The winners and losers after the sledgehammer strike.

Posted by Pointman on July 15, 2022 · 6 Comments 

In the aftermath of the sledgehammer strike, it’s worth trying to have an informed guess as to what the new world will look like after all the pieces fall back to the ground and begin to be reassembled into a different jigsaw puzzle by geo-political forces. Who will be the winners, who will be the losers is the basic question.

Certainly, one of the biggest losers will be the EU. It was already suffering with a huge north/south prosperity divide but the manner in which it instantly and savagely applied every sanction it could to Russia moved its perception from being a trading union to being a dangerous economic war arm of NATO, meaning America. A lot of smaller countries looked at it and slowly edged towards the BRICS protection umbrella. That’s why countries like Argentina and Iran, whatever you think of them or their politics, are applying for full BRICS membership

When it comes to the EU, France has always been an empty pitcher that makes a lot of noise when you toss a pebble into it. Germany is the real powerhouse behind the EU because quite simply it writes all the cheques that keep things afloat. Even before this Ukraine crisis, it was getting increasingly reluctant to do so and the departure of the arch-globalist Merkel hasn’t helped either. It had a very simple and extremely prosperous business model. Buy lots of cheap power from next door Russia, manufacture things using imported materials (mainly from guess where), and then flog the finished product to the world.

The obvious weak point in that beautifully simple model was that if you lost your cheap source of power, what did you have going as a backup? Their answer was wind and solar power which they charged into head first and are right now finding out how expensive and useless renewable energy actually is. One piece of natural gas pipeline kit sent to Canada for repairs gets stuck there in the midst of a Canadian/German sanctions tiff and their supply of natural gas drops by three fifths, almost provoking a state of national emergency.

The obvious way for Russia to eliminate the EU as a threat is to destroy Germany. Kill Germany, the EU withers. It’s a matter of how you time it for lasting effect. Turn off all supplies of all commodities to Germany Monday night, Germany dies Tuesday morning and then the domino effect kicks in right across the EU, especially the already vulnerable southern members like Italy and Spain. A more useful strategy would be to let them bleed out. Keep supply significantly below minimum demand and keep them paying the “unfriendly” country premium. You destroy their economy but not so dramatically. A steadily shrinking GDP also destroys the capacity to maintain a large standing army.

At the same time, the resultant economic hardship will hasten regime changes to more Russian friendly ones. Once you’ve humbled Germany onto the breadline and the EU has started to disintegrate with the southern states defaulting on debt as they secede from it, you can start talking about not only leaving the EU but another organisation as well.

I’m talking of course about NATO. The chances of persuading Germany to leave it are zero but after the Biden administration’s behaviour over the last few months, there are a lot of the smaller members who are having serious thoughts about their continued membership. An organisation they eagerly joined in the postwar years as a watchdog for Europe has mutated into an attack dog for America. All that bluster from the WH about a nuclear war, especially when everybody knew Joe Biden wasn’t in reality in charge of anything, worried the hell out of a lot of ordinary Europeans. Frightened them, to be blunt. Exactly who the hell in the WH was behind picking this proxy war with Russia using western Europe as cannon fodder?

Forget what the MSM are reporting about Britain’s regime change, Boris got the boot because he wouldn’t concentrate on the obvious domestic problems but instead was slavishly following the WH’s orders to get involved in a war with a foreign country on the Black Sea nobody could give a damn about in the current circumstances. I hold out no great hope of any of his potential successors having the political smarts to get Britain off Russia’s shit list of “unfriendly” countries. No matter what you hear or read to the contrary, that will be number one priority for all these new regimes that will be springing up all across western Europe in the coming year or two as the economies crash.

The Environmental church will definitely be big losers, though the ruling class will cling on to supporting for as long as possible its useless and expensive renewable energy with its devastating effect on household bills. Over winter, angry mobs will be wandering about in the blackouts with pitch forks and burning torches looking  for someone to blame for their soaring household utility bills. In the end, the politicians will throw the environmentalists to them to be ripped limb from limb.

You can already see them backing off all their green energy promises by the EU parliament declaring the labeling of investments in gas and nuclear energy to be ‘green’. It’s only a matter of time and desperation in what’s rumoured to be a coming savage European winter that fracking and coal become hurriedly redesignated to being green energy sources and greens as endangered species.

It’s a catastrophe for the Globalisation movement. Instead of just one defenseless world to be resource raped, it now has a coalescing resistance in the shape of the East block with most of the smaller defenseless countries seeking protection from the globalists by joining the BRICS group and seeking China and Russia’s security against it. Both of the latter are not friends with those oligarch individuals who’re ultimately the ones behind globalism. East block won’t allow them the slightest toehold in their domain.

The Ukraine is of course a loser. The country lost the war on February 28th, is already an economic disaster and the countries of the West block, especially in Europe, are already asking if it hasn’t just become an insatiable money pit. Just this month, it asked for its monthly allowance of money to keep the state just ticking over to be increased from $6 billion to $9 billion. People are finally asking for some audit trail on what’s happening to all these billions of dollars – in the front door and out the back into offshore accounts? America itself has already given them about 70 billion USD with seemingly not a trace of any audit. Why is so much of the military equipment donated to them ending up on the darknet for sale? Why won’t the Ukraine allow any auditors in to verify the final destinations of the money and equipment?

People have at last got a bit jaundiced by all those fake propaganda stories emanating from the Ukrainian government for the last five months. The latest one is a million man offensive in August to take back all the territory lost to the Russians, when they’re down to conscripting churchgoers and women? I think America’s resolve to fight to the last Ukrainian should be reworded to fight to the last Ukrainian man, woman and child.

