The Unz Review: An Alternative Media Selection
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
 BlogviewMike Whitney Archive
Ruble Takedown Exposes Cracks in Putin’s Defense
Barbarossa 2
🔊 Listen RSS
Email This Page to Someone

 Remember My Information


Bookmark Toggle AllToCAdd to LibraryRemove from Library • BShow CommentNext New CommentNext New ReplyRead More
ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
These buttons register your public Agreement, Disagreement, Troll, or LOL with the selected comment. They are ONLY available to recent, frequent commenters who have saved their Name+Email using the 'Remember My Information' checkbox, and may also ONLY be used once per hour.
Ignore Commenter Follow Commenter
Search Text Case Sensitive  Exact Words  Include Comments
List of Bookmarks

“The plunge of the Russian currency this week is the drastic outcome of policies implemented by the major imperialist powers to force Russia to submit to American and European imperialism’s neo-colonial restructuring of Eurasia. Punishing the Putin regime’s interference with their plans for regime change in countries such as Ukraine and Syria, the NATO powers are financially strangling Russia.” Alex Lantier, Imperialism and the ruble crisis, World Socialist Web Site

“The struggle for world domination has assumed titanic proportions. The phases of this struggle are played out upon the bones of the weak and backward nations.” Leon Trotsky, 1929

Russian President Vladimir Putin suffered a stunning defeat on Tuesday when a US-backed plan to push down oil prices sent the ruble into freefall. Russia’s currency plunged 10 percent on Monday followed by an 11 percent drop on Tuesday reducing the ruble’s value by more than half in less than a year. The jarring slide was assisted by western sympathizers at Russia’s Central Bank who, earlier in the day, boosted interest rates from 10.5 percent to 17 percent to slow the decline. But the higher rates only intensified the outflow of capital which put the ruble into a tailspin forcing international banks to remove pricing and liquidity from the currency leading to the suspension of trade. According to Russia Today:

“Russian Federation Council Chair Valentina Matviyenko has ordered a vote on a parliamentary investigation into the recent activities of the Central Bank and its alleged role in the worst-ever plunge of the ruble rate…

“I suggest to start a parliamentary investigation into activities of the Central Bank that has allowed violations of the citizens’ Constitutional rights, including the right for property,” the RIA Novosti quoted Tarlo as saying on Wednesday.

The senator added that according to the law, protecting financial stability in the country is the main task of the Central Bank and its senior management. However, the bank’s actions, in particular the recent raising of the key interest rate to 17 percent, have so far yielded the opposite results.” (Upper House plans probe into Central Bank role in ruble crash, RT)

The prospect that there may be collaborators and fifth columnists at Russia’s Central Bank should surprise no one. The RCB is an independent organization that serves the interests of global capital and regional oligarchs the same as central banks everywhere. This is a group that believes that humanity’s greatest achievement is the free flow of privately-owned capital to markets around the world where it can extract maximum value off the sweat of working people. Why would Russia be any different in that regard?

It isn’t. The actions of the Central Bank have cost the Russian people dearly, and yet, even now the main concern of RCB elites is their own survival and the preservation of the banking system. An article that appeared at Zero Hedge on Wednesday illustrates this point. After ruble trading was suspended, the RCB released a document with “7 new measures” all of which were aimed at protecting the banking system via moratoria on securities losses, breaks on interest rates, additional liquidity provisioning, easier credit and accounting standards, and this gem at the end:

“In order to maintain the stability of the banking sector in the face of increased interest rate and credit risks of a slowdown of the Russian economy the Bank of Russia and the Government of the Russian Federation prepare measures to recapitalize credit institutions in 2015.” (Russian Central Bank Releases 7 Measures It Will Take To Stabilize The Financial Sector, Zero Hedge)

Sound familiar? It should. You see, the Russian Central Bank works a lot like the Fed. At the first sign of trouble they build a nice, big rowboat for themselves and their dodgy bank buddies and leave everyone else to drown. That’s what these bullet points are all about. Save the banks, and to hell the people who suffer from their exploitative policies.

Here’s more from RT:

“Earlier this week a group of State Duma MPs from the Communist Party sent an official address to Putin asking him to sack (Central Bank head, Elvira) Nabiullina, and all senior managers of the Central Bank as their current policies are causing the rapid devaluation of ruble and impoverishment of the majority of the Russian population.

In their letter, the Communists also recalled Putin’s address to the Federal Assembly in which he said that control over inflation must not be in the way of the steady economic growth.

“They listen to your orders and then do the opposite,” the lawmakers complained.” (RT)

In other words, the RCB enforces its own “austerity” policy in Russia just as central bankers do everywhere. There’s nothing conspiratorial about this. CBs are owned and controlled by the big money guys which is why their policies invariably serve the interests of the rich. They might not call it “trickle down” or “structural adjustment” (as they do in the US), but it amounts to the same thing, the inexorable shifting of wealth from working class people to the parasitic plutocrats who control the system and its political agents. Same old, same old.

