohibition on long term price contracts. California did something as assinine when GW Bush’s buddy, Ken Lay of Enron helped rig that regulatory market. It drove Grey Davis and the Republicans out of office. The state has been in decline ever since then.
            https://www.mondaq.com/uk/oil-gas-electricity/37626/long-term-gas-supply-contracts-prohibition-decision

            The policy decision of President Biden in cancelling all of Trump’s engergy indepence initiatives has, of course, zero impact on any of this.

          • TTG says:

            Fred,

            Those European actions obviously affect local prices, but global supply, demand and storage capacity have a massive effect. Spot market prices are so volatile, It remains a complete mystery to me why Germany would prefer the spot market to long term contracts. China is going for the long term contracts whenever she can.

            “TOKYO — Asian spot prices for liquefied natural gas have dropped by 30% in a span of a week, with Chinese and Japanese inventory pressures easing after a similar plunge in Europe. The weekly LNG spot price for the Asia region stood at $33.80 per million BTU on Thursday last week, down from the record $48.30 logged on Dec. 23. The easing of LNG supply concerns in Europe is a welcome turn for Asian markets like China and Japan, which have growing appetites for natural gas as a cleaner alternative to coal.”

            “China “has inventories approaching the upper limits of storage capacity,” said Toshiyuki Makabe, managing director of commodities sales at Goldman Sachs. Chinese LNG imports rose only 5% in November compared with a year earlier, representing a sharp slowdown from October’s 24% gain.”

            “In Europe, the Dutch TTF benchmark for natural gas was 64.50 euros ($72.83) per megawatt on Dec. 29, the lowest level in about six weeks, according to data from Refinitiv. The reading is down 65% from the record of 184.95 euros on Dec. 21. The dramatic reversal in European LNG prices comes as fears of a winter supply shortage recede. Inventories as of Monday topped 56% of storage capacity. Although the number is still about 17 points below the year-earlier level, stores gained on the previous day for four consecutive days through Sunday. ”

            https://asia.nikkei.com/Business/Energy/Asian-LNG-prices-plunge-30-as-Europe-supply-worries-ease

          • Leith says:

            Fred – Regarding Ken Lay and the ENRON scandal: You have it backwards. The Republicans gained seats in both the US House and in California.

          • Fred says:

            Leith,

            How long did that last?

            TTG.

            Shutting down Trump’s energy policies did what to global supply?

          • TTG says:

            Fred,

            Energy supplies increased in 2021. Demand has also increased. World demand decreased dramatically in 2020 and our production decreased in response. That was under Trump, although he has little to no control over that. The export of US petroleum products, including LNG, has also increased last year. We are expected to be the world’s leading LNG producer and exporter by the end of 2022… under Biden. So what energy policies are you talking about? Pipelines that never pumped a drop? Wells that weren’t yet drilled?

      • English Outsider says:

        TTG – Yes, that’s about as far as one can go. “As far as I can see, Russia’s hands are clean in this matter.” With your proviso very much in mind since the market’s opaque to inspection.

        There are different stories floating around on current natural gas supplies from Russia.

        DW states “On December 21, Russia halted the supply of gas via Yamal-Europe, immediately spooking markets.”

        https://www.dw.com/en/putins-gas-weaponization-hits-a-hot-spot-in-berlin/a-60268858

        So that’s the wicked Putin story that is more or less standard here. Other sources state that it’s Germany and France not buying rather than Russia refusing to sell. A recent Russian statement claims that Germany was buying gas cheap on long term contracts and selling it, at several times the price paid, to Poland.

        That seems to be happening – “A spokesman for Polish energy company PGNiG acknowledged the reverse flows were happening but would not go into detail.

        “I cannot confirm whether the gas coming back from Germany is going to PGNiG, as there are many companies on the market and we consider this a trade secret,” the spokesman said.

        Katja Yafimava a senior research fellow from the Oxford Institute for Energy Studies Gas Research Programme, said there was no need for Gazprom to book capacity on Yamal if it does not have requests for gas on the other side of the pipeline.”

        https://www.euractiv.com/section/energy/news/hoping-for-cheaper-gas-to-come-europe-reverses-russian-link-to-tap-storage/

        But whatever’s happening on that it doesn’t have to be political. Just traders making a buck in a turbulent market. That turbulent market resulting as you say from spot market speculation, increased Asian demand and Covid disruption. Also resulting, however, from regulatory snarl-ups that have plagued European natural gas supplies for some time.

