Small Wars Journal

Post-Empire Nostalgia

In “Collapse of an Empire: Lessons for Modern Russia” Yegor Gaidar writes “[w]e are not the first to suffer post-empire nostalgia, which permeates the Russian consciousness today. It has occurred in history more than once. The Soviet Union was not the first empire to collapse in the twentieth century, but it was the last. … The problem for a country dealing with post-imperial syndrome is that it is easy to evoke feelings of nostalgia for the lost empire.”[i] It is easy to see the effect of the “post-imperial syndrome” in how the Russian population supports Putin’s actions in the Crimea. What may be less easy to see is how that syndrome is affecting us.

When the Soviet Union fell apart the United States was an unchallenged military leviathan; the only superpower on the planet. Our military divided the earth into sectors of military control overseen by geographical combatant commanders. We projected power across the globe, and we still do. However, since we won the Cold War the U.S. military has been involved in two less than totally successful campaigns in Iraq and Afghanistan. In those wars we fought an enemy who did not use the conventional tactics and systems that we had perfected over the last half of the twentieth century. As those counterinsurgency operations come to a close the military today looks to regain its past prominence as a conventional fighting force.

Russia’s land grab has offered us that opportunity.  This new confrontation in Europe comes complete with convenient historical examples.  Russia, with its quasi-dictatorial leadership, makes the perfect enemy. We can see the long shadow of Hitler in his actions, replaying the events of Czechoslovakia in 1938, only the first steps in his quest for German “living space”.  Further, this is the Soviets, … err, … I mean, the Russians we are talking about. It was not that long ago that they were a threat to capitalist societies around the world. History dictates that we must act now. There is the added bonus of the Russians being a conventional force. We know how to fight them. Most of the equipment we now have was designed in the era where BMPs, T-90s, and Hind-Ds were the threat to defeat.

But before we jump into this with both feet, perhaps it is worth considering Sun Tzu’s advise to know not just your enemy, but yourself.  How much of our interests in re-engaging Russia in a battle of wills is an attempt to regain our own former military glory?  Secretary Gates characterizes Putin’s actions this time around as a direct challenge to America – Putin had “thrown down a gauntlet.”[ii] Putin’s action is not about Russians in Crimea or even Russian territorial and military interests there. In reading blogs on places like the Small Wars Journal one would believe that the Ukrainians are simply caught in the cross-fire between Russia and the United States, helpless pawns in the U.S. versus the U.S.S.R., Round Two. Why do we choose to characterize the situation this way? Perhaps it is because we are also trying to regain our former military glory. Here is an enemy the entire country can fear.  Putin is Stalin and Hitler all rolled into one. Here too, is a military we can confront on conventional terms where we have the clear advantage. This is the perfect combination to provide us the opportunity to reassert our dominance and regain our status as the undefeatable military leader of the world!

So before we turn the Kremlin into radioactive ash, we need to consider that the world is no longer a bi-polar place. This is not capitalism versus communism. Putin is not after “living space.” He has extra-territorial aspirations, but he is probably not looking to invade France. Our allies in Europe have their own interests in how this confrontation plays out that may not align with our need to beat Russia into submission. More important, we need to understand how our own recent history is affecting our decision making process. We should not let nostalgia motivate our response; two former enemy’s both attempting to regain past glory is a recipe for disaster.

If we recognize how our history is affecting how we view this situation, then perhaps we can make some rational long term decisions on how to deal with a leader trying to regain his nation’s former status. If we fail to recognize our own nostalgia, then we are likely to see only what we want to see, and make the kind of mistakes reminiscent more of WWI than of WWII.

End Notes


[i] Gaidar, Yergor. “Collapse of an Empire: Lessons from Modern Russia.” Translated by Abtonia W. Bouis. 2007. Washington, D.C.; Brookings Institution Press. P.

[ii] Gates, Robert M. “Putin’s Challenge to the West: Russia has thrown down a gauntlet that is not limited to Crimea or even Ukraine.” The Wall Street Journal. March 25, 2014. http://online.wsj.com/news/articles/SB10001424052702303725404579460183854574284 (accessed April 15, 2014)

 

Comments

Many here seemed excessively focused upon the military dimension of the problems between Russia, NATO and the USA. That to me seems backwards. It is politics that drives the issue not military readiness or deterrence.

