Skip to comments.Biden tries to climb down from Ukraine ledge Twin strategic and economic crises prompt search for a way out of Ukraine trap
Posted on 06/23/2022 4:20:43 AM PDT by Cathi
Biden tries to climb down from Ukraine ledge
Twin strategic and economic crises prompt search for a way out of Ukraine trap
By DAVID P. GOLDMAN JUNE 17, 2022
The Biden Administration faces a double disaster after its Ukraine miscalculation, namely a US recession and a second strategic humiliation in the space of a year.
The United States economy is almost certainly in recession, while oil prices drive inflation that has cut workers’ real pay by about 6% year on year.
Washington’s earlier boasts of driving Putin from power, destroying Russia’s capacity to make war and halving the size of the Russian economy look ridiculous in retrospect.
The world economy is reeling from supply shocks in energy and food provoked by Western sanctions on Russia. Monetary policy can reduce inflation only by forcing consumers to stop buying, which forces retailers to liquidate inventory at lower prices and crushes demand for raw materials – a cure that is worse than the disease.
Russia meanwhile earned a record EUR 93 billion from energy exports during the first 100 days of the war, a Finnish study concluded. China and India, which refused to join G-7 sanctions against Russia, reportedly are buying oil at a $30 to $40 per barrel discount, while American and European consumers are paying the full price.
Energy prices have become the main driver of G-7 inflation. Changes in the oil price lagged by one to four months explain 70% of the monthly change in the CPI, according to an Asia Times study. The sensitivity of the US Consumer Price Index to the oil price, moreover, was about twice as high during the February 2020 to May 2022 period than it had been during the preceding fifteen years, the study shows.
US GDP contracted at a 1.9% annual rate during the first quarter. The surprise drop in May retail sales that was reported June 15 by the Commerce Department and the 14.4% month-on-month fall in US housing starts reported June 16 point to a second quarter of contraction – that is, a recession according to the standard criterion. That spells catastrophe for the Democrats in next November’s election.
More dire than an American recession is the risk of a financial disaster among the weaker G-7 economies.
Japan’s yen has been in free fall as the Federal Reserve has tightened credit. Government debt is 270% of GDP, and half of it is owned by Japan’s central bank, up from about 5% in 2011. With an aging population that is spending its retirement funds rather than saving, the world’s third-largest economy is financing itself by the printing press. The cost of hedging Japanese government bonds spiked this week to the highest level since the 2008 financial crisis.
Italy, Europe’s weakest economy, suffered a jump in government debt risk almost as severe.
The European Central Bank convened an emergency meeting June 15 to address the deterioration of its weakest members and promised yet-to-be-specified measures to prevent the “fragmentation” of the European Union. june16b.png
The Biden Administration vastly underestimated the inflationary impact of the $6 trillion COovid stimulus package, which began under the Trump Administration but doubled under Biden.
It underestimated the resilience of the Russian economy and the capabilities of the Russian military. Climbing down off this ledge won’t be easy. It may be impossible. Biden denounced Russia’s leader as a war criminal, averred that he couldn’t be allowed to remain in office and bragged that US sanctions would cut the Russian economy in half. Defense Secretary Lloyd Austin claimed that the US would destroy Russia’s capacity to make war.
A compromise in Ukraine with significant territorial concessions to Russia – the only conceivable way to end the war – would humiliate Washington.
A negotiated solution to the Ukraine war, though, is not impossible. Washington could continue to portray itself as the defender of Ukraine’s sovereignty while encouraging European leaders to do the dirty work and force Ukraine into negotiations with Moscow.
A possible hint in this direction came on June 14 from the US Undersecretary of Defense for Policy Colin H. Kahl, who declared: “We’re not going to tell the Ukrainians how to negotiate, what to negotiate and when to negotiate. They’re going to set those terms for themselves.”
Kahl was Joe Biden’s national security adviser during Biden’s term as Vice-President under the Obama Administration, and one of Biden’s most controversial appointees. Republican Senators unanimously rejected his nomination to the Pentagon post, and Vice President Harris cast the tie-breaking vote to confirm him. it is noteworthy that the statement came from him, rather than from Secretary of State Blinken or National Security Adviser Sullivan.
