The Sledgehammer.

Over last weekend a conference called the Saint Petersburg International Economic Forum (SPIEF) took place. The chances are you might not even of heard it occurred but it did and what came out of it confirmed my worst fears of how dire a situation the US, EU and the West in general have managed to steer themselves into.

The old establishment powers of the US, Britain, Canada, Australia, New Zealand and Japan refused to attend it, which was a massive mistake because they ended up with absolutely no input into the world shaping decisions that were being made there. It was sneered at as being an irrelevant sideshow but when it’s hosted personally by Putin, virtually attended by China’s XI, India’s PM, a packed representation of the African Union and other notables from around the world, and it’s barely reported on in the MSM, you know something is up. Strangely enough it was attended by 1250 Russian companies, 265 foreign firms and 4,188 journalists from 30 countries who registered for SPIEF accreditation.

I want you for a moment to imagine a huge jigsaw puzzle that’s been put together perfectly on a table. There are people standing around it because they’ve all had a hand in putting it together. There’s not a piece missing and it has been there for years, so familiar and liked that people occasionally run their fingertips across it to derive some sort of comfort from its seeming changelessness.

Now, imagine a huge sledgehammer coming down on the middle of that table with thunderous force, splintering a huge hole in the solid wood table and exploding the timeless jigsaw pieces into a million spinning pieces flying up into the air to land all over the place. In one Earth shattering move, the old comforting order has been exploded into an irreparable disaster. There’ll never be any putting it back together.

That is what we are currently living through – a fundamental baseline shift in the balance of power in the world. It’s not just a second Cold War, but a fundamental realignment of who is on the side of the West and who is on the side of the Eastern blocks. Let’s get detailed about who is actually on whose side in this new arrangement of power.

For the West, surprisingly few of the old stalwarts. The US, Canada, Britain, a deeply-divided EU, Australia, New Zealand and Japan – everybody else is snuggling up behind the power and strength of the new Russian and Chinese alliance. We’re talking India, all of Africa, Latin America, Asia, Eurasia, Kazakhstan and all of the other “stans”. Biden friendly coalitions are falling like dominoes – France, Estonia, Bulgaria and Columbia. If the US loses Brazil to lula, its influence will be severely curtailed in South America and their plans for a “League of Democracies” for S. America run by them of course will be stillborn.

All those little countries who’ve lived under US hegemony since the end of WWII have suddenly got something they were too small to ever have had before – protection from what can only increasingly be described as the world’s bully – America. Do what we say or we’ll crush you, drone you or regime change you. In less than two years, that’s what the Biden administration has mutated the world’s view of America into being. It has succeeded in making the new world order a lot more attractive to the smaller countries than the old one.

Under the guise of munificent globalism, we’re going to strip mine every mineral and human resource you have and pay you pennies on the dollar for the privilege of letting us do that to you, and there’s not a damn thing you can do about it. That’s all changing now. These little countries can now get the raw resources directly from Russia, the consumer goods produced by the prodigious manufacturing capacity of China and all at a discount to the prices the East block will be charging the “hostile” West block countries.

Putin set the tone for it in the opening speech he gave on Friday and it was a very direct and politically honest speech. He doesn’t give many long public speeches to large audiences, but when he does, it pays to listen very carefully to what he’s saying so clearly and concisely. He simply doesn’t bluff. He said it right up front. In essence, Russia has broken any economic dependence on the West and the complete and abject failure of the attempt to destroy Russia’s economy by sanctions and theft of assets held abroad proved it conclusively. From now on, its focus will be eastwards, not westwards. He barely mentioned the war because everybody with a lick of military sense knows it was lost from February 24th onwards.

The Russian economy was in fine health, it had simply raised interest rates momentarily to control the spike in the cost of living rather than just print money as the West would do and as for the ruble, it’s exchange rate for the dollar had nearly doubled in its favour. They’d already dropped their central bank interest rate by 10% but the ruble is still too strong, so they might have to do another interest rate cut.

