On January 19th, President Biden held a press conference where he supposedly made another “gaffe” in response to a question about how the U.S. would respond to a Russian invasion of Ukraine. Biden said, “I think what you're going to see is that Russia will be held accountable if it invades. And it depends on what it does. It's one thing if it's a minor incursion and then we end up having a fight about what to do and not do.”
Many observers—particularly in the media—have interpreted Biden’s statement to mean that Russia will face less severe sanctions if it only invades Ukraine a little bit. Countless headlines the next day looked like this one from Newsweek:
However, it is possible that Biden’s “gaffe,” for which “top officials” needed to conduct damage control, wasn’t a gaffe at all, but instead part of a calculated effort to goad Russia into Ukraine. I understand that might sound like a preposterous statement initially, but within the wider context of geopolitics, it actually makes sense. So, let us consider some of the global realities that are seldom discussed.
First, America’s primary geopolitical objective was, is and always will be the prevention of any single power from controlling Eurasia. That’s what the Cold War was about, and that’s what the “Global War on Terror” is about.
Second, another objective, which buttresses the one above, is the maintenance of the U.S. dollar as the world’s preeminent reserve currency. For example, the George W. Bush administration gave a lot of reasons—many of them quite laughable in hindsight—as to why the United States needed to invade Iraq in 2003. But today it seems clear that among former Iraqi dictator Saddam Hussein’s many non-existent sins, such as having nothing to do with 9/11, or not possessing any WMD whatsoever, his greatest crime was in fact his decision in 2000 to denominate his country’s oil sales in euros rather than dollars. (In those three years alone, the euro gained 17% in value against the dollar.)
A few years later, Libya’s Muammar Gaddafi made the same mistake. His plan was to create a regional African currency based on gold and sell his oil in that. The next thing he knew, Hillary Clinton was cackling on TV about how she killed him.
But why does it matter so much if oil is priced in dollars? Thirty-year Congressional veteran, Mike Lofgren, explains it this way: “If commodities, especially oil, were no longer priced in dollars, the American system could no longer crank out cash and maintain some semblance of stable exchange rates.” He goes on to point out, “This particular loop explains why the United States has been able to run up large trade deficits year after year and still maintain the dollar as the world reserve currency. It also allows the government to operate a fiscal policy based on imprudent tax cuts and budget-busting military spending without having to worry about an eventual day of reckoning.”
In other words, the U.S. government’s total reliance on printing money so that it can spend more than it has, hinges entirely on the U.S. dollar remaining the world reserve currency. So, from the perspective of Washington’s power elite, that is definitely a cause worth fighting for—which brings us back to Russia and Ukraine.
First of all, who is America’s greatest rival? Is it Russia? China?
What about Europe?
Think about it. The U.S. has already demonstrated its willingness to expend extraordinary levels of blood and treasure to topple any Middle Eastern dictator who so much as thinks the word “euro” while he lies awake at night. So, what about the Europeans themselves? After all, they’re the ones who issued the dreaded euro in the first place. The Chinese yuan—for a myriad of reasons—isn’t going to replace the dollar any time soon. Neither is the Russian ruble. But the euro stands a chance. It’s the world’s second largest reserve currency and could easily become number one. If it succeeds, the economic blow to the United States would be catastrophic. The effects would be far more devastating than anything Russia or China could do, short of launching a full-scale nuclear attack. So I ask you again, who is America’s greatest rival?
So, from that perspective, let’s take a look at what America’s objectives truly are with Ukraine, regardless of dubious public pronouncements.
A December, 2021 article from the BBC quoted an anonymous high-ranking European intelligence official who said, “Let's not be blind. If Russia initiates a scenario of any kind it will also initiate action against Nato members.” The official added, “To think war could be contained to one nation would be foolish.”
It is also likely that a Russian invasion of Ukraine would greatly exacerbate growing tensions within the European Union. For example, E.U. diplomats have already stated that a Russian incursion will be met with severe economic repercussions. However, as one security analyst at the European Policy Centre put it, “Putting tough sanctions on Russia can also have consequences for the E.U. because the economies (Russia’s and Europe’s) are linked … There could be costs to pay that some member states do not want to pay.”
That statement crystalizes one of the E.U.’s biggest problems: economic policies—especially monetary ones from the European Central Bank—are seldom one-size-fits-all. So, what’s good for northern states like Germany or Denmark is not always good for southern states like Greece or Italy. This “North-South” divide has fostered a growing fissure within the E.U. for years, and if Russia invades Ukraine, it will grow even wider.
