UNLOCKED: What Russia Thinks Will Happen Next
(8 Min Read) DOLLAR DEATH AND GOLD REBIRTH
INTRO: THE WORLD AS RUSSIA SEES IT: On May 16th, Dmitry Trenin addressed the Council for Foreign Defense Policy. In that speech were interesting comments on how Russians view the war with Ukraine as it relates to the United States. Here is our analysis on what the implications are, Russia’s true goals seem to be, and their effects on money.
Main Points
Takeaways on what Russia believes, or wants us to think it believes about the Ukraine War, and their policy changes as it is affecting global trade.
Ukraine War To Spread East
The War in Ukraine will extend beyond the borders of Ukraine proper. This proxy war with NATO can balloon into a real one between Russia and the US in 3 years or less.
Russian Supply Chains Reconstructed
Russia prepared for this war. They nationalized Russian-held foreign assets, effected import substitutions, and reworked strategic industry operations including eliminating foreign managerial influence.
China Vs The US Militarily is Coming
They believe the Ukrainian war will eventually include China facing off with the US militarily.
Gold/Commodity Backed Alternative to USD
One major goal is to completely redo the balance of trade power with a viable alternative to the USD Swift system. They are also aware of what is at stake.
Mercantilism is Both Cause and Effect of The Above
The current shredding of international cooperation will continue to manifest as mercantilist policies are enacted to protect respective countries’ economies and borders.
Ukraine Implications Felt for Years
What is evolving between America and Russia (through NATO) and between America and China Geo-politically will change the balance of the world and many structures which have been in place since the end of World War 2.
These changes will occur over the next three years; some slowly, others all at once, none reversible for decades. Their effects will be felt globally.
Taken together from a high up view this realignment of global power looks simply like a mercantilist pushback. But mercantilism is economic warfare in some ways via protectionism, economic colonialism, and frequent embargoes. It can and does lead to military escalation sometimes as well.
These new policies will have far reaching effects on global business, relations between countries, and currencies. They already are. We are not going back to the way things were, at least not meaningfully. Worse, military conflict or the expectations of conflict is in our future for years now.
Simon Hunt Strategic Services (SHSS) believes: By the mid-2020s our lives and markets will be totally disrupted, a future more akin to what was experienced in the 1929- 1932 period and less than the decades since Paul Volcker slaughtered inflation.
The West’s views are well articulated in the media and during last month’s World Economic Forum’s in Davos. What is less well known, or at least less sensibly portrayed in the west is Russia’s views on the matter.
Here are those views and policy behaviors as noted by SHSS with headlines and minor edits by GoldFix.
Dmitry Trenin’s Address
“They (US & its allies) are striving to exclude Russia from world politics…, and completely destroy the Russian economy. Their success would allow the US-led West to finally resolve the ‘’Russian Question” and create favorable prospects for victory in the confrontation with China”.- Dmitry Trenin, May 16th
Dmitry Trenin, a senior member of President Putin’s inner circle gave a wide-ranging speech at the 30th Assembly of the Council for Foreign Defense Policy on 16th May 2022. First, we quote excerpts from that speech; and second, we lay out three scenarios of how the war in Ukraine may evolve, based on how some people in Moscow see its development.
SANCTIONS MEAN NO COMPROMISE
The stand-off between Russia and Western Nations has been developing since 2014, but since February this year the stand-off has grown into a war. The danger of this war in Ukraine intensifying towards a direct collision not only exists but is increasing.
The attitude on the part of NATO gives no room for serious dialogue since there is little prospect for compromise because western nations pursue policies of a ‘dramatic severance’ of ties across the State, Economy, Sciences, Culture, Sport etc. It is a dividing line not just between Russia and NATO countries but between Russia and the ‘perfunctory neutrality of individual countries. In short, ‘the systemic confrontation between the West and Russia is likely to be protracted.’
POINT OF NO RETURN NOW
‘We have to understand that the strategic defeat that the West led by the United States is preparing for Russia will not bring peace and a subsequent restoration of relations. ‘It is highly probable that the theatre of the ‘hybrid war’ will simply move from Ukraine further to the East, into the borders of Russia and its existence in its current form will be contested.’
‘The enemy’s strategy should be actively countered’. The immediate and most important task of this strategy is to achieve strategic success in Ukraine within the parameters that have been set and explained to the public.