Russia is definitely a big winner. In one of the James Bond books, the Soviets want to embarrass the West, kill James Bond and achieve about ten other major goals. They enlist the services of a chess grand master to come up with a plan. Looking at the last six months, I cannot help but escape the fanciful notion that over the Christmas holiday Putin hauled in a grand master and said to him over a friendly glass of vodka – come up with a plan that’ll neutralise the Ukraine threat, destroy the EU and wreck all the economies of western Europe, drain every armoury they’ve got, weaken NATO to the point where members are afraid to be in it, push us much closer politically to China and India as well as creating a whole new market of 3 billion people for all the commodities we currently supply to a hostile western Europe. At the same time, generate in the West a recession like they haven’t seen since the 1970s, a 20% rise in living costs and inflation running at 12%. And I want it all done in the next six months.

Include America?

Niet, it’s already doing all that and worse to itself.

And as if by magic, the plan worked out beautifully and it all came to pass. At the start of the year what’s now the West block had no recession, about a 1.5% inflation rate and wasn’t on the brink of food and fuel shortages as well as rationing, never mind nearly tripling our income for natural gas alone. No massive ongoing wage strikes. Blackouts. And to top it all, America has printed 3 trillion USD to cover payments for various indulgences it can really no longer afford. No wonder the dollar is starting to lose its value and its advantage of being the world’s reserve currency, never mind being the petro-dollar.

According to the Biden administration’s sanctions plan, Russia GDP should be 25% down, but it’s dropped only 5% and showing signs of real growth. The ruble should be rubble trading at over 200 to 1 USD but instead it trades steadily at just under 60 to 1 USD, meaning it’s effectively doubled in value against the dollar since February or the dollar has halved in value against it. Take your pick.

The Russians could see what was coming and prepared sensibly but they also had a huge advantage in the talents of someone who is the head of Russia’s central bank and whom you’ve never have heard of – Elvira Nabiullina. She’s well worth researching and no doubt her fabled brooch signal will be replaced momentarily by the Hero of the Russian Federation medal she’ll undoubtedly be awarded at the end of the war. Only a week after sanctions being imposed, her swift and decisive moves had the Russian economy back on track.

China, in both the short and long term, is the big winner. Politically it now effectively leads the East block in this new Cold War. In terms of economic power, it now has direct access to the almost inexhaustible supply of Russia’s cheap power and commodities while the West block have managed to effectively sanction themselves from any access to those same basic economic building blocks, and at some point quite soon all access to them will be turned off.

West block economies are in ruins and almost on a daily basis more developing countries are joining the BRICS trading union, and with good reason. Trade among BRICS countries is soaring in contrast to West block’s miserable growth in the first half. Alone, China’s foreign trade with other BRICS member states amounted to 250 billion USD in the first half of the year, up a storming 14.1% in annual terms. Growing and expanding the BRICS marketplace which covers almost 40% of the world’s GDP gives them the perfect market for all the consumer goods they’re mass producing.

At some future date, I’ll cover to a greater extent exactly how big a win this is for China, but for the moment the two paragraphs above are the salient points in the winner / loser stakes.

America is the huge loser. It’s not just a momentary setback – there are real fears it’ll never get back the leadership and trust it enjoyed before it so thoroughly screwed up its handling of the Ukraine situation. Ignore the fake news and fawning politicians of the West block. The ordinary people have dusted off some very cynical phrases from the height of the Cold War. eg America has managed to fight two world wars on European soil and if it has its way, it’ll do the same for the third. Already there’s a feeling of it preparing to do a runner back home and leave Europe to cope with the disaster created in most European economies by slavishly supporting an American sanctions war against Russia.

In West block Europe it’s facing a recession and an inflation crisis all accomplished in just over four months by following unquestionably the leadership of a totally disastrous Biden administration. By the end of this coming winter and after all the local regime changes, all fingers will be pointing at America as being the source of all their troubles, and they’ll be right. Never trust or rely on them again.

After the runner they did getting out of Afghanistan without even warning all their allies who’d also spent 20 years of blood and treasure in the wretched country, why the hell did we decide to follow their lead a second time and end up ruining our own countries will be the question. Never again America.  Beyond the usual West block vassal states, nobody in the developing or third world piled in behind them to support or implement sanctions. The fact that American bullying to pressure smaller countries into doing what they were being ordered to do didn’t work and Biden has been reduced to grovelling before the Saudi kingdom for more oil, which he won’t get, has further damaged their respect on the world stage.

This refusal not to get involved in America’s proxy war with Russia has been more a manifestation not of sympathy for Russia, but antipathy to the West. As a consequence, the broad refusal to recognize the right of the West to lead means there will no longer be a world order based on Western rules, which means America. You can see this on display this week with the Saudis publically showing complete and utter contempt for the visiting Biden as he grovels for more oil and they announce they’re applying to join the BRICS union days before he arrives.

Less than a year and a half ago, America was energy self-sufficient, had a strong economy, low inflation, low unemployment, a strong dollar, a low crime rate, not embroiled in Cold War II, protected borders and not a fentanyl death rate of 107,000 people a year and for the first time in decades a real increase in wealth for working class and middle class America. Over and above all those things, it was trusted and respected on the world stage. All that is gone now.

Whoever takes over in 2024 has one hell of a reconstruction job on their hands.

©Pointman

Related articles by Pointman:

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

The Ukraine war – the military realities.

The reaction to the sledgehammer by West block Europe.

All articles in the Sledgehammer series

All articles about the Ukraine situation

Click for a list of other articles.

Filed under Article · Tagged with BRICS, China, EU, Russia, sledgehammer, Ukraine