If we had a large number of heavy armored divisions on NATO’s eastern front they likely still would not act as a plausible deterrent to Russia because Moscow fully appreciates that they would never be used to defend non-NATO Ukraine. The military deterrence of NATO in this case is incapable of being convincing.

In fact, if the US tried to forced such military action upon its western European allies that could actually drive a wedge between us only to Russia’s advantage. Military deterrence is only effective if the other side believes that you would fight. In this case Russia knows that NATO would not go to war for Ukraine a non-NATO country nor would the American or European public's accept such a war.

Our recourse is not to rebuild and redeploy the US Army to Europe but to engage Russian behavior with serious economic and political consequences. Just doing that will be difficult enough.

Ned McDonnell III

Wed, 04/30/2014 - 10:18am

In reply to by Outlaw 09

Amen to that. President Obama lashed out at critics recently about his resistance to use military force. While I sympathize with the President not wanting to go to war, he is again casting his critics as bent on war when no one is.
http://www.politico.com/blogs/under-the-radar/2014/04/obama-fed-up-with…
There is a big difference between using military assets and a war. It is this reticence to use the soft (information, like that described in the article you posted) and economic power at his disposal, and to use both decisively, that is most difficult to understand.

Outlaw 09

Wed, 04/30/2014 - 1:50am

In reply to by Ned McDonnell III

Ned---this is one area that I absolutely do not understand the WH actions/reactions on and it would drive a stake into the heart of the current KGB/FSB mis/disinformation which could be driven by the Voice of America or Radio Free Europe over and over into eastern Ukraine and into the rest of Europe as Europe is wavering.

If we in fact have voice intercepts indicating clearly Russian involvement then why not play them for the entire world to hear and hear often.

Since the entire world now knows what the abilities of the NSA are after Snowdon--just release them and let them play in the global public opinion especially since virtually the entire leadership of Russia have all publicly stated there are no Russian troops or intel types in the Ukraine.

http://www.thedailybeast.com/articles/2014/04/29/kerry-u-s-taped-moscow…

Ned McDonnell III

Tue, 04/29/2014 - 5:39pm

In reply to by Outlaw 09

All the more reason to slam that box shut, now! I look forward to reading the Pandora's box article, though hope seems to be late in emerging...

I shared on F.B. one of the articles you had previously posted here (from 'Yahoo! News' because of its brevity and many links into other aspects of the situation), crediting you and an intel 'bud' but not by name/moniker, with the following:
"It's all in the sleep and the waking:
1. President Putin goes to bed dreaming of Peter the Great and wakes up thinking like Stalin.
2. President Obama goes to bed speaking like Churchill and wakes up acting like Chamberlain."

Even libs among my friends are 'liking' the link and comment...there seems to be a non-partisan split emerging among people I know. These issues tend to strike to heart of personal values like 'stick up for allies'; 'root for the underdog'; 'not our business'; etc.
http://www.reuters.com/article/2014/04/29/us-ukraine-crisis-idUSBREA3S0…
While I would tend to be a 'little Englander' type, like President Cleveland, the ramifications (i.e., steps 2,3,4 out there in response and strategy) makes some resolute response necessary for reasons you cite from the article you posted.

Outlaw 09

Tue, 04/29/2014 - 2:19am

In reply to by Ned McDonnell III

Ned---what is interesting is that Russia now detects a opening between the Europeans and the US over further sanctions yes or no---and are crowing about it on RIA.

In some aspects I hate to say it--at some point the US must simply go to the branch wide sanctions regardless of what the Europeans think or say.

Branch wide sanctions will bite and hurt and get Putin's attention---only when he sees the West take financial hits as well will he believe the financial threat is real and will hurt.