As for the natural gas, oil, wheat, grain, fertilisers and other commodities that used to be exported westward to the EU, the Russians had already found new buyers for the lot of them. They have new buyers for everything they can produce. Russia, rather than Saudi Arabia, is now the biggest supplier of oil to China. Sales of Russian oil into India have multiplied at least fifty fold in the last three months alone. After all, it’s so much cheaper to pipe oil over the border into a neighbouring country than fill up oil supertankers on the other side of the world and then unload and distribute the oil around the country. Chuck in a 20% discount on heavy Urals crude and it’s a no brainer deal to be made.

The really bad news for the EU is that statement confirms what a lot of that furious trade visits Russian government officials have been making over the last four months were all about – making up trade deals. The bottom line is that Russia has absolutely no need to supply the EU with any commodity, whether it’s been sanctioned or not. It’s got new buyers lined up for everything it produces. Rather, it has every reason to not supply the EU with a damn thing and do nothing other than watch it implode over this coming winter.

A rather childish question being posed in the EU and West block is that if they drop the sanctions policies, will things go back to normal, especially before Winter? It’s indicative of how badly some supposed world-leaders are adjusting to the new realities after the sledgehammer hit the jigsaw. First of all, the EU has so closely aligned with each more vicious and petty sanctions round, it’s not perceived as anything other than just another wing of NATO.

When an EU commissioner Burrel says they are totally committed to arming the Ukraine to beat Russia and the only solution is a military one on the ground, they’ve effectively left the zone of being an economic entity and become a military arm of NATO. All pretense has fallen away and Russia has to categorise them as an aggressive military force determined to kill Russian soldiers in America’s proxy war with Russia. He’s since tried to walk back the comments, but everybody knows it’s too late, way too late. The damage has been done and cannot be undone.

The outrageously aggressive statements of EU president Ursula von der Leyen (one of seven unelected presidents of the EU BTW), about destroying Russia haven’t gone down well either. She even suggested stealing natural gas being piped through Germany to keep Poland going who’d refused to pay for it it rubles, but did so in the end. Imagine, an EU president advocating theft but then again, she’s actually a German of a certain generation who in their heart of hearts know all slavs are untermensch or sub-human.

When you consider that Biden announced the sanctions with the full support of the EU to effect regime change in Russia, I think Russia will use the disaster that sanctions have wreaked to overturn a lot of regimes in the West. Biden is effectively gone in November, Napoleon Macron is already out of power, Boris is living on borrowed time, the Italian PM is virtually gone as is the Spanish guy, the Estonia, Bulgarian, Latvian coalitions are already collapsing and such things are due to accelerate in the next 3 months when the first winter chills of the year arrive, food shortages start to appear, prices go mad, people start striking for pay increases to keep up with the cost of living and also begin to realise their money is losing its purchasing power at a rate of 10% a year.

You may have noticed Russian supplies of natural gas to the EU have started to develop mysterious technical supply glitches where Germany has already gone to condition red because they’re short three fifths of their usual supply of natural gas at this time of year. Just to hurry along the regime changes in the EU, the Russians are not going to let them fill up their reserve tanks before General Winter arrives. In passing, Russia have just announced they’ll be cutting off all natural gas to Germany from July 11 to July 21 to do annual maintenance. The big fear in Berlin is whether that supply will ever get switched back on. Cold, hungry electorates living in a madhouse of rising prices, industrial strikes with rolling blackouts should hurry along regime changes quite nicely.

Russia will not be turning back on the supply of any commodity to the West block and if anything, will be turning off more supplies to the EU in order to kill it off as a threat, which it will within the next year. The days of the EU as a danger to the East block will become a distant memory. What will happen though is a few years down the line some of the old smaller EU member states will apply to become members of the prosperous East block. Don’t laugh, it’s inevitable.