Even so, the media has pinned the blame for Tuesday’s ruble fiasco on Putin who, of course, has nothing to do with monetary policy. That said, the ruble rout helps to draw attention to the fact that Moscow is clearly losing its war with the US and needs to radically adjust its approach if it hopes to succeed. First of all, Putin might be a great chess player, but he’s got a lot to learn about finance. He also needs a crash-course in asymmetrical warfare if he wants to defend the country from more of Washington’s stealth attacks.

In the last 10 months, the United States has executed a near-perfect takedown of the Russian economy. Following a sloppy State Department-backed coup in Kiev, Washington has consolidated its power in the Capital, removed dissident elements in the government, deployed the CIA to oversee operations, launched a number of attacks on rebel forces in the east, transferred ownership of Ukraine’s vital pipeline system to US puppets and foreign corporations, created a tollbooth separating Moscow from the lucrative EU market, foiled a Russian plan to build an alternate pipeline to southern Europe (South Stream), built up its military assets in the Balkans and Black Sea and, finally–the cherry on the cake–initiated a daring sneak attack on Russia’s currency by employing its Saudi-proxy to flood the market with oil, push prices off a cliff, and trigger a run on the ruble which slashed its value by more than half forcing retail currency platforms to stop trading the battered ruble until prices stabilized.

Like we said, Putin might be a great chess player, but in his battle with the US, he’s getting his clock cleaned. So far, he’s been no match for the maniacal focus and relentless savagery of the Washington powerbrokers. Yes, he’s formed critical alliances across Asia and the world. He’s also created competing institutions (like the BRICS bank) that could break the imperial grip on global finance. And, he’s also expounded a vision of a new world in which “one center of power” does not dictate the rules to everyone else. That’s all great, but he’s losing the war, and that’s what counts. Washington doesn’t care about peoples’ dreams or aspirations. What they care about is ruling the world with an iron fist, which is precisely what they intend to do for the next century or so unless someone stops them. Putin’s actions, however admirable, have not yet changed that basic dynamic. In fact, this latest debacle (authored by the RCB) is a severe setback for the country and could impact Russia’s ability to defend itself against US-NATO aggression.

So what does Putin need to do to reverse the current trend?

The first order of business should be a fundamental change in approach followed by a quick switch from defense to offense. There should be no doubt by now, that Washington is going for the jugular. The attack on the ruble provides clear evidence that the US will not be satisfied until Russia has been decimated and reduced to “a permanent state of colonial dependency.” (Chomsky) The United States has launched a full-blown economic war on Russia and yet the Kremlin is still acting like Washington’s punching bag. You can’t win a war like that. You have to take the initiative; take chances, be bold, think outside the box. That’s what Washington is doing. The rout of the ruble is perhaps the most astonishingly-successful asymmetrical attack in recent memory. It involved tremendous risks and costs on the part of the perpetrators. For example, the lower oil prices have ravaged important domestic industries, created widespread financial instability, and sent markets across the planet into a nosedive. Even so, Washington persevered with its audacious strategy, undeterred by the vast collateral damage, never losing sight of its ultimate objective; to deprive Moscow of crucial oil revenues, to crash the ruble, and to open up Central Asia for imperial expansion and US military bases. (The pivot to Asia)

This is how the US plays the game, by keeping its “eyes on the prize” at all times, and by rolling roughshod over anyone or anything that gets in its way. That is why the US is the world’s only superpower, because the voracious oligarchs who run the country will stop at nothing to get what they want.

Does Putin have the grit to match that kind of venomous determination? Has he even adjusted to the fact that WW3 will be unlike any conflict in the past, that jihadi-proxies and Neo Nazi-proxies will be employed as shock troops for the empire clearing the way for US special forces and foot soldiers who will hold ground and establish the new order? Does he even realize that Barbarossa 2 is already underway, but that the Panzer divisions and 2 million German regulars have been replaced with high-powered computers, covert ops, color-coded revolutions, currency crises, capital flight, cyber attacks and relentless propaganda. That’s 4th Generation (4-G) warfare in a nutshell. And, guess what? The US attack on the ruble has shown that it is the undisputed master of this new kind of warfare. More important, Washington has just prevailed in a battle that could prove to be a critical turning point if Putin doesn’t get his act together and retaliate.


You mean nukes?

Heck no. But, by the same token, you can’t expect to win a confrontation with the US by rerouting gas pipelines to Turkey or by forming stronger coalitions with other BRICS countries or by ditching the dollar. Because none of that stuff makes a damn bit of difference when your currency is in the toilet and the US is making every effort to grind your face into the pavement.


There’s an expression in football that goes something like this: The best defense is a good offense. You can’t win by sitting on the sidelines and hoping your team doesn’t lose. You must engage your adversary at every opportunity never giving ground without a fight. And when an opening appears where you can take the advantage, you must act promptly and decisively never looking back and never checking your motives. That’s how you win.

Washington only thinks in terms of winning. It expects to win, and will do whatever is necessary to win. In fact, the whole system has been re-geared for one, sole purpose; to beat the holy hell out of anyone who gets out of line. That’s what we do, and we’ve gotten pretty good at it. So, if you want to compete at that level, you’ve got to have “game”. You’re going to have to step up and prove that you can run with the big kids.

