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UK Sleepwalking Into Food Crisis As Fresh Produce Set To Vanish From Supermarkets

By Tyler Durden | Zero Hedge | April 1, 2022

The National Farmers’ Union has warned the UK is sleepwalking into a food security crisis. Soaring energy and fertilizer costs have led to an unprecedented situation where growers’ margins have collapsed, forcing many to halt growing operations.

Reuters says because of the inclement weather in the UK. Farmers grow cumbers, plant peppers, aubergines, and tomatoes in vast greenhouses. Greenhouses use natural gas for heat, but after last year’s surge in gas prices exacerbated by Russia’s invasion of Ukraine last month, the crops have become uneconomical to produce.

Trade body British Growers said the average cost to produce a cucumber in Britain before the energy crisis was around 25 pence, which is now more than doubled and set to hit 70 pence when higher energy prices fully kick in.

“Gas prices being so sky-high, it’s a worrying time,” grower Tony Montalbano said.

“All the years of us working hard to get to where we are, and then one year it could just all finish,” Montalbano said.

He noted his 30,000 square meters of glasshouses at Green Acre Salads business, which supplies major supermarkets such as Tesco, Sainsbury’s, and Morrisons, are shuttered because costs outpace market prices. In fact, the farmer would be losing money if he were to grow.

Compared with this time last year, European gas prices are up a mindboggling 500%.

Fertilizer prices have tripled since last year, along with soaring prices for packaging, diesel, freight, labor, and everything related to running a grow operation.

“We are now in an unprecedented situation where the cost increases have far outstripped a grower’s ability to do anything about them,” said Jack Ward, head of British Growers.

With many greenhouses offline, this will inevitably push down the output of produce for supermarkets and result in persistent and or even higher food inflation when overall inflation is at historic levels.

To give an idea of just how bad the situation is, the Valley Growers Association, whose members produce about 75% of Britain’s cucumber and sweet pepper crop, said 90% of farmers didn’t plant in January. Others said they would not grow with elevated gas prices.

“There’s definitely going to be a lack of British produce in the supermarkets,” association secretary Lee Stiles said. “Whether there’s a lack of produce overall depends on where and how far away the retailers are prepared to source it from.”

The UK could increase imports of produce, but countries worldwide are implementing protectionism measures to keep farm goods domestically to mitigate shortages due to the Ukraine conflict disrupting the global food supply.

Like many other countries worldwide, the UK is sleepwalking into a food crisis.

April 1, 2022 Posted by | Malthusian Ideology, Phony Scarcity, Russophobia | , | Leave a comment

Russia will see record gas earnings this year – expert

Samizdat | April 1, 2022

Russia will have record revenues from natural gas sales this year due to high prices in the spot markets, Janis Kluge, a Eurasia-focused researcher at the German Science and Politics Foundation, told ntv.de news outlet.

“Almost half of the Russian budget is based on transactions with oil and gas. The state earns enormously from production taxes and export duties. It receives the income in rubles, and the amount is determined by two factors: firstly, by energy prices on the world market and, secondly, by the exchange rate of the ruble,” Kluge says.

According to him, revenue from gas will soar this year, as many of Russia’s gas contracts are adjusting to the rising spot prices.

“The gas price on the spot markets has quintupled within the past year. That means Gazprom will have record revenues,” he said, while predicting that the cost will increase significantly within the next several months.

The situation is similar with oil, Kluge says, which profits from the ruble’s sanctions-induced drop.

“Russia planned the national budget with a dollar-ruble exchange rate of 72, but now the ruble is around 85, much weaker, but with a view to energy exports this is an advantage. If we multiply the oil price by the ruble exchange rate, it shows that Moscow expected revenues of around 4,500 rubles per barrel of oil, but is getting much more, around 7,000 rubles.”

According to him, the profit from energy sales will be enough to cover the impact of Ukraine-related sanctions on the Russian economy, among other things, by halting inflation.

Kluge also believes the costs of the operation in Ukraine are not very high, and economic measures, except for a complete embargo, will hardly “stop the tanks.” And seeing that the Russian Central Bank has been inventive in introducing counter-measures to keep the economy afloat, Kluge predicts that Russia will survive the sanctions and even have a budget surplus this year.

April 1, 2022 Posted by | Economics | , | Leave a comment

Is Russia the REAL target of Western sanctions?

Soaring oil prices, energy and food crises on the horizon… is it possible the REAL target of this economic war is us?

By Kit Knightly | OffGuardian | March 30, 2022

The first tweet I saw when I checked my timeline this morning was from foreign policy analyst Clint Ehlirch, pointing out that the Russian ruble has already started recovering from the dip created by Western sanctions, and is almost at pre-war levels.

Ehrlich states, “sanctions were designed to collapse the value of the Ruble, they have failed”.

… to which I can only respond, well “were they?”

… and perhaps more importantly, “have they?”

Because it doesn’t really look like it, does it?

If anything, the sanctions seem to be at best rather impotent, and at worst amazingly counterproductive.

It’s not like the US/EU/NATO don’t know how to cripple economies. They have had years of practice starving the people of Cuba, Iraq, Venezuela and too many others to list.

Now, you could argue that Russia is a larger, more developed economy than those countries, and that’s true, but the US and its allies have previously managed to hurt the Russian economy quite drastically.

