So, um, yeah, the Ukraine, Crimea, and Russia . . . if we are to believe what we are told, by those who like to tell us things, that what is going on over there is of the utmost importance to us, here in America, and the world, and to quote The Dude, in the film, The Big Lebowski, “This aggression will not stand, man.” We are being led to believe that what is going down over there warrants the sternest of words, the fiercest of finger wagging, mixed with a hefty dose of economic sanctions, as well as a bit of a rattle of the sabre, towards those dastardly Russians and their oh so evil ways. We are being told that those sneaky Russians, and their president, one Mister Vladimir Putin, deliberately destabilized the Ukrainian government, and used oil and gas as leverage to get what they (the Russians) want, which is to bring the Ukraine back into the fold of Russian influence and control. That is what we are being told.
Now, before I go any further, I do not want anyone to think that I am a Russian apologist, nor am I a fan of Mr. Putin and his concept of democratic principles. He, in my opinion is basically a despot, and the Russian government is essentially a oligarchy, that isn’t too awfully far from being as bad as the former Soviet communist government in its want for control. Then there is the fact that I did grow up during the later part of the Cold War, so my feelings are still shaded by that experience. All of that being said, I also try to be a rationalist, pragmatist, and realist in my adult years, and this is where the rest of what I am about to say is going to be coming from.
Before the Ukrainian government lost control and the populous began mass demonstrations and riots, I read an article about a leaked phone call between the Assistant Secretary of State, and the U.S. Ambassador to the Ukraine, in which the two are discussing who they think the U.S. should support for the next president of the Ukraine. Upon reading that article I wasn’t surprised, at all, as the United States has a long history of meddling in the affairs of foreign politics that includes toppling democratically elected officials, and installing dictators that will be friendly to the concerns of Uncle Sam; and to be fair, other countries have, and will do the same thing – though none of that should make it right. Anyway, it wasn’t too long after that article came out that the Ukraine dissolved into bedlam, and that we were told that it was Putin, and the Russians responsible for everything; while that above mentioned article seems to say different.
A full three months before the above referenced article there are still more roots as to why the U.S., and the E.U. would have an interest in installing a more western facing government in the Ukraine, as back in November the democratically elected president of the sovereign country of the Ukraine, announced that it was going to abandon an agreement that would lead to closer ties with Europe, and instead seek closer cooperation with Russia. “This aggression must not stand – man.” indeed.
Many people would probably think, “Who cares who the Ukraine wants to be B.F.F.’s with?” Which is a relatively pragmatic and rational question; but sadly, when it comes to geopolitics, pragmatism and rational thought often fail to be considered, because, in geopolitics, everything is about “interests,” and there is apparently little room for anything so mundane as rationality and pragmatism when “interests” are involved. What are the interests in the Ukraine? Well, what seems to always be one of the interests in today’s world? Energy. More specifically, oil and gas. Much of Europe gets a sizable percentage of its oil and gas supplies from Russia, and much of that oil and gas passes through pipelines that lay directly across the Ukraine. Well, if the Ukrainian government wishes to get more cozy with Russia, then the paranoia creeps in, that a sizable percentage of the E.U.’s oil and gas supplies could be threatened. The thing is though, that unlike the Ukraine, the E.U. actually pays Russia for the oil and gas that it receives from Russia, so the odds of Russia deciding not to receive billions in revenue from the E.U. is slim to none, regardless of who the Ukraine wants to be best buds with. Plus, if Russia wished to halt energy exports to the E.U., then they can do so with or without the Ukraine.
There is something to the whole energy thing though, and as I mentioned, it hasn’t anything to do with the E.U.’s supply being threatened. The something there requires us to jump in to Professor Peabody’s Wayback Machine, and head towards July 22, 1944. That is the day in which the Bretton Woods Agreement was signed, which made the United States dollar the world’s reserve currency following the end of World War II. The establishment of the U.S. dollar as THE currency of the world meant/means that the trading of things, particularly commodities, would require that those trades are made in the all mighty dollar; and oil is the commodity that the industrialized world needs to keep things moving (both literally and figuratively). The establishment of the dollar as the world’s reserve currency afforded/affords the United States tremendous leverage, as well as enables Uncle Sam to spend dollars with relative impunity, because EVERY country needs dollars (typically acquired through the purchase of U.S. treasuries, otherwise known as debt). With every country buying our debt, this kept the interest rates on that debt low, and essentially provided/provides a near limitless amount of debt that Uncle Sam can accumulate, because everyone will buy that debt, so that they can receive dollars in interest payments, which are then used to buy and sell oil. What does any of this have to do with the Ukraine, Russia, and the Crimea? Well, I’ll tell you.