And that’s what makes Putin’s next move so important, crucial really. Because whatever he does will send a message to Washington that he’s either up to the challenge or he’s not. Which is why he needs to come out swinging and do something completely unexpected. The element of surprise, that’s the ticket. And we’re not talking about military action either. That just plays to Uncle Sam’s strong hand. Putin doesn’t need another Vietnam. He needs a coherent gameplan. He needs a winning strategy. He needs to takes risks, put it all on the line and roll the freaking dice. You can’t lock horns with the US and play it safe. That’s a losing strategy. This is smash-mouth, steelcage smackdown, a scorched-earth event where winner takes all. You have to be ready to rumble.

Putin needs to think asymmetrically. What would Obama do if he was in Putin’s shoes?

You know what he’d do: He’d send military support to Assad. He’d arm rebel factions in Saudi Arabia, Somalia, Nigeria and elsewhere. He’d strengthen ties with Venezuela, Bolivia, Ecuador providing them with military, intelligence and logistical support. He’d deploy his NGOs and Think Tank cronies to foment revolution wherever leaders refused to follow Moscow’s directives. He would work tirelessly to build the economic, political, media, and military institutions he needed to impose his own self-serving version of snatch-and-grab capitalism on every nation on every continent in the world. That’s what Obama would do, because that’s what his puppetmasters would demand of him.

But Putin must be more discreet, because his resources are more limited. But he still has options, like the markets, for example. Let’s say Putin announces that creditors in the EU (particularly banks) won’t be paid until the ruble recovers. How does that sound?

Putin: “We’re really sorry about the inconvenience, but we won’t be able to make those onerous principle payments for a while. Please accept our humble apologies.” End of statement.

Moments later: Global stocks plunge 350 points on the prospect of a Russian default and its impact on the woefully-undercapitalized EU banking system.

Get the picture? That’s what you call an asymmetrical attack. The idea was even hinted at in a piece on Bloomberg News. Here’s an excerpt from the article:

“Sergei Markov, a pro-Putin academic, wrote in a column on “Since the reasons for the ruble’s fall are political, the response should be political, too. For example, a law that would ban Russian companies from repaying debts to Western counterparties if the ruble has dropped more than 50 percent in the last year. That will immediately lower the pressure on the ruble, many countries have done this, Malaysia is one example. It’s in great economic shape now.” (Is Russia ready to impose capital controls? Chicago Tribune)

Here’s more background from RT:

“Major banks across Europe, as well as the UK, US, and Japan, are at major risk should the Russian economy default, according to a new study by Capital Economics. The ING Group in the Netherlands, Raiffeisen Bank in Austria, Societe General in France, UniCredit in Italy, and Commerzbank in Germany, have all faced significant losses in the wake of the ruble crisis…

Overall Societe General, known as Rosbank in the Russian market, has the most exposure at US$31 billion, or €25 billion, according to Citigroup Inc. analysts. This is equivalent to 62 percent of the Paris-based bank’s tangible equity, Bloomberg News reported.

Following the drop, Raiffeisen, which has €15 billion at risk in Russia, saw its stocks plummeted more than 10 percent. Raiffeisen also has significant exposure in Ukraine, which is facing a similar currency sell-off as Russia.” (Russia crisis leaves banks around the world exposed by the billions, RT)

So Putin defaults which nudges the EU banking system down the stairwell. So what? What does that prove?

It proves that Russia has the tools to defend itself. It proves that Putin can disrupt the status quo and spread the pain a bit more equitably. “Spreading the pain” is a tool the US uses quite frequently in its dealings with other countries. Maybe Putin should take a bite of that same apple, eh?

Another option would be to implement capital controls to avoid ruble-dollar conversion and further capital flight. The beauty of capital controls is that they take power away from the big money guys who run the world and hand it back to elected officials. Leaders like Putin are then in a position to say, “Hey, we’re going to take a little break from the dollar system for while until we get caught up. I hope you’ll understand our situation.”

Capital controls are an extremely effective of avoiding capital flight and minimizing the impact of a currency crisis. Here’s a short summary of how these measures helped Malaysia muddle through in 1998:

“When the Asian financial crisis hit, Malaysia’s position looked a lot like Russia’s today: It had big foreign reserves and a low short-term debt level, but relatively high general indebtedness if households and corporations were factored in. At first, to bolster the ringgit, Deputy Prime Minister Anwar Ibrahim pushed through a market-based policy with a flexible exchange rate, rising interest rates and cuts in government spending. It didn’t work: Consumption and investment went down, and pessimism prevailed, exerting downward pressure on the exchange rate.

So, in June 1998, Prime Minister Mahathir Mohammad… appointed a different economic point man, Daim Zainuddin. In September, on Daim’s urging, Malaysia introduced capital controls. It banned offshore operations in ringgit and forbade foreign investors to repatriate profits for a year. Analysts at the time were sharply critical of the measures, and Malaysia’s reputation in the global financial markets inevitably suffered.