Kahl’s statement, to be sure, is mendacious in the extreme. France and Germany on February 15 asked Ukrainian President Zelensky to comply with the Minsk II agreement, then supported by Moscow, which would have given autonomy to Russian-speaking regions in the Donbas within a sovereign Ukraine.
At Washington’s prompting, Zelensky rejected a February 19 proposal from German Chancellor Olaf Scholz to avoid war. Michael Gordon reported April 1 in the Wall Street Journal:
Mr Scholz made one last push for a settlement between Moscow and Kyiv. He told Mr. Zelensky in Munich on February 19 that Ukraine should renounce its NATO aspirations and declare neutrality as part of a wider European security deal between the West and Russia. The pact would be signed by Mr Putin and Mr Biden, who would jointly guarantee Ukraine’s security. Mr Zelensky said Mr Putin couldn’t be trusted to uphold such an agreement and that most Ukrainians wanted to join NATO.
The hapless Zelensky did not invent the idea of NATO membership for Ukraine. He was given assurances by Washington and London, which stepped up weapons deliveries to Ukraine.
The United States won’t tell Ukraine what to do, Undersecretary Kahl declared. But that doesn’t prevent other governments from making Zelensky an offer he can’t refuse. Zelensky adviser Oleksiy Arestovych told Germany’s Bild-Zeitung on June 16 that German Chancellor Scholz, French President Macron and Italian President Draghi might deliver such a demand to Zelensky during their current visit to Kyiv.
The Zelensky aide said he feared that Scholz, Macron and Draghi “will try to get a Minsk III. They will say that we need to end the war that is causing food problems and economic problems, that Russians and Ukrainians are dying, that we need to save Mr Putin’s face, that the Russians made mistakes and that we need to forgive and give them a chance to return to world society.”
Germany’s leading center-right daily Die Welt commented: “Kyiv is beginning to have doubts about the solidarity of the West. Voices are being raised calling for peace efforts. In particular, a statement by NATO chief Stoltenberg points to a change of course.”
Die Welt referred to a June 12 speech in which NATO Secretary-General Jens Stoltenberg stated: “The question is: what price are you willing to pay for peace? How much territory? How much independence? How much sovereignty? How much freedom? How much democracy are you willing to sacrifice for peace? And that’s a very difficult moral dilemma.”
It’s possible that Biden’s instincts for political survival may take precedence over the ideological priorities of his Secretary of State Antony Blinken and Undersecretary of State Victoria Nuland, the architect of the 2014 Maidan Square coup that set the present tragedy in motion.
We do not know what the Biden Administration will do in the face of this double disaster, to be sure. At this point, it probably doesn’t know, either. The choices, though, are stark and clear: Either climb down off the ledge or plunge into a world recession and a spiraling strategic crisis.
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Interesting news on the Ukraine conflict front:
Yesterday, Russia reported, “In the area of Nikolaevka of the Donetsk People’s Republic, due to the threat of defeating the units of the 14th and 24th mechanized brigades , the Ukrainian command evacuated up to 30 wounded and eight dead American and British mercenaries at night to prevent them from falling into the units of the Russian Armed Forces.”
ASB Military News
LPR says that when trying to break out of the encircled Zolote — a group of foreign mercenaries was destroyed, one of whom was an instructor.
Instructors are always Brits or Americans to our knowledge. LPR won’t disclose details but they say “very valuable trophies were found”
ASB Military News
Ukrop channels are circulating information about the pentagon instructing American private military companies (mercenaries) operating in Ukraine to withdraw all US citizens from Ukraine within a month.
Our source in the OP said that the Pentagon demanded that American PMCs withdraw US citizens from Ukraine within a month. At the moment, about 1,000 military PMCs have been hired in the United States by our oligarchs, and about 3,000 more representatives of European countries.
Just tell them we got no money or guns left to give them. They can ask the others. We already given them countless weapons and about 56 billion dollars. Half of which will be laundered back to politicians.
Way out is not to get in. For a long time now, we have known that our great power rivalry is with China, yet we bogged ourselves down in Ukraine after the Afghanistan debacle.
The other thing Ukraine has done is remind us what real war looks like between industrialized countries. It isn't a battle above 30,000 feet with F22s. It's on the ground with bullets and shells and troops taking and holding territory.
And, as von Clausewitz reminds us, which Russia is focused on, is the destruction of the other side's army, something we didn't do in Korea, in Vietnam, or any of our Middle East adventures.
