January 16, 2015 "ICH" - "Peak Prosperity" - - For several weeks now the anti-Russian stance in the US press has quieted down. Presumably because the political leadership has moved its attention on to other things, and the media flock has followed suit. 

Have you read much about Ukraine and Russia recently?

I thought not, despite the fact that there's plenty of serious action -- both there as well as related activity in the US -- going on that deserves our careful attention.

As I recently wrote, the plunging oil price is a potential catalyst for stock market turmoil and sovereign instability. Venezuela is already circling the drain, and numerous other oil exporters are in deep trouble as they foolishly expanded their national budgets and social programs to match the price of oil; something that is easy to do on the way up and devilishly tricky on the way down.

But consider the impact on Russia. From the Russian point of view, everything from their plunging ruble to bitter sanctions to the falling price of oil are the fault of the US, either directly or indirectly. Whether that is fair or not is irrelevant; that's the view of the Russians right now. So no surprise,  it doesn't dispose them towards much in the way of good-will towards the West generally, and the US specifically.

The fall in the price of oil is creating serious difficulties economically and financially for Russia. We'll get to those facets in a minute. But right now, I want to focus on the continued belligerence of the US towards Russia -- some of which is overt and some of which, you can be certain, is covert -- which could very well end up provoking a more kinetic and dangerous response than the West is prepared for.

Russia Forced To Act

Before anyone jumps in to say "Why are you defending Putin? He's a bad man", let me just say that I have been closely analyzing each move by Russia and the West since then President of Ukraine Yanukovych declined to sign the European Association Agreement back in November of 2013. 

Based on the preponderance of evidence, its' clear to me that the West/US deserve the lion's share of the blame for the conflict that now rages with Ukraine and between Russia and the western world.

It was the West that supported the unsavory assortment of thugs, neo-Nazis, and ultra-nationalists that seized power in a coup from the democratically-elected Yanukovych.  We can argue all we want about whether he was a good boy or not, but that's irrelevant and plays into the hands of those at the US State Department who would like to deflect attention away from the very non-democratic events (shaped behind the scenes by our influence) that led to his overthrow.

The US did the same thing with Saddam, if you recall. It's a simple deflection: away from the actions of the US, and towards the character of the person standing in the line of fire from those actions.

In my view, if Yanukovych had not been violently deposed, Ukraine would be peaceful right now, Russia would not have had to intervene, and there would be no civil war in Ukraine and far reduced tensions between the West and Russia.

So ham-handed were those efforts to intervene in Ukraine on the part of the Obama State department that no less an historically loathsome creature than Henry Kissinger even called the US's actions a 'fatal mistake':

Kissinger warns of West’s ‘fatal mistake’ that may lead to new Cold War

Nov 10, 2014

Former US Secretary of State Henry Kissinger has given a chilling assessment of a new geopolitical situation taking shape amid the Ukrainian crisis, warning of a possible new Cold War and calling the West’s approach to the crisis a “fatal mistake.”

The 91-year-old diplomat characterized the tense relations as exhibiting the danger of “another Cold War.”

“This danger does exist and we can't ignore it,” Kissinger said. He warned that ignoring this danger any further may result in a “tragedy,” he told Germany’s Der Spiegel.

(Source)

When even Henry Kissinger thinks you've been too reckless in the application of raw power, you've over done it.

So given the timeline of the events that have led to the frostiest US-Russian relations since the depths of the cold war, I am of the view that Russia has been actually quite restrained and has not over reacted to any of the numerous provocations.

Despite the lull in front page reporting of the Russian situation, there remains a careful program of steady anti-Russian propaganda running through the western press.

It Takes Two To Tango

prop·a·gan·da

ˌpräpəˈɡandə/

Noun  - derogatory

Information, especially of a biased or misleading nature, used to promote or publicize a particular political cause or point of view.

For propaganda to work well, there needs to be tight coordination between the State and the press.  The role of the press is to first publish the propaganda, and second, to neglect to look into it or report on anything that might call it into question. Sins of omission and commission are both required.

