"The Dim Brigade"
As the Russia-Ukraine war wears on,
what if we're all being kept in the dark?
by Bill Bonner
"Forward the Light Brigade
Was there a man dismayed
Not tho' the soldier knew
Some one had blunder'd."
- Alfred Lord Tennyson
Baltimore, Maryland - "The headlines have been relentless. Ever since the beginning of the war of the Donetsk Oblast began, Russia has failed miserably. Its generals have been killed off. Its tanks have been sitting ducks. Its convoys have been stopped. Its targets missed. Its offenses halted. For the Russians, the Ukraine has been the valley of death.
Newsweek, yesterday: "Ukraine Destroys Two Military Ammo Depots, Hurting Russian Morale." The Russian military was portrayed as ill-equipped, ill-trained, ill-disciplined and hopelessly incompetent. Not once have we heard of a Russian victory… a Ukrainian killed, or a Russian who was not. At this stage, based on US news reports, it is amazing that there is a Russian soldier left alive. But what if there were more to the story?
We saw yesterday that Russia is where doomed empires go to die. 1709, 1812, 1941… Charles X11, Napoleon Bonaparte, Adolf Hitler – none fully recovered their Russian losses. So, we wondered: will America’s sanctions war, using its Ukrainian allies to do the dying, turn out any different?
Drunk and Sober: We wonder not for geopolitical or ideological reasons. We have no Ukrainian flag on our walls. Nor a flag for the Russian Federation. Our only loyalty is to our own homeland… not someone else’s. Yes, ‘Maryland, My Maryland’ – land of ersters and ‘bacca’… loudmouths and dimwits… Nancy Pelosi and Roger B. Taney… drunk and sober. Even here, our sentimental attachments run no further north than the south bank of the South River. Beyond it… which is to say, from Annapolis to the Pennsylvania line… is foreign to us.
As for Maryland south of the South River, it is a shame. Once so delightfully backward, quiet and charming, it is now filled up with spillover from the greater Washington DC area… and thus culturally and economically dead. (One of the finest houses on the banks of the Chesapeake, once the home of an honest contraband smuggler… is now owned by a disgraceful military contractor.) That is a digression… almost a non sequitur. But not quite. For now, we are expected to stretch our patriotism far beyond the Patapsco… and the Potomac… all the way to the banks of Dnieper.
General de Caulaincourt begged Napoleon to stay out of Russia. Only a damned fool would want to fight there, especially in the wintertime, he said. Shouldn’t one of America’s brass-bedecked heroes have warned Joe Biden too? Yes, maybe he should. But winter will come soon enough. The gods of war will have their say. Russia may not prove the pushover Biden had hoped. And ‘General Winter’ – the victor in both 1812 and 1944 – may not stop at the Ukrainian border. German experts are warning that their economy could contract by more than 12% if Russia shuts off its gas. Nearly 6 million jobs would be lost. Germans would shiver. Germans would fret and grow restless. And Germany, the great industrial powerhouse of the West – would have to capitulate. But we are just speculating…
Quality vs. Quantity: To back up a bit, the US war industry needs enemies. But it needs certain kinds of enemies – those that are unpopular in the US… and can do us little real harm. Little, largely defenseless nations are best. They are low-risk, high-reward targets. Lots of money to the industry; little chance of getting its butt kicked.
In this respect, Russia is an outlier. It is a nuclear power. But it had been rendered unpopular by endless charges of ‘interference’ in US elections. No serious evidence was ever presented, but it didn’t matter; the charge itself – though absurd – helped create the atmosphere the industry needed.
Compared to the US, the Russian economy is tiny – roughly equivalent to Spain. But it is not the size of the Russian economy that poses a challenge, it is the quality of it. Over many years, the US economy has been pumped up by financialization, fake money, and faddish technology. The Russian economy has not. Nobody buys the latest Russian fashions. Nobody buys fine Russian wines. And the only electronic entertainment produced in Russia with widespread appeal is pornography. Russia sells necessities – food, fertilizer and fuel. Oh… and Russia is also a big producer of ‘industrial warfare’ ammunition, bullets and artillery shells, for example.
So, when we compare the two economies, what do we see?
Russia – wheat, barley, seafood, nitrogen, phosphorus, potash, oil, gas, metals and minerals… many of them essential to modern economies and standards of living.
USA – Facebook, Netflix, Google, Amazon, Microsoft, Twitter, Tesla, Walmart, Apple.
A Tale of Two Economies: The US economy is much bigger. But how much is it fluffed up with things we mostly don’t really need? Entertainment. Distraction. Consumption. Do our most valuable US companies actually help us produce wealth? Or do they subtract it by wasting our most precious asset – our time? We don’t know. But we note that since the US became fully on-line – around about the beginning of this century – real GDP (goods and services) growth rates have declined; from 3% to 5% in the last half of the 20th century, they fell to 2%... down to… currently… less than zero!
How much of the US economy is just foam, created by the Fed’s money-printing and phony interest rates over the last 30 years? A week or so ago, we estimated the froth in household wealth at over $50 trillion. This is how much would vanish if the financialized economy were de-financialized… with stocks, bonds and real estate marked down to more ‘normal’ levels.
How would the two countries – Russia vs. USA – stack up then? Maybe a better question is this: when push comes to shove, how important is the quality of output, compared to the quantity of it? If Facebook, oops... Metaverse, shut down, people would be disappointed. But would it really matter? They don’t make bullets in the Metaverse; they make them in Russia. And they don’t deliver gas from Netflix. It comes from Russia, too. And if it were turned off; what would be the effect? It looks like we’re going to find out. More to come…"
Joel’s Note: "Germans have been “on edge,” according to the newswires, as Russia undertakes “routine maintenance” on the critical Nord Stream 1 pipeline, the main gas pipeline connecting the two countries. Some worried whether the scheduled work (due to end this Thursday) was a political maneuver by Mr. Putin, designed to test the German mettle. It’s unlikely we’ll ever know for sure…
But it does raise the question: What happens if Russia did decide to “flip the switch” on European gas supplies? The continent is suffering through a heatwave now, which is no doubt uncomfortable enough. But what happens when ‘General Winter’ marches onto the frontlines? When Germans are shivering and industry is halted?
The energy minister has already warned German citizens that there may be hot water rationing come Winter… that street lights will be dimmed… workers will be asked to stay home… office buildings will be allowed to freeze.
We spoke to Byron King about all this in our latest Fatal Conceits podcast. We talked about the war in the Ukraine and Russia’s real military reserves, plus what’s going on with international energy markets and what happens to global supply chains when Russian inputs are no longer so… “dependable.” Look out for Part I of that conversation later today. The Fatal Conceits podcasts are free for all Bonner Private Research readers/listeners."
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