Russia Inks Expansive New Energy And Weapons Deal With Iran

oilprice  |  Iran’s Supreme Leader, Ali Khamenei, gave his official approval on 18 January to a new 20-year comprehensive cooperation deal between the Islamic Republic of Iran and Russia, according to a senior energy source in Iran and a senior source in the European Union’s (E.U.) energy security complex, exclusively spoken to by OilPrice.com last week. The 20-year deal – ‘The Treaty on the Basis of Mutual Relations and Principles of Cooperation between Iran and Russia’ - was presented for his consideration on 11 December 2023. It will replace the 10-year-deal signed in March 2001 (extended twice by five years) and has been expanded not only in duration but also in scope and scale, particularly in the defense and energy sectors. In several respects, the new deal additionally complements key elements of the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and analysed in full in my new book on the new global oil market order.

In the energy sector to begin with, the new deal gives Russia the first right of extraction in the Iranian section of the Caspian Sea, including the potentially huge Chalous field. The wider Caspian basins area, including both onshore and offshore fields, is conservatively estimated to have around 48 billion barrels of oil and 292 trillion cubic feet (tcf) of natural gas in proven and probable reserves. In 2019, Russia was instrumental in changing the legal status of the Caspian basins area, cutting Iran’s share from 50 percent to just 11.875 percent in the process, as also detailed in my new book. Before the Chalous discovery, this meant that Iran would lose at least US$3.2 trillion in revenues from the lost value of energy products across the shared assets of the Caspian Sea resource going forward. Given the newest internal-use only estimates from Iran and Russia, this figure could be a lot higher. Previously, the estimates were that Chalous contained around 124 billion cubic feet (bcf) of gas in place. This equated to around one quarter of the gas reserves contained in Iran’s supergiant South Pars natural gas field that account for around 40 percent of Iran’s total estimated gas reserves and about 80 per cent of its gas production. The new estimates are that it is a twin-field site, nine kilometres apart, with ‘Greater’ Chalous having 208 bcf of gas in place, and ‘Lesser’ Chalous having 42 bcf of gas, giving a combined figure of 250 bcm of gas. 

Related: E&P Companies Face Tough Year Despite Oil Patch 'Bumper Crop'

The same right of first extraction for Russia will also now apply to Iran’s major oil and gas fields in the Khorramshahr and nearby Ilam provinces that border Iraq. The shared fields of Iran and Iraq have long allowed Tehran to side-step sanctions in place against its key oil sector, as it is impossible to tell what oil has come from the Iranian side or the Iraqi side of these fields, which means that Iran is able simply to rebrand its own sanctioned oil as unsanctioned Iraqi oil and ship it anywhere it wants, as also analysed in full in my new book on the new global oil market order. Former Petroleum Minister, Bijan Zanganeh, publicly highlighted this very practice when he said in 2020: “What we export is not under Iran’s name. The documents are changed over and over, as well as [the] specifications.” Another advantage of the shared fields is that they allow effectively free movement of personnel from the Iranian side to the Iraqi side, and the utilisation of key oil and gas developments across Iraq is a key part of Iran’s longstanding plan, fully supported by Russia, to build a ‘land bridge’ to the Mediterranean Sea coast of Syria. This would enable Iran and Russia to exponentially increase weapons delivery into southern Lebanon and the Golan Heights area of Syria to be used in attacks on Israel. The core aim of this policy is to provoke a broader conflict in the Middle East that would draw in the U.S. and its allies into an unwinnable war of the sort seen recently in Iraq and Afghanistan, and which may soon be seen as the Israel-Hamas War escalates.

The price of all manufactured items traded between Russia and Iran, including military and energy hardware, has been formalised in the new deal, although also not in Iran’s favour. For Iranian goods exported to Russia, Tehran will receive the cost of production plus 8 percent. However, these export sales to Russia will not be transferred to Iran, but rather they will be held as credit in the Central Bank of Russia (CBR). Moreover, Iran will receive a huge markdown on US dollar/Rouble or Euro/Rouble exchange rates used to calculate its credits in the CBR. Conversely, for Russian goods exported to Iran, Moscow will receive the payment in advance of delivery and at a much stronger exchange rate that benefits Russia. Moreover, the base price before any exchange rate calculations are made, will be founded on the highest price that Russia has received in the previous 180 days for whichever product it is selling Iran. This system has informally been in place for several weeks now, and according to the senior energy sector source in Tehran exclusively spoken to by OilPrice.com last week, Russia has ensured itself the highest possible price by selling to Belarus at a very large premium whichever product it intends to sell later to Iran, so establishing the required pricing benchmark. Payments for goods and services falling outside the direct finance route between the central banks of the two countries can now be done through interbank transfers between Iranian and Russian banks. Those also involving renminbi can also be done through China’s Cross-Border Interbank Payment System (CIPS) system, its alternative to the globally-dominant Society for Worldwide Interbank Financial Telecommunications (SWIFT) system. 

In many cases, the expansion of military cooperation between Iran and Russia is tied into the energy sector elements of the new 20-year deal. Progress is earmarked to be made on upgrading the facilities at the key airports and seaports that have long been targeted by Russia as being especially useful for dual-use by its air force and navy, and which are also close to major oil and gas facilities. Top of the list of Iranian airports that Russia regards as the best for dual-use by its air force are Hamedan, Bandar Abbas, Chabahar, and Abadan, and it is apposite to note that in August 2016, Russia used the Hamedan airbase to launch attacks on targets in Syria using both Tupolev-22M3 long-range bombers and Sukhoi-34 strike fighters. Top of the list of seaports for use by its navy are Chabahar, Bandar-e-Bushehr, and Bandar Abbas. Similarly linked to Russia’s gaining the first right of extraction in the Iranian section of the Caspian Sea is that it will also be given a joint command capability over the northern aerospace defense section of Iran’s Caspian area.

Nixon Didn't Even Understand The New Economic Policy - But He Believed Kissinger

cointribune  |  Henry Kissinger became Secretary of State under President Richard Nixon in 1973. That is, just two years after the end of the gold standard.

The collapse of the international monetary system established in 1944 at Bretton Woods should have dug the grave of the dollar. But that was without counting on Henry Kissinger and his brilliant geopolitical poker move: the petrodollar…

Indeed, the beginnings of the petrodollar date back to 1945, when American President Roosevelt, returning from the Yalta Conference with Stalin and Churchill, met with King Abdul Aziz aboard the USS Quincy.

This meeting was later called the Quincy Pact. Kranklin Roosevelt secured a guarantee from Saudi Arabia to supply American energy needs for 60 years.

Owing to current events, it is worth noting that the American president had to promise not to allow the creation of a Jewish state in Palestine. Unfortunately, or fortunately depending on one’s view, Roosevelt died two months later and his successor Harry Truman, hand in hand with the British, recognized the State of Israel immediately after its creation.

Despite this betrayal, Saudi Arabia did not sever ties. It needed Washington to counter the growing popularity of Nasser in Egypt. His pan-Arab socialist policy was indeed an existential threat to the Saudi monarchy. The United States saw an opportunity to counter the USSR, which was then allied with Cairo.

But let’s focus on H. Kissinger.

The Masterstroke

His poker move took place in June 1974 during a meeting with King Faisal bin Abdul Aziz in Saudi Arabia. It was the climax of a Machiavellian plan rooted in the Israeli-Arab War of Yom Kippur (1973).

At the time, Kissinger convinced President Nixon to intervene in favor of Israel. Henry Kissinger was indeed Jewish. In retaliation, Saudi Arabia raised the price of a barrel of oil from $3 to $12.

This is exactly what Henry Kissinger wanted, who ended up simply threatening Saudi Arabia to use force to address what he then called the “strangulation of the industrialized world”. It wasn’t a bluff. The London Sunday Times revealed in February 1975 the existence of operation “Dhahran Option Four” which envisioned invading Saudi Arabia.