Ned McDonnell III

Mon, 04/28/2014 - 5:15pm

In reply to by Outlaw 09

Outlaw-09,

I do not get it, either. I gave up on most D.C. reporters when I was an intern in the early 1980s for the U.S. Senate. Even with the leadership presence of President Reagan, it was obvious that the keys to the stories more often lay in Congress. There was little to know coverage; I decided that most reporters preferred covering the White House because it was easier to cover one President rather than 535 legislators.

These days, in the U.S. at least, there seems to be an enmeshment among reporters and various government agencies. Perhaps, these people see their livelihoods threatened by calling out the failing policies of national leaders (or, at least, questioning their advisability in the absence of immediate impacts). I wonder what the quality of the coverage was like in the 1937 and 1938 coming out of the Far East and Europe.

What concerns me is that people are not looking ahead of where we are now and what the consequences of lacking a firm and swift response might be. President Putin may be trashing his economy. Nevertheless, if he, the regime and its security agencies have the guns, younger Russians may acquiesce. Appeasement gives President Putin more time to build up his strength, with plants from eastern Ukraine producing arms, and as his strength increases, so does his 'calculus'.

Great articles. President Putin did say he was counting on the West to prevent civil war in Ukraine. This will lead to the truespeak of saying that his leading a Russian intervention to re-take eastern (or all of) Ukraine, after his thugs have fomented disorder, will be the fault of the West for not assuring that there would be no civil war.

Like saying, "Hey, I left it up to you guys and you failed; I had to step in for humanitarian reasons..." Oy-vey!

Outlaw 09

Mon, 04/28/2014 - 4:42pm

In reply to by Ned McDonnell III

Ned---slowly getting angry at the Western media for playing into the KGB/GRU dis/misinformation campaign---why no one calls them out is interesting.

http://www.thedailybeast.com/articles/2014/04/28/russia-s-gunmen-in-eas…

This journalist from VICE who was kidnapped then released, but is still hanging in and reporting.

http://inforesist.org/video-earlier-identified-invades-in-donbas-confes…

Ned McDonnell III

Mon, 04/28/2014 - 3:50pm

In reply to by Outlaw 09

From the article you just attached:
"The same thing happened during the Cold War. As capitalism grew around the world, the Soviet economy, disconnected from globalization, quietly rotted from the inside out. When it finally collapsed, it became clear that the power the USSR was projecting was largely a myth."

Reminds me of of the old joke: What is the Irish version of foreplay? Brace yourself Brigid!

P.S. With a name like Ned McDonnell, I can get away with it.

Outlaw 09

Mon, 04/28/2014 - 3:38pm

In reply to by Ned McDonnell III

Ned As I have been saying often here---this goes back a number of years and we in the IC and senior leadership since the Bush WH have simply not paid attention---the same goes for the Russian violation of the INF not being called out.

http://news.yahoo.com/putin-divulged-plot-reunify-ussr-101500515.html

Secondly---the development of the counter threat finance abilities of the IC are starting to come into play---this article shows the economic impact that is starting to take hold---another angle is the Russian oligarch currently charged by the US in Austria--- knows the inherent black money routes of the Putin elite---he is the key to understanding Putin's wealth and where it is hidden.

http://www.themoscowtimes.com/business/article/investors-fear-crimps-ru…

Ned McDonnell III

Mon, 04/28/2014 - 12:59pm

In reply to by Outlaw 09

Then it is time to lower the boom. Although my preference for more active -- not aggressive -- push-back is not going to occur, the economic measures should be fast incoming because they are already late. If Russia is to implode, so be it; the key will be keeping W.M.D. away from extremists.
http://www.rferl.org/content/russia-crimea-and-the-good-hitler/25322600…
Putin has the country on a track that will precipitate such an implosion sooner or later. Interesting article on some internal dissent that is emerging in Russia.
http://www.nytimes.com/2014/04/28/world/europe/putin-rival-takes-messag…
With the moderate Ukrainian mayor being shot, things still indicate a window of opportunistic pretext for the Russians to take the rest of eastern Ukraine because the "West and Ukraine" have failed to avoid civil war as Putin had "counted" on them to do, leading to the intervention.

