The year has started off on quite a strange note, especially from a geopolitical perspective. If you are in the western world and you are in a somewhat functioning society you are probably already informed on the ongoing crisis in Ukraine.
There’s even a strong chance of you opposing Russia’s stance on the overall matter which is a fair assessment. From an objective point of view, invading any country is wrong and that is exactly what is happening now if you look at it.
On the flip side, invading is wrong but every activity was not created in a vacuum, there are externalities always at play, especially in this geopolitical turmoil. Currently, it is mainly Russia vs the West and Russia is currently rolling with the punches.
Before I go any further within this article, I want to make it clear that war is wrong and the current crisis is horrible. You have civilians who are displaced from their homes, innocent civilians dying, destruction of buildings and communities, it is absolutely bad.
I do not condone or promote war, but at the same time it is necessary as a rational person to put emotions aside, all the media hysteria, and look at this situation from an objective point of view.
At the moment the so-called, “world leaders” are not showing any semblance of stoic within their demeanor in this situation which shouldn’t have been started in the first place.
Now that the war is here which the west has been heckling about for months is here, it is necessary to understand the economic implications of it as it could prove to be devastating if our leaders don’t hard and fast.
When I talk about “the west” in this article, I am referring to North America, Europe, and some of its eastern allies. I am also referring to NATO (North Atlantic Treaty Organization), which was developed to help smaller countries defend themselves from imperialist threats.
Current Sanctions and Hypocrisy
Over the last week since the war started, we have seen a significant portion of the western leaders imposing sanctions on Russia which was long talked about.
I am Vladimir Putin who is the current president of Russia and his leadership across all sectors have done their analysis and understood the risk and rewards of their gamble on Ukraine.
Their move to invade Ukraine even though from their point of view poses an existential threat to Russia with Ukraine’s backing from NATO, could prove to be catastrophic for the economy if plans prior to plans weren’t in place to curtail the predictable and harsh retaliation from the west.
We have seen several Russian banks being removed from SWIFT which is a big deal. We have seen sanctions on Russian businesses worldwide, sanctions on Russian Oligarchs such as seizing offshore assets.
Multiple foreign companies have pulled have out of the country folding under the pressure from the west.
Russia is akin to a radioactive item right now, no one wants to touch it. It’s definitely tribalistic and scary when we look at the lengths the west goes to banning a country.
It’s even a poor use of power depending on how you look at it and a misjudgment for those who control the game so to speak. At the moment Russia is taking a beat and some of these sanctions are necessary but here’s the hypocrisy in all of this. Where was the media when America and several NATO members invaded Iraq, Afghanistan, Libya, etc?
I guess they are all not civilized nations so they could all careless, it’s blatant double standards if you ask anyone that’s neutral on the overall matter or have a distaste for the western democratic hypocrisy which is clearly evident at this time of writing.
To turn it up a notch, where are the outcry over Yemen and the Palestinian people who are being oppressed. No one bats an eye on the matter as thousands continue to die worldwide through war.
I am assuming Ukraine is more civilized than the other countries which makes it necessary for attention. It shouldn’t be a surprise for anyone though who is on top of what is going on in the world.
It shouldn’t even be surprising to anyone who doesn’t have their heads bombarded with western propaganda on 95% of the articles, videos, and analysis being posted.
Russia’s Energy Reserves
Russia has retaliated mildly to the sanctions, I am assuming they are looking to see the western leaders exert all their options before they decide to strike heavily on Oil, natural gas, wheat, minerals, and other exports which are important to the world.
My question is why did the west never sought to resolve this conflict diplomatically, which political scientists have been talking about for years before we even reached this point.
If there was some sort of a diplomatic solution to resolve the conflict between Russia and Ukraine, this issue could’ve been done with and other problems could have come to the forefront. I guess that other plans were in mind as Ukraine seems to be a strategic initiative of the west to have under their control.
The Russians never quite liked that proposition at all, they reacted to those developments aggressively which led partially to this situation. One of the main facing the world and especially the west is energy.
As covid is declining quickly around the world and civilians forgive governments for their draconian lockdown, energy is needed to push power industries and keep the world spinning.
Russia has lots of it, the west is heavily dependent on Russia’s energy resources most notably Europe. Russia accounts for more than 40% of Europe’s natural gas which was used to reduce the production of other environmentally unfriendly energy resources such as crude oil.
Europe’s dependence on Russia’s gas is well known and if Russia decides to turn off the valve, the repercussions could spread far and beyond European soil.
