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Why Russia didn’t shoot anything down yet? | The Vineyard of the Saker

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

By Tarik in the Vineyard for the Saker Blog

If Russia shot down a NATO bomber or ship flying or sailing where it shouldn’t be (or even a US one), who would dare respond in kind?

It begs the next question: Why Russia didn’t shoot anything down yet?

Things need to be put in perspective. So here is a third question: Why is the West and the US in particular, so dead set on confronting Russia and China at every corner, short of direct military attack?

It is not because they want to cut Russian gas to Europe (it would terminally break the EU economy and destroy its ability to store increasing dollar reserves), or repatriate jobs from China (systemically incompatible with dollar hegemony) , or even prevent the implementation of the BRI per se (because the matter of fact is that potentially it could become a huge new, and very much needed pit for excess dollars to find their home; if only it were done the “right” way).

When Kissinger invited China into the western world economy, it was understood that it would eternally accumulate dollar trade surpluses, and over time, become another EU or Japan. In the case of the EU, the US had NATO, and for Japan they had their military bases to make sure these two would dutifully stockpile every dollar that comes their way. But nothing of the sort existed for China. To make a story short; in the early nineties they took over the largest stash of natural resources that is Russia. With that in hand they thought they now held China on a tight leash. Late nineties the Asian economic crisis hit; Beijing was livid. 2000 Putin takes over Russia’s natural resources, unleashing China. The later enters a global buying spree of natural resources through its huge accumulated dollar reserves. Commodities’ prices shoot up, interest rates follow suit and triggers the subprime implosion and all its aftermath.

For all practical purpose, intentional or not, this was an unofficial war declaration. No doubt every central banker on the planet worth his salt understood a new player entered town. It meant business, and was to be reckoned with. US responds with an “epidemic” of color revolution everywhere China was laying the ground work for what was to become the BRI, and dramatically increases the pressure on Russia to force it back into the US$ fold. Neither China nor Russia blinked. Instead the former announced to the world the official launch of BRI, and the latter openly challenged US military supremacy in Syria, and soon after started in earnest the distribution of S400s (almost as good as the atomic bomb, in diplomatic terms) to the world.

For those holding reservations about the above interpretation of events, please consider: the price of gold went from under 300 US$/ounce in the late 90’s to 1900 US$ by the end of the first decade, bear in mind that this in a market hated by all. To this day less than 1% of global private wealth is held in gold. In 5000 years of history never did this ratio fall below 5%, even under the most exuberant times. Who was buying? While the western bullion banks acted as “sellers of last resort” with unlimited fictitious supplies on the Futures market to keep the price under cap, so did Beijing act as “buyer of last resort” on the spot market with unlimited dollar supplies from their trade surpluses, thus uncapping the price. The relevance of this is apparent when juxtaposed to the BRI project.

It is estimated tens of thousands tons of gold were disappeared in China; that enters the border but never show up; neither in retails nor official reserves records, but instead just somehow vanish in thin air. At the minimum it shows they’re preparing for a post dollar economy. Then again the BRI makes no secret that it intends to make use of local currencies worldwide. There are two ways only to have any currency accepted. Either it is backed by the most powerful military, or alternatively it is referenced to gold. Anything else (eg. Petrodollar, Eurodollar…) is military backing under the guise of… and the BRI has also admitted its preferred option for trade account settlements.

Such monetary arrangement (no matter the exact actual architecture) would in short order annihilate any form of western prevalence and privilege on the global scene. In itself it would just be an ego bruise, but when added to the staggering debt levels, it translates to guaranteed decades of servitude. That my friends is the crux of the matter, the unfathomable horror the west is facing. It is what keeps their elite awake at night, while the population imperfectly senses a looming day of reckoning whether under the traits of a yellow slit eyed giant dragon, a monstrous growling bear, a flood of melted ice, or an amorphous unforgiving pestilence, when instead they should really fear Shylock’s lurking specter and past due pounds of flesh.

Now that the real motive for the Big Boys’ quarrels has been defined, how would a war with Russia or China, even if only through a proxy (Ukraine or whatever) fit in this equation. First of all the West or the US today is not comparable to say Napoleon’s France or Hitler’s Germany which “benefited” from industrial and military supremacy. It is those specific advantages that allowed them the privilege to make fools of themselves. Without them, neither Napoleon nor Hitler would have ever thought of heading East. And I might add, nor would have the US embarked on the last 50 years of hegemonic delusions. Today the latter has lost both trump cards, and with them, one might presume, the luxury to fantasize a swift military solution.

This leaves us with only a proxy war scenario. If realized, that option can only yield very short lived dividends that could never alter the natural course of the empire’s demise. After all once the Ukrainian army is spent, that card is gone. In fact the Ukraine holds value as long as the status quo last, once the situation is resolved (which ever way that may be) it looses any bargaining stock. The same holds true for the JCPOA, Syria, North Korea, Taiwan, Myanmar, Ethiopia, and so many others. And what bargaining may I be referring to? Well hold on tight: the West pushes for terms of a new partitioning of the world, while Russia and China expect its terms of surrender.

Sure, until say around 2018, all these pressure points were meant to force China and Russia reconsider the dollar’s role in the BRI and related projects. But then in March of that faithful year (if I remember well) Putin casually announced a panoply of hyper-sonic toys. If the subprime event was a “Wazari”, March 2018 was the “Ipon Seonage”, or basically a “checkmate”.

No doubt every general worth his salt must have raised an eyebrow or two, and every central banker realized the dollar was now naked, with neither gold nor the most powerful military on the planet to enforce it.

All the while Putin was giving his speech, the list of nations that were rejoining the BRI since its official launch and their commitment, were about to dramatically increase. The practical effect was a gradual and ongoing abandonment of dollars in cross border regional settlement of trades, particularly in South-East Asia were the doomed currency is now considered almost a dirty word among regional players. Consequently local currencies reserves are displacing US$, which are increasingly being spent on the acquisition of raw materials on the international market for infrastructure projects. If it sounds like “déjà vu” it’s because it is. The resulting inflationary pressure on the commodities’ market would again spill over to the interest rate market, triggering the September 2919 REPO event. Because of its brevity, I suppose, few realize how defining that moment was to what came next (…more)


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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December 18, 2021

“At the minimum it shows they’re preparing for a post dollar economy….There are two ways only to have any currency accepted. Either it is backed by the most powerful military, or alternatively it is referenced to gold.” Russia and China ought to quit the IMF and back their currencies with gold. To make their currencies even more internationally acceptable, they should issue bills/coins that are printed/engraved in English on one side and, respectively, Russian or Chinese on the other side. English is the common language of international trade. Other countries, tired of being under the thumb of the US, could… Read more »

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