Monday, July 14, 2014

Putin Holds All The Cards

After America was caught spying on its Europeans friends it is little wonder they are less than enthusiastic about trusting the Obama administration. Now Germany is in a new uproar concerning more ongoing spy activity by America. This happens while still fresh in the minds of many Europeans is Obama to his discredit backing down and away from his words about a "red line in the sand" during the Syria fiasco. None of this inspires great confidence in Washington. In a display of self-righteousness, President Obama continues to scold Russia for intervening in the affairs of Ukraine. Secretary of State John Kerry even went so far as to declare it unacceptable to invade another country on a "completely trumped-up pretext," or just because you don't like its current leadership.

It's difficult to say if the double standards exhibited by the White House or what appears to be a total lack of self-awareness by U.S. officials is the most surprising part of the unfolding Ukraine saga. While Obama  continues to charge his Russian counterpart, Vladimir Putin, with violating Ukraine's sovereignty and territorial integrity in breach of international law, it is difficult to forget this comes after the infamous "Fuck the EU" comment by Assistant Secretary of State Victoria Nuland in the run-up to Ukraine's revolution. The comment revealed the extent to which Washington was recklessly maneuvering to undermine Ukraine's elected pro-Russian president, Viktor Yanukovych, by backing the Kiev street protesters' demands.

In reality, America has few military options in Russia's backyard unless it has the backing of a full and enthusiastic NATO and that is very unlikely. Europe has reason to be unexcited about a possibly long and expensive conflict. While still trying to recover from a recession Europe would face fuel shortages and a massive spike in the price of natural gas. Currently, Russia supplies much of the gas used in Europe, this gives Putin a great deal of leverage. If an actual ground attack were to occur few see the Russians as likely to roll over as other armies have when America approaches.

It appears Russia has been thinking several steps ahead and was prepared for being squeezed out of the Group of 8 for some time. With the recent exclusion of Russia what is now known as the Group of 7 and is made up of mostly insolvent nations has seen its global influence wane. A major shift in the geopolitical axis towards the east is taking place. As the days of summer past and we move towards fall the thought of a long cold winter will begin to weigh heavily upon the Euro-zone. Time appears on the side of Putin who has not taken the lead in promoting violence in Ukraine but instead left it to those in Kiev who insist on holding the fractured and bankrupt country together by force.

Putin has sat back and allowed violence to fester and to his credit, he holds the trophy of a bloodless Russian annexation of Crimea. Obama would give his eye teeth for such a victory. All the self-righteous huffing and puffing in Washington over Ukraine jars on European and especially Russian ears after the multiple U.S. led invasions and interventions into several countries in recent years. Not stopping after attacking Osama bin Laden and his al Qaeda training camps after the 9/11 attacks, Bush opted for full-scale regime change. The lamentable consequences of that decision are still being felt 13 years later in a crumbling Iraq and by the ever-growing numbers of Afghan civilians dying as the final NATO withdrawal approaches.

Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natural gas exports to Germany and Europe. The surge in Ukraine gas prices is probably the best indication of what Europe faces. A cutoff by Russia would severely disrupt supplies. The EU, Turkey, Norway, Switzerland, and the Balkan Countries received 30% of the natural gas they burned last year from Russia according to the U.S. Energy Department "We have to be very careful not to hurt ourselves more than we hurt the other side," the Polish Foreign Minister said recently in Brussels. This comes after Russia announced what many have called the "Holy Grail" energy deal with China that has geopolitical implications for the whole world by binding the two nations in a commodity-backed axis. 

If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts, and political alliances. In a sign that Russia has the ability to use its economic power to drive a wedge between its former G20 allies, France’s government said this week it will deliver Mistral helicopter carrier warships to Russia as planned, thus rejecting requests from its European and U.S. allies to cancel the sale. There are also significant dependencies on Russian grain exports, particularly in the EU. It looks the pragmatists and non-ideologues may be gaining the upper hand over the  more hawkish western voices who were risking conflict with Russia.

The recent huge fine levied upon a French Bank by the American government is viewed by some as financial blackmail and has reinforced the idea America has lost its moral compass. It appears Obama has been following in Bush's footsteps as America has repeatedly and cynically without U.N. security council authorization.launched or backed myriad armed attacks on foreign soil, in Libya, Somalia, Yemen, and Pakistan to name a few. We should remember the expanded use of drones has made few friends for America in the international community. Critics say the Obama administration has continued to flout international law by refusing to join or recognize the International Criminal Court developed in 1945.

