Putin Peace, Petrodollar Pain
The petroruble is Putin's Omicron to end the West NATO virus
This episode adds information and analysis on Ukraine from Aaron Mate, the US Peace Council, Scott Ritter and Michael Hudson. It asks whether there were diplomatic options that Russia could have pursued but didn't. It examines Putin's strategy in having $650B of Russian gold in foreign banks subject to seizing and freezing. Was it a trap so he could repudiate the petrodollar? Has the US done him a favor by bankrupting the Russian oligarchs? What does this mean for Germany and France that they'll need to buy oil and gas in the petroruble? And how much trickle-down pain will there be when petroleum-based fertilizer factories shut down? And could this be a catalyst for taking back local economies and making them productive? It ends with Putin’s speech to Russians and Ukranians after he launched this “special military operation.”
Aaron Mate’s article, Urging regime change in Russia, Biden exposes US aims in Ukraine, states: “Biden's declaration that Putin ‘cannot remain in power’ was not an error, but a clear expression of entrenched US policy: using Ukraine for a proxy war against Russia.” To answer whether Russia has had diplomatic means to resolve the Donbas conflict, he provides some historical context:
Obama's misgivings about arming Ukraine helped yield the 2015 Minsk II accords, in which an outmatched Kiev accepted limited autonomy for the Donbas in exchange for the Russian-backed rebels' demilitarization.… The Ukrainian far-right, empowered by the 2014 Maidan coup and in no mood for an accommodation with Russian-speakers in the east, successfully undermined the Minsk accords with violent protests.
With Obama's exit from the White House, the DC foreign policy establishment — also opposed to an accommodation with Russia — seized the opportunity to permanently sabotage Minsk and escalate the Ukraine proxy war that the outgoing president had tepidly waged. Their goal was made clear by two of the Senate's leading hawks, Republican Senators John McCain and Lindsay Graham, during a visit to Ukraine in December 2016.
"Your fight is our fight. 2017 will be the year of offense," Graham declared to a group of Ukrainian soldiers at a military base. "All of us will go back to Washington and we will push the case against Russia… It is time for them to pay a heavier price."
Aaron includes a chart from a RAND study, "Overextending and Unbalancing Russia," on which the option to “provide lethal aid to Ukraine” has a “moderate” chance of overextending Russia with a high cost and risk, but high potential benefits. This coldblooded calculation confirms Matt Taibbi’s jibe about “overgrown Risk-playing lunatics in [the] neocon treehouse.”
In 2021, the Biden administration made two agreements with Ukraine:
In August 2021, Washington and Kiev signed the U.S.-Ukraine Strategic Defense Framework, which calls for collaboration "to advance the military capabilities and readiness of Ukraine to preserve the country’s territorial integrity, progress toward NATO interoperability, and promote regional security." The plan also calls for a "closer partnership of defense intelligence communities in support of military planning and defensive operations."
This was followed in November by the U.S.-Ukrainian Charter on Strategic Partnership, which declared U.S. support for "Ukraine’s aspirations to join NATO." The agreement also touted "Ukraine’s efforts to maximize its status as a NATO Enhanced Opportunities Partner," a special status for a small number of NATO allies, and a green light for increased NATO weapons shipments and integration.
Zelensky played his part as celebrity patsy:
In a recent interview with Time magazine, Zelensky's first national security adviser, Oleksandr Danyliuk, revealed that Zelensky deliberately targeted Ukraine's Russian-backed opposition in early 2021 to please the new regime in Washington. According to Danyliuk, when Zelensky shut down three pro-Russian opposition TV networks, the move was "conceived as a welcome gift to the Biden Administration, and "calculated to fit in with the U.S. agenda." The Biden administration signaled its appreciation by cheering the crackdown. Its silence on Zelensky's recent banning of 10 opposition parties suggests a similar reception.
Zelensky's DC-inspired hostility to the Russian-tied opposition also carried over to the peace accords that he was elected on implementing. At the final round of Minsk talks, which concluded just two weeks before Russia's invasion, a "key obstacle," the Washington Post reported, "was Kyiv’s opposition to negotiating with the pro-Russian separatists." And even as "the talks continue to stall and the threat of war grows more present," the Post added, "it’s unclear how much pressure the United States is placing on Ukraine to reach a compromise with Russia."