Russia has given up trying to negotiate with the West block all together. Just look at the unpredictable, untrustworthy maniacs they are expected to make deals with – Biden, Harris, Trudeau, Freeland, Scholz, Ursula von der Leyen, Johnson, Macron and a mad new general Sir Patrick Sanders who’s just taken over charge of the British Army who’s obviously ready to fight a war with Russia. The British army is in no fit state to take on a war with Lichtenstein, never mind the Red Army. The Minsk accords were totally and deliberately ignored in 2014 and the most recent bout of negotiations with the Ukrainians in Turkey turned out to be a farce. Barely had the Russian delegation touched down back in Russia then they found all the agreements made by the Ukrainians had been renounced.

When the USSR fell I’d say there was about 20% of “enlightened” Russians who looked forward to integrating into Western Europe while the rest of the population never lost their deep mistrust of the West – the West hated them and only wanted to destroy if not exterminate them. When you’ve had 27 million of your people murdered by the West, trusting anything coming from that direction becomes a rare commodity. This majority opinion was generally seen by the progressive intelligentsia as a reactionary stick in the mud attitude to the bright new shiny Europe that was going to be created after the Wall came down.

After the last four months of the anti-Russian hate campaign, the spite, the pettiness and the delight in finding new ways to hurt, humiliate or offend Mother Russia and her people, that 20% of enlightened people quite simply no longer exists. All good will has gone. Russia now regards Western Europe as a malign and malignant enemy which is totally irrelevant to its future. In parallel with developing a sprawling trading network eastwards and deep into the developing world, they fully intend to destroy the EU, or to be more precise, simply let it wither on the vine.

There are simply too many implications to the effects of that one sledgehammer blow, so I propose to move to cover them in a series of articles subsequent to this one. However, I think there might be a much bigger plan at work here, and perhaps not the one you think.

©Pointman

Related articles by Pointman:

Remind me again, which country’s economy was sanctions going to devastate?

The Ukraine war – the military realities.

All articles in the Sledgehammer series

All articles about the Ukraine situation

Click for a list of other articles.

Comments
16 Responses to “The Sledgehammer.”
  1. forestree says:

    Excellent analysis of major economic changes in the World of East vs West!! Keep up the good work!! –Your colleague and friend, Gary Kutcher

    Liked by 1 person

  2. E.M.Smith says:

    Yup. Exactly right.

    The key word here is “fungible”. You basically never hear it from politicians. Especially when talking sanctions.. A product or commodity is “fungible” if you can treat one unit of it as identical to any other and substitute one supplier for another. Or in this case, one customer for another.

    As soon as I’d heard the things the EU and not-my-potus-America were going to “sanction” I said “OMG, those are all fungible. Russia will just find another customer.”

    So all it achieves when you boycott a supplier of a fungible good, is a change of who buys it from whom. There’s a (very) temporary misalignment as folks change partners, and then the ripple disappears from the product flow.

    China and India buy more Russian oil and less Saudi oil. EU, having a fuel shortage, pays up extra to get that Saudi oil shipped and unloaded (as ships cost more than pipelines). So it goes.

    Will it cause the EU to collapse? The UsSA to return to our roots and a proper POTUS? One can only hope… It is very clear that large power has corrupted hugely. Pretty much all of Europe, N. America, and Australia / New Zealand are in Thrall (original meaning) to some evil manipulators. Certainly WEF, Soros, and increasingly UN Apparatchiks, but with Big Money behind the scenes. I don’t really want my ancestral homelands in Europe and my present homeland in the USA to suffer collapse and ruin, but that’s the only end game of their stupidity. “Play stupid games, win stupid prizes” …. So if we must go through the fire to purge these leaches and worms, so be it.

    I’m just glad somewhere in the world there’s a large segment that is escaping their grasp and can preserve some culture, technology, and wisdom for the next round of civilization when it arises.

    When (and it is a when…) the DNC & Friends steal the mid-term election and it is absolutely clear to everyone: That will be the starting bell for the final round of the collapse of The American Empire. Best to be settled in and prepared for it by then.

    Liked by 1 person

    • philjourdan says:

      Sadly I have to agree. 2020 was the test run, and the democrats found out they could get away with it because fake news was running cover for them. So the steal in 2022 and 2024 will be bigger and more overt. And they will jail anyone that points out the obvious.

      YOU can always tell what the democrats are doing by listening to what they accuse republicans of doing. SO Democracy dies in the shadow of counting ballots behind closed doors.

      Like

  3. Margaret H Smith says:

    I would say the ‘liberal’ left elite have never done joined-up thinking and have no understanding that their world model was flawed from the start. A stolen election has consequences and all of them bad! The RINOs are still flirting with making more money and have not looked up to see what is really happening around them.
    Thank you Pointman for pointing me in the right direction.

    Like

  4. Pointman says:

    African leaders shun Zelensky

    “Only four out of 55 leaders reportedly listened to President Zelensky’s virtual address to the African Union”

    In a panicked reaction to the success off the SPIEF meeting, Zelinskyy’s handlers quickly set up a massive Zoom virtual meeting with all 55 leaders of the AU. The spin is four turned up but I hear it was actually only TWO. A very rare display of African unity in my experience.

    The article is on RT (https://www.rt.com/news/557783-african-union-zelensky-hostage/) which because of censorship you can only get at using TOR, but well worth a read.

    Pointman

    Like

  5. Richard Ilfeld says:

    The analysis is fine, but the new group welded together is assembled as well as a nuclear plant in Zimbabwe might be. There can be only one Hegemon in the Chinese view; and neither India nor the former USSR qualify. The terms of trade will be set by the Chinese, and it will soon be clear that there is a first world and a second world and only the Chinese will inhabit the first. Initial mumblings about a Sino-Soviet war will note that it would not be the first, and the Indian subcontinent quite possibly has a resistance to colonialism. If the West recovers(economically and resource wise easy, politically requiring a purge of the green lemming cults) we likely have a tripolar world, with Russia as a weak fourth wishing to be free of Chinese dominance, but afraid to re-align with the west (and still having nukes, dammit).

    Like

  6. another ian says:

    FWIW

    “The Causes and Consequences of the Ukraine Crisis”

    https://nationalinterest.org/feature/causes-and-consequences-ukraine-crisis-203182

    Like

  7. Doonhamer says:

    For some reason I believe that Putin likes his country, it’s people and it’s history.
    The political leaders of West, not so much. More means to an end.

    Like

  8. another ian says:

    Hi Pointy

    Try this map

    https://en.wikipedia.org/wiki/Central_Europe#/media/File:Grossgliederung_Europas-en.svg

    See the bloody big hole that Ukraine would make in Russian frontiers with a NATO excursion east?

    Probably makes more sense if you view it as “ICBM’s and Cuba vs the Monroe Doctrine”

    Kyiv to Moscow is about 500 miles

    Like

  9. Pointman says:

    “Germany Warns of Lehman Brothers-Style Financial Collapse if Gas Crisis Continues”

    Economy Minister and Vice-Chancellor Robert Habeck has certainly changed his tune – no more scorched economy against Russia. A lot of chickens are starting to come home to roost in Germany.

    https://www.breitbart.com/europe/2022/06/25/germany-warns-of-lehman-brothers-style-financial-collapse-if-gas-crisis-continues/

    Pointman

    Like

  10. matt murphy says:

    Very well presented

    Like

  11. John W. Garrett says:

    The 1990s in Russia weren’t fun. The average Ivan lost everything— his/her job, his/her pension and any sense of economic security or progress.

    The average Russian identifies that decade as synonymous with “democracy” and “capitalism” and is not even the slightest bit interested in a repetition of the experience.

    Like

  12. another ian says:

    FWIW

    “Deafening Drumbeats for War – Biden Sends More U.S. Troops to Ukraine Border, 101st Airborne Deployed, Six Destroyers to Mediterranean, F-35 Squadrons to U.K.

    June 29, 2022 | Sundance | 594 Comments”

    https://theconservativetreehouse.com/blog/2022/06/29/deafening-drumbeats-for-war-biden-sends-more-u-s-troops-to-ukraine-border-101st-airborne-deployed-six-destroyers-to-mediterranean-f-35-squadrons-to-u-k/

    Like

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