From Kiev via Brussels to Washington: An Unraveling Narrative and a Fraying Hegemon
An Unraveling Narrative and a Fraying Hegemon
[Image: with the permission of the artist, Mr. Fish]
Publication date: 2022-03-28
Update 2022-03-29: Added some sub-headings amongst the sea of text to provide readers a port of call. Added an interview with Gilbert Doctorow as second in the video sources section. It fits beautifully with the core thesis of the second half of the article. Highly recommended.
Plus two more sources, Michael Hudson and Patrick Bond on TheAnalysis.News with Paul Jay, and another interview with Prof. Gerald Horne. See Video Sources.
Update 2022-03-31: More sources; a brilliant article by Caitlin Johnstone, a discussion with Glenn Diesen, and more piercing analysis from Pepe Escobar. Lastly, Lee Camp interviews Chris Hedges looking at the censorship of independent voices in the USA as a part of its domestic strategy.
Update 2022-04-01: Part 1 of 3 part series of interviews with Vijay Prashad by theAnalysis.news is included in the Video Source. It is excellent. Pepe Escobar’s latest article is included in Sources, too.
Update 2022-04-02: A note on the resolution of Russia’s demand for some customers to pay for its gas exports in roubles. See ‘Update’ below the main article.
Update 2022-04-04: Added an article by Larry Johnson to sources.
Update 2022-04-05: Added articles by Ellen Brown and Elijah J Magnier to sources. Also a new Update section has been added, with its own sources section, commenting on the alleged war crimes in Bucha.
Update 2022-04-06: Added a great article by Douglas McGregor to sources, and an interview with him by Scott Horton. Also added a 2 hour discussion with Scott Ritter on The Duran. The Ritter interview is excellent. Alex and Alexander let him speak, and speak he does.
Update 2022-04-09: Fascinating discussion between 3 academics and a former ambassador (Mearshiemer, Laurelle, Petro and Matlock) published by ACURA has been added to sources.
Update 2022-04-10: The battle in Ukraine does have a history back to at least the 2014 coup. There is also the attempted coup in Kazakstan in January 2022 which everybody seems to forget about as yet another provocation.
Update 2022-04-13: Aaron Maté’s interview with Jacques Baud has been added to video sources.
Update 2022-05-27: The size of seized Russian foreign reserves is revised down from 300 to 130 Billion based on recent information.
This article reviews recent events in Ukraine first, to demonstrate that if your only source of information about the current crisis in Ukraine is from western media you have a very poor understanding of what is happening. For those who have already reached this conclusion, the arguments presented largely concern fairly recent events and so may still be of interest.
The second part of the article looks at developments in geopolitical and geoeconomic spheres and examines the results of the collective West's response to Russia's "Special Military Operation", invasion, or war, call it what you wish.
An Unraveling Narrative
Any understanding of the conflict in Ukraine needs to include some history, minimally beginning at the 2014 "Euromaidan" coup supported by the USA via Vicky "Fuck-the-EU" Nuland and Joe Biden and with the armed support of Ukrainian Nazi fascists. Thereafter occurs the "annexation" of Ukraine. Then the resistance in many Ukrainian cities and towns to the newly appointed but not elected government in Kiev, and the indiscriminate shelling of the two "break away" republics by Ukraine's armed forces and various paramilitary brigades for 8 years, and with that the consideration of their ethnicity and their language and cultural affinity as Russian. Similarly, one needs to understand who these Nationalist "Banderistas" are and their background. While they have little more than 2% electoral support in Ukraine they have been integrated into the Ukrainian National Guard and have a political influence which greatly outweighs their political support.
Ignoring the West's economic responses to the conflict until the second part of this article, reviewing practical actions and narratives is instructive. The UN General Assembly and Security Council have been used to attempt to condemn Russia for its actions, and rightly so given the illegality of its military efforts outside of the Donetsk and Lugansk oblasts. They are clearly illegal under international law, and from my perspective as a peace activist, are also clearly immoral. The next level of action by the USA and its NATO "partners" is the supply of weaponry to Ukraine and to not lift a finger to find a political solution to the conflict.
Narratives: State Dept vs. DoD
In recent days in response to two narratives rolled out by the USA's State Department, compliant USA media and USA’s political class, the USA's Dept of Defence has leaked two stories to the media to counteract these narratives. One is designed to counter this insane idea of NATO establishing a "no fly zone" over any part of Ukraine. The insanity is clear. As soon as NATO planes start doing this, they will start shooting at Russia planes, and they will in turn will respond and before you know it the USA's Military Industrial Complex are wringing their hands with glee as the world looks upon a conflict that could well go nuclear. The DoD is neither prepared for this type of conflict nor sees any wisdom in it. The second narrative is also monumentally stupid. After the revelations that 30 odd bioweapons research facilities had been established in Ukraine in a collaboration between the Ukrainian government and various USA contractors, including programs under the DoD, the State Dept starts warning that Russia is going to use Chemical weapons in some dastardly false flag operation. The counter narrative offered by the DoD, in fact the DIA (Defence Intelligence Agency), declares that they have seen no evidence to support this theory or claim. Again, this is designed to prevent NATO getting involved directly in this conflict. We shall return to this battle of narratives again below.
Narratives: Western Media as Ukrainian Stenographers
From the earliest days of the conflict western media have essentially been stenographers for Ukraine's Ministry of Defence and Foreign Ministry's information dissemination. This is obviously a stupid thing to do, as all parties in a conflict will deliver a compromised narrative, even if its true. For example, a party to the conflict's media arm may only report on their successes. Secondly, when a misrepresentation of facts is likely to generate more sympathy for a party they will be sorely tested to avoid this misrepresentation. Ukraine is running two narratives, that they are brave defenders who will win, but also would really like lots of help, especially from NATO. Their misrepresentations are totally about motivating public support for NATO to intervene and/or continue arm supplies. The key narratives are about "human suffering" and civilian casualties. A recent UN OHCHR report details what civilian casualties they have been able to verify. For deaths, their figure is 1081 for all of Ukraine by all parties.