In a recent interview, Zelensky made clear that the only US pressure he received was to sabotage diplomacy. Speaking to CNN, Zelensky effectively admitted that Russia's core demand to avoid war – that Ukraine renounce NATO membership and commit to neutrality – was used to bait Russia instead.
"I requested them [NATO] personally to say directly that we are going to accept you into NATO in a year or two or five, just say it directly and clearly, or just say no," Zelensky said. "And the response was very clear, you're not going to be a NATO member, but publicly, the doors will remain open."
Even after demonstrating that Trump and Biden have wiped their arses with the Obama-negotiated Minsk II agreement and seduced Zelensky with visions of NATO military sugarplums, Aaron demurs: “By choosing to invade Ukraine rather than exhaust all diplomatic options to resolve its grievances over the Donbas war and NATO expansion, Russia is legally and morally responsible for the carnage that it has caused.”
A commenter called Doc Hollywood replied, “From the Minsk Accords to Russia’s draft treaty proposals in late 2021, all diplomatic proposals and treaties were blocked, ignored, or rejected by the West. No UNSC action was possible due to its permanent members’ veto power. So exactly which diplomatic options were not exhausted? What were Russia’s non-military choices in the face of Ukraine’s years-long shelling and military operations against the Donbass?”
This is a question that the US Peace Council has taken seriously. First they examine whether Russia has violated the Charter of the United Nations, of which USPC is a staunch supporter:
Russia presents important arguments in favor of its use of force under Article 51. The Ukraine government has acted as the US and NATO’s proxy in hostilely encircling the Russian Federation. Ukraine military and paramilitaries have attacked Donetsk and Lugansk since 2014, resulting in the deaths of some 14,000 of their own people, many of whom were Russian speakers and some Russian citizens. Most recently, Russia discovered an imminent Ukrainian government plan for a large-scale invasion of the Donetsk and Lugansk that border Russia. Russia now recognizes these two republics as independent states, after they asked Russia to aid in their defense.
Russia clearly asked for security guarantees from the US and NATO, which refused to adequately respond to Russia’s concerns. Ukraine was planning to host US/NATO nuclear weapons on its territory that could reach Moscow in a matter of five minutes. This took place in the alarming context of the US decision in 2019 to withdraw from the Intermediate-Range Nuclear Forces (INF) Treaty with Russia.
They then point out eight examples, as a partial list, of the UN’s inability to uphold their charter against violations by the US, NATO and their allies. Their inaction, the USPC shows, has led to the situation in Ukraine where NATO has explanded with impunity. Answering the argument that this is one empire vs another and both are equally wrong, they write:
… this kind of argument … removes the whole issue of aggression from the picture. It no longer matters who is the aggressor and who is the victim. It obviates the fact that the US seeks to be the world’s hegemon with global “full-spectrum” dominance. In short, US imperialism generated a war without using US soldiers….
It ignores the fact that US/NATO has flooded Ukraine with hundreds of millions of dollars’ worth of military equipment along with dispatching military and covert operations personnel to “advise.” A correct demand would be recognition of Ukraine as a neutral state, removal of all foreign weapons and military personnel (including mercenaries) from Ukraine, and full implementation of Minsk II agreement….
The US with its NATO allies have not only provoked this tragedy but have sought to prolong it in their refusal to engage in negotiations for a ceasefire. While no one wins in a war, the US has had the most to gain: further unifying NATO under US domination, reducing Russian economic competition in the European energy market, justifying increasing the US war budget, and facilitating sales of war materiel to NATO vassals. A Europe further divided between the EU/UK and Russia benefits none but the imperial US.
Now let’s go to Scott Ritter’s excellent analysis. Scott was a US Marine Intelligence Officer and UN Chief Weapons Inspector. He states that Russia isn’t occupying Ukraine, which is just a straw man argument. Their military goals are two: deNazification and demilitarization. They came in with 200,000 troops to the 260,000 NATO-trained Ukranian troops and 130,000 reservists. They came in ‘soft-handed’ and didn’t bomb barracks, saying that they were there for the Nazis and foreign weapons and that Ukranian soldiers who stayed in the barracks wouldn’t be harmed. But Ukraine fought rather than give up the Nazis and NATO weapons.