As recently as 2014, following the “annexation” of Crimea, Western sanctions were tame compared to the recent unprecedented measures, but crucially the US massively increased its own oil production, then later that year (following a visit by US Secretary of State John Kerry) Saudi Arabia did the same.

Despite objections from other members of OPEC – Venezuela and Iran chiefly – the Saudis flooded the market with oil.

The result of these moves was the biggest fall in oil prices for decades – collapsing from $109 a barrel, in June 2014, to $44 by January 2015.

This kicked Russia into a full recession and saw Russia’s GDP shrink for the first time under Putin’s leadership.

Again, just two years ago, allegedly as part of competing with Russia for a share of the oil market, Saudi Arabia once more flooded the market with cheap oil.

So, the West does know how to hurt Russia if it really wants to – by increasing oil production, flooding the market and tanking the price.

But has the US increased its oil production this time round? Have they leant on their Gulf allies to do the same?

Not at all.

In fact, in a point of beautiful narrative synchronicity, the US claims it’s “unable” to increase its oil production due to “staff shortages” caused by that gift that keeps on giving – Covid.

Similarly, Saudi Arabia is not tanking the oil market, but deliberately increasing prices.

Yes, right now, with the Western allies locked in an alleged economic war with Russia the price of oil is soaring, and may continue to do so.

This is good news for the Russian economy, to the point it may even make up for the damage done by the brutal sanctions.

The high price of oil and need “not to rely on Putin’s gas” or “de-Russify” our energy supply will doubtless result in millions being poured into “green” technology.

Those Western sanctions are targeting other Russian exports too, including grains and food in general.

Russia is a net exporter of food, meaning they export more food than they import. Conversely, many countries in Western Europe rely on imported food, including the UK which imports over 48% of its food supply.

If Europe refuses to buy Russian food, the net effect is that Russia has food… and the West doesn’t.

And, just as with oil, increasing food prices will help rather than hinder the Russian economy.

Take wheat for example, of which Russia is the biggest exporter in the world. The vast majority of this wheat is not even sold to Western countries – but instead to China, Kazakhstan, Egypt, Nigeria and Pakistan – and so is not even subject to sanctions.

Nevertheless, the sanctions, and the war, have actually driven the price of wheat up almost 30%.

This is good for the Russian economy.

Meanwhile, according to CNN, the US is likely to enter a full-blown recession by 2023, France is considering food vouchers and countries all over the world are expected to begin rationing fuel.

So, the sweeping sanctions imposed against Russia by the West, allegedly in response to the invasion of Ukraine, are not having their stated aim – tanking the Russian economy – but they are driving up the price of oil, creating potential energy and food shortages in the West and exacerbating the “cost of living” crisis created by the “pandemic”.

You should always be wary of anybody – individual or institution – whose actions accidentally achieve the exact opposite of their stated aim. That’s a simple rule to live by.

Remember how Orwell described the evolution of the concept of war in 1984:

War, it will be seen, is now a purely internal affair. In the past, the ruling groups of all countries, although they might recognize their common interest and therefore limit the destructiveness of war, did fight against one another, and the victor always plundered the vanquished. In our own day they are not fighting against one another at all. The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact.

Recall that “the worst food shortages for fifty years” were predicted as a result of Covid. But they never materialised.

Likewise, we were due to experience Covid-related energy disruptions and power cuts. Short of the UK’s damp squib of a “petrol crisis”, they never really arrived.

But now they are heading our way after all – because war and sanctions

Increased food prices, decreased use of fossil fuels, lowering standards of living, public money poured into “renewables”. This is all part of a very familiar agenda, isn’t it?

Regardless of what you feel about Putin, Zelensky, the war in general or Ukrainian Nazis, it’s time to confront the elephant in room.

We need to be asking: What exactly is the real aim of these sanctions? And how come they align so perfectly with the great reset?

March 30, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , | Leave a comment

Sanctioning Russia could topple the West

A new Cold War would cripple the American empire

BY THOMAS FAZI | UnHerd | March 22, 2022

The West, following the lead of the United States, has reacted to Russia’s invasion of Ukraine by introducing a “crippling” regime of sanctions. It is a “total economic and financial war” aimed at “caus[ing] the collapse of the Russian economy”, the French finance minister Bruno Le Maire candidly admitted. And yet many of the current sanctions appear to be run-of-the-mill restrictions used against several countries in the past. A number of them — including export bans and the freezing of certain assets — have been imposed on Russia since its annexation of Crimea in 2014. Even the much-discussed exclusion of a number of Russian banks from the main international banking message system, SWIFT, is not new, having already been used against Iran, with mixed results.

The most controversial aspect of the new sanctions regime is without a doubt the freezing of Russia’s offshore gold and foreign-exchange reserves — about half of its overall reserves — but even this is not unprecedented: last year, the US froze foreign reserves held by Afghanistan’s central bank in order to prevent the Taliban from accessing its funds; the US has also previously frozen the foreign-exchange reserves of Iran, Syria, and Venezuela.

So, taken individually, these measures are not as exceptional as they’ve been portrayed. However, never before have so many sanctions been deployed at once: there are already 6,000 various Western sanctions imposed on Russia, which is more than those in existence against Iran, Syria and North Korea put together. Even more importantly, none of the previous targets of sanctions were remotely as powerful as Russia — a member of the G20, and the world’s largest nuclear power.