Not a Narrative: Parallels between the Syrian and Ukrainian Proxy Wars
Those who have not dug deeply into what really happened during the still ongoing, but now at a much lower level, proxy war in Syria, may have difficulty in recognizing patterns common to both conflicts. False allegations of the use of chemical weapons is one commonality. The second is one party using "human shields" to provide a tactical advantage to their side. In Syria, these tactics were used by the religious extremist insurgent terrorist forces. In Ukraine its being used by the Nazi elements incorporated into the Ukrainian national military. In Syria the claims of the use of Chemical weapons were made by the White Helmets and other media offshoots funded by the UK's Foreign and Commonwealth Office and to a degree by the USA, when in fact these events either did not occur or were performed by the insurgent terrorists. In both cases, this tactic is used by the force in a weaker position to generate a "human rights" type emotional narrative to garner western support. The same is actually true of the 'human shield' tactic too. It increases the likelihood of civilian casualties which can then we weaponized in a media narrative speaking of the suffering of these non-combatants. In Ukraine the “human shield” tactic is evidenced by the fighting in Mariupol, with the Azov battalion either preventing civilians using the humanitarian corridors to leave the city, or actually shooting at them. The evidence of these crimes of war is from civilians who actually managed to escape, interviewed on RT and by other independent reporters. We’ve yet to see a false flag chemical weapons attack, however it seems that this narrative is being furthered by western media to prepare the ground for such an event.
Narrative: Human Suffering and Civilian Casualties
Russian forces of over 100 000 with full artillery, mechanized units, intelligence, logistics and air support are fighting along side the Donetsk and Lugansk Peoples' Republics Militias/Armies whose numbers I know not but expect to be at least 30 000. The Militias are fighting within their oblasts with Russian support, while the Russians are fighting on their flanks and holding positions in the north, including around Kiev and Kharkov and other cities, and in the south in Kherson and neighbouring areas. This is a very wide front of hundreds and hundreds of kilometers and fighting has been going on for 30 odd days. The UN OHCHR's report states that they consider their figures a lower bound for civilian deaths. So, lets roughly double it to 2100 and divide that by 30 to get an average of 70 civilian deaths per day along a front spanning hundreds of kilometres. Every single civilian death is a tragedy.
One could not possibly portray this as a conflict that is dominated by civilian casualties. Neither Russia nor the LDPR forces are employing “Shock and Awe” type tactics involving widespread destruction. We do know that Ukrainian forces have been deploying weapons that are banned and using them against civilian only targets. A single case in point is the use of a large missile, a Tochka-U, armed with cluster munitions which targeted a civilian area of Donetsk city. You may dislike my use of RT as a source here, but they had reporters on the scene within under an hour of the attack and interviewed people who had witnessed the event. I give credibility to timely, on the ground, at the scene reporting. This one event by Ukrainian forces accounts for a third of the daily average (70) for civilian deaths on that day, with 23 killed. If you are having trouble accessing RT, this guide may help. (I am not advocating their coverage but I do like a wide array of sources for news, especially in conflict areas).
Narrative: Event Focusing
An interesting recent event is the bombing of the Theatre in Mariupol. At the time the Theatre was under the control of the local Ukrainian forces, predominantly the Azov battalion. It is obvious that the roof got blow up by something, but curiously nobody died and one person was seriously injured. Claims by the deputy Mayor of Mariupol, who had left the city many days earlier, that there are hundreds of bodies under the rubble have yet to be verified, and if present must be obvious by the smell.
There are three obvious causes for the damage to the theatre:
The Russians attacked and just don't know how to destroy a building
Either the Russians or the Ukrainians accidentally hit the building with a stray artillery round or three, or
The roof was blow up from inside by the Azov battalion
This is the explanation that western media have been running for a week and is a patently absurd explanation. Russia have destroyed much more difficult targets (ammunition storage in bomb proof bunkers) at extreme range with precision missiles.
This is plausible
This is plausible and there is evidence to support this theory
Max Blumenthal from The Grayzone seems to have taken great interest in this event. The first detailed reporting on it was by MoonOfAlabama. I wish The Grayzone all the best in getting to the bottom of it.
Not a Narrative: Political Repression and Media Control in Ukraine
On the political front, the Ukrainian government has just banned 11 political parties, one of which was the largest opposition party, and merged all media in Ukraine under a single government controlled outlet, justifying this as a "unified information policy". You may have heard little about this in western media, which is somewhat strange. For this is the sort of thing which the West would usually scream about until they're blue in the face. These Ukrainian moves are hardly "democratic" and wreak of the type of national fascism adhered to by the Nazi/Banderista forces allied to the current government.
Narrative Holes: Poor Analysis of Actual Events
The Russian Ministry of Defence had warned at the beginning of their "Operation" for other nations to not get involved, and just to make the point crystal clear, put Russia’s nuclear forces on high alert. On March 12th the MoD also made it clear that foreign mercenary fighters and weapons shipments into Ukraine were valid military targets. The next day, a military training facility located in Ukraine's far west, very close to the Polish border was heavily damaged by Russian 'cruise' type (Calibr) missiles. The West reported 35 casualties, because that's what the Ukrainian authorities said. The reality appears to have been much higher.
Russia, during the first days of the conflict, destroyed many armories of weapons that had been donated to Ukraine by the USA congress using their citizens’ tax revenue to pay for the weapons from USA weapons manufacturers. Interestingly, this knowledge by Russia of the locations of these weapons storage facilities indicates the level of intelligence information they have for Ukraine. Following the attack on that western military training facility more attacks have been delivered against other military training facilities (2) to warn "foreign mercenaries", and against other weapons caches and fuel depots (I’ve lost count of the numbers).
One of the most interesting was an attack on a reported weapons storage facility close to the Romanian border in south western Ukraine. The reason this strike was so interesting was that Russia's MoD declared that they had used one of their newest type of hypersonic missiles, the Khinzal. If this weapon was used, and I have no reason to doubt the MoD on this as the USA's DoD will be following up by asking the NRO (National Reconnaissance Office) for every single frame of every single satellite that covered the likely flight path of the missile to find out what happened. Assuming the MoD's claim is valid, then this is the first time that the weapon has been used in combat, and the DoD's analysis will tell them just how fast this thing flies and the type of damage it can inflict with a non-nuclear payload.