        The Hungarians took the right approach. Fixed up energy supplies, LNG included, wherever they could. On natural gas they ignored the politics of it, went against the EU policy of moving to spot, and secured long term contracts in good time.

        https://newseu.cgtn.com/news/2021-09-28/Hungary-signs-long-term-gas-deal-with-Russia-s-Gazprom-13UgO4BfSiQ/index.html

        The Minister spelt out that approach – “Here in Hungary, energy supply is a matter of security, sovereignty and economics but not politics,” he told the media. “Flats, homes and apartments cannot be heated with political manifestos, only with gas. The same is true with industry.”

        And I must say that I too resent having the price of the propane we use for our gas hob depending, not on the fluctuations of the market, but on political manoeuvres outside our control. Particularly when that increased price feeds into the price of other energy sources as it must.

        But it’s not just the politics of it. It’s the move to Net Zero. The Russians, if they want reliable customers, will have to find them elsewhere than Europe and are already putting in the infrastructure for that. Europe regards Russian natural gas as a stopgap in the process of tapering off fossil fuel use entirely. Why bother too much with European customers who won’t be wanting gas in the future anyway?

    • Ben Grogan says:

      Given the massive demographic changes in the West it doesn’t take a lot of imagination to foresee that any prolonged disruption of goods and services— power, water, food, et al.— will no doubt quickly devolve into an inexorable downward spiral. Hell, it’s been struggling under prosperous conditions. I don’t need to cite the startlingly demographic statistics— which will be radically more diverse in a decade— but sufficed to say that it ain’t your father’s Europe where you had a surplus of men who could both fight wars abroad and maintain and rebuild infrastructure at home.

      But with the U.K. shipping MBT LAWs and other armaments to Ukraine over the past 12 hours I think this is better app to game things out: https://nuclearsecrecy.com/nukemap/

      • Deap says:

        Simple solution to supply chain issues: If it is made in China, we don’t need it. If we need it, we make it ourselves.

  15. Eliot says:

    John,

    “ The problem of our system of democracy is that long term planning is impossible, so it has enabled the bankers to gain control of the political system.”

    I believe bankers are a feature of the system.

    As the middle class grew increasingly wealthy and powerful in the West, they looked for ways to undermine and replace their feudal lords. Democracy was a useful weapon, because it denied the legitimacy of the nobility. And Democracy enfranchises the richest in society, which makes it very attractive, their wealth gives them an incredible ability to influence and control the world around them. They can purchase and rent outcomes, in a way that would otherwise be impossible. And it’s legitimized, vía elections, which they have a profound influence over. Either by picking candidates, or influencing the vote itself.

    If you look at Ancient Greece, Democracy was unstable, and prone to rash decisions, like the punishment of the Mytilenes, but it also seemed to inevitably decay into oligarchy. Which is what we see across most (all?) of the West now. Western nations have become oligarchies.

    We didn’t free ourselves from anything. We traded aristocrats for bankers. And the problem, is that bankers have horrible and corrosive values. And shouldn’t be allowed anywhere near power.

    But here we are.

    – Eliot

    • Eliot,
      I think Michael Hudson touched on this dynamic, between rulers and financiers, in his recent book, Forgive Them Their Debts. Where the rulers/political system need to hold a coherent society together for security, if nothing else, while those with the most wealth use compound interest to suck the rest of society dry. Hence, debt jubilees.
      The point I try making is the basic thermodynamic feedback loops working through society are not that difficult to figure out, but get obscured by the tribal networks and their fights over narrative. For all our fancy technology, we are still fairly socially primitive.
      For example, in culture, good and bad are some cosmic duel between the forces of righteousness and evil, while in nature they are the basic biological binary of beneficial and detrimental. The 1/0 of sentience. Even bacteria get that. Trying to figure out an ideal good is like trying to figure out a perfect yes.

      • blue peacock says:

        The financiers also have a lot of debt in a credit-based system. Additionally, in a fractional reserve system the banks assets are also debt. Unencumbered tangible assets in the real economy of actual produced goods and services as well as real assets are a small fraction of the total credit market debt. That’s why a debt jubilee in a massive credit-based architecture will cause a collapse in the value of financial assets and bring down the credit edifice. There’s a reason why total credit market continues to grow. It has embedded huge losses that need to be papered over and fresh credit to keep financial assets inflated. And government profligacy has to be maintained for the power brokers.

