Russia's Invasion of Ukraine Is Creating a Financial World War
Over a month after Russia invaded Ukraine, the military conflict has remained a regional conflict. While Russia has been able to fortify its claim in eastern Ukraine and has made advances in the south, recent counteroffenses by the Ukrainians have pushed Vladimir Putin’s military away from Kyiv. Meanwhile, allegations of war crimes committed by Russian forces during the conflict have given Ukrainian president Volodymyr Zelenskyy new ammo in his campaign to increase pressure from the international community against the Russian Federation.
The situation on the ground has fueled a narrative popular in America and Europe that Putin vastly underestimated the difficulty of conflict with Ukraine and that the Russian regime is suffering from the “authoritarian trap” of government bureaucrats prioritizing placating their president over accurately reporting the state of Russia’s military affairs. While any degree to which Russian military failures push the countries to a ceasefire is a cause of celebration, overestimating Russian weakness could serve to undermine peace negotiations. Hopefully, the United States and the North Atlantic Treaty Organization’s analysis of this conflict is better than it has been in other situations in recent history.
Putin’s aspirations, however, go well beyond territorial conquest in former Soviet nations. At its core, the aim of the Russian regime is to challenge the post–Cold War order of a unipolar America-dominated global order.
On that front, Russia’s actions—and the West’s response—have now sparked a global conflict.
Since the 1970s, the dollar has been as vital a tool for American global supremacy as any military weapon. America’s war on terror not only transformed the Middle East into the main theater of US foreign policy but fueled Washington’s desire to militarize the American financial sector. What began as debanking al-Qaeda conspirators evolved into the primary tool used against rogue nations such as Iran and North Korea. In recent years, Western nations have also wielded these tools against domestic political dissidents.
In response to Putin’s aggression against Ukraine, America and the West have responded with some of the most extreme sanctions yet deployed. While these measures have forced severe financial pain on Russian oligarchs, who had become used to a certain quality of life outside of their homeland, Russia’s own counteroffensive is revealing the limits to Washington’s favorite weapons.
Global demand for Russian energy, food, and other vital resources has allowed Putin’s regime to provide support to the ruble by demanding purchases be made in Russia’s currency—Putin’s investments in various European “green” causes were well made. The result has been the value of the ruble returning to its postwar standing and stabilizing a financial sector bearing the brunt of Western sanctions.
What should concern the Washington regime the most, however, has been the geopolitical response to the West’s actions. The Russian government has created a list of “friendly” and “unfriendly” countries, leveraging access to its commodities in exchange for neutrality over the Ukrainian conflict. The Kremlin’s response has been supported by the West’s own increasingly aggressive positions towards countries willing to prioritize the interests of Ukraine over that of their own people. The result has been an increasing number of significant, non-European countries refusing to submit to the demands of the Biden regime.
Countries like Mexico, Brazil, and India—all led by nationalist political leaders—have refused to sanction Russia, providing economic support to Putin beyond his handshake agreement with the Chinese Communist Party. In fact, opposition to Washington’s demand for these nations to sacrifice their economic ties with Russia in order to morally condemn Russia has succeeded in bridging geopolitical rivals. Pakistani prime minister Imran Khan praised President Narendra Modi for the India’s “independent” foreign policy.
"They (India) are saying they will import Russian oil because it is better for their people despite the sanctions [on Russia]."
[Kahn] said he had the "same problem".
As Ryan McMaken noted recently on the Wire, Washington’s military adventurism over the past two decades has greatly eroded America’s claims to a moral high ground. The same is true of Washington’s increasingly aggressive abuse of the privilege of having the global reserve currency. A prominent central banker warned that the US’s continual weaponization of the dollar demonstrates a need for the global community to find something new.
This call came not from the Bank of Russia or the Bank of China, but the Bank of England—one of Washington’s closest allies. In the past month, we’ve seen a historical alternative, gold, enjoy renewed attention as a strategic asset.
The new phase of the West’s financial war is succeeding in bringing together a new coalition of global powers—many with long-standing historical disagreements—who are unified in their opposition to submitting to the edicts of Washington. Additionally, the economic impact of global economic disruption—currently being felt in gas and fertilizer prices and to be felt in the future with food shortages—is now causing social unrest. Politically, the nation of Hungary overwhelmingly reelected nationalist Viktor Orbán against the demands of the European Union and the Biden administration, while polling shows France’s Emmanuel Macron now trailing EU-skeptic Marine Le Pen.
Over a month into the conflict, it remains to be seen whether or not Vladimir Putin will achieve his military goals in Ukraine.
Increasingly, however, it appears he may have achieved his larger aim of overthrowing the unipolar world. Yet another failure of Washington’s technocratic class.