The question is why did Russia use this new weapon? It is unlikely that this is the only class of weapon would could penetrate whatever air defence systems still remained at the site, as Russia wiped out most of Ukraine's air defenses early in the conflict and have continued to do so as more are discovered. It also seems unlikely that is Russia’s only class of weapon which could inflict the type of damage they intended. So, a message is being sent. Recipient NATO: just to let you know, we have tested these, and incorporated them into our military. Here's a test case for you to study. Consider your actions wisely. This is not propaganda. Its an executed military attack, and Russia’s MoD informing the west of the type of weapon used, for the “west” to perform their own asessment. Have you heard about the USA DoD’s assessment? I am certain that they have done this as they would be remiss in ommission.
The same is true of the attack on the military training facility proximate to the Polish border. The class of weapon mattered not at all, but the position of the target did. Recipient NATO and Poland: observe our reach, 30 Calibr missiles precisely impact targets 10 kilometres from NATO (Poland's) border. Combined, these two attacks deliver a very simple combined message, "we can hit whatever we want, whenever we want, anywhere in Ukraine with precision". This is a reason that explanation #1 above in the Mariupol Theatre incident is obviously wishful thinking or pure narrative management. The Theatre is a piss weak civilian building, not a weapons armory in a bunker.
Narrative: Russian Forces Attacking Fleeing Civilians
How about the Russians attacking civilians fleeing via humanitarian corridors? This makes no sense whatsoever from a Russian military standpoint. They are the ones who set up the corridors and negotiated with Ukraine for their use. Russia wants the civilians out of the conflict zone, especially in difficult situations like Mariupol. Once all the civilians are gone they can bring in their big guns, literally. Secondly, and equally importantly, this is a mechanism for Ukrainian forces to desert.
The completely beat up story of the soldiers on "Snake Island" exposes this analysis's implausibility. Following the brain-dead stenographic reporting in the west's media of the "event", Russia shows these soldiers as being alive and well. They were also shown as housed as prisoners of war within the barracks of the Donetsk People's Republic's Militia eating the same food given to the Militia. The Russian military, as instructed by their political leadership, were told in no uncertain terms to honor all the Geneva conventions for prisoners of war, and Ukrainian forces who were not Nazis (or Banderistas) were to be treated with RESPECT. The reason for this is obvious. The forces that Russia has deployed are not sufficient to invade and the control all of Ukraine. Recall Ukraine is huge (size of France) and has a population of 42 million, minus the approximately 6.5 million refugees who have fled. Russia wants to denazify and demilitarize Ukraine's forces, but it wants an effective national Ukrainian army to remain, and it needs that army to witness that Russia has treated them fairly with the very likely exception of the Nazis.
The tactic of the "cauldron", combined with creating and negotiating the use of humanitarian corridors is a tried Russian tactic, as tested in the Syrian conflict. It works. Civilians leave, as do some fighters. You process the fighters and separate the irredeemable from the lower ranks who may not really have wished to be involved in the conflict. Removing civilians to safety and reducing the number of enemy combatants are both in Russia’s interests.
Narrative: Russia is Stuck in the Mud
Finally, lets examine the "Russia is bogged down" narrative. This is fanciful. As Scott Ritter has said, two weeks into the 2003 invasion of Iraq the USA's forces took a pause. Why? Because they needed to do maintenance on vehicles, bring up logistics support, rotate out tired soldiers etc.. War is a stressful thing to be involved in, no matter how well trained one's soldiers are. They need rest and a relief from the constant tension. One of the great narratives was the tens of kilometres long column of Russian mechanized units and support that sat in one spot for days and days. The Western narrative was "see, they're bogged down". A better analysis may have been, "see, the Ukrainian airforce cant do anything at all." "The Russians are sitting there like ducks on a pond".
The reality seems to be that yes, Russia has been "bogged down" in places, and indeed has been defeated in various tactical engagements. Scott Ritter's explanation for this is that the Ukrainian army is well trained, well led, well armed and well motivated. Additionally, they are generally fighting from positions that have been created as strong defensive positions during the last 8 years. Of course, this is not going to be an easy campaign for Russian or the LDPR Militia forces.
Not a Narrative: The Narrative Nexus
Independent journalist Dan Cohen has recently published an extensive article which examines the PR firms and western government funded organisations which are behind an extensive web of media narrative influencing outlets. If reading this recommended article, note that it continues below the extensive listing of graphics posters produced by one of the key groups orchestrating this propaganda drive. Make sure to read on below the graphics for the full article.
A Fraying Hegemon: Geopolitical and Geoeconomics
Before zooming out, a point regularly made by Alexander Mercouris, as evidenced during Russia's involvement in the Syria proxy war, is that there are differences between how "the west" and Russia view the relationship between diplomacy and the use of military force. The “western” stance is that diplomacy happens before military action and then military action replaces it until a military victory has been achieved and thus any following diplomacy is a fait accompli. The Russia version is quite different. First diplomacy, possibly with some threatened military response is tried. If this fails, military action may begin, but diplomacy is never disengaged. Indeed, the military action is used as a parallel to rather than a replacement of diplomacy. Russia has been involved in talks with the Ukrainian government at every opportunity presented since the beginning of the conflict.
Responses: Sanctions on Russian Commoditites
At the point of Russia recognizing the independence of Donetsk and Lugansk "the west" (aka the USA and EU/NATO) threaten the greatest economic sanctions package of all time. It starts with the irrelevant, sanctioning Russian "oligarchs" and members of the Russian government, including the President and Foreign Minister. Sanctions then move to the strategically stupid, targeting Russia's commodity exports.
[Image: a list of some of Russia’s commodity exports as a fraction of global exports of the commodities.]
The USA will not suffer terribly from this, but sanction participating EU nations will, due to their reliance on Russian energy and grain, and various other commodities like Neon, Industrial diamonds, Palladium and metals like Aluminium. These essential items for various industries will now need be sourced from further afield increasing freight charges, and the drop in market supply will also raise prices with the two cutting into profits for these EU industries.
The biggest problem is gas and oil. The oil markets are doing a little price gouging here, but Russia's oil exports are significant on a global scale and the market is tight. The gas prices in Europe have sky rocketed. Even if various EU nations have blocked sanctions on this commodity, they still need to deal with the price rises, placing even further pressure on their industries. Rising energy costs hit the whole of an economy, not just industries but also hospitals and homes, and even agriculture as gas and/or oil are used in fertilizer production. The civilian effects of the sanctions policies implemented in Europe are beginning to emerge. Protests from truckers, farmers and fisherman in southern Europe (Spain, Greece, Italy) have already occurred.