According to Scott, Russia has already won. Strategically they’ve surrounded the last stronghold of the Azov Battalion in Mariupol, where the neo-Nazis have been terrorizing that population since 2014. Zalensky tacitly admits Ukraine has lost every time he states, “If you don’t close the skies, we will die.” NATO would need to enter into full scale war with ground-to-air missiles to enact a no-fly zone. That’s not going to happen.
Then Scott talks about the sanctions and how Biden looked Putin in the eye last June and told him that if he responded in any way in Ukraine, he’d be hit with sanctions like he’d never seen before. So nothing the US has done is a surprise. In my first video on Michael Hudson, he raised the question of why Russia moved $650 billion into foreign banks, knowing it would be frozen. Scott answers that Putin was laying a trap.
That trap was sprung this past week when Putin announced that the US had defaulted on its obligations to Russia and therefore Russia would be no longer accepting dollars for oil and gas. And those countries that went along with the sanctions will now need to pay in rubles. This is a game-changer for Germany, who can’t get through next winter without Russian gas. Their petroleum-based fertilizer factories will close, with ripple-down effects for food production worldwide. And France is in real trouble.
The US, in fact, has given Putin exactly what he wanted but couldn’t do. All of the Russian oligarchs who had hidden their stolen wealth abroad are now bankrupt and broke. Putin’s telling them they’re no longer welcome in Russia, and go live where your friends are in the West. About 20% of Russian voters lean towards Europe and would have impeached him if he’d tried to break from the dollar regime and European market. But now they can’t complain because he didn’t do it—they did.
And what does Michael Hudson, leading geopolitical economist, say about this?
So what you’re seeing is not the US backfiring and shooting it in their foot by creating a world crisis. That’s the idea! Because it realizes that in the world crisis, energy prices are going to go way up, benefiting the US balance of payments. Not only as an energy exporter, but the oil companies that control the world oil trade, once they exclude Russia from it, agricultural crop prices will go way up, benefiting the United States as an agricultural exporter, especially if they prevent Ukrainian and Russian wheat exports, and this is going to create a debt crisis for third world countries whose debts are coming due. And the United States can use this debt crisis to force them, or attempt to force them, if they go along with it, to continue privatizing and selling off their public domain to US buyers so they can sell off their patrimony in order to get the money to pay the debts to pay for the higher oil and food imports…. The US strategy is to create exactly the world crisis that you are presented as being accidental. … Look at what they’re doing as deliberate. Don’t assume they’re dumb. They’re smart—they’re evil, but they’re not dumb.
… President Putin, in his speeches, said this war is not about Ukraine. This war is about restructuring the international order. And what that means is an alternative to the IMF. An alternative set of institutions to the World Bank. An alternative to the World Court. And an alternative to the US rules-based order based on the United Nations rules for instance, but that can’t be done as long as the United States is a member of that group.
So it means that there’s going to be a new grouping of international organizations, of which the United States will not join because it won’t join any organization that it does not have veto power in. So you’re going to have to parallel paths. You’ll have a neoliberal financialized, debt-financed path in Europe and North America, and you’ll have an industrial capitalism evolving into socialism path in China and the Belt and Road Initiative, Shanghai Cooperation Organization Block.
… this attempt on pressure points … certainly it’s going to cause suffering in the short term for these countries. Over the longer-term … we’re going to have to become self-sufficient in the main pressure points. We’re going to have to produce our own food. Not import our wheat. We’re going to have to shift away from growing export plantation crops and have our own grain, maybe return to family size farming to do all this. We’re going to have to produce our own arms, we’re going to have to have our own fuel sources, and that would include solar energy and renewable energy to become independent of the American-dominated oil and gas and coal trade. So the longer-term, even medium-term effect of all of this is going to make other countries self-sufficient and independent.
There will be a lot of interruptions, even starvation, a lot of property transfers and disruption, but over the long term, the United States… is destroying the idea of a single interconnected globalized order because it’s separated Europe and North America from the whole rest of the world….
Neoliberalism impoverishes. Neoliberalism is a class war against labour by finance, primarily, and a class war against industry. A class war against governments. It’s the financial class really against the whole rest of society seeking to use debt leverage to control companies, countries, families and individuals by debt. And the question is, are they really going to be able to convince people that the way to get rich is to go into debt? Or are other countries going to say, this is a blind alley. And it’s been a blind alley really since Rome that bequeathed all the pro-creditor debt laws to western civilization that were utterly different from those of the near east—that’s where civilizations take off.