King Faisal heard these drumbeats loud and clear and, by the end of 1974, reached an agreement with Kissinger, who promised unlimited arms sales and a return of Israel to its 1948 borders.

In exchange, the kingdom had to commit to two things:

    To sell its oil EXCLUSIVELY in dollars,
    To invest its dollar surpluses in US debt.

The petrodollar was born, thanks to H. Kissinger, who was undoubtedly a key player in the special relationship that the United States maintains with Israel.

The European nations that had the audacity to exchange their dollars for gold were forced to accumulate dollars again to buy the oil essential to any industrialized nation. Checkmate.

As for the agreement on Israel’s borders, it was quickly forgotten after the assassination of King Faisal a few months later…

 

Have Iran And Russia Set A Trap In Palestine?

thecradle  |    Hamas has called on the millions of Palestinians in the diaspora, as well as the whole Arab world and all lands of Islam, to unite. Slowly but surely, a pattern may be discerned: could the Arab world – and great swathes of Islam – be on the verge of significantly uniting to avenge their own “century of humiliation” – much as the Chinese did after WWII with Mao Zedong and Deng Xiaoping? Beijing, via its sophisticated diplomacy, is certainly hinting at it to key players, even before the ground-breaking, Russia-China brokered Iran-Saudi rapprochement was struck earlier this year. That by itself won’t thwart the perpetual US neocon obsession to bomb critical infrastructure in Iran. Worth less than zero when it comes to military science, these neocons ignore how Iranian retaliation would – accurately – target each and every US base in Iraq and Syria, with the Persian Gulf an open case.

Peerless Russian military analyst Andrei Martyanov has shown what could happen to those expensive American iron bathtubs in the Eastern Mediterranean in case of an Israeli-threatened attack on Iran. Moreover, there are at least 1,000 US troops in northern Syria stealing the country’s oil – which would also become an instant target. Ali Fadavi, IRGC’s deputy commander-in-chief, cut to the chase: “We have technologies in the military field that no one knows about, and the Americans will know about them when we use them.” Cue to Iranian hypersonic Fattah missiles – cousins to the Khinzal and the DF-27 – traveling at Mach 15, and able to reach any target in Israel in 400 seconds. And add to it sophisticated Russian electronic warfare (EW). As confirmed in Moscow six months ago, when it comes to military interconnection, the Iranians told the Russians at the same table, “whatever you need, just ask.”

The same applies vice-versa, because the mutual enemy is one and the same. The heart of the matter in any Russian-Iran strategy is the Strait of Hormuz, through which transits at least 20 percent of the world’s oil (nearly 17 million barrels a day) plus 18 percent of liquified natural gas (LNG), which amounts to at least 3.5 billion cubic feet a day. Iran is able to block the Strait of Hormuz in a flash. For starters, that would be some sort of poetic justice retribution for Israel aiming to gobble up, illegally, all the multibillion-dollar natural gas discovered offshore Gaza: this is, incidentally, one of the absolutely key reasons for the ethnic cleansing of Palestine. Yet the real deal will be to bring down the Wall Street-engineered $618 trillion derivative structure, as confirmed for years by analysts at Goldman Sachs and JP Morgan, as well as independent Persian Gulf energy traders.

So when push comes to shove – and way beyond the defense of Palestine and in a scenario of Total War – not only Russia-Iran but key players of the Arab world about to become members of BRICS 11 – such as Saudi Arabia and the UAE – do have what it takes to bring down the US financial system anytime they choose. As an old school Deep State higher up, now in business in Central Europe, stresses: “The Islamic nations have the economic advantage. They can blow up the international financial system by cutting off the oil. They do not have to fire a single shot. Iran and Saudi Arabia are allying together. The 2008 crisis took 29 trillion dollars to solve but this one, should it happen, could not be solved even with 100 trillion dollars of fiat instruments.” As Persian Gulf traders told me, one possible scenario is OPEC starting to sanction Europe, first from Kuwait and then spreading from one OPEC country to another and to all countries that are treating the Muslim world as enemies and war fodder.

Russia Has Reoriented Toward The Arab World

johnhelmer.net  |  In the first direct Russian warning to the  US Navy force in the Eastern Mediterranean,  Zakharova added: “So far we see that the situation is developing along the path of escalation. There is a great risk of involving third forces in this conflict. And this is fraught with long-term consequences for the region and for the world.”

Putin followed in the evening on the telephone with the Turkish President, Recep Tayyip Erdogan. “The need for an immediate ceasefire by both sides and the resumption of the negotiation process was emphasised,” according to the Kremlin’s communiqué. “Mutual readiness to actively contribute to this was expressed…Separate issues of Russian-Turkish cooperation in various fields were also touched upon.”

Erdogan’s press release was more revealing. He and Putin had “touched upon what initiatives can be taken to meet humanitarian needs in the region, as the Turkish president told Putin that targeting civilian settlements is worrying and Türkiye does not welcome such move.”   Erdogan’s twitter announcement adds: “President Erdoğan and President Putin of Russia also exchanged views on potential initiatives to meet humanitarian needs in the region.”

This is a hint that Erdogan and Putin are contemplating a Turkish ship convoy of aid to Gaza, protected from Israeli attack by the Russian Navy from its Tartous base on the Syrian coast, and by the Russian Air Force from Hmeimim. This humanitarian operation by sea would aim at breaking the blockade of the coast by the Israelis, and running the gauntlet of the USS Gerald Ford and its squadron further offshore.  If this operation, a reminder of the Gaza Flotilla of 2010,   is in planning now – the open signals are warning Washington and the US Navy to expect it – then the confrontation, and the risk to the US and Israel of strategic defeat at sea, are unprecedented.

The planning of Russian military protection of seaborne humanitarian aid convoys to the Gaza also extends to Egypt.

This was touched on in the conversation which Egyptian Foreign Minister Sameh Shoukry had with Foreign Minister Sergei Lavrov.  That was followed by Egyptian press disclosure of Israeli warnings, following by bombings, to stop Egyptian trucks delivering aid into Gaza across the Rafah land bridge at the southern end of Gaza.

An alternative Egyptian option is a naval convoy. If this will be coordinated through the Kremlin and the Russian Defense Ministry with an Erdogan-Putin plan of a Turkish convoy sailing from the north, the escalation to regional and superpower level will have materialised before the Israeli invasion of Gaza can preempt it.

The Russian Defense Ministry has not been silent towards Israel in the past. Since the ambush by the Israel Air Force of the Russian Il-20 surveillance aircraft, and the killing of its 15-man crew in September 2018, the General Staff has said it has been reserving its moves against the Israelis while identifying them as the enemy.

Vzglyad, the Moscow platform for Russian military and security thinking, editorialised on April 17, 2023, that in siding with the Ukraine during the Special Military Operation, the Israeli government had become Russia’s adversary: “The time has come to take a new position on the Palestinian issue. To take the celebration of Al-Quds Day to a new level, as well as to take a more pro-Palestinian position in the Middle East conflict. To stand on the side of those who help Russia within the framework of their own interests (Iran, Saudi Arabia) against those who help our enemies. And thereby to send a very clear signal to the world – a signal that Russia will treat its partners exactly as they treat it. To help supporters – and not to act in the interests of opponents.”

The creation of a humanitarian corridor was explicitly mentioned in the Foreign Ministry briefing on Tuesday.   “Tensions are rising in the West Bank of the Jordan River. There are high risks of the conflict spreading to the area of the Lebanese-Israeli border and drawing new parties into it. A large-scale humanitarian catastrophe is unfolding before our eyes. The main thing now is to cease fire and stop the bloodshed. We support the efforts of interested parties aimed at solving this priority task. This would make it possible to avoid new victims, end the suffering of the civilian population, ensure its evacuation through humanitarian corridors and prevent the situation from sliding into a region-wide humanitarian catastrophe. This is not just a crisis or an emergency. We are talking about the fate of millions of people.”