Responses: Fingers in the Dyke for the Oil Market
The USA's response to this all too foreseeable outcome was to rush to Saudi Arabia and beg for an increase in oil production to lower both international and USA domestic fuel prices. Saudi Arabia said no. UK's Prime Minister Boris Johnson tried a similar gambit to no avail.
The upcoming loss to the USA of heavy crude, which they had been importing from Russia, means a threat to the livelihood of USA industries in their south (Houston) who process heavy crude. From this heavy crude are produced heating oil. The USA’s native oil and gas industries possess very little heavey crude, and they need it for this crucial heating oil, especially in their north.
In one of the strangest about faces in some time the USA sends a delegation to Venezuela to beg for their heavy crude, and in doing so recognize President Maduro as the key government official with which to negotiate just a few years after the USA tried to 'coup' him by playing with Juan “the fool” Guaido as the "interim president", a post for which he has never stood in Venezuela. The schadenfreude is just so sweet.
Next off the rank to get more oil in international markets, and thus drive down prices, was a rush to solve the "Iran Deal" which the USA had unilaterally abandoned under the Trump administration. Efforts to reestablish the JCPOA (as the "Iran deal" is more formally known) via negotiations in Vienna had been making incremental progress, but were essentially being stretched out by the USA trying to wrangle in restrictions on Iranian missile development and other clauses. A sudden rush of gusto to get this "deal" solved enthused the USA and thus also EU negotiators. In truth, the Europeans have always wanted this "deal" re-instantiated but were prevented from doing much by actions and pressure from the USA. Again, we have another "backflip" on USA narrative and strategy staring at us. It is also true that Russia recently threw a spanner in the works too, adding a clause which would be very difficult for the USA to accept. There's plenty of blame to be shared around.
Background: What is the USA’s Real Strategy
Pulling further back, we can now see what the USA strategy has been. Its an old but tried strategy which goes back partially to the late (died 2017) Zbigniew Brzezinski and his current russia-phobe acolytes. The arming and funding of the Mudjahadeen by the CIA and Saudi Arabia to run an insurgency in Afghanistan was one of Zbig's proudest moments.
The USSR did come to the aid of the fledgling communist government in Kabul to resist the insurgency after many, many requests from Afghanistan (17, from memory). Many Russian officials saw this as the "Vietnam" trap that it was, which accounts for the repeated delay in the USSR's engagement. The USSR's involvement did drain resources. The USSR forces withdrew in an orderly fashion after having taken quite a beating, and left in charge an elected government which lasted close to a year before being overthrown, as opposed to the case of the USA's recent withdrawal in 2021 after 20 years rather than 10. The drain on USSR's resources did play a role in the its political decision to dissolve, though it was far from the only cause.
Zbig had also seen Ukraine as Russia's weak point. Ukraine was producing armaments and a massive quantities of grain and other foodstuffs, the "bread basket" of the USSR. The strategy to weaken/influence Ukraine has been a part of the USA's playbook since at least 2008 when NATO offered potential membership to both Georgia and Ukraine.
Then Georgian President Mikheil Saakashvili believed he would have USA military backing and attacked "rebel" regions of Georgia which were largely ethnic Russian and which were receiving Russian support. The Georgian military received a bloody nose from these regions, and the end result was the "independence" of Chechnya (officially the Chechen Republic) and South Ossetia (officially the Republic of South Ossetia, or the State of Alania) which are now annexed/occupied/aligned with Russia (choose whichever verb you like). Russian President Putin made it very clear to "the west" that Ukraine is a red-line for Russia, with formidable Foreign Minister Lavrov making the clearest of comments upon the matter: NYET MEANS NYET.
Russia's concerns were relayed to the USA by William J. Burns, then the USA's Undersecretary for Political Affairs and now the Head of the CIA, in one of the most prescient diplomatic cables. Please read the entire cable, it is very informative. The prescience is most visible in two sentences:
NATO enlargement, particularly to Ukraine, remains "an emotional and neuralgic" issue for Russia, but strategic policy considerations also underlie strong opposition to NATO membership for Ukraine and Georgia. In Ukraine, these include fears that the issue could potentially split the country in two, leading to violence or even, some claim, civil war, which would force Russia to decide whether to intervene.
Its seems that the Zbig acolytes saw this not as a warning but an opportunity. They now have that for which they have strived. Western Europe is not just under economic pressure but also now has 6.5 million Ukrainian refugees to accommodate.
Returning to that battle of narratives between the USA's DoD and the State Department/Political Class/Media, it seems that the DoD is giving away the original plan which is the Zbig "quagmire" as in Afghanistan, but this time in Ukraine. Russia "fell for the bait" and Ukraine's Military is capable. The general strategy for the war is for it to continue for as long as possible and thus sap Russia’s resources. Whenever official hostilities cease, an armed insurgency can begin by well trained forces, to keep Russia engaged and thus continue to drain her resources. This plan does NOT include NATO troops at all, just trainers and covert operatives. The more aggressive suggestions by the other group of "no fly zones" and "chemical weapon attacks" would force NATO forces to be involved which is most definitely not the plan.
The USA's military leadership are not stupid. They understand what a "land war in Asia" against Russia means, even without nuclear weapons. I expect they have no desire to follow in the footsteps of Napolean with France and Hiltler with Nazi Germany to become the third great military power to fall into this historically proven quagmire of quagmires.
Responses: Targeting Russia’s Central Bank Reserve has Consequences
The really big, and honestly incredibly stupid, component of the "biggest sanctions of all time" took a little while to finesse as it required the compliance of the European Central Bank and other European banking institutions. The USA's Federal Reserve and the European Central bank were so unhappy with this component of the sanctions policy that they have stated that they "were never consulted" as a manner of distancing themselves from it. As Alastair Crooke writes:
… both the Fed and the ECB said that they were not consulted on the seizure, or the expulsion of seven Russian banks from the SWIFT financial clearing system, adding that they would have opposed both moves, were they to have been asked.
That "it" was the freezing of
$300 $130 Billion of Russia's Central Banks' foreign reserves and components of Russia's national wealth fund. Recall the freezing of $2 USD billion of Venezuela's Central Bank's gold reserves by the Bank of England, or the spending (read as theft) of $7 USD billion (or 9, depending who you read) by the USA of Afghanistan's Central Bank reserves (enjoy the verb “releases” in the article title here by The Guardian). These are nothing compared to what has been done to Russia's Central Bank.