Ask Jennifer Griffin / Milley / Austin
$$$$ is gone.
Stolen elections have consequences.
Biden fell off his bicycle long ago. It was Putin’s fault.
President Rice wants a hot war with Russia so they can turn the censorship and anti-insurrection knobs up to 11 before the mid-terms but Russia is not playing.
Yeah, Biden raised his voice. He was adamant, he had a plan to wreck the economy, that these sanctions would bring Russian to her KNEES and BEG for economic relief. I think he missed a cue from one of his handlers, as this did not go down the right rabbit hole. Maybe he will try again, and see if he can ruin the entire world economy this time...
The part of the article that surprised and infuriated me is that apparently the EU big three did everything they could to get Zelensky to just enact the Minsk agreement Ukraine had already signed 7 years ago. prior to the military conflict starting.
It was the Biden administration that egged Zelensky on to fight Russia instead with the promise of NATO inclusion and lots of weapons and money.
Well, we are all paying the price now. Our NATO partners were unhappy with how Biden handled Afghanistan and left them in the lurch. They have to be beyond angry now over his unbelievably dumb move of trying to make this a proxy war in order to achieve the Obama/Biden strategy formulated over a decade ago to “destabilize Russia, weaken them militarily and create “regime change.”
...the ideological priorities of his Secretary of State Antony Blinken and Undersecretary of State Victoria Nuland, the architect of the 2014 Maidan Square coup that set the present tragedy in motion.
The Tweedle Dee and Tweedle Dum of the State Dept; the very epitome of interventionism the State Dept loves, which they think will create a utopian one-world government, but which instead inevitably leads to chaos and destruction of other countries.
For people wanting to know why Russia is so interested in winning in Ukraine, this may help. Basically it calls for splitting up Russia into multiple countries*. “Its aggression also is catalyzing a long-overdue conversation about Russia’s interior empire” - Note the term “Interior Empire”...it’s no longer about their neighborhood, it’s about Russia itself.
Note also that this is posted on a US Government Website.
Finally note also that they cannot even write 2 paragraphs without being full of propaganda as they’re blaming Russia for both Libya (where they had next to no involvement, but we sure did) and Syria (where they were not involved there for 3 years, but we’ve been involved from day one).
It looks like our government is pretty much through with peaceful coexistence with Russia, regardless of what happens in Ukraine.
*I think many here might be ok with that in the US, but that doesn’t mean Russians wants that outcome.
“The part of the article that surprised and infuriated me is that apparently the EU big three did everything they could to get Zelensky to just enact the Minsk agreement Ukraine had already signed 7 years ago. prior to the military conflict starting.”
Perhaps, but I heard that someone high up said that they were never serious about Minsk and they only told Ukraine to agree to it in order to stop the Russian troops from moving into Kiev, in 2014. He said that agreeing to Minsk was only to buy time, to arm-up Ukraine to fight Russia. Kind of makes it difficult for Russia to now trust us, at all. The Soviet Union trusted us more than Russia does now.
Funny that the United States won’t tell Ukraine what to do.... Biden had no problem getting a prosecutor fired as VP. Article say oil is the driving force in inflation, which Biden had 12-months of war on the oil industry before this conflict. Screw the democrats.
The Approved Reality is getting vaporized by Reality, just like the Ukes
One of the enlightening things for me to discover is that every group and committee we think is legitimate and objective is actually a paid for front for the U.S. government.
That committee that held that program on “Decolonizing Russia” is an American paid for entity. I posted about that program yesterday and the site I got it from actually had a full colored map showing how WE were going to divide Russia for, you know, DEMOCRACY.
Yes, Bob, I think they have our number now. Like they keep saying this is a divorce.
At some point in the future when historians look at this point in time they may wonder just how insane our world leaders were.
I saw that map too...kind of like a guy comes into your house and says he’s going to dismember you. A normal reaction might be to fight back, with EVERYTHING you have, and the case of Russia, do we really want to see EVERYTHING that they have? And if they really intend to literally break up Russia, then we will, indeed, see EVERYTHING they have.
The Eastern Shipbuilding Company here in Panama city, Florida, hires a bunch of Ukrainians. They are are filthy, rude anti-American a****oles to say the least. They think the USA is supposed to go fight Russia while these bums stay here and milk off the US system.
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