According to Kaplan and Rodrik, however, the capital controls were ultimately effective. The government was able to lower interest rates, the economy recovered, the controls were relaxed ahead of time, and by May 1999 Malaysia was back on the international capital markets with a $1 billion bond issue.” (Is Russia ready to impose capital controls, Chicago Tribune)

Sure they were effective, but they piss off the slacker class of oligarchs who think the whole system should be centered on their “inalienable right” to move capital from one spot to another so they can rake-off hefty profits at everyone else’s expense. Capital controls push those creeps to the back of the line so the state can do what it needs to do to preserve the failing economy from the attack of speculators. Here’s a clip from a speech Joseph Stiglitz gave in 2014 at the Atlanta Fed’s 2014 Financial Markets Conference. He said:

“When countries do not impose capital controls and allow exchange rates to vary freely, this can give rise to high levels of exchange rate volatility. The consequence can be high levels of economic volatility, imposing great costs on workers and firms throughout the economy. Even if they can lay off some of the risk, there is a cost to doing so. The very existence of this volatility affects the structure of the economy and overall economic performance.”

That sums it up pretty well. Without capital controls, the deep-pocket Wall Street banks and speculators can simply vacuum the money out of an economy leaving the country broken and penniless. This nihilistic decimation of emerging markets via capital flight is what the kleptocracy breezily refers to as “free markets”, the unwavering plundering of civilization to fatten the coffers of the swinish few at the top of the foodchain. That’s got to stop.

Putin needs to put his foot down now; stop the outflow of cash, stop the conversion of rubles to dollars, force investors to recycle their money into the domestic economy, indict the central bank governors and trundle them off to the hoosegow, and reassert the power of the people over the markets. If he doesn’t, then the speculators will continue to peck away until Russia’s reserves are drained-dry and the country is pushed back into another long-term slump. Who wants that?

And don’t think that Putin’s only problem is Washington either, because it isn’t. He’s got an even bigger headache in his own country with the morons who still buy the hogwash that “the market knows best.” These are the fantasists, the corporate toadies, and the fifth columnists, some of whom hold very high office. Here’s a clip I picked up at the Vineyard of the Saker under the heading “Medvedev declares: more of the same”:

(Russian Prime Minister) “Medvedev has just called a government meeting with most of the directors of top Russian corporations and the director of the Russian Central Bank. He immediately announced that he will not introduce any harsh regulatory measures and that he will let the market forces correct the situation. As for the former Minister of Finance, the one so much beloved in the West, Alexei Kudrin, he expressed his full support for the latest increase in interest rates.”

This is lunacy. The US has just turned Russia’s currency into worthless fishwrap, and bonehead Medvedev wants to play nice and return to “business as usual”??

No thanks. Maybe Medvedev wants to be a slave to the market, but I’ll bet Putin is smarter than that.

Putin’s not going to roll over and play dead for these vipers. He’s got to much on the ball for that. He’s going to beat them at their own game, fair and square. He’s going to implement capital controls, restructure the economy away from the west, and aggressively look for ways to deter Washington from spreading its heinous resource war to Central Asia and beyond.

He’s not going to give an inch. You’ll see.

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at [email protected].

(Republished from Counterpunch by permission of author or representative)
• Category: Economics, Foreign Policy • Tags: Russia 
Hide 37 CommentsLeave a Comment
Commenters to FollowEndorsed Only
Trim Comments?
  1. schmenz says:

    “He’s not going to give an inch. You’ll see.”

    I hope you’re right, Mr Whitney. I hope you’re right.

  2. What we’re witnessing is the economic equivalent of Stalingrad. Russians understand sacrifice much better than Americans. All Putin has to do is wait just long enough, maybe sell off some US Treasury Bonds in the meantime, before uttering the single sentence that will restore the ruble and destroy the dollar.

    • Replies: @pyrrhus
  3. Bliss says:

    Cold War II is clearly in full swing.

    1. Obama’s detente with Cuba seems timed to pre-empt any attempts by Putin to create trouble for America in it’s own continent. The leaders of Venezuela, Bolivia etc must feel that the ideological rug has been pulled from underneath them.

    2. The hugely successful cyber attack and threats of violence against Sony/Hollywood seem to be of either russian or chinese origin. It is highly unlikely that North Korea could have pulled off such a sophisticated campaign on it’s own. And guess what: right after Sony/Hollywood crumbled, Putin invites Kim Jong Un to Moscow for his first trip abroad as North Korea’s leader. Russia and North Korea have a long history of close co-operation as communist entities.

    If you think about it North Korea could be Putin’s ace in the hole in this geo-political game where most of the cards are stacked against him. It is a crazy, unpredictable nation armed with nukes and missiles which terrifies economic powerhouses Japan and South Korea, America’s closest allies in Asia. And which directly threatens the two highest concentrations of American military might outside the West. If Cold War II leads to WWIII the most likely place the hot war will break out is not eastern europe but East Asia where America, China, Russia, Japan, North and South Korea meet and compete.

    Expect Putin to offer advanced military technology to Kim and to propose a gas pipeline via North Korea to South Korea.

  4. Bliss says:

    The U.S. investigation into the recent hacking attack at Sony Pictures Entertainment has turned up evidence that does not point to North Korea as the “sole entity” in the case, but rather, raises the possibility that Iran, China or Russia may have been involved, an intelligence source told Fox News on Thursday.

