Europe: Putin did not invade Ukraine to invade Ukraine, but as a genius invasion against the U.S. Dollar. Almost all media have missed the high-level geopolitical chess at play and focused so narrowly on the individual moves, that they’re completely missing the big picture. There’s currently a war about what reserve currency the world should use – and the U.S. is poised to lose.
We can see this in how biased the reporting is toward Western political actions being favorable and working. The sanctions are not only not working, they were a trap for the U.S. Dollar in the first place. Putin has been the one in control of the situation for the past decade and more, and he’s playing a long-term game.
Any reporter who regurgitates the oft-repeated statement that Western sanctions are the cause of Russian economic problems is 100% wrong. Not just wrong on details or nuance, but wrong in the worst “politicians-are-right-because-they-said-so-themselves” type of way.
Putin is trying to unsettle the U.S. Dollar’s reserve-currency status. If that succeeds, the U.S. Empire will collapse like a house of cards. Today, if you live in Germany and want to buy something from China, you must first purchase U.S. Dollars from the U.S., and then exchange those USD for the goods you want from China. This means that the U.S. is literally in a position to print as much money as they want, and the world is supporting consumption levels in the U.S. that go way beyond their means – not to mention a military that is vastly overstretched.
The key to maintaining this reserve-currency status lies in the vital energy trade. As long as energy (oil, gas, uranium, coal) is traded in USD, the USD is a reserve currency for all other trade. The usual term for this lock-in arrangement is the “petrodollar” – the connection between the USD and oil trade which reinforces the USD’s de-facto status as default trade currency.
Putin has spent the past 15 years making the world’s largest economy – Europe – completely dependent on Russian energy: oil, natural gas, and uranium. Europe cannot do without Russian energy at this point in time.
However, it is still traded in US Dollars. And Russia is not in a position to demand that its customers start paying in Rubles or something else than USD at this point. It needed to get its customers to demand the ability to pay for Russian energy in something else than USD. If Russia could make her own energy trade happen in something else than USD, the United States’ overstretched empire would collapse in short order.
So what could Russia possibly do to cause its energy customers to demand settlement for Russian energy to happen in something else than USD?
Russia needed its customers to ban trade in US Dollars – or needed the US to ban Russian customers from using the US Dollar when buying energy from Russia.
Russia needed sanctions from the United States, so its energy supply to Europe couldn’t be denominated in US dollars anymore.
So how do you willingly cause the US to invoke sanctions? You need to provoke the international community in a way that goes well beyond acceptable behavior, but does not meet the bar for a military response. That’s a very delicate dance to perform.
Putin needed a non-NATO country to harass in order to lay the intended trap for the U.S. Dollar.
Hence the invasion of Ukraine, a series of moves that have defied any normal military routine. It has been constant and consistent provocation, but has equally consistently not met the bar for a military response from the West.
And Obama took the bait hook, line and sinker, and issued the sanctions in question against the Russian economy. Western media has falsely and parrotly portrayed these sanctions as successful, when they were the desired outcome all along from the Russian side.
Putin’s invasion of Ukraine was not an invasion of Ukraine. It was a trap for the US Dollar, a trap that sprung perfectly.
And in the months that have followed, Russia has successfully withdrawn from the petrodollar, which has negative exports for the first time in 18 years. The trap is working perfectly, despite the current fall (crash) in oil price that has other causes entirely.
So now, when the largest French energy company Total is looking to exploit a new large Russian natural gas project in Yamal, a joint venture with Russia’s Novatek and China’s CNPC, it is going to invest “yuan, euros, rubles… anything but the US Dollar”. And it doesn’t care that it’s not using the USD. It’s not allowed to and it doesn’t care. This is the company with the CEO that went on record saying there’s no reason to uphold the petrodollar, and who died in a plane crash shortly after making that statement.
This is geopolitics at high levels, where laws do not apply.
In effect, Putin has successfully defeated the US Empire by defeating the petrodollar, unless Obama has a last-ditch ace up his sleeve at this point.
Finally, there is an impression in Western media that Putin would be “incapable” of sophisticated schemes like this – that Vladimir Putin would be an unsophisticated simpleton. That image doesn’t pass the simplest of smell tests.
Putin is the president of Russia. Russian power is cutthroat to unimaginable levels. To not just reach the top, but also stay at the top, you need to be long-term, cynical, and results-oriented to levels not even understood in the West. Long-term as in taking 15 years to set the bait by making Europe dependent on Russian energy. That’s why Putin comes across as “mad and irrational” to Western policymakers; the Russian thought processes are more ruthless than anything relatable in the West.
But “mad and irrational” doesn’t make somebody a Russian president. “Mad and irrational” makes somebody a Russian homeless. Therefore, Western media are either painting a propagandistic picture of Putin on purpose, or not understanding the utterly pragmatic way of thinking. Therefore, claims that Putin is unpredictable and irrational don’t pass the simplest of smell tests. To the contrary, he’s genius and he’s a very very skilled power player.
Shale Oil and the Ruble
Now, the Russian economy and the Ruble are failing short-term, but not because Russia is locked out from access to the dollar; that part is helping the Russian economy. The reason the Russian economy is failing is because half of their GDP is based on fossil fuels, and that U.S. domestic oil production has halved the cost of oil.
But that’s a different story, and one that hurts the United States almost as much as it hurts Russia. That’s primarily Saudi Arabia flexing its muscles and also trying to outcompete the United States and Russia and Iran, which is another problem entirely.