Russia is one of the world’s leading producers of oil and gas, and as they obviously cannot consume all of their oil and gas themselves – nor would they want to keep it all to themselves, as they can sell it to others for boatloads of money; and that money, because of the Bretton Woods Agreement, is in dollars. No big deal, they’re making billions of dollars out of the sale of their oil and gas, it’s all good, right? Well, no. It’s no big secret that the United States is the world’s biggest debtor nation, and that debt is built upon the fact that the dollar is the world’s reserve currency, and as long as the dollar remains the world’s reserve currency, then the United States government can continue to spend, spend, spend – and spend so much more money then it takes in, in the form of taxes. Wellll, see, the problem is that more and more countries are beginning to become concerned with Uncle Sam’s spending addiction. They are beginning to wonder if Uncle Sam is even capable of being able to service (pay for) all of the debt these countries have to hold, in order to get dollars, so they can then buy and sell things, like oil and gas. Russia just so happens to be one of the growing list of countries that has these concerns. In fact Russia is so concerned about the U.S.’s ability to pay its debt obligations, as well as the fact that the Federal Reserve is hell bent on devaluing to dollar to the point of it being near worthless (it’s roughly worth 5 cents when compared to a 1913 dollar, the year the Federal Reserve was created), that Russia (as well as other countries) has begun to openly call for the end of the dollar’s world reserve status. In fact, Russia and China agreed in 2010 that they would not use the dollar when conducting trade between their two nations. That, if you are the Untied States, is not good news, because, as mentioned, the dollar’s reserve status is essentially the only thing keeping the whole house of cards, that is built on debt, standing.
As I mentioned above, Russia isn’t the only country that has begun to openly question whether or not the dollar deserves to remain the world’s reserve currency. There have been others, and there will be more. Some of those countries leadership has witnessed what happens when you begin to talk a little too seriously about replacing the dollar as the world’s currency.
Remember Saddam Hussein? Yeah, well, not only was he one of the dictators that the United States government helped install into power, and supported and supplied with weapons – until he stepped in it big time by invading Kuwait. As if that ill advised invasion wasn’t enough, Mr. Hussein then decided in 2000 that he was going to sell his oil for euros, instead of the dollar; because he was tired of watching the dollar continue to fall in value. We know what happened to him.
Then there is Colonel Gaddafi. Gaddafi, following September 11, 2001, openly denounced those acts terrorism, destroyed Libya’s weapons of mass destruction, and offered Libya’s support in the global war on terror. However, he also called for African and Muslim nations to create a new unified currency to rival the dollar and the euro, and that oil (as well as other resources) be traded in gold dinars. Things went poorly for him too.
Venezuela? Yes, their former leader, Hugo Chavez, in 2001, wished to sell his countries oil for something other than the dollar, and survived a coup shortly after he made his wishes public. The country is now in the midst of constant civil unrest.
Now, I will grant that none of the a fore mentioned countries would land anywhere close to places that I’d find ideal as a place I’d like to live, or even visit; as I am not a big fan of totalitarianism, theocracies (Iran, I’m looking at you), intolerance (Iran, I’m still looking at you), and socialism; but I do find it a bit striking that whenever an oil producing nation even hints at selling its oil for anything other than the dollar, then in no short order things start to go more than a little sideways for those nations leaders.
What I see going on with U.S.’s and the E.U.’s response/involvement in Russia, the Ukraine, the Crimea is the height of hubris, and hypocrisy; veiled under a guise of the rights of the Ukrainian and Crimean peoples to self determination and democracy; all the while Uncle Sam is keeping his fingers crossed that no one will see it for what it really is; just another message to anyone who so ever even thinks about circumventing the dollar’s reserve status – the only thing that is keeping his house of cards together.
The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag. (Smedley Butler)