Globalization For All It’s Worth
Being engulfed in a global society, particularly in the western hemisphere has its perks and issues. One of the main advantages is being able to trade with each other in goods and services.
I can go to the supermarket and buy a shoe that was developed in Italy at an affordable price due to the efficiency of the supply chain that got it here. I can engage with customers who are within this system in some form of commerce and become the beneficiary.
One of the downsides of engaging in a global market is that countries are no longer self-sufficient, especially if that particular doesn’t have any natural resources to fall back on, things can get difficult and that economy can burn through money pretty fast.
If the supply chain in the global market experiences a certain degree of inefficiency which we have seen over the last year. The cost of goods can rise as the demand exceeds the supply which is being delayed somewhere within the global supply chain.
Due to the fact that a particular market is being exposed to buyers from around the world, bidding can drive up the price as well. Countries that don’t have the means to pay for the higher prices will now be affected.
The Coming Food Problem
Wheat is an important part of our everyday staple and it’s everywhere. Russia and Ukraine account for approximately 30% of the global wheat supply. If it’s completely cut off from the global market due to the war it can send wheat prices through the roof.
I already created an article on the matter showing charts of the effects it is already causing worldwide.
If the effects are anything close to what analysts predicted, it would lead to food inflation we have never experienced for decades. Countries that are dependent on Russia’s wheat such as Hungary and Turkey are already trying to cope with such issues. As the war rages on, it might not even be enough for the long term.
Here’s a chart showing countries that are heavily reliant on Ukraine’s wheat.
Fertilizer is another issue that needs to be taken into consideration, Russia and Belarus are the world’s leading fertilizer producers. Belarus which is closely engulfed in Russia’s ecosystem is also currently under sanctions.
It is not the extent of Russia, but the west carefully tightening the noose which is tied to the involvement of the current conflict in Ukraine. Russia’s Ministry of Industry and Trade recommended temporarily suspending the export of fertilizers from Russia.
If tensions further escalate look see more of those retaliatory moves from Russia which will likely have an effect on global markets.
China in the Shadows
The imposing sanctions against Russia will only allow it to align itself with China’s economy and other large players as well such as India. Both China and India decided to take a neutral stance on Russia’s invasion of Ukraine.
They both know behind closed doors that it was the west’s provocation that caused that. There have been rumors that China and India are working on a system to make trade feasible with Russia who they are both dependent on for certain resources.
It would be irrational to follow the west’s child-like perspective on the matter by throwing useless tantrums and making a huge fuss out of something they already know was bound to happen.
All these sanctions only make Russia’s alliance with eastern countries stronger. This mainly includes China who historically they have had a hot and cold relationship with.
China will overtake the US economy within the next decade or two and aligning itself with Russia that has the potential to become a global superpower seems like a proper geopolitical move.
On the same day of the Winter Olympics, China’s leader Xi Jinping met Russia’s President Vladimir Putin to discuss a lot of matters regarding politics, finance, etc.
Rumors are swirling around that they even discussed the matter in Ukraine as it was the talking point at the time and still is within the western media. They also signed a deal branding it, “the no-limits agreement”, I would leave this up to the reader’s imagination to think of what this could mean for these future geopolitical countries.
One important thing that went unnoticed among western journalists is the fact that Russia and China have been reducing their dependence on the US dollar.
This move might seem subtle but it’s effective. They are slowly reducing their dependence on a currency that has been at the cornerstone of the world economy. It has also been weaponized and politicized to a great effect against countries that are deemed to be out of line with US objectives.
Russia is possibly teaming up with China even more than ever and will also bring other countries such as Iran into the mix along with India, Pakistan, and other nations so that they can create reduce their reliance on western rules and methodologies which has wreaked havoc on the global economy for decades and is now being used as a weapon as the once vibrant empire is on its death bed.
What Lies Ahead
At the moment the west might be winning against Russia, the party might stop soon as the repercussions are there for anyone to see with even an ounce of cognitive ability between their eyes.
Even though Russia has been sanctioned from many different facets by the west, their export of energy is not. It’s mainly due to the fact that if they should block Russia’s energy from the world, Europe would be in deep trouble.
Poorer nations from around the world would also feel the effect of these actions which should be blamed on our leaders and policymakers who brought us close to this precipice. Russia’s economy will take a hit, the extent is not yet known but they have the resources to be self-sufficient.
The western economy could be in for a rude awakening if their sanctions are not lifted and Russia strikes back with equal force.
