Spheres of Influence
Russia, Ukraine and the whole international 'liberal' order
(Source: Getty Images)
Bill Bonner, reckoning today from Buenos Aires, Argentina...
We left you yesterday wondering… Are we entering a New Era, where energy will be hard to come by, you can’t trust the money, and you can’t depend on the rule of law? What kind of world is that?
Why… it’s right in front of our eyes. It’s Argentina!
A joke making its way around the streets of Buenos Aires:
How can we punish the Russians? Cut them off from trade? Block money transfers? Send troops? Make a no-fly zone?
No… just make them follow the Argentine model. That will ruin them just like it ruined us.
The Argentines held prices low for fuel in order to appease voters. Result: power shortages. They fund much of their government spending (only half the people in the country work… ) with printing press money. Result: inflation, now about 50%. The system has become drenched in corruption. People don’t trust the money or the political or the justice systems. Result: little investment; economic stagnation and poverty are widespread.
But it is not the Russians who are adopting the Argentine model; It is the Biden Team and the international ‘liberal’ order that is taking to it.
The gist of our message today: While the Argentine model is largely dysfunctional, at least here it is applied with a laissez-faire incompetence that leaves it almost pleasantly tolerable. We doubt it will be so agreeable when it is administered by Pete Buttigieg, Justin Trudeau, Emmanuel Macron and Kamala Harris.
Last evening, we stuffed our pockets with cash and ventured out for dinner. Walking along the streets of the Recoleta area, the shops were full of expensive clothes and furniture. Stylish people walked their dogs… families came out to restaurants… there were only a couple of beggars. Altogether, this district of Buenos Aires is much more agreeable than, say, Baltimore.
We chose a sidewalk café. The waiters were professional. Everyone was polite and well-dressed. We dined on a flank steak, which we shared between the two of us; even then we couldn’t finish it. And we ordered a bottle of expensive wine. ‘Yacochuya’ comes from a winery near our farm; it was listed on the menu for 8,700 pesos. That’s about $43 at the black market exchange rate – a very reasonable price for such a good wine.
Yes, dear reader, you can live well – even in an inflation ridden, corrupt and semi-functional country. Prices rise, but they have a hard time keeping up with the fall of the currency. So, real prices actually fall. But… you can’t depend on the government… or its money. You need real money of your own.
Our subject in these postings is money. But money is more than something you use to buy a café latte. It is a ‘social construct,’ say the academics. It regulates and registers the connections between people. One is lender, the other borrower. One is wage slave, the other is his master. One takes, the other makes.
In an honest system, with honest money, an honest man judges his worth to the rest of society largely (but not entirely) by how much money he has. He gets money by providing goods and services to others. The more he gives, the more he gets. And the measure of his net contribution to society is how much he gets that he doesn’t spend… his savings, in other words. At death, the ledger is closed…and we see whether he has made a positive contribution to society… or been a drain on it.
Of course, we humans are only occasionally honest. We cheat regularly… often… and as much as we can get away with. Which is what makes the world of money so interesting.
And the most interesting event in the money world lately happened last week… when the US and its ‘western, liberal’ partners undermined their own money by imposing conditions on how it can be used. They ‘weaponized’ it… and turned the weapon against even honest Russian. A man might have earned a fortune by supplying oil to heat houses in Western Europe. But now, he may be cut off from his money. Ka-boom… he’s now financially dead.
Yes, it is a wicked world, dear reader, and we are watching an episode of extreme cunning and wickedness play out before us. The ‘western, liberal’ intelligentsia has decided that the Russians are the bad guys. They have imposed ‘sanctions.’
Almost every news item tells us that Putin is an ogre. Congress said it loud and clear in a special act, voicing its condemnation of Russia and its support for brave little Ukraine. Only three members voted against it; they were portrayed in the press as if they had voted to crucify Christ. Newsweek:
The Democratic Congressional Campaign Committee (DCCC) tweeted a response to the resolution, calling the no votes from the Republican congressmen "truly despicable behavior."
Entertainers, too, jumped on the bandwagon. Here’s Stevie Nicks:
This time, Vladimir — you went too far. You crossed a sacred line. You tried to take a beloved country away from its beloved people.'
Spheres of Influence
As they say on Wall Street, ‘when everyone is thinking the same thing, no one is really thinking.’ Ms. Nicks should have spent 5 minutes at Wikipedia. She would have discovered that that the country was only stitched together by the Bolsheviks in 1917… and then became independent in 1991. It has a very long history of internal pogroms, massacres, imposed famines and warfare; it has usually only been held together by some outside power – such as Russia.
The Monroe Doctrine gives the US a ‘sphere of influence.’ Dozens of times, it has invaded, persuaded, and bullied its neighbors. It invaded Nicaragua twice… and also supported a guerrilla war against the government there. In the “Cuban Missile Crisis” it took the world to the brink of nuclear war, insisting that the Soviets remove their missiles from Cuba. The CIA even sponsored an invasion of the island.
But the US was never sanctioned. The dollar did not collapse. Rich Americans did not have their yachts seized in foreign ports.
We take no sides in the Russo-Ukrainian conflict. But isn’t it possible that Russia has its sphere of influence too? Couldn’t a decent person of sound mind think so? And when US warmongers helped to overthrow the elected pro-Moscow government in Kyiv, in 2014, and handpicked their puppet replacement – “Yats (Arseniy Yatsenyuk) is the guy” – mightn’t they have crossed a sacred line too?
But as with the War on Terror… the Bailout of Wall Street… and the Great Plague, no contrary opinion is permitted. Newsweek is on the story:
Virginia substitute teacher was suspended from the Arlington Public Schools district after saying he understood and approved of Russian President Vladimir Putin's decision to attack Ukraine.
And here’s the New York Daily News:
Famed Russian soprano Anna Netrebko has withdrawn from her upcoming performances at the Metropolitan Opera in New York City after refusing to distance herself from Russian President Vladimir Putin, Met officials said Thursday.
Even in our church in Ireland, the organist played the Ukrainian national anthem, a gesture of ‘solidarity,’ he explained. Why no solidarity with the Russians?
How can they know? Can they really tell good from evil on the remote pampas of central Eurasia? Which one would be best for the Ukrainian people – puppets from Washington… or those from Moscow?
And how could they be so sure that masks and mandates were the best way to handle the COVID virus? How did they know the vaccines were safe… or that even people who were not at risk should be forced to take them?
We don’t know either. But we are fairly sure that Stevie Nicks has no more of an idea than we do.
More to come… on what the western elite has against Russia… and how the conventions and institutions that built our prosperity – including the dollar – are now being dismantled by the “Davos Deciders.”