Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Showing posts with label SWIFT. Show all posts
Showing posts with label SWIFT. Show all posts

Monday, January 17, 2022

The Eurasia War - Wizard's Chess

 "We have nowhere left to retreat" - Vladimir Putin, President of the Russian Federation. These words were meant for the Russian people, and not as a plea to the rest of the world. Putin is invoking the patriotic spirit of Russians, and framing the coming war as an act of self-defence (which it might be) so that he has those same people behind him for the big move. The move he has dreamed of since he witnessed the fall of the Soviet Union. This is not just about Donetsk or Lugansk Republics, or even Ukraine. This is about recreating the Russia of old. 

Putin has named several factors as strategic imperatives for Russia. A key one is having NATO nations on his borders. He points to Ukraine as a possible NATO member, but there are three countries on his eastern flank, within hours of Moscow, that are NATO members already: Estonia (population 1.3 million); Latvia (population 1.9 million); and Lithuania (population 2.7 million). Collectively known as the Baltic States, they give NATO a staging ground in behind Russia's western border, and are therefore problematic for Moscow. Those countries have, respectively, the following NATO troops stationed in them: 800; 1200; and 1200. Currently they represent an irritant at most, but their potential to become much more for NATO is the danger for Russia.

Most analysts are looking at Russia's position as solely focused on Ukraine, but this would be a foolish miscalculation. Firstly, Russia needs to send a very strong message to countries like Finland, Sweden, Georgia and others that it is prepared to destroy countries that imperil its strategic stability. A minor shuffle into eastern Ukraine would have no such affect, and might in fact do the opposite. Russia knows, like anyone knows, that if there is going to be a big cost then you might as well go for the gusto. The "gusto" in this case is not just eastern Ukraine, not just Ukraine, but the Baltic states and likely Moldova - or at least parts of it. The following map shows that such a move gives Russia the smallest western border to defend amongst all the options. (blue line)

Essentially the new western border of Russia will extend from Kaliningrad in the north to the Pro-Russian Transnistria in the south. It will reduce the number of countries accessing the Black Sea to Russia, Turkey, Romania and Hungary. Romania and Hungary are NATO countries, but now they will have Russian divisions stationed at their border, and they do remember when they were occupied, so their inclination to poke the bear will likely be zero. That leaves Turkey, also a NATO member, but a member whose western based economy is in freefall and whose currency is devaluating on a daily basis - leaving it vulnerable to China and Russia. 

Russia has also been moving large forces from the far east, near China, to their western border. Those troops have not yet arrived. This indicates that Russia intends on taking very serious military action, decisive military action, and it also indicates Russia is very comfortable leaving China with a less guarded border. 

That brings us to Eurasia. Russia and China have been planning a separate economic system from the West for decades. They have been stockpiling gold as their system will be a gold-backed trade/currency system. They have signed strategic economic and arms agreements. They are in a sense creating anew world order that intends to completely sideline the West economically, and if necessary militarily. The United States has fed this ambition by sanctioning Russia to the point where Russia, and importantly its citizens, have gotten used to being apart from Western goods and services. It is, therefore, almost amusing that the United States is threating Russia with expulsion from the SWIFT economic settlement system. Intentionally, or unintentionally, the US is playing right into Russia hands, and therefore China's. The West's reaction to a Russian invasion of the Baltic States, Ukraine, and Moldova will be the moment both China and Russia have been waiting for to initiate their Eurasian project, and they can say they had no choice, because the US threw them out of SWIFT. Things to come.

In the mean time look for a one fell swoop Russian assault, due to an Ukrainian assault in the Donbass, likely during the Beijing Olympics. Ukraine has been banging the pot internationally that Russia has 100,000 troops near its border, but what Ukraine has been reticent to say is that half the Ukrainian military is now on the the borders of the Donbass region. The danger for Ukraine is that half its army is in very real danger of being enveloped by Russian forces almost as soon as hostilities start. The following map shows the general area that one half of Ukraine's troops are concentrated in (blue circle), and the likely approaches of Russian, and possibly Belorussian troops. It's quite easy to see how quickly they will be isolated, or as the Russians like to call it: "a caldron". A second flanking will be to isolate Kiev from the West and place the entire country in a free fall within days of an invasion. 


 It should not be forgotten that Russia stated, just months ago, that a Ukrainian military intervention in the Donbass would be the end of Ukraine as a state.

We should find out if this is the big Eurasian move or not within the next month or so, but all signs point to it. Keep in mind that both China, Russia, and even North Korea are ahead of the West in developing strategically decisive hyper-sonic missiles. Russia and China have also now had the time to modernize their militaries. In a sense they are ready to go, and their hypersonic advantage may be short lived. It will be in that calculus that the fate of the world as we know it will rest. 














  


Saturday, December 18, 2021

War in Ukraine 2.0

 War is coming back to Ukraine, and potentially surrounding countries as well. Back in 2014, when it was quite obvious the Western powers initiated a civil war in Ukraine, during the Olympics, to topple a President who backed off joining the EU, Russia responded by seizing Crimea and aiding separatist forces in the Lugansk and Donetsk republics in Ukraine. It was a tit - for - tat power grab by the Russians, but key to this was that it was a response to the initiation by the Americans of an "in your face" alteration to the balance of power in the region. 