Outlaw 09

Mon, 04/28/2014 - 7:30am

In reply to by Ned McDonnell III

Ned---do not think the Russian Central Bank has be all up front about their money supplies and current condition of their economy.

This is the third time in the last five days this has circulated via Interfax as a press release title--from today.

If one shouts there is a fire in the barn enough times there might just be a fire where no one is seeing one especially Putin.

09:32 Ruble not expected to crash but Russia ready for all scenarios - Nabiullina

Ned McDonnell III

Sun, 04/27/2014 - 5:33pm

In reply to by Outlaw 09

Than you, kind Sir, for the link for two reasons. One, the information. Two, for reminding me that Syria is the more dire issue. The U.S. can do things with SOF that would be very constructive in the longer term, especially in and around Syria. These actions would not be aggressive but in place as preventive measures. On Ukraine, I am at a loss at why the U.S. would not push the soft-power pressure point it has, if other forms of push-back are off the table.

What are we waiting for?

Maybe there is something we just do not know. Of that, I am skeptical.

Outlaw 09

Sun, 04/27/2014 - 4:44am

In reply to by Ned McDonnell III

Ned---you are right one must filter the articles but both are interesting as it is the first mention of anything along the same lines even from US standard say nothing media---the second article reference the old Soviet General tells me Russia is drifting farther right and more nationalist than I have initially thought being pushed by the ethnic nationalism expounded by Putin.

One thing I have actually learned or better said relearned with the Ukraine issue is something from the Cold War days---listen and watch and you will learn---Soviets and then Russians always signal their intentions---we are just poor at understanding them.

IE we see constant Interfax financial press releases indicating a struggling economy and yet we shy away from pushing the pressure point as what we are afraid of diplomacy not working? It sounds strange but the Soviets and now Russians do understand a firm definitive stand even if hard.

Right now there is a mix of a few Ukrainian sites that try to tell their side vs four solid well made web sites carrying the proRussian/Russian voices---the inforesist link is the first to even carry the Russian Army order of battle---not even mentioned in the US media.

This particular site is interesting while in the English version they even carry battle field reports out of Syria from the Assad side.

http://rusvesna.su/

Ned McDonnell III

Sun, 04/27/2014 - 1:01am

In reply to by Ned McDonnell III

P.S. Call me Mr Push-back. I still support the deterrence posture in eastern N.A.T.O. being firmed up quickly. Additionally, I still favour overflights of eastern Ukraine from the U.S.S. G.H.W. Bush (if still in the area); a naval quarantine of Sevastopol; training exercises with three companies of the California National Guard in Western Ukraine; and, two companies of Special Forces in Eastern Ukraine to train and aid in counter-terrorism and rule-of-law. Upon the arrival of U.N. peace-keepers or other N.A.T.O. personnel, these 750 soldiers would draw down.

Ned McDonnell III

Sun, 04/27/2014 - 12:53am

In reply to by Outlaw 09

Outlaw-09,

In my last comment, I was trying to think of why this Administration is doing nothing to stand behind Ukraine. The only reason I could think of was the idea of an internal implosion in Russia being so dreadful that President Obama wanted to avoid that at all costs.

Like MoveForward has written elsewhere, I am not convinced that the President's advisors are that savvy. Such a rationale -- doing anything is worse than doing anything that might crack the egg -- may pop up as an after-the-fact rationale (like we are hearing about absence in Syria being a shrewd idea of letting a war of attrition burn out two enemies).

Thank you for those articles. While they are more alarmist than I would tend to be, they should not be dismissed but considered closely. The first of the 'inforesist' articles seems outlandish, except to understand that such a scenario of provoking a provocation would be consistent with Russian actions to date, except on a larger scale. Like Hitler, the Putinista may be starting out small and then getting bigger as he gains momentum.

The second article about a major war in the West seems crazy. Perhaps, had I been around in 1938, I would have considered a big war precipitated by Germany inconceivable, given the strong French defenses, a large French Army, a re-arming Britain and a Germany thought to be weaker than she was. And the big war did come. So this thesis needs to be explored.