[Update 2022-05-27: the change in volume of seized funds by the USA and EU is based on a Reuters report cited by Alex Christoforou here.]
Many an analyst has scratched their heads attempting to explain two facts. Why did Russia keep so much of its reserves and sovereign wealth fund in European and USA banks? And why was Elvira Nabiullina, the head of Russia's Central Bank, retained in her role following this debacle? Many Russians were extremely unhappy about this affair. One hypothesis is that this was deliberately set as a trap for "the west". There does not seem to be sufficient evidence to support this theory. It is, nonetheless, an interesting idea.
What all of these moves to freeze Russia's reserves tells nations outside of "the west" is that storing your Central Bank's reserves in "western" banks is a high risk strategy should you be caught up in some geopolitical game being played in which you wish no part. This may lead to two related things, the transfer of funds in "western" central banks to elsewhere and a reduction in investment in USA or Euro treasuries or currency by those countries who see no security in these western institutions. This is just the beginning.
As Central Bank Boards consider their situation so too do major investors and industry leaders. The real effect of this unprecedented attack on one nation's Central Bank Reserves will be to re-factor global trade alliances. The USA called on the UN General Assembly to vote on a non-binding resolution to condemn Russia's military action in Ukraine. The resolution was carried with a wide majority. This is the basis for the USA narrative that their sanctions have "global support". This is rubbish. The nations participating in the sanctions regime against Russia are: USA, most EU nations, Canada, Australia, Japan, South Korea (somewhat reluctantly), and Singapore. (I may have left off a few.) This could be re-expressed as USA+NATO+lackey's. Who is missing? All of Africa, all of South America, all of the middle east and all of south east and central Asia (minus the few mentioned above). In pure population terms, that's more than half the global population. More importantly, many of these countries contain key dominant mineral reserves which "the west" craves.
Counter Responses: De-Dollarization
What is really happening is a growth in international trade outside of the USA dollar.
China talks to Saudi Arabia: how about out we pay for the oil we buy in Yuan (or more precisely Renmimbi (RMB))? Saudi Arabia: we will consider this. India to Russia: we would like to purchase some of your oil. Could we get a discount rate and pay in Rupee? Russia: why not? Lets see how we can work this out.
International trade in energy resources outside of the USD is a death threat to the USA's Petrodollar, and they know it, as does their Federal Reserve. The bigger problem for the USA, though they are not talking about it, is that they have a declared inflation rate of 8%, which is much more likely to be twice that in reality. The standard method of dealing with that is to raise interest rates. But doing that will also increase their repayments on the astronomic debt they hold, much of which is held by China.
It will be very interesting to see what China wishes to do with this debt. It may be that China decides to sell some of this debt at discounted prices to selected countries. As the trade war continues and inflation rises, so will interest rates, and thus this USA debt could be a good investment. It is also possible that the USA will default on some parts of its debt held in China, in which case China would receive a reduced rate of return, or nothing. Thus the motivation for selling some of it. This is all guesswork and theory crafting, but this author will be watching to see what China decides to do with the USA debt she possesses.
Russia has been calmly considering how best to respond to the economic sanctions and the impounding of its Central Bank reserves. But before that, a little sideline into just how "impounded" those reserves are. Russia, to meet some of its debt repayments for that held in some USA banks, offered to use the funds currently "impounded" in other USA banks to service the debt. This offer of payment has been accepted and transacted. This sits under a little "escape" clause in the sanctions imposed whereby USA institutions can recover debts with these impounded funds. A much larger debt repayment is due in the near future and it will be very interesting to see how this is handled by USA financial institutions.
Russia’s Counter Response: How Much do Nations Want her Commodities?
Russia has made only one international response to all the sanctions. They have not cut off gas supplies to Europe, or done anything "nasty". Instead they have decided that nations which are purchasing their gas who have been "unfriendly" (meaning they have imposed sanctions on Russia) shall now be paying for gas in Roubles.
Technically this is a change of contract, which a German Minister was quick to point out. However, Germany is not, to put it lightly, in a terribly good negotiating position here. She needs the Russian gas, as do other European nations like Italy, Hungary and many others. The brilliance of the strategy takes a little moment to unpick.
Russia Repairs the Rouble
Firstly, these "unfriendly" nations will need to purchase Russian Roubles. Russia's initial strategy to defend against the attack on her currency was to raise interest rates to 20%, to be lowered when the attack is seen as concluded. Secondly, she placed tight controls on flight of capital to retain as much of her currency in her banks as possible. These two policies work nicely together, with currency in these banks obtaining a nice rate of return, and even encouraging investors to buy Roubles. Early in the currency attack the Rouble quickly lost 40% of its value. However, with these policies and no doubt other measures, the currency has recovered significantly.
[Image: the last one month in trading in USD to Roubles. Source]
The graph shows that just at the start of the SMO/invasion/war for 1 USD you could get 82 Roubles which is a tiny jump of the price for months previous sitting at around 80 Roubles. The highest point on the graph is 1 USD buys 139 Rubles. Working with 80 Roubles, if the value had degraded to 160 for 1 USD that would be a halving in value of the Rouble to the USD, or a 50% reduction. Today, for 102 Roubles you can buy 1 USD, which is worse that 80, but nowhere near as bad as 140 (or 139). So, the Rouble has clawed back from 60 Rubles over 80 to buy 1 USD to only 20 over 80.. The worst loss of value for the Rouble was described in market reporting as a 40% loss in value and now the loss in value is a third (20 is a third of 60) as of that, so the loss of value is about 13%. This is still a significant devaluation, but is a dramatic improvement on the 40% previously.
The SCO and Global South: A New Paradigm in International Currency and Commodity Trade
Trade deals with other nations, like that with India mentioned above, and others like Iran, will have helped too in protecting the Rouble as Russia's economy is not failing as was perhaps the intention of the sanctions. It is also incredibly likely that China has also provided some strategic financial assistance to Russia. Now enter the "pay for gas in Rubles" policy. This will further raise the value of the Ruble as European companies and countries will need to purchase the currency, and they're in a bit of a bind, because the price of the Ruble will rise too. Buy more now? Take the hit?