Nightmarish World War II memories linger in Moscow, Ukrainian neo-fascists were among those who seized control in the new government in Kiev yet the U.S. rushed to give its blessing to what the Kremlin later described as a "coup d'etat". While Sergei Lavrov, the Russian Foreign Minister, reflected these worries when he voiced "most serious concern" over Ukraine in phone calls to the French, German and Polish foreign ministers the EU, knowing this was what Washington wanted, just looked on. Little wonder the Russians were furious at what they saw as a western double-cross. Don't hold your breath for Putin to back-off or back-down, he has put down his marker and is now playing both Obama and Kerry for fools in a contest that cost Russia little. It is likely that if If Putin doesn't get his way next week he will next month or next year at the latest.

Many people see Ukraine as the worst east-west crisis since the end of the Cold War and as the biggest foreign test of the Obama Presidency but with so many problems in the world eyes have shifted to the collapse of Iraq and turmoil in the Mideast. Putin is an unredeemed Cold War throwback and one tough cookie and he is prepared for the crisis to get very ugly. Similar battles elsewhere on Russia's periphery, in Georgia, Moldova, Armenia, Nagorno-Karabakh, and maybe Belarus and the Baltic states have hardened Putin. Whatever they think in Washington, and whatever the financial markets say, it's working for him  with polls showing his popularity soaring at home. One of these days western leaders will learn to stop underestimating him and recognize Russia's leader as the canny, dangerous, and unyielding opponent he is.

For the latest update see the article below;


  1. Bruce,

    Try the same post and make believe you were Russian and thinking of how the US would react. We Americans tend to make too many assumptions, mainly because the US has put its nose where it doesn't belong int he past. But, as they say in the investment world, past performance does not necessarily reflect future performance.

    I respect Mish, but his reporting on Russia has really damaged his credibility in my view. If you are not 100% sure of something, your opinion will cause issues. And that's exactly what Mish is doing, he is immediately thinking that the US is wrong because it has been wrong in the past - while giving Russia a free pass.

    Russia and the EU have a much worst past than the US - see the history of wars video - its in Youtube. Russia has stayed pretty much irrelevant because the US became a much powerful nation - not because it's more "ethical" or "gooder" than the US. I'd bet that Putin is worst than Obama anytime and he will prove it.

    Don't give Russia a free pass without knowing the facts and don't blame your own nation while defending a proven rogue state.

    1. #defending a proven rogue state.

      you, americans so funny.

      try google @what countries us bombed since ww2 @. heres the results

      Afghanistan 1998, 2001-
      Bosnia 1994, 1995
      Cambodia 1969-70
      China 1945-46, 1950-53
      Congo 1964
      Cuba 1959-1961
      El Salvador 1980s
      Korea 1950-53
      Guatemala 1954, 1960, 1967-69 Indonesia 1958
      Laos 1964-73
      Grenada 1983
      Iraq 1991-2000s
      Iran 1987
      Kuwait 1991
      Lebanon 1983, 1984
      Libya 1986, 2011
      Nicaragua 1980s Pakistan 2003, 2006-
      Palestine 2010
      Panama 1989
      Peru 1965
      Somalia 1993, 2007-08, 2010-
      Sudan 1998
      Vietnam 1961-73
      Yemen 2002, 2009-
      Yugoslavia 1999

      sure, RUSSIA IS SO rogue state. :)

  2. Interesting comment, it highlights by looking through different color glasses dramatically changes the way we see and view the world.

  3. Nice piece of independent journalism and excellent analysis.

  4. The USA and Israel , biggest purveyours of state sponsored terrorism on earth.

    Its all about keeping the US dollar was world reserve currency, If that collapses so does the USA which is the largest debtor nation on earth and prints money out of thin air. The USA like all BULLIES will eventually get their comeuppance. They USA hates anyone that doesn't kiss their ass and hands over their lunch money.

  5. What a great story! Thanks so much for sharing this! Would love to hear more from you.
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  6. Currently Russia supplies much of the gas used in Europe, this gives Putin ...

  7. Comment update; More than seven months later the only good thing we can say about the situation in Ukraine is that it has not dramatically escalated. More recent post on this site flow along the same conclusion that this will only be over when Putin says it is over. We can only hope nobody does anything really stupid to up the stakes.