With Insufficient Lifeboats, the Titanic is Sinking

The Biden sanctions on Russia, issued in the final 10 days of the Biden administration, hit primarily at Russian oil companies, their executives, even the executives of Russia’s principal nuc;lear energy company, and most importantly, the so-called shadow fleet that distributes sanctioned Russian oil, and the Russian companies that insure the tankers.

Will the Sanctions Work?

Yes, a bit, but not for long

Alexander Mercouris, in his daily broadcast earlier today, makes a good argument that the sanctions will not stop Russian oil exports. There will always be ships available to ship them; they will always find crews and ports; they can always get insured by Russian insurers, and they can, if necessary, seek repairs in Russia.

Sanctions may make Russian exports more expensive (though the pressures on price of Russian exports have yet to show, even as energy prices in Europe rise) and given the importance of Russian oil to total oil distribution, the sanctions will exert upward pressure on oil prices and, because the energy markets are interrelated, on gas prices as well.

Russia will take a few months to establish work-arounds for the sanctions. That they will establish these work-arounds is certain because this is what has always happened in the past when largely self-sufficient major economies are attacked in this way. The demand for oil is so high, and some alternative sources (think Iran) so threatened and suppressed, that markets always find of way of getting their supplies.

In the meantime there may be some temporary inconvenience to the Russian economy. Western economists decry its supposedly high interest rates. But take a look, while you are at it, at credit charge interest rates in the US for a sober, comparative assessment). Russian inflation is around the same level as experienced by the US a couple of years ago, and the Russian Central Bank is handling the challengbe quite satisfactorily.

But Western economists do not allow their judgments to be influenced by the elephants in the room:

*The absurdly low level of Russian indebtedness (14% to GNP) as against the absurdly high level of US indebtedness (around 125% to GNP, if memory serves, and it is much worse across the collective West);

*The utter beholdeness of Western economies to their oligarchs whereas, in Russia, the oligarchs are kept beholden to the State;

*Russia’s alliance with China and the BRICS who are committed, ultimately, to establishing a parallel trading and financial architecture that will demote the dollar and the tools of Washington financial imperialism - the IMF and World Bank;

*The increasing standard of living enjoyed across Russia’s social classes and different geographical regions;

*The respectable rate of growth of the Russian economy (3-4%);

*Russian military superiority, and its acquisition in Eastern Ukraine of important new mineral and energy resources.

Will the Sanctions Last Longer than Nine Days?

We do not know for sure at this point whether Trump is complicit with the Biden Administration’s outgoing strategy of “escalate to de-escalate,” i.e. threaten Russia with misery so that it will skulk like the proverbial abused dog to the negotiating table, pining cutely before Trum’s golden place-setting at its head.

That might be more compelling a vision if Russia wasn’t winning in Ukraine and the collective West wasn’t hopelessly losing.

If he isn’t complicit, and he truly disapproves of measures that seem designed as much to make Trump’s life more difficult as to make life difficult for Russia, then he can, if he wishes, simply rescined the executive orders that Biden’s sadistic controlled used to introduce the sanctions. Even if he needs Congressional approval to rescind the sanctions, and it is not clear that he does, Trump can easily secure that approval, given his strength in both houses or, he can even disregard theoretical Congressional disapproval by refusing to sign a note of disapproval (which could be overriden by Congress only with a two-thirds majority in both houses).

Trump would be advised to rescind the Biden sanctions immediately for four main reasons:

(1) Because they will inevitably increase pressure on both oil and gas prices, so that it will be the American people who suffer their consequences long before Russia will (Russia can simply lower the value of the ruble to maintain constant sales revenues), and US citizens will deeply resent an elite that can pass such an outrageously inflation-promoting measure even as Biden boasts that he has been able to suppress inflation; similarly, the people of Europe (whose gas reserves, at least, are in some quarters, Britain included, running very low and whose gas prices are expected to rise because of Ukraine’s action in shutting off the supply of Russian gas to Europe; and, similarly, Russia’s main clients in the Global South, especially China and India;

(2) The reckless, punitive but self-sabotaging sanctions-wielding imperialism of the US provides further concrete proof that the era of the dollar must come to an end, as soon as possible, to put an end to this disastrous, empire-in-anguished-decline idiocy. The BRICS must stand up, now;

(3) Because the impact of sanctions are at best only temporary’

(4) There is a better chance that this idiocy will strengthen Russian resolve to press home its battlefield advantage as far as it can go than that it will shrink in terror before the Biden paper tiger. The Russian people can expect nothing less in their clear sight of US lack of integrity, lack of morality, lack of magnaminity; lack of character or, simply, its grotesque and pitiful weakness.

Trump, Putin and Xi Jinping

There are signs, as outlined in previous posts, of a Trump intrigue with the possibility of a grand redesign of the global security architecture, one that would revert the global order to a “balance of power” mode of doing geopolitics, for which Trump is preparing in his moves on Canada and Greenland (in truth, they are already in the US pocket), and Mexico. These would likely confirm the preeminence of the US, China and Russia, but leave Europe to a second class status, one which it will bitterly resist, at the expense of its own people - as it has been doing these past three years of the SMO - and one which will gradually transition to a new Europe in which Russia is the strongest power.

This will not be a smooth process. Trump will face bitter opposition within the US, albeit an opposition on which he has more leverage in 2025 than in 2017, and the country’s fractures and fissures will be widened, perhaps violently. Trump’s reactionary domestic politics will sharpen the internecine civil war to come. Europe will fall apart, much in the same way, but with more complications and convolutions. Russia and China, not so much.

An order of spheres-of-interest is perhaps a safer world, but it is far short of the best kind of world, and far less of a world that the people of the world all deserve. For that, the struggle has barely begun.