    The source pointed to the sophistication of malware “modules or packets” that destroyed the Sony systems — on a level that has not been seen from North Korea in the past — but has been seen from Iran, China and Russia.

    There is no evidence of a forced entry into the Sony systems, pointing to an insider threat or stolen credentials. And the first emails sent to Sony, described as blackmail or extortion, included demands unrelated to the movie.

    The malware had two destructive threads, the source said: it overwrites data and it interrupts execution processes, such as a computer’s start-up functions. After the initial attack, the FBI warned the industry that the malware can be so destructive that the data is not recoverable or it is too costly a process to retrieve. The intelligence source added that the forensic evidence suggests that the final stage of the attack was launched outside North Korea’s borders —

    Is Putin retaliating with cyber warfare to the financial warfare being waged against him? If so, and I am willing to bet on it, then he killed some other birds with that same stone by using it ostensibly in support of Kim Jong Un:

    1. He forged a deeper friendship, therefore a more compliant partner, with a dangerous nation located smack dab in the middle of the most economically important region on the planet: East Asia. What happens in Ukraine, Syria or Iran has little direct effect on the rest of the world compared to any disruption in China, Japan and South Korea.

    2. He made Hollywood think again about any ideas they may have of making movies or TV shows about Putin.

    Interesting times ahead…

  5. KA says:

    It is karma . It is comeuppance . Chicken is coming home for Russia to roost. The non delivery of Mistral by France is reminiscent of the breaking of the promises to delivery of ss300 to Iran .And ironically both under the pressure of US .
    The relentless sanctions on Iran,the periodic piling up of demands on that country and the decimation of the economy of Iran could have been prevented by Russia but it chose to ignore . It chose for it wanted to be treated as equal to the West in exercising hegemony and psychopathic behaviors . But the gangsters don’t like any competition or challenge even figuratively . Russia sacrificed Ghaddafi ( Medved) and chose to remain silent on wars in Somalia or Yemen .
    Poor Putin ! He is in a pickle . Saddam and Ghaddafi and Noregia – all cooperated with US but …

  6. KA says:

    Russia is being pushed like German was before and after WW1. The players are the same with different attired and beliefs . Result will not be much different than 1933 but much shorter in arriving .

  7. KA says:

    It seems Russia can allow Ruble to depreciate further and then buy them back with dollars . Dollars might find itself in same situation but no other currency to buy it back . In that case dollars might become the sick sad dog looking up for consolation. Russia has same resources and will have same resources to trade but it can choos to trade in hard currency Ruble and different national currencies .
    Whatever happens ,it’s going to be interesting .

  8. Anon • Disclaimer says:

    I’m starting to agree with Mr. Whitney that the U.S. is one who has been outfoxing Russia. You can tell now that everything that’s unfolding has been pre-planned. The baited trap was Ukraine. The U.S. knew that Russia was not going to let Crimea fall to NATO and be pushed out of the Black Sea. They predicted the ethnic divisions (even encouraged them) in Ukraine. All so that they could roll out their pre-planned sanctions on Russia. That was the real goal here.

    Russia is too large, has too much land, too many resources. It has the potential to rise and challenge American corporate hegemony. As the article correctly points out, it’s sort of stab in the back to Putin, who was actually playing nicey-nice with the corporate hegemony for the longest time.

    We witnessed this week the decoupling of the stock market from oil. Anyone who is counting on the markets to fall is a fool. We control the markets. They will not fall. Everyone could be living in cardboard boxes on the streets of America and you would still see a rising stock market.

    We have the U.S dollar as the world reserve currency, the Fed, the IMF, military bases strung out around the world with the ability to strike almost anywhere on the planet within 24 hours, and the largest spying apparatus the earth has ever seen. You cannot fight that. If it becomes too expensive, we just print more money to pay for it.

    We already live in a global American hegemony. Right now is just the mopping up process, getting the dissenters in line. There will be endless small wars from now on as the dissenting countries fall like dominoes. While Russia is down on the mat, Iran is likely next.

    • Replies: @Anonymous
    , @Realist
  9. Priss Factor [AKA "Andrea Ostrov Letania"] says:

    Jewish war on Russia continues. I said so from the beginning.

  10. rod1963 says:

    We’re not powerful enough to force a decline in oil prices – the Persian Gulf sheikdoms have to pump like mad to keep their regimes flush so they don’t get overthrown. Industry across the U.S., Europe and China are slowing down – simply put behind every unit of GDP is a unit of oil. When the GDP declines so does energy prices. American consumers can’t afford to purchase the vast amounts of Chinese junk like they’ve done in the past.

    Just look at how many are on the dole – close to 50%. We are not a economic powerhouse anymore. We’re running on fumes and lies from Wall Street.

    Militarily we’re shot. Oblowme has been downsizing the military and riffing personnel like mad. It’s in no condition to do a replay of Desert Storm let alone take on Russia. Our ground forces are exhausted and the equipment of large scale overhaul needing tens of billions to replenish.

    So what if we have a bunch of pipsqueak bases around the world. We have nothing to deploy beyond brigade strength and some drones that are only useful against people in mud-huts. Did you folks see the pathetic show of force by the U.S. in Poland? BFD. A couple of battalions. Oh wow.