Likewise, none of the 63 central banks that are members of the Bank for International Settlements (BIS) in Basel — known as the central bank of central banks — has ever been the target of financial sanctions. The BIS itself has even joined in on the sanctions in order to prevent Russia’s access to its offshore reserves. This really is unprecedented: since its establishment in 1931, the BIS had never taken such a measure, not even during World War II.

So what should we expect from the sanctions? Western pundits and commentators have little doubt: the sanctions will hamstring the Russian economy, sow discontent among the Russian people and elites alike, and possibly even cause the downfall of the Putin regime. At the very least, we’re told, they will hinder Russia’s war efforts. But history suggests otherwise: see Iraq, or more recently Iran. Far more likely is that this turns out to be the latest Western strategic miscalculation in a long list of strategic blunders, of which the United States’ inglorious withdrawal from Afghanistan is just the most recent example.

After all, Russia has been preparing for this moment for quite some time. Following the first wave of Western sanctions, in 2014, and partly in retaliation against them, Putin embarked on what analysts have dubbed a “Fortress Russia” strategy, building up the country’s international reserves and diversifying them away from US dollars and British pounds, reducing its foreign exposure, boosting its economic cooperation with China, and pursuing import substitution strategies in several industries, including food, medicine and technology, in an effort to insulate Russia as much as possible from external shocks.

True, Putin made the mistake of leaving around half of those reserves parked in foreign central banks, resulting in these now being confiscated. But nonetheless Russia still has access to more than $300 billion in gold and foreign-exchange reserves — more than most countries in the world and more than enough to cushion any short-term fall in exports, or prop up the rouble (for a while).

Moreover, the Russian central bank reacted to the sanctions by stopping capital flows out of Russia and nationalising the foreign exchange earnings of major exporters, requiring Russian firms to convert 80% of their dollar and euro earnings into roubles. It also raised interest rates to 20% in an effort to attract foreign capital. These measures are aimed at bolstering the rouble’s value and providing a flow of foreign exchange into the country. They appear to be working: while the rouble is around 40% of its value since the start of the conflict, the Russian currency’s free-fall seems to have come to a halt for now, even registering an uptick over the past two weeks. For the time being, Russia’s financial account — the difference between the money flowing in and out of the country — is far from disastrous.

Let’s not forget that the main source of Russia’s foreign-exchange reserves — oil and gas exports — has been excluded from the sanctions, for obvious reasons: for most European countries, Russia accounts for a huge part of their oil and gas imports (and other staple commodities), and there’s simply no way of replacing those energy sources from one day to the next.

In short, Russia runs no risk, in the short term, of running out of reserves and not being able to pay for its imports. But even assuming that the West decided to put a stop to all its imports from Russia overnight, there’s no reason to believe that this would bring the Russian military machine to a halt. The notion that “we are financing Russia’s war by purchasing gas and oil”, as the Finnish prime minister recently stated, is fundamentally misplaced.

As the economist Dirk Ehnts has observed, the Russian military machine, for the most part, doesn’t rely on imports (if anything, Russia is an arms exporter). It is sourced domestically and, like the salaries of its soldiers, is paid for in roubles, which the Russian central bank can create in an unlimited quantity, just as the Bank of England does when it comes to pounds.

Equally unfounded are rumours of an impending Russian default. In recent years, the Russian government has taken steps to reduce its foreign liabilities: its foreign currency-denominated debt amounts today to about $40 billion — a tiny amount compared with the size of Russia’s yearly exports of more than $200 billion in oil and gas. Any decision to default would be entirely political. We mustn’t forget that the very creditors expecting to be paid back in dollars are the same that have just confiscated a good part of Russia’s dollars — if the latter were to default on their payments, it would be an even bigger problem for their Western creditors. As with Russia’s oil exports, hurting Russia inevitably means hurting ourselves as well.

Moreover, thanks to the Russian government’s successful efforts at boosting domestic agricultural production, domestic food production now accounts for more than 80% of retail sales, up from 60% in 2014. This means Russia is largely self-sufficient food-wise. So even if its export revenues were to plummet (which is unlikely), the country wouldn’t go hungry — unlike the rest of the world — and would most likely be able to continue to finance its war efforts.

Might a selective ban on exports of specific high-tech Western components, some of which are bound to be used in Russia’s defence industry, prove more effective? Possibly. But Russia has been reducing the dependence of its military-industrial apparatus on foreign components and technologies for years. More importantly, both hypotheses — that Russia’s economy and military can be brought to their knees through export and/or import bans — rest on the flawed assumption that the whole world is on board with the sanctions. But that is far from the case.

While most of the world’s nations — 143 out of 193 — voted for a resolution in the UN’s General Assembly condemning Russia, the 35 countries that abstained include China, India, Pakistan and South Africa, as well as several African and Latin American states. These and many more countries — including several that voted in favour of the resolution, such as Brazil — have strongly criticised the sanctions against Russia and can be expected to continue trading with Putin. It’s frankly very hard to call Russia isolated when some of the world’s largest economies have refused to support the West’s sanctions regime.