WINNING MILITARILY MEANS EASTERN WORLD ORDER
Success in achieving Russia’s objectives in Ukraine will provide a solid foundation for bringing other countries into the country’s fold of ‘building a new system of international relations together with non-Western countries and the formation in cooperation with them of a new world order and its consequent promotion. We need to work on this task now, but it will be only possible to act fully after a strategic success in Ukraine.
DOLLAR DEATH: THE REAL REASON FOR ‘LIBERATING’ UKRAINE
His comments serve to remind us that the war is not just about securing Russia’s borders and the eradication of Nazism in Ukraine, but the development together with China of a new currency and trading platform devoid of the US dollar.
The most important policy direction is to cooperate with global powers outside the Western Alliance including China, India, Brazil and leading regional players such as Turkey, ASEAN countries, the Gulf States, Iran, Egypt, Algeria, Israel, South Africa, Pakistan, Argentina and others.
Here’s how it can play out from our post BW3: Gold Replaces Dollars in Mercantilism
Whether the West likes it or not: Demand for commodity reserves will be higher based on the competing Eastern ideology that demands less counterparty risk and more sound collateral. Commodities and Gold will naturally replace demand for FX reserves (Treasuries and other G7 claims); Meanwhile, demand for dollars will be lower too as more trade will be done in other currencies; and as a result of this, the dollar premium will fade away and potentially become a liability for anyone holding Dollars.
No joke this is.
NEW RUSSIAN BORDERS
‘Never since the end of the Soviet-American confrontation has the prevention of nuclear war been more relevant than now. The new challenge after achieving strategic success in Ukraine will be to force NATO countries to actually recognize Russian interests and to secure new borders of Russia.’
‘The most important objective in this regard is developing a strategy for an emerging confrontation between the United States and China. Although Beijing is not a formal military ally of Moscow, the strategic partnership between the two countries has been officially characterized as more than a formal alliance. The United States views both countries as its adversaries.’
SUPPLY CHAINS REVAMPED, FOREIGNERS OUT
The transition to a situation of economic war with the West requires Russia to undertake a deep revision of its foreign economic policy (which it is doing). Measures aimed at dedollarization and repatriating offshore finances are under implementation. For instance, business elites who previously took profits out of the country are being forcibly ‘nationalized’. Import substitution is underway and the Russian economy is shifting focus from the policy or raw materials export to the development of ‘closed-cycle production processes.’
It is important to bring together a closer alignment of relations between the State and the Business Community in such sectors as finance, energy, metallurgy, agriculture, modern technology (mostly related to information and communications, transport, military exports and economic integration.
Russia will have to revise its approach to Climate Change issues under these changed conditions.
COMING WAR WITH THE USA
Today Russia is a country at war and will be so for the foreseeable future. The country will need the solid support of its citizens, the ability to organize all of its available resources and the removal of obstacles that weaken the country from within.
In summary, Dmitry Trenin is saying that Russia is preparing for a protracted war and that the war will spread to between the United States and China.
Three Ways Ukraine is Likely To Play Out
The importance of the Ukraine war becomes clear from this address not just for Russia itself but in developing an alternative to the West’s dollar-based system. Success there will make the introduction of the new planned currency/trading system a plausible outcome: failure in achieving those objectives will make that introduction rather doubtful.
Washington knows that, which is why the war will be protracted and risks moving outside the borders of Ukraine into other European countries. Here are three scenarios that we were alerted to from Moscow.
[EDIT- This is what Moscow is selling, you decide if it is credible- GoldFix]
1- It Stops at Donbass
A freeze on the status quo when Donbass is occupied. This is a working scenario that suits the bureaucracy of Russia, the USA and Europe.
2- Poland and Romania Attack Russian Flanks
The second scenario is an escalation of the conflict which involves the coalition of ‘Little Europe’ under the auspices of Britain. This scenario includes the entry into the war of Poland and a number of central European countries, mainly Romania.
For Russia, this is a dangerous development due to the collapse of the flanks – the northern one due to the outbreak of hostilities in Belarus and the southern one because of the aggression against Transnistria and the offensive on Kherson and further Crimea.
3- False Flag Leads to US Entry
The third scenario will happen if Britain decides to ‘turn the board over’ to bring down the entire political structure in Europe, bringing the level of confrontation to the risk of a direct conflict between Russia and the United States.
This scenario will be realized through the creation of a controlled catastrophe in Ukraine and a successful military coup. The catastrophe most likely will be the detonation of a nuclear charge in a large Ukrainian city, then to blame it all on Russia.
END
Previously:
Interesting analysis. Russia has a history of feeling surrounded by hostile states. Maybe it’s’ roots lie in the swaddling of babies...