    Europe is sick with only Germany sustaining the EU. The EU is now going nuts trying to tax people and businesses even more to keep the party going. Poland just rejected adopting the EU currency. Farmers and businesses across Europe have been hammered by sanctions against exporting to Russia.

    To make matters worse, the bankers have just had Congress gut all the rules regarding speculation and forcing the taxpayer to backstop any large scale losses by the banking sector. Want to bet another massive bank blow up isn’t far ahead?

    As for Russia, they can handle the downturn, their people are used to it. We can’t, we don’t have anything resembling men who can lead the country. Just a bunch of failed lawyers who think that lying all the time will fix everything.

    • Replies: @KA
  11. David says:

    “US-backed plan to push down oil prices?” Is there any evidence for this? None is presented here. Doesn’t that matter to anyone?

    • Replies: @Anonymous
  12. Anonymous • Disclaimer says:

    How many times do people need to be reminded that Kerry pressured Saudi who were too happy to go along with US plans?

    • Replies: @David
  13. KA says:

    Like Russians Americans are used to hardships . It took only 5 years or less for Russians to get used to the new realities of liberalized crony capitalism in 1990 that robbed them of health care,housing education- all free- and guarantee of jobs .America took a little less . Life hasn’t been easier since 2008.
    Americans have got used to the impotence ,vacuous rage,ineffective electoral process,atomization of basic dreams ,pervasiveness of corruption and the celebration of all of the above by the free and not ” state run media” . America can take more . Bankers recently used that newly created American default position to insert the mechanism of more stealing from the savings account.

  14. David says:

    Citation besides Mr Whitney’s own Oil Coup or the evidenceless Guardian column he based it on?

  15. KA says:

    “Among the banks’ most important commodities bets are oil derivatives. An oil derivative typically involves an oil producer who wants to lock in the price at a future date, and a counterparty – typically a bank – willing to pay that price in exchange for the opportunity to earn additional profits if the price goes above the contract rate. The downside is that the bank has to make up the loss if the price drops.

    As Snyder observes, the recent drop in the price of oil by over $50 a barrel – a drop of nearly 50% since June – was completely unanticipated and outside the predictions covered by the banks’ computer models. The drop could cost the big banks trillions of dollars in losses. And with the repeal of the Lincoln Amendment, taxpayers could be picking up the bill.”
    Ellen Brown-

    So to get Russian hurt ,Americans will have to get clobbered .

  16. unit472 says:

    Its really astonishing the Libertarian support for this Russian ‘national socialist’ Putin whose slogan could be the same as another national socialist regime. “Ein Volk, Ein Reich, Ein Fuhrer” may as well appear, suitably translated, on Russian money. That Angela Merkel, despite not being a particularly close ally of Washington, is leading the European sanctions efforts against Putin, ought to give pause to those who see Putin as anything other than a dangerous megalomaniac.

    Whitney’s attack on the Russian Central Bank ( and I’m no friend of Central Bankers) as ‘fifth columnists’ and ‘collaborators’ is as ridiculous as some Putin butt boy calling them ‘liberal feminists’. A central bank can do nothing about collapsing oil prices but the only way to defend the rouble was to put up domestic interest rates and or buy roubles using Russian reserves of ‘hard’ currency and the CBR did both and has managed to arrest the roubles freefall . For the time being anyway. It has also moved to stabilize the Russian banking system with the same sort of gimcrack measures other Central Banks use including allowing Russian banks to extend and pretend by rolling dubious loans and offer hard currency loans for dodgy collateral to Russian banks. Most importantly it is allowing Russian banks to value their assets using the average exchange rate from the previous quarter which allows them to conceal the fact that they are currently insolvent!

    The truth is Putin’s gambit to use military force to change national borders and ‘Finlandize’ its neighbors is crumbling because it depended on Russia’s energy supplies being indispensable to the global economy. Without an ‘oil weapon’ Russia is little more, geopolitically, than Pakistan. A large nation with nuclear weapons and little else. Why oil prices have fallen so dramatically is interesting but it is clear there is no physical shortage of oil and this has exposed the limits of Russian power. I tend to believe the Gulf Arabs are more interested in weakening Iran and preserving their own global influence than acting as Washington’s cats paw ( does anyone really believe that Obama’s foreign policy team of Rice, Powers, Kerry and McDonough are that clever) and that Russia, Venezuela, Nigeria etc. are just collateral damage of the Gulf Arabs engaging in some competitive supply destruction but it is a happy coincidence that it does leave Putin standing with his pants around his ankles.

  17. War for Blair Mountain [AKA "Bill Blizzard and his Men"] says:

    There is no antiwar movement in the US. What passed for an antiwar movement during the W Bush era was a wierdo transgender rights movement.

    If there was an anti-war movement there would be daily protests in front of the home of the Irish Skank Foriegner Samantha Powers.

    The mass murder of the Conservative Orthodox Christian Russian People is being waged by the majority nonwhite Democratic Party that is in a political coalition with the gay rights -transgendered rights crowd.