Spokesman Zakharova also struck at the CIA and the Pentagon for their surprise defeat by Hamas. “How did it happen that in a year; that’s how much time the operation was being prepared for, then carried out now in a few days, the United States as Israel’s closest ally did not warn about this? They have satellites everywhere, appropriate tracking devices, military bases, including in the region. There are all the possibilities to carry out, not just monitoring, but surveillance — the facts speak for themselves — of all information circulating on American-made equipment (hardware and software). For the whole year of preparing such a large-scale operation, the United States with all the power of its special services did not transmit anything to Israel as intelligence…How did it happen that during the whole year of preparation of the corresponding operation in the Middle East, the United States did not transmit any information to its partners in Israel?”

By contrast, the Foreign Ministry spokesman said, “for two months at the end of 2021 and two months at the beginning of 2022, the United States at all levels told how Russia would  ‘attack’ Ukraine. This was done specifically to create an information backdrop in order to divert the eyes of the whole world from how, for all these years, the United States and their NATO colleagues (primarily the United Kingdom) have been pumping Ukraine with weapons and creating the anti-Russia project, an anti-Russian springboard…After the corresponding instruction from Washington, a multiple increase in the shelling of Donbass by the regime of V.A. Zelensky followed.  Then, in late 2021-early 2022, the US ‘knew everything’ and told everyone. But in the area of their direct responsibility — the Middle East has always been one of them — in relation to the closest ally over which the American protectorate is carried out, the US special services, the State Department and the White House did not transmit any information necessary for self-defence.”

Even The Moustache Of Understanding Is Telling Israel "To Be Smart!!!"

Israel Has Never Needed to Be Smarter Than in This Moment

the cradle  |  Hamas did not coordinate its military operation with any of its Resistance Axis allies. It also did not plan to achieve the stunning results that were soon to follow. The Qassam Brigades' immediate goal was only to destroy Israeli army positions around the Gaza Strip and capture as many soldiers as possible, which they could later exchange for the thousands of Palestinian captives in Israeli prisons. 

But the Palestinian resistance forces were taken by surprise at the laxity of the occupation army. Contrary to expectations, they stumbled upon security vacuums and poorly guarded military sites in which a large number of enemy soldiers and officers were fast asleep. It was this unexpected opportunity that prodded the Palestinian fighters to reach for bigger gains.

Hamas' military leadership planned to carry out this operation in complete secrecy. Just weeks earlier, their fighters had conducted military maneuvers/exercises that were observed by the Israelis. But Tel Aviv's rather complacent intelligence assessment had been that "Hamas is training for what it does not dare to do." The Israelis, in short, thought that Hamas was merely flexing in order to gain financial concessions for Gaza. No actual operation was ever expected by Israel's military brass.

The veil of secrecy over the operation also extended to the Hamas fighters who carried out the attack. Sources close to Hamas say that their cadres believed, until the morning of the operation, that they were assembling for a training exercise, not for the real thing. 

Very few knew details of the comprehensive attack plan. Even Hamas' allies in Lebanon and Iran learned of the operation at zero o'clock and not a moment before, according to well-informed sources in the Resistance Axis. 

Even for this axis, the Hamas operation went beyond all possible expectations. Although true that many of the Hamas tactics employed are shared among the Axis' fighters in Palestine, Lebanon, Iran, and Yemen, the innovation in the Al-Aqsa Flood operation was the signature of the Al-Qassam Brigades, and particularly its brilliant leader Muhammad Deif.

The operation was coordinated with remarkable professionalism: accurate and detailed intelligence was amassed, high-level training exercises organized, secrecy was paramount, and superior coordination was established between the myriad drones, paratroopers, and vast majority of Hamas fighters who crossed into the occupation state, through tunnels and above ground. 

Al Qassam also planned to target Israeli communications towers and all military sites surrounding Gaza. From a military perspective, this was a near-perfect operation that led to the destruction of all the facilities of the Israeli army's “Gaza Division" and the annihilation of entire Israeli brigades. For Israel, this was a total humiliation - something it had never experienced before, even in the devastating 1973 Arab-Israeli war. 

A zero-sum game

With the support of the collective west, Israel is now assembling a plan to restore its deterrence. Operation Al-Aqsa Flood didn't only affect the Israelis - it has also endangered western deterrence throughout West Asia and the Arab world. The decline in Israel's deterrent capacity correlates directly with the weakening of western hegemony in the region.

While Israel has been scurrying around to mobilize its troops and equipment for a counterattack, the Americans sent messages to the Resistance Axis - specifically Iran and Hezbollah - saying, essentially: “We don’t want this to escalate. We want and need stability on the Lebanese border with Israel. We are urging you not to interfere in this war.” 

The messages were sent on 7 October, as events unfolded, and through more than one medium. Hezbollah's response was seen on the ground the very next morning, when it bombed Israeli army positions in the occupied Lebanese Shebaa Farms. This was a warning message, which was clarified further by Hezbollah's Executive Council Chief Hashem Safi Al-Din when he said: “We will not remain neutral in this battle.” 

Neither will Washington, which immediately announced $8 billion in aid to Israel, and sent an aircraft carrier to the eastern Mediterranean Sea. The US cannot afford for Israel to take more losses, but how far will they go to deter Tel Aviv's adversaries?

Within the axis of resistance, from Iran to Gaza, there is a uniform decision to prevent the defeat of any of the principal allies. As this axis made clear during the Syrian war, a major attack on one will be viewed as an attack on all. Today, their red line is preventing the collapse of the resistance in Gaza.

Israel's urgent need to restore its deterrence is not, however, possible without destroying Gaza's resistance factions. Both Netanyahu and Israeli Defense Minister Yoav Galant have ominously warned that Tel Aviv’s response to Gaza’s attack will “change the Middle East.”  Those are fighting words indeed: the US called for the birthing of a “new Middle East” during Israel's month-long bombardment of Lebanon in July 2006.

Tel Aviv and Washington want to take down the Palestinian resistance while ensuring that no other battle fronts flare up to distract from that mission. Of course, the Resistance Axis principals will seek to do exactly the opposite, doing what is necessary to distract Israel from its strategic objective. 

 

The Managed Withdrawal Eliminates The Thing DC And Kiev Were Hanging Their Hats On...,

You can’t understand military operations at any level without also understanding basic geography — especially the height of terrain features (hence the universal tactical imperative to “hold the high ground”).

The entire managed withdrawal (retreat) conversation has missed the crucial fact that the west bank of the Dnieper River is much higher than the east bank — thus there is no possibility of flooding the west side of the river. Any high water would inundate the flood plain to the east, which would cause the heavy artillery stationed there to displace and would disrupt fire support to the forces holding west of the river — not to mention also causing havoc with the supply lines leading up to the choke points of the bridges and ferries crossing the Dnieper, many of which would be damaged/washed away if the British managed to break the big Kakhovskaya dam with one of their underwater drones.

That is the problem that General Surovikin is pre-empting by his managed withdrawal from the east bank of the Dnieper now vs the chaos of a forced retreat after the SHTF from a massive dam break. The only inundation of the west bank that I can see occurs where the river just north of Kherson flows into the Dnieper, and it's relatively minor.

The article begins with the statement:
“A worst case modelling for a Russian demolition of the Nova Kakhovka Dnipro river dam show that the worst flooding will take place on the left (south east) side of the river bank.”  The animated map of the projected flooding is quite interesting, especially regarding the big backflow up the Bug River.  It shows that the majority of the water would inundate the east ban.   The right (west bank) of the river is generally higher than the east bank all the way north to Kiev. An old chestnut about WW II is that “if the Todt organization had begun fortifying the west bank of the Dnieper in 1942, the Germans would still be defending that line today….”