In short, that’s good news for the U.S. dollar. The more division within Europe the better, because it calls into question the euro’s future existence—no one is going to invest in that, it’s too risky. That leaves the dollar as the only option. So, no matter how screwed up America is, either at home or abroad, it’s still a better bet than anyone else. That is U.S. foreign policy in a nutshell.
But what about Russia? Does the U.S. gain anything from Russia getting bogged down in a Ukrainian quagmire?
In the book, “Implosion: The End of Russia and What it Means for America,” author Ilan Berman argues that the biggest worry regarding Russia is not its strength, but its weakness. This is primarily due to the country’s rapidly shrinking population and abysmal mortality rate. (The average Russian male dies at 59.) The problem with this, from a Western perspective, is that if the Russian government collapses, who is going to safeguard the roughly 7,000 nuclear weapons currently at its disposal?
Russian leadership is fully aware of this problem. It knows that it needs an exceptionally large military to guard its numerous and expansive borders, and before long, there won’t be enough young people to fill the ranks. That means that if they’re going to make any big geopolitical moves, they need to make them now. That could include military thrusts into the Caucasus, the Baltic states and Eastern Europe. But if the U.S. could figure a way to goad Russia into an interminable, Afghanistan-like occupation of Ukraine—a country with which the U.S. has very little strategic interest—then managing Russia’s slow decline might become an easier task, as well as prevent the highly apocalyptic scenario of thousands of high-yield nukes suddenly appearing in the world’s black markets.
The U.S. has been quietly sowing the seeds for an arduous Russian occupation of Ukraine for years. One might argue that as early as 2004, and Ukraine’s “Orange Revolution,”—which many in Moscow regard as a CIA-orchestrated coup—the U.S. has been “poking the bear,” so to speak, in an effort to get Russia militarily involved in Ukraine. It has been a slow process, but the more Moscow intervenes in Kiev’s affairs, the more the Ukrainians unite in opposition to Russia. That means that this time around—unlike in 2014 when Russia annexed Crimea—Russian troops will face a much tougher adversary in the field. The Ukrainian military today is more cohesive, better trained, and above all, better equipped with billions of dollars in modern weaponry, in particular the U.S.-made Javelin anti-tank missile. Any Russian invasion will likely involve a considerable number of tanks, and the Javelin makes destroying those tanks exceptionally easy.
Now, if you’re an American and you’re reading this, it’s possible that at this moment you’re feeling a slight twinge of pride. After all, it’s sometimes nice to hear that your political leaders are actually quite clever, rather than the usual view of them being complete morons.
But here’s the thing: What’s good for “America the Superpower” is not always good for the average American. It might feel good in a “civic pride” kind of way, like rooting for your home football team, but that’s a superficial type of pride at best.
Remember how the U.S. dollar is the world reserve currency, and how Washington will do anything to make sure it stays that way? Well, I hate to break it to you, but that’s not necessarily for your benefit. (Unless of course you’re a high-level executive at Raytheon or Goldman Sachs—then it’s definitely for your benefit.)
The U.S. government’s ability to print endless amounts of cash has proved to be a boon for major defense contractors, as well as banks that are “too big to fail.” Companies like Lockheed Martin and General Dynamics feed off the Pentagon’s near-trillion dollar annual budget—something that’s only possible when the government possesses a magical money printing machine. Meanwhile, banks on Wall Street can take on as much risk as they want because—as 2008 proved—if the shit ever hits the fan, Uncle Sam will print as many trillions as it takes to bail them out.
But as you can see from those examples, an endless money supply causes people, companies, banks and institutions to make stupid decisions. As an economist might say, it creates “distortions” in the market. Defense companies pursue the wrong, multi-billion dollar projects, like the F-22 Raptor for example, while Wall Street gorges itself on mortgage-backed securities that aren’t worth the paper they’re printed on. In other words, capitalism gets thrown totally out of whack.
It’s the same for the government—an institution which Elon Musk once described as “a corporation in the limit.” One of the main drivers behind the gutting of America’s industrial base and the erosion of the middle class is the fact that with an endless supply of cash, people realized they could make more money by manipulating financial markets than they could by building stuff.
So now, here we are—a country that is simultaneously more wealthy than it has ever been, yet dirtier and cheaper and less impressive in every way than it’s ever been as well.
So, yes, it’s possible that the American “deep state” actually has some idea what it’s doing in Ukraine. That is comforting. After all, the U.S. and Russia have more than 10,000 nuclear weapons pointed at each other.
But don’t kid yourself. If the deep state scores a victory in Europe, it won’t share a single penny of the spoils with you. And if it ever runs out of enemies abroad, guess who it’s coming for next?
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