China, in particular, has been very vocal in its support of Russia. Beijing is already the Kremlin’s main trading partner, and it alone can absorb huge quantities of Russian energy and commodities, as well as provide Russia with basically any industrial and consumer goods that the latter currently imports from the West. China also operates an alternative to the Western-managed SWIFT system called CIPS to manage cross-border transactions in yuan, which could allow Russia to partially circumvent the West’s financial blockade. Even though the yuan still makes up a small percentage of international transactions, its role is bound to grow rapidly in the coming years (consider the news that Saudi Arabia may start pricing its oil sales to China in the latter’s currency). All this helps explain why even Western financial analysts, such as Goldman Sachs and JP Morgan, predict a year-on-year contraction for the Russian economy of about 7% — bad, but hardly catastrophic (Covid caused a much larger drop in GDP for most countries).

However, much will depend on the policy response of the Russian government. Obviously, the withdrawal of many foreign firms and decline in foreign investments will increase unemployment. But the Russian government can cushion the blow by resorting to a “Keynesian” expansionary fiscal policy aimed at boosting domestic investment and supporting incomes. If ever there were a time for Russia to abandon its historically ultra-tight fiscal policy, as several Russian economists have been arguing for some time, it is now.

Two weeks ago, I suggested that, in the short term at least, the US will benefit from the conflict in Ukraine. In the long term, however, it is slowly becoming clear that US-led global Western order will suffer. The West’s imposition of sanctions — involving not only governments, but also private companies and even allegedly apolitical organisations such as central banks — has sent a clear message to the countries of the world: the West will stop at nothing to punish countries that step out of line. If this can happen to Russia, a major power, it can happen to anyone. “We will [never again] be under the slightest illusion that the West could be a reliable partner,” the Russian foreign minister Sergey Lavrov has said. “We will do everything so as never, in any way, to be dependent on the West in those areas of our life which have a decisive significance for our people.”

Those words are bound to reverberate across the world, with dramatic implications for the West. As Wolfgang Münchau has warned: “For a central bank to freeze the accounts of another central bank is a really big deal… As a direct result of these decisions, we have turned the dollar and the euro, and everything that is denominated in those currencies, into de facto risky assets”. At the very least, it will inevitably push countries to diversify their reserves and increase their yuan holdings, in order to loosen the West’s grip on their economies and bolster their economic resilience and self-sufficiency. Even if it doesn’t push countries straight into Beijing’s arms, as is already happening with Russia, it will likely lead to the emergence of two increasingly insulated blocs: a US-dominated Western bloc and a China-dominated East-Eurasian one.

In this new pseudo-Cold War, “non-aligned” countries could find that they are in a better position to assert their sovereignty than they were under the American global empire. Forget “the collapse of the Russian economy” — this could be the result of the West’s new economic war.

March 29, 2022 Posted by | Economics | , , , | Leave a comment

Russia states position on West’s mediation in Ukraine talks

Samizdat | March 28, 2022

Moscow is eager for a diplomatic solution to the conflict in Ukraine, but it won’t be needing any Western mediation during its talks with Kiev, Russian Foreign Minister Sergey Lavrov has said.

“We’re ready to give diplomacy a chance. That’s why we agreed to the talks, which are resuming in Istanbul,” Lavrov said during a video conference on Monday with the Serbian media. The discussions are scheduled to continue on Tuesday.

The Turkish government, which has good ties with both Russia and Ukraine, has been putting a great deal of effort into getting the two sides around the negotiating table. But there’s no need to include the EU or the US – which support Kiev in the conflict – in the peace process, according to the minister.

“There are many examples of times when the achievements of diplomacy were shattered by Western colleagues. They can’t be trusted anymore,” Lavrov opined.

“I wouldn’t want to see any shuttle diplomacy from our Western partners, because they’ve already done their ‘shuttling’ – in February 2014 in Ukraine and in February 2015 in Minsk,” he added.

In February 2014, the EU became the guarantor of the agreements between Ukraine’s then-president Viktor Yanukovych and the Maidan protesters in Kiev, Lavrov reminded viewers. “It was a pinnacle of diplomacy. But, the next morning, the opposition spat on that diplomacy, and the EU had to swallow it.”

Yanukovich ended up being deposed after violent clashes and fleeing the country, and the new Ukrainian authorities soon sent its military to the eastern regions of Donetsk and Lugansk, where most of the population refused to recognize the coup in the capital.

In September of the same year, the Minsk I agreement between the breakaway republics and the government in Kiev was achieved in the Belarusian capital of that name, having been negotiated by Ukraine, Russia, Germany, and France in the so-called Normandy Format. The deal called on the two sides to stop fighting, organize prisoner exchanges, allow deliveries of humanitarian aid, and withdraw heavy weaponry.

“The diplomacy then reached new heights in February 2015, when the agreements that were signed in Minsk ended the war in eastern Ukraine and opened the way to restoring Ukraine’s territorial integrity by granting a special status to the Donbass,” the minister continued.

The second agreement, Minsk II, introduced another ceasefire and paved the way for administrative and political reform in Ukraine as well as for autonomy and local elections in the Donbass republics. However, Kiev’s Western backers were subsequently unable to persuade the Ukrainian government to fulfil its promises.

“The European Union has proven its incompetence as an organization that is capable of fulfilling the agreements being reached,” Lavrov said.

Russia sent its troops into Ukraine over a month ago, following a seven-year standoff over Kiev’s failure to implement the terms of the Minsk agreements, and Russia’s eventual recognition of the Donbass republics of Donetsk and Lugansk.

Moscow has now demanded that Ukraine officially declare itself a neutral country that will never join the US-led NATO military bloc. Kiev insists the Russian offensive was completely unprovoked and has denied claims it had been planning to retake the two republics by force.