The good news is that the internet is a great equalizing force and we can readily unearth inconvenient facts with a little digging that blunt the propaganda. The bad news is that a lot of people still get all their news from so-called 'official' sources.

At any rate, here's a first-rate piece of unadulterated propaganda courtesy of Bloomberg.  Note that it was printed on Dec 31, one of several very quiet news days where little debate is likely to happen:

Inside Obama’s Secret Outreach to Russia

Dec 31, 2014

President Barack Obama's administration has been working behind the scenes for months to forge a new working relationship with Russia, despite the fact that Russian President Vladimir Putin has shown little interest in repairing relations with Washington or halting his aggression in neighboring Ukraine.

In several conversations with Lavrov, Kerry has floated an offer to Russia that would pave the way for a partial release of some of the most onerous economic sanctions. Kerry’s conditions included Russia adhering to September's Minsk agreement and ceasing direct military support for the Ukrainian separatists. 

(Source)

The tenor of this piece is set. It's the US that is trying to be reasonable, but Russia has shown little interest in repairing relations. That's one assertion.

Another is that Russia has been providing direct military support for the separatists in neighboring Ukraine. And yet another that Putin himself has shown little interest in halting his aggression. 

That's the main narrative that the US wants to put forward. Putin is a bad guy. Like Saddam...remember him?  The US is the one being reasonable here, according to this piece, and it'is Russia that has been fomenting the troubles.

The US narrative goes further, repeatedly claiming that Russia has been supplying major arms to the separatists, as we see here from early December 2014:

U.S. Says Russia Arms Ukraine Rebels, OSCE Wary on Truce

Dec 2, 2014

North Atlantic Treaty Organization Secretary General Jens Stoltenberg accused Russia of sending tanks, advanced air-defense systems and other heavy weapons across the border to Ukrainian rebels.

Russia denies involvement in the conflict.

“Since the Sept. 5 Minsk cease-fire agreement, Russia has funneled several hundred” tanks, armed personnel carriers, and other military vehicles directly to pro-Russian separatists in Ukraine, Kerry said.

Russian military forces still operate inside eastern Ukraine where they provide “command and control” for the separatists they back, he added.

(Source)

The charge from the Secretary General of NATO and from John Kerry of the US State department is that Russia has military forces inside Ukraine, and that they've funneled hundreds of tanks, APCs, and other military vehicles numbering in the hundreds.

As with the MH-17 disaster, we have to call this another case of the dog that did not bark.

Where are the pictures? 

The sorts of weaponry being claimed here are impossible to conceal from the air.

Snapping high resolution photos of such things is child's play for today's military satellites, and even civilian ones, too.

Accusing a major world power of action this brash should require at least some demonstration of proof. Especially after the WMD warning fiasco that played out at the UN leading up to the Bush II Iraq invasion. The least you could do is provide a few pictures of said military vehicles and heavy weaponry.

But there are none.  And the reason none have been offered is because none exist.  If they did, you can be 100% certain they'd be released and replayed over and over again on CNN until everybody and their uncle could distinguish a T-72 tank outline from a Russian made APC.

About Those 'Unwilling' Russians

Let's look more closely at the reasons why Russia may not exactly be in a conciliatory mood towards the US at this moment in time.

With just our short-term memories, we can recall that the US Congress passed a serious piece of anti-Russian resolution last month that can easily be seen as a declaration of war by a reasonable person.

This unfortunate piece of legislation, H.Res. 758, was passed on December 4, 2014 and is titled "Strongly condemning the actions of the Russian Federation, under President Vladimir Putin, which has carried out a policy of aggression against neighboring countries aimed at political and economic domination."

Ron Paul expressed the problems with this resolution very well:

Reckless Congress 'Declares War' on Russia

Dec 4, 2014

These are the kinds of resolutions I have always watched closely in Congress, as what are billed as “harmless” statements of opinion often lead to sanctions and war. I remember in 1998 arguing strongly against the Iraq Liberation Act because, as I said at the time, I knew it would lead to war. I did not oppose the Act because I was an admirer of Saddam Hussein – just as now I am not an admirer of Putin or any foreign political leader – but rather because I knew then that another war against Iraq would not solve the problems and would probably make things worse. We all know what happened next.