These are scary and also exciting times. My book, How to Dismantle an Empire, is about how to take back control of our community economies and food production. So maybe we too can break away from globalized world order, even if we live in the soon-to-be-hungry belly of the beast.
Here is the bulk of Putin’s LONG speech soon after the invasion:
President of Russia Vladimir Putin: Citizens of Russia, friends,
I consider it necessary today to speak again about the tragic events in Donbass and the key aspects of ensuring the security of Russia.
I will begin with what I said in my address on February 21, 2022. I spoke about our biggest concerns and worries, and about the fundamental threats which irresponsible Western politicians created for Russia consistently, rudely and unceremoniously from year to year. I am referring to the eastward expansion of NATO, which is moving its military infrastructure ever closer to the Russian border.
It is a fact that over the past 30 years we have been patiently trying to come to an agreement with the leading NATO countries regarding the principles of equal and indivisible security in Europe. In response to our proposals, we invariably faced either cynical deception and lies or attempts at pressure and blackmail, while the North Atlantic alliance continued to expand despite our protests and concerns. Its military machine is moving and, as I said, is approaching our very border….
What I am saying now does not concern only Russia, and Russia is not the only country that is worried about this. This has to do with the entire system of international relations, and sometimes even US allies. … Of course, practice, international relations and the rules regulating them had to take into account the changes that took place in the world and in the balance of forces. However, this should have been done professionally, smoothly, patiently, and with due regard and respect for the interests of all states and one’s own responsibility. Instead, we saw a state of euphoria created by the feeling of absolute superiority, a kind of modern absolutism, coupled with the low cultural standards and arrogance of those who formulated and pushed through decisions that suited only themselves. The situation took a different turn.
There are many examples of this. First a bloody military operation was waged against Belgrade, without the UN Security Council’s sanction but with combat aircraft and missiles used in the heart of Europe. The bombing of peaceful cities and vital infrastructure went on for several weeks. I have to recall these facts, because some Western colleagues prefer to forget them, and when we mentioned the event, they prefer to avoid speaking about international law, instead emphasizing the circumstances which they interpret as they think necessary.
Then came the turn of Iraq, Libya and Syria. The illegal use of military power against Libya and the distortion of all the UN Security Council decisions on Libya ruined the state, created a huge seat of international terrorism, and pushed the country towards a humanitarian catastrophe, into the vortex of a civil war, which has continued there for years. The tragedy, which was created for hundreds of thousands and even millions of people not only in Libya but in the whole region, has led to a large-scale exodus from the Middle East and North Africa to Europe.
A similar fate was also prepared for Syria. The combat operations conducted by the Western coalition in that country without the Syrian government’s approval or UN Security Council’s sanction can only be defined as aggression and intervention.
But the example that stands apart from the above events is, of course, the invasion of Iraq without any legal grounds. They used the pretext of allegedly reliable information available in the United States about the presence of weapons of mass destruction in Iraq. To prove that allegation, the US Secretary of State held up a vial with white power, publicly, for the whole world to see, assuring the international community that it was a chemical warfare agent created in Iraq. It later turned out that all of that was a fake and a sham, and that Iraq did not have any chemical weapons. Incredible and shocking but true. We witnessed lies made at the highest state level and voiced from the high UN rostrum. As a result we see a tremendous loss in human life, damage, destruction, and a colossal upsurge of terrorism.
Overall, it appears that nearly everywhere, in many regions of the world where the United States brought its law and order, this created bloody, non-healing wounds and the curse of international terrorism and extremism. I have only mentioned the most glaring but far from only examples of disregard for international law.
This array includes promises not to expand NATO eastwards even by an inch. To reiterate: they have deceived us, or, to put it simply, they have played us. Sure, one often hears that politics is a dirty business. It could be, but it shouldn’t be as dirty as it is now, not to such an extent. This type of con-artist behavior is contrary not only to the principles of international relations but also and above all to the generally accepted norms of morality and ethics. Where is justice and truth here? Just lies and hypocrisy all around….
