Jack Worthington's Blog

Texas, Crimea, Catalan, and What’s Really Driving the New “Cold War” With Russia

Posted in Uncategorized by Jack Worthington on March 25, 2014

Texas, Crimea, Catalan, and What’s Really Driving the New “Cold War” With Russia

 

As long-time readers and subscribers will know, the main purpose of my social and investment commentaries isn’t for amusement, entertainment, or aimless political punditry, but to provide investors with hard assets on the line much needed clarity through the fog of often chaotic economic and geopolitical events which can make investment decision-making and strategic planning a daunting, if not frightening endeavor…especially when it’s not only company jobs and money, but also a personal job and money on the line.  The aim is to provide broad directional clarity for the strategic decision-making process that can be used by anyone…hedge fund and private equity investors, corporate strategic planning departments, or “Joe the Plumber”.

 

I opened my general blog to the public after the 2008 financial crisis in the hope that it would help individuals who experienced massive losses, to recover…whoever or wherever they might be.

 

There are economic costs, potentially severe, when I am wrong, and I willingly accept that personal risk…because I’m almost always directionally correct in my analysis.  Anyone who put money on the line following my advice since 2008 has made tremendous returns, so much so, they probably shouldn’t be reading this anymore…should be sipping a pineapple drink somewhere with a lovely partner at their side.

 

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Below is one key part of what I think is happening in Ukraine, and what you should do about it:

 

Before I present my hypothesis on the title topic, you must, at least temporarily, erase from your mind any notion that the current conflict between the West and Russia is primarily based on any serious concern on the part of Western leaders that Russia’s Vlad Putin is an unhinged tyrant / Neo-Hitler, hell-bent on invading as many sovereign nations as he can get away with, who must be stopped immediately…to the point of increasing the risk of thermonuclear war over it and bringing a cold and potentially hot war to Europe’s backyard…all this because of our profound and altruistic interest in democratic freedom for the peoples of Moldova / Trans-Dniester, Georgia / South Ossetia, Ukraine / Eastern Ukraine, etc…etc…, and genuine fear that Russia has sinister designs on owning the real estate once part of the Soviet Union…perhaps more…then advancing malevolent intentions onto our world from an unassailable empire of evil focused on destroying us.

 

Does this pass the smell test to you?  It doesn’t to me.  Then, all propaganda aside, who is is taking us into the conflict, and why specifically?

 

Wipe your mind clean of emotionally-charged CIA / Western media propaganda and ineptitude…just for a moment.

 

The Butterfly Effect

but·ter·fly ef·fect

noun

“The phenomenon whereby a small localized change in a complex system can have unintended, large effects elsewhere.”

 

The small localized change:

  • The botched US-led coup in Ukraine primarily meant to destabilize Vladimir Putin and weaken Russia.

 

The unintended, large effects elsewhere:

  1. The coup was hijacked by violent, fascist, Neo-Nazi, anti-Russian extremists, who occupy many top posts in the US/EU-backed putsch government, including the Deputy Prime Minister.  Immediately upon securing power, the fascists commenced activities of intimidation and violence against anyone, primarily ethnic Russians, who opposed their illegal putsch government.

  2. These intimidated ethnic Russians in Eastern Ukraine naturally sought help from mother Russia, to the extent that many regions of Southern / Eastern Ukraine want to secede from Ukraine and re-join Russia.  Crimea has already done so, and more could follow.  Following historical Russian strategic imperatives, Russia does not want to own pro-Russian Eastern Ukraine.  The area is being forced upon them by this botched US-led coup.  Russia needs these pro-Russian Eastern Ukrainians to balance hostile, anti-Russian politics in a key buffer country on its border.  If Russia owns Eastern Ukraine, it now has a hostile, anti-Russian, impoverished country on its border, strongly influenced, if not run by fascists, some of whom are on its terrorist watch list and have threatened Russia with nuclear rearmament within 3-6 months…a major problem for Russia.  Russia does not want, or need to own the real estate.  They just need to control it with balanced politics which lean in their favour. This strategy defines modern American hegemonistic “imperialism”, and what much of the world is fighting against…including our “allies”.  Imperialism is alive and well…just in a different format…and the United States is the dominant global imperialist power today, by far, and it leads to our undoing.