March 28, 2022 Posted by | Deception | , , , | Leave a comment

UAE: There is no substitute for Russian oil

Samizdat | March 28, 2022

The world’s energy markets need Russian oil and no producer can replace it, United Arab Emirates (UAE) Minister of Energy Suhail al-Mazrouei said on Monday.

Russia produces some 10 million barrels of oil a day, which makes it a critical member of the OPEC+ energy alliance, al-Mazrouei explained during an energy forum in Dubai.

“Leaving the politics aside, that volume is needed today,” he insisted, adding that “unless someone is willing to come and deliver that amount, we don’t see that someone can substitute Russia.”

Russia is the world’s second biggest crude exporter after Saudi Arabia. Following Russia’s military operation in Ukraine, some nations, led by the US, have pledged to stop buying Russian oil and gas. The United States, Europe, and others have been calling on Gulf Arab oil producers to ramp up production and help bring down crude prices, which at one point shot above $120 a barrel.

The International Energy Agency announced earlier this month that it had decided to release 60 million barrels of oil from its emergency reserves, saying that global oil markets were already tight with highly volatile prices and commercial inventories at their lowest level since 2014.

Many have expressed doubts, however, about whether it was possible to ditch Russia’s energy resources.

Last week, the EU stepped back from imposing an embargo on Russian crude and petroleum products, despite pressure from the US. An immediate embargo on Russia’s fossil fuels “from one day to the next would mean plunging our country and the whole of Europe into a recession,” German Chancellor Olaf Scholz said last week. Europe gets nearly 30% of its crude and roughly 50% of its petroleum products from Russia.

Reducing dependence on natural gas – something that the EU hopes to achieve over the next few years – may prove difficult as well. Qatar – which holds the third-largest natural gas reserves in the world – said last week that it was practically impossible to replace Russian gas on the European market, as between 30 and 40% of the total volume of gas supplied to the world market comes from Russia.

March 28, 2022 Posted by | Economics | , , | Leave a comment

G7 rejects Russian demand to pay for gas in rubles

Samizdat | March 28, 2022

The Group of Seven major economies have collectively agreed to reject Moscow’s demand to pay for energy imports from Russia in rubles, according to German Energy Minister Robert Habeck.

“All G7 ministers agreed completely that this [would be] a one-sided and clear breach of the existing contracts,” Habeck told journalists on Monday.

The minister added that “payment in rubles is not acceptable” and that the nations will urge the companies affected “not to follow” the demand issued by Russian President Vladimir Putin last week.

On Monday, Putin ordered the government, the central bank, and Gazprombank to develop the necessary tools to switch all payments for Russian natural gas from “unfriendly states” to rubles from March 31.

This includes countries that have targeted Russia’s financial system and seized its foreign reserves in response to the crisis in Ukraine.

Kremlin spokesperson Dmitry Peskov said Russia will stop shipping natural gas to countries that reject the demand.

March 28, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity, Russophobia | , | Leave a comment

Biden’s reality check in Europe

BY M. K. BHADRAKUMAR | INDIAN PUNCHLINE | MARCH 26, 2022 

The takeaway from the US President Joe Biden’s European tour on March 25-26 is measly. Dissenting voices are rising in Europe as western sanctions against Russia start backfiring with price hikes and shortages of fuel and electricity. And this is only the beginning, as Moscow is yet to announce any retaliatory measures as such. 

The unkindest cut of it all is that the Russian Defence Ministry chose Biden’s trip as the perfect backdrop to frame the true proportions of success of its special operation in Ukraine. The US and NATO’s credibility is perilously close to being irreparably damaged, as the Russian juggernaut rolls across Ukraine with the twin objectives of ‘demilitarisation’ and ‘denazification’ in its sights. 

The Russian General Staff disclosed on Friday that the hyped up Ukrainian Armed Forces, trained by NATO and the US, have sustained crippling losses: Ukrainian air force and air defence is almost completely destroyed, while the country’s Navy no longer exists and about 11.5% of the entire military personnel have been put out of action. (Ukraine doesn’t have organised reserves.) 

According to the Russian General Staff’s deputy head Colonel General Sergey Rudskoy, Ukraine has lost much of its combat vehicles (tanks, armoured vehicles, etc.), one-third of its multiple launch rocket systems, and well over three-fourths of its missile air defence systems and Tochka-U tactical missile systems. 

Sixteen main military airfields in Ukraine have been put out of action, 39 storage bases and arsenals destroyed (which contained up to 70% of all stocks of military equipment, materiel and fuel, and more than 1,054,000 tons of ammunition.)

Interestingly, following the intense high-precision strikes on the bases and training camps, foreign mercenaries are leaving Ukraine. During the past week, 285 mercenaries escaped into Poland, Hungary and Romania. Russian forces are systematically destroying the Western shipment of weapons. 

Most important, the mission to liberate Donbass is about to be accomplished. Simply put, the main objectives of the first phase of the operation have been achieved.

Apart from Kiev, Russian troops have blocked the northern and eastern cities of Chernigov, Sumy, Kharkov and Nikolaev, while in the south, Kherson and most of Zaporozhye region are under full control — the intention being to not only to shackle Ukrainian forces but to prevent their grouping in Donbass region. (See my article Dissecting Ukraine imbroglio, Tribune, March 21, 2022)  

“We did not plan to storm these cities from the start, in order to prevent destruction and minimise losses among personnel and civilians,” Rudskoy said. But, he added, such an option is not ruled out either in the period ahead.