    The open and deliberate policy of race-replacing The Historic Native Native Born White American Majority goes hand-in-hand with the ongoing mass murder of the Conservative Orthodox Christian Russian People. What drives both policies is the vaulting-monumental greed of the White Liberal Mega CEO Greedy Cheating Class.

    The passage of The 1965 Immigration Reform Act was the reprobate Teddy Kennedy’s monument to his War Criminal brother JFK who brought The Human Species to within 60 seconds of permanent Extinction during the Cuban Missile Crisis.

    1962=2014… have been warned!!!!!

  18. Anonymous • Disclaimer says:

    Libya, Syria, Iraq, Afghanistan, Egypt not so much. Countries are rarely “on the mat” permanently, because politics and economic development is a dynamic, not a static process. Additionally, since this is a “war” by definition the outcome is extremely uncertain.

  19. pyrrhus says:
    @An Observer

    Short term vs long term, the Russians are good at the long term. If I were Putin, I would confiscate the wealth of these bankers and give it to the Russian people, just as an example.

  20. Realist says:

    “You cannot fight that. If it becomes too expensive, we just print more money to pay for it.”
    Yeah, that’s brilliant.

  21. What a fascinating article; I’m so glad it was reprinted here, as I often miss good stuff at Counterpunch.

  22. Putin had wide public support. Now he can judge how deep that support might be. How much punishment can Ivan endure? He surely knows that Americans are pussies, but has to frame his policies based on the endurance of his core. They have Stalingrad, “we” have hurricane Sandy. Who ya gonna call?

    Incidentally, we don’t heart Putin, it’s that all of our guys (and gals, hi Victoria!) simultaneously suck and blow.

  23. Anonymous • Disclaimer says:

    Isn’t it sad that amoral/immoral/un-Christian types have complete control over geopolitics and finance and are backed up by dispensationalist/neo-con useful idiots (see Free Republic)? What would the atheistic Machiavellian snakes do without the un-questioning support of Bible-quoting, Reagan-worshiping troglodytes? Sad. But not sustainable for very long.

    Alas, what does it profit a people…

  24. “Putin needs to think asymmetrically. What would Obama do if he was in Putin’s shoes?”

    Obama is hardly the leader of the War on Russia. “What would Kagan do?”, perhaps.

  25. I don’t know whether Putin can take the actions needed to fend off the latest US attack. Even if he wins this one (as he won the first dozen or so – remember South Ossetia?) another will be along in a minute. The neocons and the Ashkenazi political elite seem to really hate Russia, quite unlike their attitude to China. They’re supported in that by eastern Europeans like Sikorski, for understandable historical reasons, but Putin has never done anything hostile to the Ashkenazi other than cramp the oligarchs a bit.

    Sometimes I wonder why most of us instinctively react against US global domination, even when we like America, the American people, and the Jewish people for that matter. Presumably a Russian or Chinese dominated world wouldn’t be great, either. What sort of world order *should* we be seeking?

  26. War for Blair Mountain [AKA "Bill Blizzard and his Men"] says:

    Most of outrage in the US against the majority nonwhite Democratic Party’s attempt to thermonuclear annihilate Conservative Orthodox Christian Russia comes from Native Born White America. Fox News does not have an enormous audience. Free Republic White Males are statistically insignificant.

    The War Criminal Kenyan Foriegner was enthusiastically installed as Dear leader of the US twice by a highly racialized and high fertility nonwhite Democratic Party voting block that would not exist if the 1965 Immigration Reform Act had not been passed.

    What ever happened to the celebrity anti-war activist Cindy Sheehan?….Why isn’t she doing vigils with her White Liberal supporters in front of The Irish Skank Foriegner Samantha Powers’ Home? I’ll tell you why:Cindy Sheehan and her White Liberal supporters got what they wanted in 2008 and 2012 at POTUS election time:gay marriage and transgendered rights(so that hairy truck drivers who think they are women can take dump in the stall next to a seven year girl in a public bathroom).

    Cindy Sheehan is a fraud…and so are her White Liberal “antiwar” supporters who were chanting War Criminal!!!! in front of W Bush’s home in Texas. It was all theater and about getting the violent psychopathic bulldyke Hillary Clinton elected POTUS on Nov 3 2016….that’s if the Human Species doesn’t go extinct in thermonuclear War within the next 60 seconds.

  27. Anonymous • Disclaimer says:


    I think you are wrong here, apart from Kagan and the neo-cons. Some of the most vociferous critics of this Obama policy toward Russia are: Professor Stephen Cohen, Henry Kissinger, Michael Savage, et al. Cohen says what the Obama Administration is doing is madness. Same with Savage.

    I agree with Bill Blizzard, the insane neo-con policies are going unchecked because the vacuous majority on the left dare not voice any criticism of their patronizing pick for President. And the people surrounding Obama, e.g., the Irish washerwoman, Samantha Power, developed a neo-con weltanschauung in humanistic education in Cambridge and socializing in Brookline.

    But as I said, it can’t sustain itself for very long. I just hope there is not a nuclear apocalypse in the meantime.

  28. Jefferson says:

    Russia is a predominantly Caucasian country, but it has a 3rd world money currency. Russia is the most disorganized and badly run White country in the world. Maybe there is truth to Western Europeans being ethnically superior to Eastern European Slavs.