  3. Follow the money:  Pro-EU Western Ukraine is impoverished.  Pro-Russia Southern / Eastern Ukraine is relatively wealthy.  If Southern / Eastern Ukraine secedes from Ukraine, the EU gets the rump end of the deal and will be morally obligated to financially support a failed dependency state ad infinitum, while Russia gains a relatively prosperous, financially independent region.  I.e. Germany will have to foot the bill for yet another unending failed state in the EU…hence Germany’s unexpectedly harsh rhetoric against Putin.  Ukraine (the EU) needs Southern / Eastern Ukraine to pay the taxes to support the Western Ukrainians.

  4. Follow the money:  Crimea’s successful referendum, with potentially others in Eastern Ukraine, pours gasoline onto the embers of copycat, highly destabilizing, global self-determination movements, primarily driven by relatively prosperous regions that want to secede from basket-case, debt-ridden central governments who have been taxing them excessively to support their relatively poor cousins, inevitably leading to ruin for all.  Within weeks of Crimea’s successful self-determination referendum, others worldwide have gained momentum.  Catalonia, the Basque, Venice, Scotland, et al.  Perhaps Texas and other US states in the future?  Who knows.  But a key problem with secessionist movements is that relatively prosperous taxation areas remove themselves from dependency areas, throwing the remaining central governments into financial ruin and social upheaval.  Perhaps this is why the West is so aggressive at the moment…not really so angry at Putin, but worried about the destabilizing precedent?  I believe this is an important consideration behind the faux Ukraine crisis / new Cold War with Russia, which obviously cannot be publicly disclosed.  If true, this position puts the US and EU in the hypocritical and awkward position of aggressively repressing self-determination, one of the key Purposes and Principles of the United Nations.

 

Purposes and Principles of the United Nations (http://www.un.org/en/sc/repertoire/principles.shtml )

 

Article 1 (2) establishes that one of the main purposes of the United Nations, and thus the Security Council, is to develop friendly international relations based on respect for the “principle of equal rights and self-determination of peoples”. The case studies in this section cover instances where the Security Council has discussed situations with a bearing on the principle of self-determination and the right of peoples to decide their own government, which may relate to the questions of independence, autonomy, referenda, elections, and the legitimacy of governments.

 

Importantly, the four points above provide common ground between the US/EU/Russia for a peaceful closure / de-escalation of this crisis, and platform for an improved ongoing relationship.

  • Russia needs a neutralized buffer country on its border, and needs pro-Russian Eastern Ukrainians in Ukraine, not Russia, to balance power.  Russia does not want to own buffer zone real estate.  The West cannot fail to accept this or we are in deep trouble with a nuclear enemy that we’ve created.

  • The EU / US do not want to perpetually support a failed dependency state(s).

  • The EU, and Germany in particular, need to maintain strong and growing economic ties with Russia.  You convert enemies into allies, not by isolation, but by engagement…ref Bill Clinton’s strategy with China post-downed spy plane crisis.  One of the key problems driving this crisis is that the US does not engage with Russia to any significant extent, economically or otherwise, like the Europeans do…hence the aggressive / harsh / unhinged US rhetoric against Russia at times, but rarely against China to the same extent.  This is dangerous and needs to be mitigated by increased economic ties between the US and Russia.

  • US and EU leaders cannot allow a highly destabilizing “Self-Determination Spring” to explode onto the world scene at this critical juncture of world history.  As economic conditions for individuals worsen, these movements will likely grow.

 

Excellent wiggle room for a mutually beneficial deal here.  If clear-headed sanity prevails, this crisis will be no more, quickly.

 

What you should do about this?

 

Contact your elected representatives and urge them to tone down the emotionally charged anti-Russia rhetoric and move towards the vision above, which allows our post-Cold War global economy to maintain expansion, thereby providing growth of personal economic opportunities for all.  I haven’t heard any sane alternatives.

 

If peacefully resolved:  follow previous recommendations, mostly unchanged since late 2008.  Yes, still mostly unchanged.  Don’t be frightened by the sometimes terrifying seas of global financial markets.  Stay the course.  Don’t time markets.

 

If no peaceful, quick resolution:  ??  I won’t go there.

 

JW

25 March 2014

NY, NY

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