It stands to reason that Washington and European capitals are well aware that the Russian operation is proceeding as scheduled and there is no stopping it. Thus, NATO’s extraordinary summit on March 24 confirmed that the alliance is unwilling to get into a military confrontation with the Russian Army. 

Instead, the summit decided to strengthen the defence of its own territories! Four additional multinational NATO combat groups of 40,000 troops will be deployed in Bulgaria, Hungary, Romania and Slovakia on a permanent basis. Poland’s proposal to deploy NATO military units in Ukraine was outright rejected.

However, Poland has certain other plans, namely, to deploy contingents to the western regions of Ukraine to support the ‘fraternal Ukrainian people” with the unspoken agenda of reclaiming control over the historically disputed territories in the those regions. What Faustian deal has been struck in Warsaw on March 25 between Biden and his Polish counterpart Duda remains unclear. Clearly, vultures are circling Ukraine’s skies. (See my blog Biden wings his way to the borderlands of Ukraine, March 24, 2022) 

Indeed, if Poland makes a bid for Ukrainian territory (with Biden’s tacit support), would Belarus be far behind to take control of the regions of Polesie and Volyn in Ukraine? Possibly not. Suffice to say, in the period since the CIA-backed coup in Kiev in 2014 when the US moved into the driving seat, Ukraine has lost its sovereignty and is now perilously close to vanishing altogether from Europe’s map! 

Washington — Biden personally, having been the Obama administration’s point person in Kiev in 2014 — should carry this heavy cross in history books. 

As for European leaders, they find themselves in a surreal world, out of touch with the stunning realities of a new world order. Eighty-year old Biden with limited grasp of the torrential flow of events, made an astounding proposal in his press conference in Brussels on Thursday that Ukraine should replace Russia in the G20! 

But Biden has a soulmate in the European Commission chief Ursula von der Leyen whose latest threat is that Russian oil and gas companies “will not be allowed to demand payment for fuel in rubles.” She is blissfully unaware that the EU has no more effective means to pressure Russian companies! 

Russian President Vladimir Putin caught the western leaders huddled in Brussels by surprise with his announcement that Russia will promptly start charging “unfriendly” countries in rubles for gas supplies. There are over 45 unfriendly countries on the list — the US and EU members plus the UK, Australia, Canada, Singapore, Montenegro and Switzerland. (See the RT’s explainer What buying gas in rubles means for Russia and the West.)

Effectively, Moscow is on the one hand strengthening the weakened ruble, while on the other hand, messaging that it is pioneering a new wave internationally to bypass the dollar as  commodity currency. 

Yet, Moscow is also continuing to routinely supply Russian gas for transit to Europe through Ukraine to meet the requests of European consumers (109.5 mln cubic meters as of March 26!) The point is, despite rhetoric and grandstanding, Europe recently increased its gas purchases from Russia significantly against the backdrop of astronomically high spot prices! 

The European Council meet at Brussels on March 25 with Biden in attendance failed to adopt any concrete measures to address the energy price growth, and could not come up with a unified approach to Russia’s decision to receive payments for its gas only in rubles. 

Apropos the European Commission’s proposal to establish a new system of common purchase of gas to prevent outbidding, the final statement of the European Council merely says that the leaders agreed to “work together on voluntary common purchase of gas, LNG and hydrogen,” meaning that common purchases may be carried out only by those EU countries who are willing to unite. [Emphasis added.] 

It is a long haul for Europe to dispense with Russian gas. Serbian President Aleksandar Vucic said yesterday:  “There are gas shortages, and that is why we need to talk to Russians. Europe will move towards reducing its dependence on the Russian gas, but can this happen in the coming years? This is very difficult.”

“Europe consumes 500 billion cubic meters of gas, while America and Qatar can offer 15 billion, up to the last molecule… That is why German and Austrian politicians told me: “We cannot just destroy ourselves. If we impose sanctions on Russia in the oil and gas domain, we will destroy ourselves. It’s like shooting yourself in the foot before rushing into a fight. This is how certain rational people in the West see it today.” 

With the doomsday predictions of Russian military failure in Ukraine coming unstuck and the blowback from Russia sanctions beginning to bite, Europeans are caught in a bind. They will be resentful as time passes. 

March 26, 2022 Posted by | Economics | , , , | Leave a comment

Hungary responds to Zelensky’s demand for support

Samizdat – March 26, 2022

“Hungary is on Hungary’s side,” its prime minister, Viktor Orban, said in a statement on Saturday, in response to Ukrainian President Volodymyr Zelensky’s calls for Budapest to quit sitting on the fence in the conflict between Kiev and Moscow.

Orban said that, while his country could not “be indifferent” to the “Russo-Ukrainian war going on in our neighborhood,” Hungary would look after its own interests first, and maintain a “Hungarian point of view.” He went on to stress that Budapest “want[ed] to stay out of this war,” but that this did not preclude it from helping “those in need.”

The statement came in response to Zelensky having urged Orban to choose a side in the conflict. Speaking to EU leaders via video link on Friday, the Ukrainian president thanked the Baltic states, Poland, France, and Germany for their support, but noted that Hungary was still declining to take a stand. He called on Budapest to “decide for yourself who you are with.” Addressing Orban directly, Zelensky asked him if he knew “what’s going on in Mariupol,” referring to the besieged southern port city, which has seen heavy fighting in recent days.