With Russian forces on the right bank Ukraine has good reason to combine destroying the dam with an offensive or just destroying it. Since Russia doesn’t really have the manpower applied to the conflict to do big pushes towards Nikolaev and Odessa the point of occupying the right bank at the moment is pride. And a temptation to dam busting. Ukraine might still blow up the dam, but it won’t create a huge blow to crimea and a military catastrophe along the river. The withdrawal also eliminates the legal reason for destroying the dam (it’s not legally prohibited when it serves a military purpose).

And in a weird way it eliminates the thing Kiev and DC we’re hanging their hats on. Sure, it can be said that Russia ran away but that’s a short news item. A defeat in the field was necessary; large losses, surrender, chaos. It’s not a short war anymore so it cannot be prosecuted like one. And the last thing the US needs or wants is an actual long war (funding a long insurgency is different). The Ukrainian state isn’t Russia’s problem and it’s a very big and growing problem.

What Happens To Europe When Russia Wins?

thesaker  |  If the unprecedented tidal wave of sanctions which the West had sent toward Russia had produced some sort of tangible effect during the first two or three months of Russia’s special operation in the Ukraine, then this strategy would have been quite enough to ease suffering Western masses through the shock of the unfolding crisis (although the crisis would continue to unfold even if the Russian economy had collapsed). But over the longer term this strategy stops working. First, the “blame Putin” narrative is rather monotonous and gets old quickly. Second, and far more importantly, at the level of mass subconscious, it creates the impression that Putin is a god: super-powerful, super-influential and able to influence processes both global and local through subtle and invisible means. Moreover, Putin the god is Zeus-like and has powerful atomic thunderbolts at his disposal, adding terrifying appeal to his already frightful image.

Sooner or later the Western mass subconscious will form a simple and perfectly logical thought: if Putin is all-powerful and super-influential, and if we with our feeble “sanctions from Hell” can do nothing to weaken or dislodge him over three, then five, then seven months, then, obviously, we must come to terms with him and accede to his demands before things get any worse for us! And while it would be demeaning for the Western mass subconscious to negotiate with a petty tyrant or a mad despot, negotiating with an all-powerful demigod who holds the fate of humanity in his hands is not shameful at all but a necessary, unavoidable, eminently reasonable measure. Moreover, it should be possible to portray such a compromise in flattering terms: as a magnanimous gift from the community of civilized nations offered in good faith in order to save the world from nuclear armageddon about to be unleashed by an angry, all-powerful demigod.

In turn, if Western politicians are, as one might expect, reluctant to negotiate with Putin and to compromise, suffering Western masses will blame them for any delay. If Putin is all-powerful and super-influential, then why aren’t they negotiating and seeking compromise? What are they waiting for? What’s wrong with them? The better-informed element among the Western masses might even be able to vaguely guess at a seldom-discussed but rather obvious fact: what Putin wants is not at all unreasonable. He just wants some of Ukraine (not necessarily even all of it—just the enthusiastically, patriotically Russian bits) and he also wants NATO the hell away from Russia’s borders. “What do we want this Ukraine for anyway?” this enlightened element might inquire. After all, most people in the West lived many happy years not knowing that the Ukraine even existed. What’s more, their recent discovery of its existence has coincided with the onset of a very nasty crisis—and they still can’t find the damned place on a map! And now they have to suffer with sky-high gas prices, with unaffordable food, galloping inflation, shortages of baby formula—all because some idiot politicians are refusing to give Putin this fucking Ukraine which nobody else wants anyway? (Well, Poland does, but who the heck is Poland?) Come on! Be reasonable! Get rid of this stupid Hunter Biden playground and let’s get on with it!

That is the new narrative that is inevitably forming in the mass subconscious of the West, and as time passes, energy prices continue to increase, shortages of all sorts of things become commonplace… and meanwhile the ruble strengthens and Russia gets richer and richer in spite of “sanctions from Hell,” unhurriedly moving its fabled wall of artillery fire westward across the Ukrainian landscape, this narrative will become stronger and stronger and will eventually become dominant. At that point, any attempt to “blame Putin” will be met with boos, hisses and a volley of rotten vegetables. What should we expect Western politicians to do under such circumstances? We should not expect any surprises; they will do what they have always done: they will try to suppress the new, competing narrative. They will “cancel” anyone who tries to articulate it within the media space. (Tucker Carlson beware!)

In doing so, the West will neatly echo what’s happened within the Ukraine itself—a symptom of a creeping Ukrainization of the West. In the Ukraine, for every single disastrous, catastrophic failure that had occurred in 2014 and 2015, the Kiev regime blamed it squarely on Putin personally. Over time it has succeeded in forming a sort of quasi-cult of Putin as an all-powerful evil deity hell-bent on destroying poor, sore-beset little cuddly Ukraine. As a result, by 2018 give or take a year, in the Ukrainian mass subconscious there formed a new narrative: “What do we need this Russian-infested Crimea or this ornery Donbass for? Why can’t we just give them to Putin, so that he leaves us alone and lets us develop as a European-oriented country?”

What did the Kiev regime do about this new narrative? It did whatever it could to suppress it. This wasn’t any sort of independent initiative on its part; it is, after all, a colonial administration run from Washington. And since Washington was busy architecting a Ukrainian war against Russia, any narrative that involved making peace with Russia was simply not allowed. That’s why all Ukrainian opposition political parties were banned, all non-government-controlled television channels were shut down and anyone who ventured to guess that giving de facto independent territories a chance to decide their own fate might be a good idea were charged with separatism and imprisoned or killed. As a result, the West got what it wanted: a Ukrainian war with Russia.

But then something went horribly wrong. Putin pre-empted the Ukrainian attack and lit a backfire by sending in tank columns into territory previously controlled by the Kiev regime, scrambling its logistics throwing its battle plans into ghastly disarray. Then he set about methodically blowing up the Ukraine’s warmaking capacity using standoff weapons. According to schedule, it will be all gone later this month, Western military aid notwithstanding. And then it turned out that Russia was ready for “sanctions from Hell,” having spent eight years preparing for them, and was able to sustain the blow, which then bounced back onto the West and started smashing it to bits. The West reflexively continued to follow the Ukrainian pattern and blame it all on Putin. By now the alternative narrative of an all-powerful Lord Putin is fully formed and we should expect to hear more and more voices clamoring for negotiation and compromise with him.

The aforementioned Tucker Carlson is one of these voices, and his influence on his vast audience sets the tone for a significant chunk of electorate in the US—not that their vote counts for much. Much more surprisingly, the same opinion was voiced at Davos by none other than that talking fossil Henry Kissinger! In response, the Ukrainians added Kissinger to their… terrorist database. Various Kiev regime mouthpieces positively choked from fury. How could he? Doesn’t he know that negotiating with Putin is strictly verboten? That narrative must be suppressed—in the Ukraine and in the West!

The strategy of blaming it all on Putin has backfired grandly in both the Ukraine and in the West and will continue backfiring, eating away at the social fabric and demoralizing the population. But that’s not all! This strategy is also immensely helpful to Russia. Ignoring the obvious thought that anything that is detrimental to the West is automatically beneficial for Russia, there is another, much more significant benefit that this strategy provides to Russia directly: it works to raise Russia’s, and Putin’s, prestige in the rest of the world, which is already much more important to Russia than the West will ever be again.

The Strategic Supremacy Is Conspicuously Obvious To The Casual Observer

thecradle  |  Strategic primacy, for Byzantium, more than diplomatic or military, was a psychological affair. The word Strategia itself is derived from the Greek strategos – which does not mean “General” in military terms, as the west believes, but historically corresponds to a managerial politico-military function.

It all starts with si vis pacem para bellum: “If you want peace prepare for war.” Confrontation must develop simultaneously on multiple levels: grand strategy, military strategy, operative, tactical.

But brilliant tactics, excellent operative intel and even massive victories in a larger war theater cannot compensate for a lethal mistake in terms of grand strategy. Just look at the Nazis in WWII.