Meanwhile, the two bank messaging and transfer systems developed by Russia and China are being linked to provide an architecture for international trade outside of western currencies and its SWIFT system.
To continue the unpicking of the “pay for gas in Roubles” response, while international trade in currencies is theoretically an open market, various "price control" type agreements are in place to pair various currencies. For example, the USD and Euro are loosely tied currencies to provide trade stability. Other currencies are also seen as related, and in our current circumstance the Rouble and Yuan (or RMB) are also loosely related. A rise in the Rouble implies, if one is looking at macro economic international trade blocks, a lowering in the USD and Euro.
As for the Yuan, China has such economic clout that she can pretty much control the value of her currency, and may not wish for a rise in the value of the Yuan. She will choose.
“Indivisibility of Security” is joined by “Indivisibility of Financial Security”
The end result of all of these sanctions and responses is not just a pressure on the USA's economy from the inflation, continued supply chain interruptions and a reduction in the percentage of international trade conducted in her currency, but also a downward pressure on its value from a rise in the Ruble and potentially other non-aligned national currencies like the Rupee. Let us not forget about BRICS; what are Brazil and South Africa doing? How are their trade relations being adjusted? As the economic effects of the sanctions from the western sanctions bounce back and hit Europe and thus impact the value of the Euro, what will the USA do about the linking of its currency with the Euro? Go down with it, or cut the European collective "Euro" economies adrift?
To further complicate matters the USA has just announced its first tier of sanctions against China under its classic “human rights” banner. This is pinned on the situation in Xinjiang which has a complex history. The western narrative is all about genocide, which has largely been debunked. China’s narrative is that she is countering an armed religious extremist insurgency. The Grayzone has done some good reporting on this.
To add even more complexity to the issue, Moscow is in discussion with both Caracas and Tehran separately to offer to include them in Russia’s Mir Credit Card facility which has taken over the vacuum left by the sanctions-forced withdrawal of Visa and Mastercard from Russia. Transactions via the Mir system will be completely separate from any western banking institutions and SWIFT. Mir has already been linked with China’s Union Pay Credit Card system, which is just further evidence of the unified non-western currency and SWIFT trade systems being established by China, Russian, and other members of the SCO (Shanghai Cooperation Organisation).
These are some of the questions and issues vexing central bankers, investment firms and macro-economic planners world wide.
The rich will be just fine, but the working classes will be impacted by these geoeconomic changes. Where that happens local national political responses will emerge. These global turmoils in geopolitics and geoeconomics will take years to find new equilibria. Its anyone’s guess as to where they will lead.
Update: The Recovered Rouble and Gazprombank as an Intermediary
The Russian rouble has almost returned to its pre-(SMO/Invasion/War/Intervention) level. One of the standout issues was the demand from Russia for "unfriendly nations" to pay for gas supplies not in the currency in the contract (Euro's and Dollars for European customers), but in Russia's national currency.
[Image: Rouble returns to somewhat normal levels. Source]
Obviously, Russia is not going to provide gas for free. Gas is also a major source of external revenue, and having it paid in Roubles would drive demand for the currency and assist in it's regaining its former value. The impasse was set with Russian President demanding payment in Roubles and European customers stating that this was not in the contract.
Russia has found a deft way to solve this conundrum allowing both supplier and customers's political leaders to "stand firm" but still achieve the same outcome. This is where banks and currency markets get to play their roll. The Russian Bank Gazprombank has been asked to play "middle man". For each European customer, two accounts are created, one at the request of the customer, and the other automatically created by Gazprombank. The customer pays for their gas in the currency specified in the contract by depositing those Euros or USD into "their" account. Gazprombank then converts that to Roubles via a currency market (and one would guess that that will be Russia's market, or perhaps "the best return going around"). The roubles purchased with the customer's deposit is transferred to the second account. I presume the customer can see this account, but not use it, meaning that they can observe the currency conversion. Then the Roubles are transferred to Gazprom. Thus, European customers are paying in the contract currency and have "stood up to Russia" and Russia gets its roubles which fortifies the national currency and her President can also declare that "customers are paying in Roubles". All true.
The other "fine detail" is by when these accounts must be created and have the relevant contract funds deposited into them. While there may have been some bluster about "by the end of the week" or equivalent, one understands that there is a period of leeway in effect to the end of the month, or thereabouts. Of course, payment will need to include all arrears.
With this simple step, the "standing firm" European politicians and technocrats can retain their positions and avoid the nightmare of a financial meltdown, which is what would happen to Germany's economy if the gas taps were turned off. Equally, Russia gets the payments it wanted and in the form it wants, while the markets get to skim a little for the currency exchange.
Update: the Bucha Incident
Western media were alarmed by reports of war crimes allegedly committed by Russia in the suburb of Bucha on the outskirts of Kiev. Caitlin Johnstone has responded to the bone chilling calls for the USA to enter a hot war with the other major nuclear power, Russia, and all of the potential disaster that such move may entail. She shrewdly notes that one effect of this warmongering creates a shift in the "Overton window" making insane warmongering an acceptable stance while arguing that this is insanity moves into the "Putin apologist" bucket of irredeemable opinion.
One should always be careful to draw rash conclusions from reports from battlefields where "truth is the first casualty". This lesson seems to have been abandoned by western media pundits. The effect of the reporting of the alleged events are in fact doing exactly as I outlined earlier in this article as being devices to inspire "humanitarian" responses in the west. This is a simple "cuo bono" analysis. When combined with the above "first casualty" analysis, we should all take pause for thought before jumping to rapid conclusions, and minimally wait for some type of credible investigation into the events.
Some independent reporters and/or commentator have already begun this process. The simplest and most effective is by b. from MoonOfAlabama who outlines the timeline of events:
Russia declares that her forces withdrew from the area on March 30th
A recording by the town/suburb's mayor on 31st March confirms the Russia statement, and importantly the mayor makes no mention whatsoever of bodies lying scattered in the streets. If the alleged events had occurred while Russian forces where in the area, the mayor should have been well aware of them. Secondly, cell phone coverage was fully operational in the area during the occupation by Russian forces and no reports of such heinous activities had been received.
A complete lack of any reporting of the alleged crimes continue during the 1st and 2nd of April. During this time Ukrainian Police come to Bucha and release an 8 minute long video in which there are no bodies in the streets and no mention is made of any such atrocity.