Zelensky reiterated his request that his country’s application to join the EU be swiftly considered, and once again appealed to Hungary in particular not to block the bid.

Unlike the other EU member states bordering Ukraine, Hungary has so far refused to either send weapons to Kiev or let other countries move such shipments through its territory.

Orban has argued that, as around 85% of its gas and over 60% of its oil is imported from Russia, it would not be in Budapest’s best interest to rile Moscow.

In his latest statement, however, the Hungarian prime minister emphasized that “it must be made clear to the Russians that it is not worth pursuing this war,” warning at the same time that Europe should avoid hurting itself “more than the Russians.” He also called on Brussels to provide Hungary with more funding to deal with the influx of Ukrainian refugees.

March 26, 2022 Posted by | Militarism | , , | Leave a comment

Russia’s ruble payment plan leaves European gas buyers confused

Samizdat | March 23, 2022

German gas industry group Zukunft Gas said on Wednesday it was confused by the statement of Russian President Vladimir Putin about the switch of payments for Russian natural gas supplies to rubles.

“We took the message that Russia wants [us] to pay for gas supplies only in rubles with great confusion,” Timm Kehler, the director general of Zukunft Gas, told DPA agency. “We can’t predict at this moment what specific implications this will have for the gas trade,” Kehler said.

Meanwhile, Austrian OMV said it was going to continue to pay for Russian gas in euros. According to the head of the company, they have no other contractual basis.

President Putin announced earlier in the day that Russia will now accept payment for gas exports to “unfriendly countries” in rubles only.

The measure is the first serious response from Moscow to sanctions imposed on Russia by the US and its allies over the conflict in Ukraine. A number of mostly Western countries have taken steps to isolate Russia from their financial systems. Major Russian banks have been cut off from the SWIFT payment network, making it difficult for the country to continue transactions in euros and US dollars.

March 23, 2022 Posted by | Economics | , | Leave a comment

Putin wants rubles for Russian gas

Samizdat | March 23, 2022

Russia will now accept payment for gas exports to “unfriendly countries” in rubles only, President Vladimir Putin said at a meeting with the government on Wednesday.

The president explained that Russia plans to abandon all “compromised” currencies in payment settlements. He added that illegitimate decisions by a number of Western countries to freeze Russia’s assets destroyed all confidence in their currencies.

“I have decided to implement in the shortest possible time a set of measures to change the payments for – yes let’s start with this – for our natural gas supplied to the so-called unfriendly countries in Russian rubles, that is to stop using all compromised currencies for transactions,” the Russian president said.

“It doesn’t make sense to deliver our goods to the EU and the US and get paid in dollars and euros,” he added.

Putin gave the Central Bank and the government a week to determine the procedure for operations for buying rubles on the domestic market for importers of Russian gas.

The president added that Russia will continue to supply gas in accordance with the volumes and pricing principles of the contracts. Only the currency of payment will change.

The announcement caused a spike in the cost of contracts for gas supply at the TTF European hub, Forbes Russia quoted data from the Intercontinental Exchange as indicating. During Wednesday’s trading, the gas price rose from €97 per megawatt hour (MWh) to approximately €108.5 per 1MWh, but after the president’s speech, it jumped by another €10 to €118.75 per 1MWh, before retreating to €114 per 1MWh as of 1pm GMT.

In the past month, Russia has been hit with several rounds of unprecedented international sanctions over its military operation in Ukraine. The US, EU, and their allies have cut off the country from their financial systems, limited dollar and euro transactions, and froze roughly $300 billion in Russian forex reserves abroad, among other measures. At the same time, they have continued to buy Russian oil and gas.

March 23, 2022 Posted by | Economics | , | Leave a comment

India, US have different priorities

BY M. K. BHADRAKUMAR | INDIAN PUNCHLINE | MARCH 23, 2022

An extraordinary week has passed for the Modi government’s dalliance with the Quad. Call it a defining moment, a turning point or even an inflection point — it has elements of all three. 

The last week saw a 2-day visit to Delhi by Japanese prime minister Fumio Kishida, virtual summit between Prime Minister Narendra Modi and Australian PM Morrison, and foreign ministry level consultations with the visiting US Undersecretary for Political Affairs Victoria Nuland. The leitmotif was the situation around Ukraine. 

Biden has since taken a jab that India has a “somewhat shaky” stance on Ukraine. Who would have imagined that the geopolitics of Ukraine was going to shake up Quad? 

Certainly, India had a premonition. The Indian foreign-policy establishment has had no misconceptions about what began unfolding in Ukraine in the last week of February. It had spotted as far back as November/December at least, like Elijah in the Bible, a small cloud like the palm of a hand coming up from the sea. 

Unlike the Indian media, academia or think tanks at large, the Indian leadership could sense that an epochal global struggle for ascendancy by the US and its western allies versus Russia and China was breaking out in Ukraine. Modi sensed that there would be collateral damage to India unless it saddled up to get down from the mountain, as the sky began to grow black with wind-driven clouds, before the huge cloudburst of rain arrived.

There is a background to it. Any perceptive observer would have noticed that Modi has been in a reflective mood as regards foreign affairs for the past several months. His participation in the Summit for Democracy last December discernibly had a fin-de-siècle air about it — the closing of one era and onset of another. One could attribute it to the sobering effect of the pandemic. 