Those who built up an empire such as the Romans, or maintained one for centuries like the Byzantines, never succeeded without following this logic.

Those clueless Pentagon and CIA ‘experts’

On Operation Z, the Russians revel in total strategic ambiguity, which has the collective west completely discombobulated. The Pentagon does not have the necessary intellectual firepower to out-smart the Russian General Staff. Only a few outliers understand that this is not a war – since the Ukraine Armed Forces have been irretrievably routed – but actually what Russian military and naval expert Andrei Martyanov calls a “combined arms police operation,” a work-in-progress on demilitarization and denazification.

The US Central Intelligence Agency (CIA) is even more abysmal in terms of getting everything wrong, as recently demonstrated by its chief Avril Haines during her questioning on Capitol Hill. History shows that the CIA strategically blew it all the way from Vietnam to Afghanistan and Iraq. Ukraine is no different.

Ukraine was never about a military win. What is being accomplished is the slow, painful destruction of the European Union (EU) economy, coupled with extraordinary weapons profits for the western military-industrial complex and creeping security rule by those nations’ political elites.

The latter, in turn, have been totally baffled by Russia’s C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) capabilities, coupled with the stunning inefficiency of their own constellation of Javelins, NLAWs, Stingers and Turkish Bayraktar drones.

This ignorance reaches way beyond tactics and the operational and strategic realm. As Martyanov delightfully points out, they “wouldn’t know what hit them on the modern battlefield with near-peer, forget about peer.”

Vladimir Putin Meets With Russia’s Defence Minister Sergei Shoigu

kremlin  |  The Armed Forces of the Russian Federation and the people’s militia of the Donetsk People’s Republic have liberated Mariupol. The remaining nationalists are hiding in the industrial area of the Azovstal steel plant.

Mariupol is a major industrial centre and the main transport hub on the Sea of Azov. In 2014, the Kiev regime declared the city the temporary capital of the Donetsk Region, and during the subsequent eight years it has been turned into a powerful stronghold and the base of far-right Ukrainian nationalists. In fact, it was the capital of the Azov Battalion.

A large amount of heavy weaponry and military hardware have been deployed in the city, including tanks, the Smerch and Uragan multiple rocket launcher systems, heavy artillery systems and the Tochka-U missile complexes. Tochka-U has a range of 120 kilometres, while the distance from Mariupol to Russia’s city of Taganrog is 94 kilometres and approximately the same to Rostov, the capital of the Southern Federal District.

The city has been stocked with missiles, munitions, fuel and lubricants, and food provisions for lengthy hostilities. The main infrastructure facilities, including the seaport and the waterway, have been mined and blocked with floating cranes. The majority of vessels there belong to foreign states.

As for armoured vehicles, there were 179 tanks and armoured fighting vehicles there, 170 various guns and mortars, including multiple rocket launchers which I have already mentioned, the Smerch and Uragan systems. When the city was surrounded on March 11, there were more than 8,100 troops of the Ukrainian Armed Forces and nationalist units in the city, as well as foreign mercenaries, who formed a large group. During the operation to liberate the city, over 4,000 of them have been neutralised, 1,478 have surrendered, and the remaining group of over 2,000 has been blocked in the industrial area of the Azovstal plant.

In their resistance efforts, the nationalists used almost all residential buildings as fortified emplacements. Armoured vehicles and artillery were placed on ground floors, and snipers took up positions on upper floors. There were separate units armed with ATGMs as well. The residents were brought to the middle floors and basements and used as human shields. It was done in almost every block of flats.

When retreating, the Ukrainian army and the nationalist battalions in Mariupol and other Ukrainian cities were using civilians as a cover. We are aware of four instances when, in order to cover their retreat, they made people leave the basements. The latest incident was literally four days ago, when we were liberating the port area and they made almost everyone leave high-rise buildings so that they could flee leaving behind ruins, including completely destroyed socially important and cultural sites.

While liberating Mariupol, the Russian army and the people's militia units from the DPR took every precaution to save civilian lives. Mr President, as you instructed, humanitarian corridors have been created daily since March 21 to evacuate civilians and foreign nationals.

Servicemen of the Ukrainian Armed Forces and militants from nationalist battalions were encouraged to lay down their arms. Of course, they were guaranteed life, safety and medical help.

We remained in daily communication with Deputy Prime Minister of Ukraine [Irina] Vereshchuk with regard to planned humanitarian acts, which included corridors and transport, both ambulances and buses. Occasionally, up to 100 such buses and 25 to 30 ambulances were made available per day.

Foreign diplomatic missions got in touch with us in various ways because their nationals were there. By the way, we have been able to free and evacuate many of them from Mariupol as part of these humanitarian initiatives. We provided official notifications to the Office of the UN High Commissioner for Refugees, the relevant OSCE structures, the International Committee of the Red Cross and other international organisations stating the time and place of these initiatives. In some instances, we even insisted on their presence to make sure that all the humanitarian rules are complied with to the extent it was possible, considering the constant and never-ending fire coming from the nationalist battalions and the Ukrainian Armed Forces.

Despite the resistance of the fighters and all others, we were able to evacuate 142,711 civilians from Mariupol after you issued instructions to this effect. We freed all hostages at the seaport, including sea crews. Those who took them hostage damaged their communications systems so that they could not get in touch with anyone. The port was mined, and the waterway blocked. I hope that these ships will now be able to leave this port.

As of today, the Russian Army and the Donetsk People’s Republic’s people’s militia control all of Mariupol, reliably blocking Azovstal territory with what remains of the nationalist forces and foreign mercenaries.

Over the past two days, again as per your instructions, we declared a ceasefire between 2 pm and 4 pm, stopped all military action and opened humanitarian corridors to enable civilians who may be at Azovstal to leave.

We prepared about 90 buses for them, and 25 ambulances. Of course, considering all the distortions we face, we installed Russian Aerospace Forces cameras and received the stream almost in real time here at the command centre. No one left Azovstal. However, other civilians, over 100 of them, were able to leave. This was a major effort for us over the past few days, and we carried it out together with all the relevant international organisations.

The city is now calm, which allows us to begin efforts to restore order, enable people to return to their homes and bring peaceful life back to the city. As for those hiding at Azovstal, we have reliably sealed its perimeter, and need three or four days to complete this effort at Azovstal.

This concludes my report.

President of Russia Vladimir Putin: I believe it would be inadvisable to storm this industrial zone.

I order you to cancel it.

Sergei Shoigu: Yes, sir.

Vladimir Putin: This is the case when we have to prioritise preserving the lives and health of our soldiers and officers. Of course, this is our constant priority, but even more so in this case. There is no need to penetrate these catacombs and crawl under these industrial facilities.

Seal off the industrial zone completely.

Sergei Shoigu: Yes, sir.

Vladimir Putin: You must offer all those who have not laid down their weapons to do so. Russia guarantees them their lives and dignity as per the relevant international legal instruments. All the wounded will get medical assistance.

You successfully completed the combat effort to liberate Mariupol. Let me congratulate you on this occasion, and please convey my congratulations to the troops. I am also asking you to submit proposals on bestowing state decorations on the service personnel who distinguished themselves. Of course, as usual, there will be various decorations, but I want everyone to know that they are all heroes for us and for all of Russia.

In this context, we need to make sure that we fulfil all the social commitments to our service personnel, especially the wounded and the families of our fallen comrades.

However, I believe that this would not be enough. We have to do more and come up with additional support measures, and in some case to consider ways of perpetuating the memory of those of our comrades who displayed heroism and sacrificed their lives so that our people in Donbass live in peace and to enable Russia, our country, to live in peace. These people deserved this by what they did and the way they honoured their oath.

I am asking you to work on this matter within the Defence Ministry, while I will issue the corresponding instructions to the Presidential Executive Office. I will talk to my colleagues in the regions, and they will work with the municipalities across Russia.