Ukrainian military forces arrive in the area some time during this period and on April 3rd the videos "documenting" the alleged atrocities are released by the Ukrainian Ministry of Defence.
If the videos are genuine, then it would seem far more likely that the atrocities occurred after the Russian forces had withdrawn. However, serious doubt has been raised as to the reliability of the videos themselves, firstly by Gonzalo Lira. (See Update Sources, below).
To understand his criticism which emerged on April 3rd, one must rewind to April 2nd when he narrates a video livestream in which he analyses 4 seemingly independent videos produced in Ukraine and published via various channels. This analysis if of videos completely unrelated to Bucha, as they emerge 24 hours later.
He draws partially on some work done by another independent researcher "Name Les" who identifies a particular green building which appears briefly in all 4 videos. Lira himself notes a particular utility pole (street lighting, or some other purpose) which appears in 3 of the 4 videos. Lira's conclusion is that the 4 "independent" videos are actually shot at the same location, i.e a "set".
Another independent person comments to Lira that the tanks shown in the footage are not Russian tanks as claimed but Ukrainian ones due to the presence of additional external armour which apparently is used on Ukrainian tanks, but not on Russian ones. This part of the analysis your author did not pay sufficient attention to, but the dominant part of Lira's video analysis is very good. These seem to be videos shot at one location talking about slightly different topics and having widely different target audiences. They are propaganda videos.
Forearmed with this understanding Lira looks at the videos released for the "Bucha" event. He is immediately suspicious. Your author has looked closely at two of these videos and shares Lira's suspicions. There are two highly suspicious elements, one from each of the videos.
The first is the shot from a civilian type vehicle which is following an armored personnel carrier as it weaves its way down a street, supposedly in Bucha. "Bodies" are strangely strewn in front of gates, fully or partially on the sidewalk, and on the edge of the road, but never sufficiently central to block vehicular passage as the carrier and civilian vehicle wind around the obstructions. No faces are visible on any of the victims. They are all covered. Their body positions are not awry, but orderly. There is no blood, except in one shot which I did not observe. This piece has several contiguous segments which are cut together.
The second piece is a sequence of still shots. There is minor camera movement, but they are essentially stills. Here Lira brings his experience as a movie director to bear. Lira has apparently been involved in the production of at least one movie, and is familiar with high end cameras and video editing and production. He claims that in this second piece the quality of the footage, and thus also the quality of the equipment used, is very high. It involves the use of very expensive equipment and an extended crew to obtain this type of footage. Various questions arise. Why is nobody attending to the coprses, but instead filming high end video shots? Why no faces? Why are the bodies arranged in such an orderly manner?
Possessing no experience in filming or editing high end footage, I cannot assess Lira's claims for this second video sequence. However, others with this technical training and experience can. One can hope that this type of analysis will be performed by others with requisite experience in the coming days.
The four elements of MoonOfAlabama's timeline, and Lira's identification of propaganda videos preceding the Bucha videos, combined with his analysis of two of the videos place doubt on the veracity of the story being propagated in western media, and some of the video evidence upon which it rests. These are not conclusive analysis but raise valid questions. We should wait for a proper investigation, though these are extremely difficult to achieve in conflict zones.
All of this can be combined with the sequence of propaganda stories which have been released by the Ukrainian Ministry of Defence, from the "ace pilot" who supposedly shot down 6 Russia planes on the first day of the conflict, to the defenders of Snake islands who were postumously awarded some high military decoration only to turn up alive and well a couple of days later, to the attack on the maternity ward in Mariupol which has been completely refuted by an eye witness.
Another independent researcher has published an even more detailed timeline of events in Bucha, with an excellent collection of sources. It reinforces that some form of massacre did occur, but that it is executed after Russian forces had left the area. Please note that this can be true and that Ukraine’s Ministry of Defense can still issue propaganda videos at the same time.
Scott Ritter has also offered his analysis of the events in Bucha.
The military conflict in Ukraine is real, and war crimes happen in wars; all of them.
Making foreign policy choices based on unconfirmed reports coming out of a conflict zone is extremely unwise, especially if it involves establishing a hot war between nuclear powers.
Pundits Who Advocate Hot War With Russia Are Enemies Of Humanity, Caitlin Johnstone, her Newsletter, 2022-04-04
The Bucha Provocation, b., MoonOfAlabama, 2022-04-04
Propaganda BTFO, Gonzalo Lira, his youtube channel, 2022-04-02
Bucha: More Lies, Gonzalo Lira, his youtube channel, 2022-04-03
Lira provides a link to the "high quality" video on his Telegram channel. [Lira took down this video. I see this as a form of self censorship. Lira claims that the video may have lent towards his channel being restricted/shut down. His channel, his choice.]
New witness testimony about Mariupol maternity hospital ‘airstrike’ follows pattern of Ukrainian deceptions, media malpractice, Kit Klarenberg, The Grayzone, 2022-04-04
The Bucha Massacre, Jason Michael McCann, Standpoint Zero (his website), 2022-04-04
The truth about Bucha is out there, but perhaps too inconvenient to be discovered, Scott Ritter, RT, 2022-04-04
Make Nazism Great Again, Pepe Escobar, Unz Review, 2022-03-24
Pentagon Drops Truth Bombs to Stave Off War With Russia, Joe Lauria (Editor in chief of), Consortium News, 2022-03-23
Ukraine: civilian casualty update 25 March 2022, UN Office of the High Commissioner for Human Rights, 2022-03-25
Was bombing of Mariupol theater staged by Ukrainian Azov extremists to trigger NATO intervention?, Max Blumenthal, The Grayzone, 2022-03-18
Neo-Nazis In Ukraine Fake Incidents To Gain More 'Western' Support - Updated, b., MoonOfAlabama, 2022-03-17
Opposition political parties banned in Ukraine and ‘unified information policy’ imposed, Abdul Rahman, People's Dispatch, 2022-03-21
Russian Missiles Strike Ukrainian Military Training Base Near Polish Border, Alan Cullison and Brett Forrest, Wall Street Journal, 2022-03-13
Russian airstrike hits Ukrainian military base close to Poland border, kills 35, AP (Associated Press), The Hindu, 2022-03-13
Russia claims first use of hypersonic Kinzhal missile in Ukraine, Paul Kirby, BBC News, 2022-03-20
Russia’s 40-mile-long military convoy near Kyiv ‘has hardly moved in three days’ MoD says, Tom Batchelor, The Independent (UK publication), 2022-03-04
Ukraine’s Propaganda War, Dan Cohen, Consortium News (originally published at Mint Press), 2022-03-23
EU coordinator to visit Tehran to close gaps on JCPOA revival, PressTV, 2022-03-26
NYET MEANS NYET: RUSSIA'S NATO ENLARGEMENT REDLINES, William Burns, PlusD Wikileaks, Cable date: 2008-02-01
Canceling Russian reserves boomerangs to a new international monetary system, Alastair Crooke, Al Mayadeen English, 2022-03-20
The American Empire Self-Destructs, Michael Hudson, Unz Review, 2022-03-07
Putin wants 'unfriendly' countries to pay for Russian gas in roubles, Nina Chestney, Reuters, 2022-03-23
Say Hello to Russian Gold and Chinese Petroyuan, Pepe Escobar, Unz Review, 2022-03-13
Promoting Accountability for Transnational Repression Committed by People’s Republic of China (PRC) Officials, Anthony Blinken, USA State Department, 2022-03-21
Moscow, Caracas considering to launch Mir payment system in Venezuela, "Trend", Azernews, 2022-03-22
(The TASS article linked in the above is unavailable due to attacks on TASS, but here is the link should it later become available.)