Despite all that, in December 2021, we made yet another attempt to reach agreement with the United States and its allies on the principles of European security and NATO’s non-expansion. Our efforts were in vain. The United States has not changed its position. It does not believe it necessary to agree with Russia on a matter that is critical for us. The United States is pursuing its own objectives, while neglecting our interests.
Of course, this situation begs a question: what next, what are we to expect? If history is any guide, we know that in 1940 and early 1941 the Soviet Union went to great lengths to prevent war or at least delay its outbreak. To this end, the USSR sought not to provoke the potential aggressor until the very end by refraining or postponing the most urgent and obvious preparations it had to make to defend itself from an imminent attack. When it finally acted, it was too late.
As a result, the country was not prepared to counter the invasion by Nazi Germany, which attacked our Motherland on June 22, 1941, without declaring war. The country stopped the enemy and went on to defeat it, but this came at a tremendous cost. The attempt to appease the aggressor ahead of the Great Patriotic War proved to be a mistake which came at a high cost for our people. In the first months after the hostilities broke out, we lost vast territories of strategic importance, as well as millions of lives. We will not make this mistake the second time. We have no right to do so.
Those who aspire to global dominance have publicly designated Russia as their enemy. They did so with impunity. Make no mistake, they had no reason to act this way. It is true that they have considerable financial, scientific, technological, and military capabilities. We are aware of this and have an objective view of the economic threats we have been hearing, just as our ability to counter this brash and never-ending blackmail. Let me reiterate that we have no illusions in this regard and are extremely realistic in our assessments….
Even now, with NATO’s eastward expansion the situation for Russia has been becoming worse and more dangerous by the year. Moreover, these past days NATO leadership has been blunt in its statements that they need to accelerate and step up efforts to bring the alliance’s infrastructure closer to Russia’s borders. In other words, they have been toughening their position. We cannot stay idle and passively observe these developments. This would be an absolutely irresponsible thing to do for us.
Any further expansion of the North Atlantic alliance’s infrastructure or the ongoing efforts to gain a military foothold of the Ukrainian territory are unacceptable for us. Of course, the question is not about NATO itself. It merely serves as a tool of US foreign policy. The problem is that in territories adjacent to Russia, which I have to note is our historical land, a hostile “anti-Russia” is taking shape. Fully controlled from the outside, it is doing everything to attract NATO armed forces and obtain cutting-edge weapons.
For the United States and its allies, it is a policy of containing Russia, with obvious geopolitical dividends. For our country, it is a matter of life and death, a matter of our historical future as a nation. This is not an exaggeration; this is a fact. It is not only a very real threat to our interests but to the very existence of our state and to its sovereignty. It is the red line which we have spoken about on numerous occasions. They have crossed it.
This brings me to the situation in Donbass. We can see that the forces that staged the coup in Ukraine in 2014 have seized power, are keeping it with the help of ornamental election procedures and have abandoned the path of a peaceful conflict settlement. For eight years, for eight endless years we have been doing everything possible to settle the situation by peaceful political means. Everything was in vain.
As I said in my previous address, you cannot look without compassion at what is happening there. It became impossible to tolerate it. We had to stop that atrocity, that genocide of the millions of people who live there and who pinned their hopes on Russia, on all of us. It is their aspirations, the feelings and pain of these people that were the main motivating force behind our decision to recognize the independence of the Donbass people’s republics.
I would like to additionally emphasize the following. Focused on their own goals, the leading NATO countries are supporting the far-right nationalists and neo-Nazis in Ukraine, those who will never forgive the people of Crimea and Sevastopol for freely making a choice to reunite with Russia.
They will undoubtedly try to bring war to Crimea just as they have done in Donbass, to kill innocent people just as members of the punitive units of Ukrainian nationalists and Hitler’s accomplices did during the Great Patriotic War. They have also openly laid claim to several other Russian regions.
If we look at the sequence of events and the incoming reports, the showdown between Russia and these forces cannot be avoided. It is only a matter of time. They are getting ready and waiting for the right moment. Moreover, they went as far as aspire to acquire nuclear weapons. We will not let this happen.