Assuming control over Mariupol, a major city in the south of the country, is obviously a success. Congratulations.

Sergei Shoigu: Thank you, Mr President.

The New Resource-Based Global Reserve Currency

strategic-culture  |  It was something to behold. Dmitri Medvedev, former Russian President, unrepentant Atlanticist, current deputy chairman of the Russian Security Council, decided to go totally unplugged in an outburst matching the combat star turn of Mr. Khinzal that delivered palpable shock and awe all across NATOstan.

Medvedev said “hellish” Western sanctions not only have failed to cripple Russia, but are instead “returning to the West like a boomerang.” Confidence in reserve currencies is “fading like the morning mist”, and ditching the US dollar and the euro is not unrealistic anymore: “The era of regional currencies is coming.”

After all, he added, “no matter if they want it or not, they’ll have to negotiate a new financial order (…) And the decisive voice will then be with those countries that have a strong and advanced economy, healthy public finances and a reliable monetary system.”

Medvedev relayed his succinct analysis even before D Day – as in the deadline this Thursday established by President Putin after which payments for Russian gas by “unfriendly nations” will only be accepted in rubles.

The G7, predictably, had struck a (collective) pose: we won’t pay. “We” means the 4 that are not large Russian gas importers. “We”, moreover, means the Empire of Lies dictating the rules. As for the 3 that will be in dire straits, not only they are major importers but also happen to be WWII losers – Germany, Italy and Japan, still de facto occupied territories. History does have a habit of playing perverted tricks.

Denial didn’t last long. Germany was the first to break – even before industrialists from Ruhr to Bavaria staged a mass revolt. Scholz, the puny Chancellor, called Putin, who had to explain the obvious:  payments are being converted into rubles because the EU froze Russia’s foreign exchange reserves – in a crass violation of international law.

With Taoist patience, Putin also expressed hope this would not represent a deterioration in contract terms for European importers. Russian and German experts should sit down together and discuss the new terms.

Moscow is working on a set of documents defining the new deal. Essentially, that spells out no rubles, no gas. Contracts become null and void once you violate trust. The US and the EU broke legally biding agreements with unilateral sanctions and on top of it confiscated foreign reserves of a – nuclear – G20 nation.

The unilateral sanctions made dollars and euros worthless to Russia. Hysteria fits won’t cut it: this will be resolved – but under Russia’s terms. Period. The Foreign Ministry had already warned that refusal to pay for gas in rubles would lead to a serious global crisis of non-payments and serial global-level bankruptcies, a hellish chain reaction of blocked transactions, freezing of collateral assets and closures of credit lines.

What will happen next is partially predictable. EU companies will receive the new set of rules. They will have time to examine the documents and make a decision. Those that say “no” will be automatically excluded from receiving direct Russian gas shipments – all politico-economic consequences included.

There will be some compromise, of course. For instance, quite a few EU nations will accept to use rubles and increase their gas acquisitions so they may resell the surplus to their neighbors and make a profit. And some may also decide to buy gas on the go on energy exchanges.

So Russia is not imposing an ultimatum on anybody. The whole thing will take time – a rolling process. With some sideway action as well. The Duma is contemplating the extension of payment in rubles to other essential products – such as oil, metals, timber, wheat. It will depend on the collective voracity of the EU chihuahuas. Everyone knows that their non-stop hysteria may translate into a colossal rupture of supply chains across the West.

Bye bye oligarchs

While the Atlanticist ruling classes have gone totally berserk but still remain focused on fighting to the last European to extract any remaining, palpable EU wealth, Russia is playing it cool. Moscow has been quite lenient in fact, brandishing the specter of no gas in Spring rather than Winter.

The Russian Central Bank nationalized foreign exchange earnings of all major exporters. There was no default. The ruble keeps rising – and is now back to roughly the same level before Operation Z.  Russia remains self-sufficient, food-wise. American hysteria over “isolated” Russia is laughable. Every actor that matters across Eurasia – not to mention the other 4 BRICS and virtually the whole Global South – did not demonize and/or sanction Russia.

As an extra bonus, arguably the last oligarch capable of influence in Moscow, Anatoly Chubais, is gone. Call it another momentous historical trickery: Western sanction hysteria de facto dismembered Russian oligarchy – Putin’s pet project since 2000. What that implies is the strengthening of the Russian state and the consolidation of Russian society.

We still don’t have all the facts, but a case can be made that after years of careful evaluation Putin opted to really go for broke and break the West’s back – using that trifecta (imminent blitzkrieg on Donbass; US bioweapon labs; Ukraine working on nuclear weapons)  as the casus belli.

Brandon Destabilized The EU Security Order - His Sanctions Destabilized The Global Economic Order

FT  | Some days back a top forex trader and now monetary economist for HSBC Global Market remarked recently that following Russian Central Bank’s foreign currency dollar asset freeze order by US, it’s only a matter of time that the Russia would be forced to go for trading with the west in Rouble only or Rouble and Yaun/Renminbi currencies only to ensure it remains 100% risk free from sanctions and asset freezes, despite potential risk of inflationary costs at home.

India, one of the major economies and the largest democracy in the world has already been trading with Russia under Rouble – Rupee exchange agreements for many decades. Indian banking and finance lawyers privately say that India’s finance ministry along with Reserve Bank of India (RBI) and Bank of Russia is “racing against time” in exploring options to “internationalise” Russian version of the SWIFT version – SPFS, starting with India as a launch base outside Russia (being helped by the fact that India has reservations in dealing with China’s CIPS – China’s version for SWIFT – though it is ready to accept expansion of China’s UnionPay card payment system subject to restrictions).

In fact many Indian online retailers, like Israeli online retailers and service providers, have/are on the verge of setting up Russia’s Mir card payment system online to enable Russian citizens to trade with/buy products from India.

Israel has/soon to have similar arrangements in place. Turkey, Malaysia, Bangladesh, Argentina, Venezuela, Iran, Saudi Arabia, South Africa and many AU countries and of course China all have (or most already rushing to have) rouble + their respective currency exchange agreements in place.

A number of lawyers based at Indian corporate law firms in Mumbai say “they are working around the clock” like never before following the outbreak of Ukraine war, in advising number of governments of African Union countries on enabling rouble-based trades and also currently advising many of the corporations and conglomerates based in emerging markets on setting up rouble based contracts, given India’s half-a-century unsurpassed experience in trading with Russia under rouble – rupee exchange agreement/and or rouble – rupee swaps.

However, notwithstanding this, Indian corporate law firms are advising many large corporations based in the emerging markets to evaluate their governing contract and arbitration clause options and to seriously consider other major jurisdictions available as alternative to London, New York, Paris and Singapore, with the options of Dubai, Hong Kong being on the table among others.

Corporate law firms in India’s financial capital Mumbai say that government of India with the help of country’s premier members of the legal profession is also seriously considering to see current Russian-Ukraine crisis as “either or never” opportunity for India to emerge as future international arbitration centre alternative to London, Paris, New York, Singapore and Switzerland and evaluate whether it can become alternative to London and New York as governing law provider for English law or New York law respectively, by using India’s well established English common law system, though this is likely to take some time (Dubai, Singapore and Hong Kong provides a tough competition).

On another note, an Indian lawyer said they along with Hong Kong and Dubai based lawyers are advising banks in Bangladesh, UAE, Pakistan and African Union member countries alongside Bank of Russia in exploring options to consider rolling out/enable cross-border Russia’s Mir and China’s Union Pay systems in the said countries’ retail and commercial banking as well as to roll out rouble currency accounts for retail customers as FCY account options for customers wishing to open forex based rouble (or alongside limited capacity Renminbi Yua) fixed deposit schemes for the purpose of sending their children to Russia for education and medical treatments, given that Ukraine is out of the equation for many; until recently, Russia, Ukraine, Belarus, Georgia after the west, Turkey and the Far East was considered one of the most attractive cheaper alternatives for study medicine and study abroad for STEM subjects for middle class citizens from the emerging markets.