        Fiat currencies have always failed. The current post-70s one is long in the tooth. Can it last another century? Of course hard money also has its drawbacks.

        • That’s why I suspect they will find themselves ever more willing to tolerate just a little more inflation, than actually pop the bubble.
          Dow 50,000. Bread $50.
          Powell doesn’t want to hang from a lamppost.

  16. Tidewater says:

    If you believe this: that Russia has subs capable of launching missiles with a thousand- pound warhead such as the 3M-54 Kalibr from a black hole in the ocean nine hundred miles away, and that these missiles have a CEP of twenty to thirty feet, then it seems to me that there is an unequivocal certainty that the Nordschleuse (‘Nord-schloy-suh’?) and the Kaiserschleuse at Bremerhaven could take hits in their lock chambers which would cause underwater shock waves that would at the very least jam the lock gates. What this means is that there is an Achilles Heel in the design of the dynamic industrial civilization’ of the German Bight–the fenland Friesen coast and its six important cities– and also that of the Netherlands. This is the creation of acres of inner harbor “wet docks” by using schleuse (sea locks) to create impounded water which allows for a stable harbor depth in a region –the North Sea– of extreme diurnal tidal change. Several million marvels of German engineering are transported every year by auto-racked train cars into the Ro-Ro inner harbor at Bremerhaven over railroad bridges and I note at least one bascule bridge. To go forth to meet their new owners these autos must go out through the schleuse into the Weser and then
    across the North Sea.

    It is the same thing for the ongoing NATO Operation that is called Atlantic Resolve. In January of 2017 the United States sealift command delivered via ARC Ro-Ro’s some 87 tanks and 144 Bradley fighting vehicles of the 3rd Armored Brigade Combat team of the Fourth Infantry Division out of Ft. Carson into the inner export harbor ‘water docks’ at Bremerhaven. A combat aviation brigade from Fort Drum also entered the Ro-Ro port docking area, after passing through the same sea locks.

    It is one obvious thing that if you wreck the Nordschleuse and the Kaiserschleuse that NATO will be denied the use of Bremerhaven as a conduit of a Forlorn Hope to a staging area in Poland, but it is an entirely different matter to consider what the threat might be to the industrial civilization of northern Europe in the event of economic warfare against Russia that might follow Putin’s successful rationalization of The Ukraine frontier problem.

    If, after an invasion, NATO continues to ship weapons or troops to the east in a steady, ongoing buildup against Russia into the new Zapadensky region, and if Russia gives warning to Germany that certain ports will be held hostage, and if the west refuses to back off–and I do not think that it will–then consider what could be done to the Netherlands, if they continue to allow American forces to use the port of Rotterdam. One key to water-borne commerce in Holland is the stability of the North Sea canal, which goes from Ijmuiden to Amsterdam. The largest sea-lock in the world is being built at Ijmuiden. It could come on-line this year. It is 500 meters long. Its gates are 72 meters long and 24 meters high. This project is hundreds of millions of euros over budget. It has taken years to build. If that sea-lock gate were smashed I think the entire North Sea canal would have to be shut down. If long- term economic warfare against Russia is in the cards following an invasion of Ukraine, I think it should be borne in mind that Russia could cause trillions of Euros of damage to northern European industrial nations in an afternoon’s work by one or two subs. It would be like dead-heading roses.

    • So many targets, so little time…

      • Tidewater says:

        PA– It seems to me that either NATO is capable of defending Bremerhaven or it is not. If NATO still cannot defend Bremerhaven after this one important High and Heavy wet dock part of the port is suddenly–explosively and shockingly–blasted out of business, with the Russian military warning immediately delivered that the container ship docking section with its long line of cranes along the river Weser, and also the railroad bridges, are going to be the next target –isn’t this checkmate?

        Wouldn’t Germany make a separate peace?

        • TTG says:

          Tidewater,

          Russian kinetic strikes like you’ve been suggesting are a sure way to start a global nuclear war. Neither Putin nor any other sane Russian wants to take that road. Now serious cyber actions can have the same effect without the photogenic shots of smoking ruins that would lead the West to call for immediate like retaliation.

          • Tidewater says:

            Thanks for the hint about the possibilities of Cyberaktion. I was surprised to learn that the water level of the North Sea canal is two meters lower than sea level! Two lock gates opened simultaneously would make quite a current, wouldn’t it?

  17. blue peacock says:

    Patrick,

    Excellent analysis. I don’t disagree with much of it.

    IMO the US needs to fight its internal battle first. This battle is really among the polity, between the Party of Davos & the laptop class that get a few crumbs who carry out their policies and the rest of us – the peons. So far the rest of us have been successfully divided to fight each other on the basis of partisanship, race, woke/anti-woke, covidian/anti-covidian, etc.

    On the strategic issues that your raise in your post, many, including you here, have the analysis that Russia+China = Unity. I’m inherently skeptical as the primary factor for unity is opposition to US hegemony. If that is achieved as you argue, what happens to that Unity? One is a completely totalitarian state under the nominal ideology of communism and the other is much more western in its ideology and cultural makeup including the resurgence of Orthodox Christianity.

    The second is “The so-called “Thucydides trap” is the name given to a condition when one power (Sparta then, USA now) fears the rising power of (Athens then, China and Russia today) and starts a war because it fears its position can only weaken. The brutal truth is that that point has already been passed: Russia+China are more powerful than the USA and its allies in every measurable matter..”. This again is a viewpoint that has become a cliché, with books and much ink spilled. As a general skeptic, I’d rather explore a contrarian viewpoint, and that is rather than the Thucydides Trap, you have the Middle-Income Trap and specifically here CCP run China. Xi is already killing Deng’s golden goose and you have new impetus all over the world that you highlight with Russia to reshore production and overcome the problems with supply chain reliability. This is being reinforced with new emerging manufacturing technologies. Additionally, similar to Japan in the late 80s, the Chinese banking system has become gargantuan relative to the size of their economy and that is not an architecture for financial stability. So the threat is not necessarily a declining power but an ascending power realizing that their power is leveling off and wanting to take advantage of the apogee of their power. Wouldn’t it be conceivable in such a scenario that the CCP would not only seek to consolidate its position against the west but also against all its neighbors including India, Vietnam, and Japan but also Putin’s Russia eventually?

    • Deap says:

      US weakens. China teeters. Russia’s soul is programed for self-destruction once it leaves home base. A cage match standoff among co-equals, for different reasons. That is how I see it. Three legged stools are more stable than two legged ones. MAGA was independent self-sufficiency; not global domination.

      • jim ticehurst says:

        ” Russia’s Soul is Programmed for Self Destruction..Once it Leaves its Home Base…” What an Interesting Comment…Why is That..I Wonder,,,I think they Did Well to End The Cold War…Agreed To Nuclear talks .tone things down..and make the changes they did..Even if it Meant Drastic Measures ..They went into Afghanistan..We gave the Taliban Aid..and they Left…No self destruction there..We stayed around and self Destructed for the Next Twenty Years..While the Russians went home..rebuilt Thier Economy..Imporved the Quality of Life for its Citizens..End Most Crime..Tripled Wheat Production..Storage and shipping…Improved Farm and Cattle Productions..,,,,,Reality Is..The United Stated has Self Destructed..and Lost alot Of Treasure and Human Life…and Its Own SOUL ..Daily Evil I see..on The Streets ..Death..Destruction..Murder..Perversion..Drug Abuse..Political Corruption ..Anarchy are NOT in Russia…The CORRUPTERS are Right here..24/7..The Son of Perdition. Is Being Revealed in America..Drooling..and Decayed…

  18. Barbara Ann says:

    Patrick

    Re Novorossiya: I see the Russian language has been purged from all Ukrainian newspapers & magazines as of this week. This seems a pretty clear indication that whatever happens to Novorossiya it isn’t going back to Ukraine.

    https://tass.com/world/1388729

    Re the dire state of ‘news’ on Ukraine in the US, I see that Politico is now publishing articles “presented by” Lockheed Martin. Is this what used to be called an advertising feature?

    https://www.politico.com/newsletters/national-security-daily/2022/01/14/us-has-intel-about-possible-russian-false-flag-op-495739

  19. Mark Logan says:

    Putin seems to have practiced a bit of “gunboat diplomacy”, he’s got the West to come to the table, and this time seriously so. It’s fortunate and a positive omen the Russia deployment did not spawn a mirror deployment/mobilization. The West has signaled a desire to jaw-jaw.