That is why I can hardly believe they are getting away with it again, and this time with even higher stakes: provoking a war with Russia that could result in total destruction!

If anyone thinks I am exaggerating about how bad this resolution really is, let me just offer a few examples from the legislation itself:

The resolution (paragraph 3) accuses Russia of an invasion of Ukraine and condemns Russia’s violation of Ukrainian sovereignty. The statement is offered without any proof of such a thing. Surely with our sophisticated satellites that can read a license plate from space we should have video and pictures of this Russian invasion. None have been offered.

As to Russia’s violation of Ukrainian sovereignty, why isn’t it a violation of Ukraine’s sovereignty for the US to participate in the overthrow of that country’s elected government as it did in February? We have all heard the tapes of State Department officials plotting with the US Ambassador in Ukraine to overthrow the government. We heard US Assistant Secretary of State Victoria Nuland bragging that the US spent $5 billion on regime change in Ukraine. Why is that OK? 

The resolution (paragraph 11) accuses the people in east Ukraine of holding “fraudulent and illegal elections” in November. Why is it that every time elections do not produce the results desired by the US government they are called “illegal” and “fraudulent”? Aren’t the people of eastern Ukraine allowed self-determination? Isn’t that a basic human right?

The resolution (paragraph 13) demands a withdrawal of Russia forces from Ukraine even though the US government has provided no evidence the Russian army was ever in Ukraine. This paragraph also urges the government in Kiev to resume military operations against the eastern regions seeking independence.

(Source)

If the tables were turned, and it was the Russian lawmakers passing a resolution condemning the US for a variety of illegal activities for which exactly zero proof was offered, I think we all know just how ablaze with indignity the US political leadership would be.

Think of this from Russia's perspective.  They know perfectly well all of the things the Honorable Ron Paul speaks of are true.  There was an illegal coup followed by legal elections.  The US recognizes the former as legitimate but the latter as illegal, and then speaks loudly about the importance of spreading democracy.

Worse, the US keeps mandating that a key condition of lifting its anti-Russian sanctions is for Russia to leave Ukraine militarily and to stop shipping lots of heavy armaments there. But it has, as of today, provided exactly zero pieces of hard evidence to support those accusations.

As bad as this legislation was, the US Senate upped the ante just one week later on Dec 11, 2014 with Act, S.2828 The Ukraine Freedom Support Act of 2014:

US-NATO Delivering Arms to Ukraine. The Planning of Aggression against Russia

Dec 15, 2014

The Ukraine Freedom Support Act (UFSA) of 2014 authorizes lethal and non-lethal aid. Besides what’s already being supplied.

Including communications equipment. Body armor. Night vision goggles. Humvees. Radar. Counter-mortar detection units. Binoculars. Small boats. Various other gear.

Sniper and assault rifles. Hand grenade launchers. Mortars and shells. Stingers. Anti-tank missiles. What’s known may be the tip of the iceberg.

UFSA legislation “authoriz(ing) (Obama) to provide defense articles, defense services, and training to the Government of Ukraine for the purpose of countering offensive weapons and reestablishing the sovereignty and territorial integrity of Ukraine…”

“(I)ncluding anti-tank and anti-armor weapons, crew weapons and ammunition, counter-artillery radars to identify and target artillery batteries, fire control, range finder, and optical and guidance and control equipment, tactical troop-operated surveillance drones, and secure command and communications equipment.”

(Source)

After chiding Russia for supplying military aid, for which the US has provided no solid evidence in support of that claim, the US has passed an Act designed to funnel all sorts of military aid to the ruling powers in Kiev. 

This could just as easily have been labeled the "Do As We Say, Not As We Do" Act.  For some reason, the Russians are not too impressed with that approach.

Russian Foreign Ministry spokesman Alexander Lukashevich said in response:

“Both houses of the US Congress have approved the Ukraine Freedom Support Act bypassing debates and proper voting. The overtly confrontational message of the new law cannot but evoke profound regret.”