Do Brandon's Neocon Puppeteers Miss-Take Putin And Xi's Geopolitical Endgame?

Can you imagine what would happen if, through Russian diplomacy, that India and China were reconciled to each other and then went into partnership that would include at its core China, Russia, India and Iran with a whole bunch of ‘stans tossed in for good measure? Just in terms of population and resources alone it would leave us in the west in the dust and I am sure that Africa and South America would be interested in signing trade treaties with such an organization. For the fourth partner Iran and China sign 25-year cooperation agreement

For all we know, it may just happen and sooner than we think.

The Russia-India-China grouping will be seeing more activity since the 18th meeting of Russia-India-China (RIC) Foreign Ministers last November during which the chairmanship passed to China.

The creation of the RIC is attributed to Primakov: The man who created multipolarity

“Yevgeni Primakov drafted the concept of a Russia, India, China strategic triangle as a counterbalance to the western alliance.”

In my assessment, the next phase of Putin’s and Xi’s confrontation with Biden is now moving to the Putin-Modi-Xi relationship.

Examining an Asia-Middle East map, you see that with geography, BRI and bi-lateral agreements, China along with Russia have placed India in an agricultural and industrial resources cauldron.

I believe Modi’s escape from this cauldron starts with repeating with China the border adjustment effort that China made with Russia two decades ago resulting in a mutually secure border.

I believe Xi is ready to accommodate Modi for their mutual interest in military and food security for their respective 1.4Billions of people.

Biden's puppeteers have made their third mistake:

Mistake 1: refusal to address Russia’s legitimate security concerns forcing Putin to initiate a Preventive War (Just War Theory) against Ukraine and by extension NATO.

Mistake 2: seizure of Russia’s Central Bank assets bringing into question (1) what is money; and (2) what is the US dollar.

Mistake 3: threatening China to take the US side against Russia.

In the next months the CCP will be conducting a number of important events culminating with the re-confirmation of Xi as President.

If Xi accedes to Biden’s threats, China will start down the slippery slope of vassalization to the US. Its stored wheat will be given to MENA, US troops will occupy Taiwan, etc etc. Another century of humiliation.

Time to pull out the map.

China has a militarily-secure, economically-transparent 2,600 mile border with Russia.

Together with Russia via the CSTO, SCO, etc, China has moderately stable borders with Central Asia.

Its border with India and southern Asia is becoming uncomfortable as Himalayan water is affected by rapid climate change and dam building. But this issue can be (and must be) resolved with multi-national agreements. India must step forward to initiate this process by asking for border resolution negotiations similar to China with Russia two decades ago. China’s door is open.

To the east are South Korea and Taiwan. Intel and others produce the sapphires, rubies, etc of semiconductors but Samsung and TSMC produce the diamonds.

Seoul is within artillery range of North Korea and Taipei is within cruise missile range of China.

I believe Xi must make increasingly explicit gestures supporting Putin’s Preventive War.

Perhaps starting with an airlift of medical supplies. Then next an airlift of medical personnel with field hospitals. And continuing to military items.

At some point Biden's puppeteers will make their fourth mistake.

 

Thanks To Sanctions, Valodya's Getting W's Far Beyond What He Gamed Out

 nakedcapitalism |  His bottom line is, as he says near the top of a two hour-talk:

The Russians are grinding down the Ukrainians and they are doing it with flipped math. 200,000 guys are grinding down 600,000 guys. It’s one of the most amazing things. When this story is finally told, people are going to be stunned. All these people now are saying, “Oh, the Russians, they are doing so poorly, the Russians this…”. Maybe they are. Maybe I’m getting this all wrong. But you know, I’ve studied military history, I think I know how to read a map, I think I know how to look at the balance of forces, I think I know how to study logistics and stuff, and I think I’m reading this right….This war is closer to being over than many people think.

Ritter also argues, interestingly, that it is of paramount importance that Zelensky surrenders to Russia, or the functional equivalent by signing a peace on Russian terms. Ritter argues that at this juncture, that means Russians cannot win too quickly. Ukraine has to look like it has exhausted its options.

Not that this is factoring into how Russia proceeds on the field, but a slower tempo favors Russia politically. Whether Zelensky accedes to Russia’s demands is ultimately a US call, unless he has found a way to go rogue. The West is at present unprepared to accept that, given that they believe their own/Ukraine’s propaganda that Russia is losing the war and that Russia’s economy is collapsing under the sanctions.

Western leaders and pundits appear not to have worked out that the rouble falling (so far much less than in the 1998 crisis) is not the same as a domestic economic seize-up. Aside from Western goods being hoovered up after the sanctions hit, we have yet to hear of domestic shortages. Admittedly, new hardships could kick in starting in a few months as important speciality items from the West like car parts become unattainable.

But the US and Europe are about to see energy price pain kick in in April, and that may soften them up with respect to a Ukraine settlement. We linked to this story on Saturday, but it’s important to keep in mind. From the Financial Times, IEA calls for driving restrictions and air travel curbs to reduce oil demand:

How the West Helped Putin With Sanctions

Ritter is amped up on the topic of sanctions. He argues that Saddam Hussein would have been shot by his own generals after the loss of the 1991 war save for Western sanctions, which unified the country behind him.

As for Putin, Ritter contends that Putin, who was originally pro-Western, became convinced of the time of the need to distance Russia from Europe, but was hampered by the roughly 20% of Russians who are middle class, normally politically indifferent, but would turn on Putin if he threatened their access to European goods and vacations. Per Ritter:

The West just did Putin the greatest favor in the world. They don’t even realize how stupid they were. The West divorced itself from Russia. Putin said, “Thank you. Thanks you very much! You’ve now allowed me to do what I needed to do.”

 

Here Comes China

thesaker  |  In 2009, after helping to rescue the US from the GFC, Zhou Xiaochuan, Governor of the Peoples Bank of China, said, “The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.”

After helping rescue America from the GFC, PBOC Governor Zhou Xiaochuan observed, “The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.”

Zhou proposed SDRs, Special Drawing Rights, a synthetic reserve currency dynamically revalued against a basket of trading currencies and commodities. Broad, deep, stable, and impossible to manipulate. Nobelists Fred Bergsten, Robert Mundell, and Joseph Stieglitz approved: “The creation of a global currency would restore a needed coherence to the international monetary system, give the IMF a function that would help it to promote stability and be a catalyst for international harmony”.  Here’s what’s happened since:

2012: Beijing began valuing the yuan against a currency/commodity basket

2014: The IMF issued the first SDR loan

2016: The World Bank issued the first SDR bond

2017: Standard Chartered Bank issued the first commercial SDR notes.

2019: All central banks began stating currency reserves in SDRs

Mar. 14, 2022: “In two weeks, China and the Eurasian Economic Union – Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan – will reveal an independent international monetary and financial system. It will be based on a new international currency, calculated from an index of national currencies of the participating countries and international commodity prices”.

The currency resembles Keynes’ invention Special Drawing Rights.SDRs are a  synthetic currency which derives its value from a global, publicly traded basket of currencies and commodities. Immense beyond imaging, and stable as the Pyramids. Everyone gets a seat at the table and a vote. It may eventually be administered by an arm of the UN.

SDRs pose a serious alternative to the US dollar, both for the EAEU, the BRI’s 145 member states, the Shanghai Cooperation Organization (SCO), ASEAN, and the RCEP. Middle East countries, including Egypt, Iran, Iraq, Syria, Lebanon, are keenly interested.

Less well known is that the EAEU, the BRI, the SCO, ASEAN, and the RCEP were discussing a merger before the currency news hit.

It is reasonable to expect them to join this new, cooperatively managed, stable reserve currency regime in which they can settle their trades in stable, neutral, predictable SDRs.