The point is, India struggled with the pandemic all by itself. No matter the hype about it, India realised that it has no real partnership with the US or EU, that it was a mere transactional relationship — and that in the final analysis, India lived in its region. 

Indeed, India handled the pandemic far better than most countries. International experts acknowledge it today, and those who threw stones at that time grudgingly accept it, too.

However, with the economy ravaged beyond recognition, the government is picking up the pieces and staggering forward. There is still so much of uncertainty in the air about yet another “wave” of the pandemic stealthily advancing to drown all ceremonies of repair and reconstruction of life. 

Succinctly put, the big-power struggle in faraway Europe, precipitated by the Biden administration for geopolitical purposes to isolate and weaken Russia, erupted at a most critical juncture when India has been increasingly sceptical about American policies and statesmanship. The picture that the US is presenting of itself is far from convincing either: a battleground of tribalism and culture wars, an ageing superpower in decline with dwindling influence globally. 

In the Indian economy’s tryst with destiny, the US is of no help. On the other hand, the waning multilateralism and the new constraints imposed on growth by the US’ growing propensity to weaponise the dollar, threaten to blight the shoots of post-pandemic growth in the Indian economy. 

On Monday, Biden celebrated a Business Roundtable with the CEOs of the largest corporations in the American economy. He boasted: “6.7 million jobs last year –- the most ever created in one year; more than 7 million now.  678,000 created just last month, in one month.  Unemployment down to 3.8 percent.  Our economy grew at 5.7 percent last year, and the strongest in nearly 40 years… We reduced the deficit by $360 billion last year…  And we’re on track to reduce it by over $1 trillion this year.” 

Biden is understandably thrilled beyond words. Yet, when he deliberately orchestrated a confrontation with Russia at this juncture, it didn’t occur to him what crippling impact and downstream consequences his draconian “sanctions from hell” against a major G20 economy would have on the developing economies. 

A UNCTAD report on March 16, titled The Impact on Trade and Development of the War in Ukraine, concludes, “The results confirm a rapidly worsening outlook for the world economy, underpinned by rising food, fuel and fertiliser prices, heightened financial volatility, sustainable development divestment, complex global supply chain reconfigurations and mounting trade costs.

“This rapidly evolving situation is alarming for developing countries, and especially for African and least developed countries, some of which are particularly exposed to the war in Ukraine and its effect on trade costs, commodity prices and financial markets. The risk of civil unrest, food shortages and inflation-induced recessions cannot be discounted…” 

Does Biden even know that at least 25 African countries depend on Russia for meeting more than one-third of their wheat imports? Or, that Benin actually relies 100% on Russia for its wheat imports? And that Russia supplies wheat at concessional prices for these poor countries? 

Now, how do these meek and wretched countries of the planet import from Russia when Biden and EU chief Ursula Gertrud von der Leyen join hands to block the banking channels for trading with Russia? Can Delaware find a solution?

The cruelty and cynical complacency with which the Biden Administration and the EU conduct their foreign polices is absolutely stunning. And, mind you, all this is happening in the name of “democratic values” and “international law”! 

India cannot agree with the US and EU’s reckless attempt to weaponise global economic links. The fact of the matter is that the US and EU may not even win this war in Ukraine. Russia has almost completed 90 percent of its special operations. Unless Biden allows Kiev to agree to a peace settlement, the division of Ukraine along the Dnieper river is in the cards. 

The US is destabilising the European security order while the western sanctions are destabilising the global economic order. The US and EU must bear responsibility for this collateral damage. The West is in panic that the world is living in the Asian century already. 

“One reason for the optimism across the heart of Asia is the immense natural resources of the (Asian) region,” writes the famous Oxford historian Peter Frankopan in his recent book The New Silk Roads: The Present and Future of the World. For, the Middle East, Russia and Central Asia account for almost 70% of global proven oil reserves, and nearly 65% of proven natural gas reserves. 

Prof. Frankopan writes: “Or there is the agricultural wealth of the region that lies between the Mediterranean and the Pacific… which account for more than half of all global wheat production… (and) account for nearly 85% of global rice production.” 

“Then there are elements like Silicon, which plays an important role in microelectronics and in the production of semiconductors, where Russia and China alone account for three-quarters of global production; or there are rare earths like yttrium, dysprosium and terbium that are essential for everything from super magnets to batteries, from actuators to laptops — of which China alone accounted for more than 80% of global production… Resources have always played a central role in shaping the world… This makes the control of the Silk Roads more important than ever.”    

The West still seems to want to “return to ‘normal’”, Frankopan writes, “and expects the newcomers to resume their old positions in the world order.” Clearly, India, an erstwhile British colony, understands the real agenda behind Washington and Brussels’ geopolitical struggle with Russia. Principally, India is looking in all directions — Russia and China included — for partnerships.

If the Chinese news website Guancha is correct, which it mostly is, “China-India diplomatic relations will significantly ease and enter a recovery period. China and India will realise the exchange of visits of diplomatic officials in a relatively short time. Chinese officials will go to India first, and Indian Foreign Minister Jaishankar will come to China.” 

This is good news. Modi’s unique stature in Indian politics enables him to take difficult decisions. The renewed mandate he secured from the heartland puts him in a position to break fresh ground in foreign policy. 

March 23, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , , , , , | Leave a comment

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