“Once again Washington is leveling baseless sweeping accusations against Russia and threatening more sanctions. At the same time it is muddling together the Ukrainian and Syrian conflicts, which the United States has been instrumental in inflating. It even refers to the INF Treaty although American compliance with it is questionable, to put it mildly.

At the same time, it promises to Kiev to arm its military operation in Donbass and openly admits that it intends to use NGOs for an impact on Russia’s domestic processes.”

“Though it appears that major challenges to international security demand pooled Russian and American efforts, US legislators follow President Obama’s administration destroying the very foundation of partnership. Bilateral relations are being torpedoed no less powerfully than by the notorious Jackson-Vanik amendment, endorsed in 1974 to obstruct cooperation for several decades. We cannot but conclude that, blinded by outdated phobias, the United States is anxious to reverse time. As the US Congress instigates anti-Russian sanctions, it should part with the illusion of their effect. Russia will not be intimidated into giving up its interests and tolerating interference in its internal affairs.”

(Source)

The really bizarre part of this story is that I cannot yet find any credible analysis or commentary explaining exactly what the US's compelling interests are in Ukraine, nor what the end goal might be. It's all something of a mystery, compounded substantially by the fact that Russia can be a very powerful ally or enemy to have.  Why not choose ally? Why choose enemy?

On the flip side, we have lots of compelling evidence that the US has a serious plan in place to weaken and destabilize Russia. The tactics we're using would certainly be considered acts of war by the US were the circumstances reversed.

As one Russian observer put it:

Both US Assistant-Secretary of State Victoria Nuland — the wife of the Project for the New American Century (PNAC) co-founder and neo-conservative advocate for empire Robert Kagan — and US Assistant-Secretary of the Treasury Daniel Glaser told the Foreign Affairs Committee of the US House of Representatives in May 2014 that the objectives of the US economic sanctions strategy against the Russian Federation was not only to damage the trade ties and business between Russia and the EU, but to also bring about economic instability in Russia and to create currency instability and inflation. [5] In other words, the US government was targeting the Russian ruble for devaluation and the Russian economy for inflation since at least May 2014.

The United States is waging a fully fledged economic war against the Russian Federations and its national economy. Ultimately, all Russians are collectively the target. The economic sanctions are nothing more than economic warfare. If the crisis in Ukraine did not happen, another pretext would have been found for assaulting Russia.

Both US Assistant-Secretary of State Victoria Nuland and US Assistant-Secretary of the Treasury Daniel Glaser even told the Foreign Affairs Committee of the US House of Representatives in May 2014 that the ultimate objectives of the US economic sanctions against Russia are to make the Russian population so miserable and desperate that they would eventually demand that the Kremlin surrender to the US and bring about "political change". "Political change" can mean many things, but what it most probably implies here is regime change in Moscow.

In fact, the aims of the US do not even appear to be geared at coercing the Russian government to change its foreign policy, but to incite regime change in Moscow and to cripple the Russian Federation entirely through the instigation of internal divisions.

This is why maps of a divided Russia are being circulated by Radio Free Europe. [17]

(Source)

We Not On A Road To War, We've Already Arrived

If it looks like a war, acts like a war and smells like a war, it may just be a war.  The US has been waging economic, financial, trade, political and even kinetic war-by-proxy against Russia.  The only question is why?

From the perspective of Russians it seems clear that neocons are driving the US ship of state, and that they are simply not the sort of people with whom you negotiate in good faith or whom you trust.  The neocons believe they have the upper hand, they are part of the most powerful country on earth, and they never negotiate preferring to dictate.

The only problem is, the US is rapidly losing allies and friends the world over and it's not nearly as powerful as it used to be, thanks to a profound failure to invest in itself (education, infrastructure, etc)

In Part 2: Why No One Should Want This To Devolve Further, we analyze the most likely responses the West's bear-baiting will generate from Russia. The short story is this: in none of the outcomes will there be clear victors.

There is simply no good rationale for the geo-political risks being taken right now. Leaving us with the critical question: Why are we willing to let our leaders play nuclear "Russian roulette", for stakes we don't agree with?

Click here to access Part 2 of this report (free executive summary; enrollment required for full access)