Biological labs

China is not losing any opportunity to bring this front and center.  This is their last list of questions:

• If the concerns are “disinformation”, why doesn’t the U.S. release detailed materials to prove its innocence? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
• What did the U.S. spend the $200 million on? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
• What kind of research has the U.S. conducted on which pathogens? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
• What is it trying to hide when the U.S. Embassy in Ukraine deleted all relevant documents on its website? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
• Why does the U.S. insist on being the only country in the world to oppose the establishment of a multilateral verification mechanism though it claims to abide by the Biological Weapons Convention? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
• This is quite an amazing poster detailing the biolab web, which is too large to load here.  But take a look at the depiction of these US biolabs.  https://www.globaltimes.cn/page/202203/1255055.shtml

How Ukraine Fits Into The Great Game

goldmoney  |  Ukraine is part of a far bigger geopolitical picture. Russia and China want US hegemonic influence in the Eurasian continent marginalised. Following defeats for US foreign policy in Syria and Afghanistan and following Brexit, Putin is driving a wedge between America and the non-Anglo-Saxon EU.

Due to global monetary expansion, rising energy prices are benefiting Russia, which can afford to squeeze Germany and other EU states dependent on Russian natural gas. The squeeze will only stop when America backs off.

Being keenly aware that its dominant role in NATO is under threat, America has been trying to escalate the Ukraine crisis to suck Russia into an untenable occupation. Putin won’t fall for it.

The danger for us all is not a boots-on-the-ground war — that’s likely to only involve the pre-emptive attacks on military installations Putin initiated last night — but a financial war for which Russia is fully prepared.

Both sides probably do not know how fragile the Eurozone banking system is, with both the ECB and its national central bank shareholders already having liabilities greater than their assets. In other words, rising interest rates have broken the euro system and an economic and financial catastrophe on its eastern flank will probably trigger its collapse.

he developing tension over Ukraine is part of a bigger picture — a struggle between America and the two Eurasian hegemons, Russia and China. The prize is ultimate control over Mackinder’s World Island.

Halford Mackinder is acknowledged as the founder of geopolitics: the study of factors such as geography, geology, economics, demography, politics, and foreign policy and their interaction. His original paper was entitled “The Geographical Pivot of History”, presented at the Royal Geographical Society in 1905 in which he first formulated his Heartland Theory, which extended geopolitical analysis to encompass the entire globe.

In this and a subsequent paper (Democratic Ideals and Reality: A study in the Politics of Reconstruction, 1919) he built on his Heartland Theory, and from which his famous quote has been passed down to us: “Who rules East Europe commands the World Island [Eurasia]; Who rules the World Island rules the World”. Stalin was said to have been interested in this theory, and while it is not generally admitted, the leaders and administrations of Russia, China and America are almost certainly aware of Mackinder’s theory and its implications.

We cannot know if the Russian and Chinese leaders and administrations are avid Mackinder fans, but their partnership in the Shanghai Cooperation Organisation is consistent with his World Island Theory. Since commencing as a post-Soviet, post-Mao security agreement between Russia and China founded in 2001 to suppress Islamic fundamentalism, the SCO has evolved into a political and economic intergovernmental organisation, which with its members, observer states, and dialog partners accounts for over 3.5 billion people, half the world’s population.

The Larger Strategic Consequences And Objectives

Rabobank |  “…Chicago wholesale prices rose by 77% between June 1914 and February 1915, when prices peaked. Of that 77% rise, 22% occurred prior to the closing of the Dardanelles Strait in October 1914. The remaining 45% increase occurred once the Dardanelles Strait was closed…Russia and Ukraine account for ~30% of global wheat exports at present. Between 1905/6 and 1909/10 Russia accounted for only 22% of wheat exports. It can be argued that due to an increased global reliance on Black Sea wheat, a price rise could now be larger. Further, wheat stocks excluding Russia are currently lower compared to the average versus 1914/15.”

Putin sent the majority of his amphibious forces to the Mediterranean and Black Seas to accomplish two objectives:

 (1) to punish Odessa for the neo-Nazis’ 2014 genocide of Russian-speakers.

(2) to inflict costly but repairable damage to Odessa’s port facilities through which Ukraine’s wheat and corn is exported to MENA nations.

Europe will be left rescuing the MENA nations from starvation or facing another mass migration into its cities.

I am 100% serious. I was also optimistic. I believed Russia would not occupy Odessa but now I think it will.

Last November for the first time, food security appeared as a priority in China’s national security strategy.

Russia and Ukraine provide a quarter of the world’s exported wheat and corn. China will be first in line for those exports. The previous MENA recipients will be Europe’s burden to feed.

Similarly Russia has halted ammonium nitrate fertilizer exports until April. Its plans beyond that are not apparent.

For seafood, China has created a three prong fleet: hundreds of thousands of fishing ships; the world’s largest coast guard; and the world’s second largest navy. And it has developed, trained and demonstrated integrated coercive grayzone fishery operations with that fleet.

Putin and Xi deeply accept the ramifications of rapid climate change and are acting to protect their populations.

Ottawa Police Services Chief Peter Sloly Is In A Tough Spot

theline |  I don't honestly know the backstory of the how and why the Ottawa protest was allowed to settle into the downtown core the way it did. It was obviously a massive intelligence and planning failure, but what kind of failure? And whose? Did they not have enough information? Bad information? Did they have good information that, for whatever reason, they didn’t accept or trust? That's not the sort of thing you can discover wandering the site. But I can tell you that some of the protesters themselves are surprised by how easy it was for them to set up shop.

I have the terrible feeling, and I've spoken with five separate sources in government roles or in adjacent security positions who all confirmed this, that Sloly is one of the damn few people in Ottawa who understands the situation he's in, and he's trying to get everyone else to notice, or at least to catch up to his understanding. My sources, alas, seem to think that most others involved in decision-making are only just now starting to realize the enormity of the challenge in the capital. Sloly figured it out last week.

The chief is very political. I say that with no disrespect. Becoming the chief of a major police force isn't something that happens because you catch the most bad guys. It happens because you're good at working your way up through the power structures of a very particular institution. Sloly talks like a politician. But if you listen closely, and if you follow along across his briefings, you start to see a theme. From the moment he first mentioned that there might not be a policing solution to this protest, and hinted that we need the armed forces, he's been signalling to the public that Ottawa, as a city, has lost control of itself. That's a blunt description, but as I noted in a Twitter thread after a pretty remarkably stark Ottawa Police Services Board meeting on the weekend, Sloly was clear: the city needs to be rescued. It has lost control, it is outnumbered, and it cannot fix this problem with the resources on hand. 

Rescued from what? The crowd around Parliament Hill is mostly — not entirely, but mostly — peaceful. I grant that; I've seen it with my own eyes. And a few minutes' walk from those sites, now that the horns have been largely silenced by a court order, the city feels quite normal. The idea that Ottawa needs rescuing may seem absurd, but it's not. The longer this goes on, the harder it will become to convince the protesters to leave, and the harder it will be to stop others from joining in. The Ambassador Bridge, which links Windsor to Detroit, is now blocked. Would that have happened if Ottawa had been cleared quickly and decisively?

The inaction that has so infuriated Ottawans, and the very visible displays of police ineffectiveness as protesters fuel trucks from jerrycans despite the city’s stated plan to stop such activity, cannot be easily explained, and no doubt has multiple contributing causes. Some is probably simply political expediency, with all the various leaders wanting someone else to take the blame in case it goes badly (which it likely will). Some is probably just necessary delay while plans are made and logistics arranged. And then there’s just the good, old-fashioned problem of our expectations being a problem, as I’ve written about here. Canadian officials are struggling to realize just how deep in the muck they are, despite what seems like increasingly exasperated efforts by Sloly (and I believe a few others) to get them caught up to the present. I don't think most of our leaders are there yet.

Also, there’s this: there's another element of the protest that's nothing at all like a festival.