    The outstanding question remains: What does Putin want to come of it?

    • jim ticehurst says:

      Mark…Good Question…”What does Putin Want”?? I Believe He wants exactly what He Says He Wants…and Not Just Him..Its What All of Russia wants.. An End to MAD..(Mutual Assured Destruction ) Threats…and A New Age of MAS..(Mutual Assured Security),,with Some Recognition of Russia’s Legitimate Security Concerns…They are NOT Unreasonable..There has Been enough War in Europe…Tragic Loss of Life..on all sides…Let them negotiate for their Security. And Conduct Business with any nation willing to do business with Them…Just Like the Western Powers Do…Especially With China. Pathetic Hypocrisy…and Terrible Lack of Good Judgement..

  20. Leith says:

    Re Kazakhstan: the Russian Defense Ministry announced today that “peacekeeping forces of Collective Security Treaty Organization (CSTO) have begun to withdraw from Kazakhstan and hand over the sites it supervises protection to Kazakhstan security forces. “

  21. Les7 says:

    Patrick,
    I’ve followed you for years. Thanks for holding to truth.

    Putin has said ” Never interrupt your enemy when they are doing something stupid” The West is doing stupid on multiple levels. Yet what Putin has just done threatens to interrupt that ‘stupid self-destructive process on just about all levels.

    Putin did not need to go public on this. He
    could have kept setting the stage, quietly. Why go public? Why shock the enemy and get them to focus??

    Is Putin, in the long game , trying to keep the US relevent on some way?

  22. Tidewater says:

    Thanks for the hint about the possibilities of Cyberaktion. I was surprised to learn that the water level of the North Sea canal is two meters lower than sea level! Two lock gates opened simultaneously would make quite a current, wouldn’t it?

    • I’m sure some strategist like Sun Tsu or Suvorov said something about always leaving an enemy a retreat route. Russia just wants the USA/NATO to leave it alone so it can fix up its own messes. If you read VVP’s speeches as I have for 20 years, the overwhelming emphasis is on home stuff — poverty, infrastructure, efficient government, corruption and the like. He’s often said that communism left a mess behind it. For example: “In the Soviet Union, for many decades, we lived under the motto, we need to think about the future generation. But we never thought about the existing, current, present generations. And at the end of the day, we have destroyed the country, not thinking about the people living today.” (Putin, press conference in Washington, 16 Sept 2005, White House website).

      • Philip Owen says:

        I have also read Putin’s speeches. The “threats” to launch hypersonic missiles (how many functioning ones have been built at a time of large military budget cuts?) were made at the annual conference of senior military officers. He talked about soldiers’ living conditions in the same speech. In context it was not so aggressive.

        That said, Russia had genuine anti Ukrainian exercises in April. Alongside the military there was a huge wave of organized xenophobic propaganda against NATO and the countries of GUAM.

        What we have now since late October is the very substantial Ukrainian counterattack ramped up by the descendants of the now free peoples damaged by the Russian Empire and USSR whose descendants run North America (some say 30% of Canadians have at least one Ukrainian grandparent). Russia’s Irish problem dwarfs the UK’s. They all piled in, often hysterically. The target was probably North Stream but the campaign seems to have succeeded beyond expectations. Russia then stupidly counterattacked with its own belligerence. “My patience is at an end”. Where have we heard that before? The parallels with the 1930’s are very clear. Molotov and Ribbentrop went ahead and defined their areas of influence. The follow on was not good.

        Meanwhile, a map to shwo where Ukrainians lived before there were campaigns to erase them culturally.

        https://www.reddit.com/r/MapPorn/comments/dwztpt/high_res_ukraine_ethnic_map_circa_1900/

  23. Deap says:

    Biden pushing his Green New Deal and climate change agenda is how he gets back at Russia’s new fossil fuel wealth.

    How much of Biden’s big new funding programs is now dedicated to “green” incentives and rapidly moving to alternate fuels and new forms of mass transportation? A lot.

    Alternate fuels remain more fancy than fact in practical terms, but they are the stick Biden is using to beat up Putin. Too bad Biden is a bumbling old fool the rest of the world intends to just wait out.

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