I have already said that Russia accepted the new geopolitical reality after the dissolution of the USSR. We have been treating all new post-Soviet states with respect and will continue to act this way. We respect and will respect their sovereignty, as proven by the assistance we provided to Kazakhstan when it faced tragic events and a challenge in terms of its statehood and integrity. However, Russia cannot feel safe, develop, and exist while facing a permanent threat from the territory of today’s Ukraine.
Let me remind you that in 2000–2005 we used our military to push back against terrorists in the Caucasus and stood up for the integrity of our state. We preserved Russia. In 2014, we supported the people of Crimea and Sevastopol. In 2015, we used our Armed Forces to create a reliable shield that prevented terrorists from Syria from penetrating Russia. This was a matter of defending ourselves. We had no other choice.
The same is happening today. They did not leave us any other option for defending Russia and our people, other than the one we are forced to use today. In these circumstances, we have to take bold and immediate action. The people’s republics of Donbass have asked Russia for help.
In this context, in accordance with Article 51 (Chapter VII) of the UN Charter, with permission of Russia’s Federation Council, and in execution of the treaties of friendship and mutual assistance with the Donetsk People’s Republic and the Lugansk People’s Republic, ratified by the Federal Assembly on February 22, I made a decision to carry out a special military operation.
The purpose of this operation is to protect people who, for eight years now, have been facing humiliation and genocide perpetrated by the Kiev regime. To this end, we will seek to demilitarize and denazify Ukraine, as well as bring to trial those who perpetrated numerous bloody crimes against civilians, including against citizens of the Russian Federation.
It is not our plan to occupy the Ukrainian territory. We do not intend to impose anything on anyone by force. At the same time, we have been hearing an increasing number of statements coming from the West that there is no need any more to abide by the documents setting forth the outcomes of World War II, as signed by the totalitarian Soviet regime. How can we respond to that?
The outcomes of World War II and the sacrifices our people had to make to defeat Nazism are sacred. This does not contradict the high values of human rights and freedoms in the reality that emerged over the post-war decades. This does not mean that nations cannot enjoy the right to self-determination, which is enshrined in Article 1 of the UN Charter.
Let me remind you that the people living in territories which are part of today’s Ukraine were not asked how they want to build their lives when the USSR was created or after World War II. Freedom guides our policy, the freedom to choose independently our future and the future of our children. We believe that all the peoples living in today’s Ukraine, anyone who want to do this, must be able to enjoy this right to make a free choice.
In this context I would like to address the citizens of Ukraine. In 2014, Russia was obliged to protect the people of Crimea and Sevastopol from those who you yourself call “nats.” The people of Crimea and Sevastopol made their choice in favor of being with their historical homeland, Russia, and we supported their choice. As I said, we could not act otherwise.
The current events have nothing to do with a desire to infringe on the interests of Ukraine and the Ukrainian people. They are connected with the defending Russia from those who have taken Ukraine hostage and are trying to use it against our country and our people.
I reiterate: we are acting to defend ourselves from the threats created for us and from a worse peril than what is happening now. I am asking you, however hard this may be, to understand this and to work together with us so as to turn this tragic page as soon as possible and to move forward together, without allowing anyone to interfere in our affairs and our relations but developing them independently, so as to create favorable conditions for overcoming all these problems and to strengthen us from within as a single whole, despite the existence of state borders. I believe in this, in our common future.
I would also like to address the military personnel of the Ukrainian Armed Forces.
Your fathers, grandfathers and great-grandfathers did not fight the Nazi occupiers and did not defend our common Motherland to allow today’s neo-Nazis to seize power in Ukraine. You swore the oath of allegiance to the Ukrainian people and not to the junta, the people’s adversary which is plundering Ukraine and humiliating the Ukrainian people.
I urge you to refuse to carry out their criminal orders. I urge you to immediately lay down arms and go home. I will explain what this means: the military personnel of the Ukrainian army who do this will be able to freely leave the zone of hostilities and return to their families.
I want to emphasize again that all responsibility for the possible bloodshed will lie fully and wholly with the ruling Ukrainian regime.
I would now like to say something very important for those who may be tempted to interfere in these developments from the outside. No matter who tries to stand in our way or all the more so create threats for our country and our people, they must know that Russia will respond immediately, and the consequences will be such as you have never seen in your entire history. No matter how the events unfold, we are ready. All the necessary decisions in this regard have been taken. I hope that my words will be heard.