A Little Bee Tells Me …
— It’s the economy, er, ah, “sanctions,” Stupid!
[NOTE: On March 9, 2022, I created a meme headlined: “A ‘lil bee tells me …” The sub-heading read: It’s the economy, er, ah, “sanctions,” Stupid! (see bottom of this article). What follows is a version of the March 9th meme edited to fit today’s March 24th conditions]
The US by trying subliminally attempting to regime change Russian president Vladimir Putin, by territorially wanting to divide Russia into regions and by levying sanctions against Russia by manipulating Ukraine in the process, gets a top rank as an all-time worst long-term policy decision by any nation in recent history.
Russia is #2 in gold production and the 9th least-indebted nation in the world. It exports an enormous proportion of oil, gas and coal. It also dominates in wheat, barley and corn. When you combine Russia with it’s very close ally Belarus, the two together importantly become the world’s #1 exporter of fertilizer.
Marketwise, due to US-Euro led sanctions against Russia, Putin’s government now has an option to either outright break its oil contracts — which it has never done in the past — and refuse to sell to Europe or the US, or it can choose to keep its contracts intact but demand payment in rubles instead of dollars or euros.
Either way, both Europe and the US, are gonna get clobbered.
Interestingly, Russia just yesterday announced it would demand any oil sold to the US-European sanctioning nations must be paid with rubles. Folks, over time, this will significantly increase the value of the ruble! One can not help but see the irony of how Western nations last week were gleefully gloating over how Russia’s ruble had fallen in value as a result of the US-Euro imposed sanctions.
At present, however, March 24th sees the ruble nearing the dollar in value:
So will we see the proverbial shoe show up on the other foot? Most likely!
Also interesting is the historical significance of a US deal made a long time ago with Saudi Arabia. It stipulated all future oil transactions would be paid by using dollars. Thus, the petrodollar was born and for decades it has reigned king within the world’s trading markets.
This privilege of standing enabled the US to develop a hegemonic reserve form of currency based on the strength of petrodollars in the market. In simple terms, the US petrodollar eventually became supported by debt.
It is more than noteworthy that Saudi Arabia is presently negotiating with China to receive the newly-minted Chinese yuan as a means of payment for the oil it sells to China. This adds a huge new wrinkle into the rug.
Although the US is #4 as a world gold producer — it is the #1 thief relative to stealing gold from other nations — its petrodollar is largely supported by debt. Comparatively, Russia’s petroruble will be backed by Russia being the world’s #2 gold producer and one of the world’s least-indebted nations. China, meanwhile, supports its yuan as the world’s #1 gold producer and in recent years has been challenging the US for the world’s greatest economy status.
Neither China and especially Russia are anywhere near the US concerning problems of world debt. In fact, the US for the first time in its history just topped out at 30 trillion in debt making it the 4th most indebted nation among all developed countries. US allies Britain, France, Germany and Japan are also in a sorrowful position with respect to debt.
Will Russia, now demanding payment for oil in rubles, also insist that payment for wheat, barley, corn and fertilizer also be made in rubles?
The important questions should become obvious. Anyone left ignoring or begging for answers is doomed to reside in The Very Troubled Land.
Markets
With the US and Europe no longer within the sphere of Russian markets, where will Russia go to sell those products? Russia is closely aligned with the most populous nation China and is a BRICS (Brazil, Russia, India, China and South Africa) nation. The BRICS nations alone comprise 40% of the world’s population.
The United Nations is comprised of 195 nations. In January of 2019, the US made a startling renegade move to recognize CIA-trained Juan Guaidó as Venezuela’s president, instead of the duly elected-president Nicholas Maduro. Only 60 nations backed the US action. The 135 nations not supporting the US, comprise a potential market where Russia can sell products that otherwise would have gone to the US and Europe.
Viewed another way, after Russia sent its military into Ukraine there was a United Nations vote to condemn the action. If one were to include the populations of the nations who participated in that vote, one would find the following number: 3.6 billion people condemned the Russian military action, but 4.3 billion did not condemn the action.
Using rounded numbers, this means that even with enforcement of US-European sanctions, Russia still has 60% of the world’s population available for which to sell its oil, wheat, barley, corn, fertilizer and other products.
Conclusion
All things considered, it appears the US made a grave and very serious tactical error thinking it could use Ukraine to economically bully Russia, and de facto China — forget not Taiwan is on the horizon. What with the respective nuclear power capabilities of the major players, the bully can’t deliver a punch either physically (war) or economically (sanctions).
As the Ukrainian paradox evolves world historians may well discover that US standing reduced to a limited role might overall become good for the planet in terms of dealing with war, climate change and a fairer economic distribution of the world’s resources.
For the first time, what the US may have unwittingly accomplished is it finally put itself into a position where it will become forced to recognize we live in a multipolar world, that it can no longer pursue its role as a hegemonic unipolar bully in the world. Multipolar strategies are the way to go — better for our planet’s future.
Let’s hope so!
Below, is my original meme:
