by Bernard at Moon of Alabama
Two days ago we looked at why Russia is doing what it does:
Russia understood Zelensky’s remark in Munich as a threat by Ukraine to acquire nuclear weapons. It already has the expertise, materials and means to do that.A fascist controlled government with nukes on Russia’s border? This is not about Putin at all. No Russian government of any kind could ever condone that.
I believe that this credible threat, together with the artillery preparations for a new war on Donbas, was what convinced Russia’s government to intervene by force.
The ‘west’ had failed to understand Russia’s need to act. It has failed to make the necessary commitments, and accept Russia’s reasonable demands, to avoid the struggle. In consequence it will now fall apart. The knee-jerk reaction to Russia’s ‘special military operation’ in Ukraine will, as Alastair Crooke writes, lead to the end of the ‘liberal order’:
So Biden, finally, has his foreign policy ‘success’: Europe is walling itself off from Russia, China, and the emerging integrated Asian market. It has sanctioned itself from ‘dependency’ on Russian natural gas (without prospect of any immediate alternatives) and it has thrown itself in with the Biden project. Next up, the EU pivot to sanctioning China?Will this last? It seems improbable. German industry has a long history for staging its own mercantile interests before wider geo-political ambitions – before, even, EU interests. And in Germany, the business class effectively is the political class and needs competitively-priced energy.
Whilst the rest of the world shows little or no enthusiasm to join with sanctions on Russia (China has ruled out sanctions on Russia), Europe is in hysteria. This will not fade quickly. The new ‘Iron Curtain’ erected in Brussels may last years.
But what of the unintended consequences to last Saturday’s ‘sanctions Blitzkrieg’: the ‘unknowable unknowns’ in Rumsfeld’s famous mantra? The unprecedented switch-off affecting a key part of the Globalist system did not download into a neutral, inert context – It developed into an emotionally hyper-charged atmosphere of Russophobia.
Now reality comes back to bite the inept minions who attempt to rule over us.
In sum, the changes set out by von der Leyen and the EU, with surging crude oil costs, could potentially tip global markets into crisis, and set off spiraling inflation. Cost inflation created by energy costs spiraling higher and food disruptions are not so easily susceptible to monetary remedies. If the daily drama of the war in Ukraine starts to fade from public view, and inflation persists, the political cost of von der Leyen’s Saturday drama is likely to be European-wide recession.“Since well before the Russian invasion of Ukraine, Europeans have been struggling under the weight of runaway energy bills”, OilPrice.com notes. In Germany, for some, one month’s energy costs the same as they used to pay for a whole year; in the UK the government has raised the price cap for energy bills by a whopping 54%, and in Italy a recent 40% domestic energy cost hike could now nearly double.
The New York Times describes this impact on local businesses and industries as nothing short of “frightening”, as all kinds of small businesses across Europe (prior to last week’s events) have been forced to cease their operations as energy costs outweigh profits. Large industries have not been immune to sticker shock either. “Almost two-thirds of the 28,000 companies surveyed by the Association of German Chambers of Commerce and Industry this month rated energy prices as one of their biggest business risks … For those in the industrial sector, the figure was as high as 85 percent.”
And it is not only Europe. Energy prices are based on global markets. As are the prices for many other minerals and metals which have suddenly become rare:
Some U.S. refineries at the south coast are designed to only process heavy oil variants. Since 2019 the U.S. has blockaded heavy oil imports from Venezuela and replaced them with imports of heavy Ural variants from Russia. It has now send too officials to Caracas to try to get Venezuela’s oil flowing again. That would of course require to lift all sanctions off Venezuela and to return all confiscated companies and the gold that is owned by that country. It is not going to happen anytime soon.
High end German cars are build with aluminum from Russia. Boeing needs Russian titanium to build planes. These manufacturers will soon start to lay off people. All this while food, heating and mobility costs will increase dramatically. A deep recession combined with strong inflation will rip social cohesion apart. I do expect strong anger in the streets of Europe and the U.S. There will be riots and in consequence a strong political move to the right. The mid-term elections will destroy the Russophobic Democrats.
Michael Hudson notes the immense strategic damage the U.S. has done to itself:…Continue Reading