Russia, Iran discuss recognition of Mir cards, bypassing SWIFT, PressTV (Iran's state media), 2022-03-24
The US Empire's Ultimate Target Is Not Russia But China, Caitlin Johnstone, her newsletter, 2022-03-31
(One of Caitlin Johnstone’s best articles; short, beautifully written and straight to the point.)
How Mariupol will become a key hub of Eurasian integration, Pepe Escobar, The Cradle, 2022-03-29
Meet the New, Resource-Based Global Reserve Currency, Pepe Escobar, Unz Review, 2022-03-31
Attacking All Things Russian Rather Than Putin Is Moronic, Larry Johnson, A Son of the American Revolution (his website), 2022-03-31
Ellen Brown: The Coming Global Financial Revolution: Russia Is Following the American Playbook, Ellen Brown, ScheerPost, 2022-03-04-04
The birth of a “new world order” from the Ukrainian battlefield, Elijah J Magnier, his website, 2022-04-04
Biden’s Folly in Ukraine, Douglas Macgregor, The American Conservative, 2022-04-05
Colonel Douglas Macgregor: The US is Deliberately Ignoring the Path to Peace in Ukraine, Douglas Macgregor on the Scott Horton Show, Scott Horton Show, 2022-03-31
(Direct Audio (mp3))
Sanctions: The Blowback, Prof Michael Hudson interview on Renegade Inc, RT, 2022-03-21 (a video source, via RT’s selection of video players — RT’s own, Rumble or Odysee)
Press TV's Spotlight - Russia gas currency switch, Gilbert Doctorow and Daniel Lazare on Spotlight (TV program), PressTV (Iranians national broadcaster), 2022-03-29
Is China’s Trade Predatory or for Mutual Benefit? - Hudson and Bond pt 2/2, Michael Hudson and Patrick Bond interviewed by Paul Jay, TheAnalysis.News, 2022-03-28
(A wonderful discussion between two like minded individuals who actually disagree on the nature of Chinese foreign investment. As in so many cases, the answer is complex. Jay is an excellent interview, and the video is very well produced, as can be expected from TheAnalysis.News)
WATCH: Alternative Media & the Russia-Ukraine War, Kevin Gozstola interviews Joe Lauria and John Kiriaku, Consortium News, 2022-03-24
US fighting Russia ‘to the last Ukrainian’: veteran US diplomat, Aaron Mate interviews Chas Freeman, Pushback (The Grayzone), 2022-03-25
The battle for Ukraine, with ex-UN weapons inspector Scott Ritter, Max Blumenthal and Aaron Mate interview Scott Ritter, The Grayzone, 2022-03-23
Iran & Venezuela Join Russian MIR Payment System, Richard Medhurst, his youtube channel, 2022-03-26
Europe Prefers To Freeze Than Pay Russia for Gas in Rubles, Richard Medhurst, his youtube channel, 2022-03-29
As a professor of History Horne brings in many forgotten episodes in the history between the European powers, and the USA in their long struggle against Russia before, during and after the USSR.
Negotiations in Turkey, more fog of war (with Glenn Diesen), Glenn Diesen in discussion with Alexander Mercouris and Alex Christoforou, The Duran, 2022-03-30
Chris Hedges & Lee Camp - on Censorship in The Most Crucial Times, Lee Camp interviews Chris Hedges, Moment of Clarity, 2022-03-31
Ukraine a Pawn in a Larger Struggle – Vijay Prashad pt 1 (of 3), Paul Jay interviews Vijay Prashad, theAnalysis.news, 2022-03-31
The first casualty of War is Truth (Live w/Scott Ritter), Scott Ritter interviewed on The Duran, The Duran, 2022-04-04
John Mearsheimer on War in Ukraine with Katrina vanden Heuvel, Ambassador Jack Matlock, more..., Mearsheimer, Matlock, Petro and Laruelle (thats 3 Professors and 1 former Ambassador) in conversation, American Committee for US-Russia Accord (ACURA), ACURA’s youtube channel, 2022-04-07
If reader, you enjoy the contribution by Prof Petro, you may wish to visit an earlier article which contains a link to his longer presentation on the topic of the role of tragedy, as viewed from classical Greek literature, in healing ruptures in social bonds.
Aaron Maté Interviews Former NATO Advisor Jacques Baud, Aaron Maté interviews Jacques Baud, Pushback for The Grayzone, 2022-04-13
Late in the interview the audio quality degrades, which would indicate a degredation in the network communications between the interviewer and interviewee. Why this should happen halfway through the interview may be viewed as puzzling.
The Second Coming - William Butler Yeats - Poem - Animation, poetryreincarnations, uploaded to youtube 201503-16
This is William Butler Yeats reading his own poem. It, unsurprisingly, is the best rendition I could find. Please do NOT watch the animation, though I appreciate their efforts. You want to hear the audio ONLY. Scroll away from the video, turn out the lights, or put on your headphones and close your eyes, and listen.
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