The Russians claim that, in 1991, when they dismantled the Soviet Union, the United States had given their word that NATO would not expand eastward. Whether that is true or not, and the Russians never got in writing for whatever reason, the truth is that over the next thirty years NATO has expanded eastward to the point that NATO forces are right on the border of Russia itself. Historically Russia has never allowed an enemy to be on its borders without going to war over it. Now Russia finds itself having three small Baltic States as NATO members, and possible jumping off points for an invasion of Russia, or at the very least bases for offensive weapons systems. The distance from the southern border of Latvia to Moscow is just under 600 kilometers, and from Estonia a mere 140 kilometers to Putin's hometown of St. Petersburg. It's an intolerable strategic situation for any world power - the Americans would be no different (Cuba crisis).

Apart from its northwestern flank, Russia has a buffer state, which is in talks to become a part of Russia, which somewhat insulates its central flank. Even there, Ukraine-like movements had been attempting to overthrow the Belorussian President with similar motivations and alliances. In fact, it would likely have been successful if Russia had not learned from the Ukrainian lesson, and this time immediately intervened overtly and covertly to stop it. The southern flank, which has been the most pressing, is the most potentially explosive of all. 

The Ukrainian government has taken what can best be described as a "bull in the china shop" strategy in dealing with Russia. Despite being warned by Russia that any Ukrainian attempt to retake Donetsk and Lugansk Republics by force would see the end of Ukraine as a national entity, and despite knowing that Russian missiles and electronic warfare would destroy Ukraine's military infrastructure in less than an hour, the Ukrainian government continues to pursue a policy of bluff and hysteria. The goal of the Ukrainian government is to trap the Western powers in a war with Russia, much like the approach taken by Winston Churchill to involve the Americans in World War Two. To this point in time the Americans are using Ukraine as a stick to beat the Russians with, but that is all. As US President Biden said: "no American troops to Ukraine" in case of war. 

From Russia's perspective, all things centre around Crimea - the unsinkable aircraft carrier that protects their southern flank with Europe. While the Russians have built a massive bridge from the mainland to Crimea, an exposed position if there ever was one, they have struggled to supply it with the most important commodity of all - water. Shortly after the annexation of Crimea in 2014, the Ukrainian government built a dam over the only water supply route to Crimea, which could be considered a crime against humanity as it primarily targeted the civilian population there. As a result, the massive drainage conduit to Crimea has gone dry, and become overgrown with all types of vegetation. The picture below shows the dam and the clogging of the drainage conduit.


 

Sooner or later, and it now appears sooner than later, Russia will have to act militarily to secure this water supply to Crimea. It cannot have a core strategic interest so exposed. From its perspective there can be no choice. 

Ukraine meanwhile, having had years to rebuild its military, has amassed half of its military, compromising all its battle ready units on the battle lines around Donetsk and Lugansk Republics. The obvious message Ukrainian message is a final battle for the Republics is coming. Many media outlets have been floating dates for such an outbreak in hostilities to happen as late January or February of 2022. Western media  outlets have suggested that is the time frame Russia will invade Ukraine, but it could just as easily be the dates Ukraine intends to send its military in, which would cause a Russian reaction. The irony of the dates put forward shut not be lost on anyone. The winter Olympics in China begin in February of 2022. The revolution in Ukraine began during the winter Olympics in Sochi, Russia. The timing is likely not a coincidence. The West has refused to send any diplomatic members to the games in China, and an invasion by Ukraine, and the response by Russia allows the West to ruin China's games and place the blame on a Russia to a distracted public.

Against this backdrop we have serious moves happening in Eurasia. Russian President Putin was just in India, arm in arm with its President who declared that India had no closer friend than Russia. Just days later the Chief of Staff of the Indian military died when his helicopter crashed in India. Russia and China also just concluded a major defence alliance.  Now Russia has sent a "proposal" to NATO which would roll back strategic advantages for NATO in former Warsaw Pact members countries, including the stationing of missiles and troops therein, and ban others from joining NATO. Apparently the proposal is signed by the Russian side with blank spots for NATO to sign. In other words, it's not a proposal, but rather an ultimatum. The question remains: what are the consequences of not agreeing to the Russian ultimatum. 

They could be something as simple as a demonstration of Russia's military power, like knocking Ukraine out of existence in short order. It could also be something much bigger. It could be that Russia's hypersonic missile systems are sufficient to attack western interests and at this point the West is unable to respond to that. Most estimates put American development of hypersonic missiles well behind both the Russians and the Chinese. As the word hypersonic implies, there is no time to defend. For Russia to be making the ultimatum to NATO that it has, it must have the ability to strike with impunity. That could include all of NATO's GPS satellites, without which NATO would be finished. It could include many things. It must also have the backing of China, who literally covers Russia's rear. It must also have at least the neutrality of India. Given Russia has made the move, it's a safe bet that all those factors have been satisfied.

The only thing left to do is wait. Will Ukraine be the willing sacrifice to start a new cold or hot war? Will Russia, China and others, having been sanctioned by the West, start their new gold based system of commerce - abandoning or being thrown out of the SWIFT system for international payments? Will China have the excuse it needs to take back Taiwan? The game of chicken is about to come to its logical end, and we can but watch.