  29. War for Blair Mountain [AKA "Bill Blizzard and his Men"] says:

    Oh sure, The Conservative Orthodox Christian People will be much better off if Harvard economist Jeffrey Sachs ran the joint. After all Bill “LOFA” O ‘Rielly calls for reimposing Neoliberal shock therapy back on the Russian People again. Neoliberal economic shock therapy worked quite well the last time when violent psychopathic serial rapist Billy Clinton imposed it on those inefficient disorganized Russian People. Jeffrey Sachs’ economic efficiency program worked marvelously….I mean, easily six million potential disorganized inefficient Russian infants were not born because of this making Russia more organized and efficient. And all those Russian male orphans were put to good use satisfying the perverted bestial urges of Rock Star Pete Townshend and Mr Saville.

  30. Lyov Myshkin [AKA "lyovmyshkin"] says:

    Isn’t the raise in interest rate logical? Tighten the money supply, increase the value?

    Regarding the RCB, I understood that it was required to invest half of its profits into the treasury, can anyone with more knowledge on the subject confirm or deny this?

    Finally, given what the West has cynically done in regards to oil price, couldn’t Russia begin to hint (and tentatively act) that they are heading towards a Gold future. Play the West at their own game. If enough hints were given and enough tentative moves in that direction were acted upon, maybe the West would take the bait and flood the gold market, leaving Russia free to gobble up more precious metal on the cheap.

    Great article, very informative.

    • Replies: @Anonymous
  31. Anonymous • Disclaimer says:

    This article is a rant without merit, consisting entirely of unsupported assertions and suppositions, a good number of paranoid conspiracy theories and ludicrously, copious advice for Putin from some internet guy who seems to believe himself wiser in finance, monetary politics, economics and geopolitics than Putin and his government all.

  32. Anonymous • Disclaimer says:
    @Lyov Myshkin

    Isn’t the raise in interest rate logical? Tighten the money supply, increase the value?

    No, not necessarily. It can actually increase the decline of the currency and increase inflation by increasing the interest income channels to people who will buy foreign currencies and assets.

  33. John says:

    I agree with your assessment of the US goals. And your suggestions for countering these goals are all valid, but these will have been “war”-gamed 100 different ways, and if-then counteractions developed for all scenarios. If Mr. P is going to keep himself out of the noose, he’s going to need to really alter the playing field. He can’t just knee-cap the opposition like he did to EU with the agricultural sanctions. He has to come up with something not only disruptive but totally unexpected.

  34. iSteveFan says:

    Russia is a predominantly Caucasian country, but it has a 3rd world money currency. Russia is the most disorganized and badly run White country in the world. Maybe there is truth to Western Europeans being ethnically superior to Eastern European Slavs.

    I am a European American, but am getting tired of comments like this, so much so that sometimes I actually welcome the replacement of Western Europeans with third worlders. But then I come back to reality.

    Jesus buddy, stop with the Eastern European Slav hate. Western Europe has done great things and created great societies that most of us are proud of, but do you really think they could have done this if they faced the hardships of those in the East? The people in the East acted like a sponge in soaking up the hordes of non-Europeans who for centuries tried to take the continent. And then as if they really needed it, were gifted Bolshevism for almost 70 years.

    Cut these guys some slack. We in the West have only had cultural marxism for about 40 years and it is already rotting out our culture. I am sure we have become unrecognizable to Westerners of just thirty years ago. Is there any better poster child of this rot than Rotherham? Can you even imagine what we are going to become after 70 years of cultural marxism?

    Eastern Europe does have problems. There ain’t no way to sugar coat it. But Westerners should be grateful for the role our Eastern cousins played in slowing down the invaders and buying us time to create our great societies. Spain and Southern Italy felt the pain of the invaders too, and they don’t seem to have societies on par with the NW Euros. Maybe if NW Euros had the same treatment, they wouldn’t be quite the places they are. We’ll never know in part because of those poor Slavs who functioned as a buffer.

    Then again, we might find out how well those Western Euro nations can function after being invaded and occupied by non-Europeans. After all, they are sure doing their best to make this a reality.

  35. KA says:

    George Kennan commented on the conception of the scientific progress and the European societies . To him the great cultural ,architectural,and scientific stuff that been achieved was not due to some inscrutable ,unknowable,fascinating genetic differences but from pure wars ,savagery,and exploitation of the 3 rd world.
    Later he suggested to 5% , how to maintain that mindset in order to enjoy the 90 % of the world resources .

  36. […] war to Central Asia and beyond. He’s not going to give an inch. You’ll see.   More here, ======================== The Oil Coup US-Saudi Subterfuge Send Stocks and Credit Reeling BY MIKE […]

Current Commenter

Leave a Reply - Comments on articles more than two weeks old will be judged much more strictly on quality and tone

 Remember My InformationWhy?
 Email Replies to my Comment
Submitted comments become the property of The Unz Review and may be republished elsewhere at the sole discretion of the latter
Subscribe to This Comment Thread via RSS Subscribe to All Mike Whitney Comments via RSS