The take-away for me is that the West is on a razor's edge of possible downsides into far larger conflicts following of appeasement or miscalculation. Care not to under-estimate Russian strength and not to consider Putin's calculations as being fixed should be weighed against the possibility of excess assertiveness spooking people into harder positions and eventual warfare.

Me? Appeasement here seems to be the greater danger. If things are as stifled in Russia as your young friend suggests, some type of implosion is likely to occur. Better to confront it and get it over with (not in terms of our fighting but in terms of bracing ourselves for an internal convulsion that will make the Arab Spring look like a fashion show).

French anti-colonial writers suggested that the path to freedom and democracy would wend its way through a time of violence as oppressed men would assume their 'manhood'. This idea may be what we are seeing not only in the Arab Spring but also in Ukraine and, eventually, Russia as well as other tottering, delinquent dictatorships. Call it the growing pains of history.

Outlaw 09

Sat, 04/26/2014 - 11:25am

In reply to by Ned McDonnell III

Ned---maybe Russia needs an economic collapse in order to get the population to the point of a "color revolt" which IMHO is one of the main reasons Putin is moving against the Ukraine---he inherently fears the Maidan effect on his own population.

He still thinks that only Nazi's rose up against the former Ukrainian Russian hand picked and supported President and he cannot fathom the why behind the three month long siege against him.

A young Russia in her mid 20s fashion design student studies with my wife and mentioned today to her as she speaks English, German and naturally Russian that she is never going back to Russia because she has no future there and cannot do what she wants to do in her chosen field and feels "safer" in Germany---the young generation is leaving Russia in droves unless they are tied to the oligarchs and criminal elements in Moscow.

http://www.themoscowtimes.com/article/498920.html

The Russian economy is struggling massively the last two weeks with the ruble and their stock markets taking major hits and the S&P lowering their bond ratings to virtually junk bonds and then this today from the CB.

IRKUTSK, April 26. /ITAR-TASS/. The Russian Central Bank expects no dramatic fall of the rouble but is prepared for any scenario, chief banker Elvira Nabiullina said on Saturday, April 26.

“If there are no additional external shocks, we think that the rouble will stay rather stable and may even slightly strengthen,” Nabiullina told REN TV’s Nedelya (Week) programme.

She noted that the Bank would not artificially buttress the national currency at a certain level and said that forecasts predicting the crash of the rouble were unfounded.

Check this articles while written in poor English they are interesting nevertheless to read especially the second one as it ties a good deal to exactly what happened in the last three days between the Ukraine and Russia especially with the Russian "exercise" that had all the markings of an actual invasion attempt that was halted.

http://inforesist.org/russia-is-getting-ready-for-a-big-war/?lang=en

http://inforesist.org/failed-storm-of-slavyansk-saved-ukraine/?lang=en

Ned McDonnell III

Fri, 04/25/2014 - 6:17pm

In reply to by Outlaw 09

Outlaw-09,
No doubt that there is a great deal I do not know. General sanctions -- like the fire bombings of WWII -- will likely not weaken support in Russia for President Putin as he plays this most dangerous card. In this 16-minute vid, Secretary of State John Kerry blusters again, putting the Putineers on double-secret probation.
http://www.c-span.org/video/?319014-1/secretary-kerry-ukraine
Even I don't believe him, though I sense that Secretary Kerry wants to do more in Syria and Ukraine. In fact, I feel sorry for John Kerry; must be Hell to be hand-cuffed. There is the possibility that this restraint by the USG is to avoid collapsing the Russian economy and fomenting a disastrous civil war.
http://www.c-span.org/video/?c4496780/putins-bye-ukraines-good-bye
In view of reneging on missile defenses in Poland, doing nothing in Iraq, yanking armor from N.A.T.O. and doing nothing in Syria, that thesis is -- as you argue soundly -- very far-fetched and highly wishful thinking. Frankly, I am glad there are those in this forum willing to investigate what we can do instead of rationalizing every idea into what we can't do. Conscience can make cowards of us all.

Outlaw 09

Fri, 04/25/2014 - 12:50pm

In reply to by Ned McDonnell III

Ned---part of the problem is not Putin, but the Russian population as a whole---there was an article that stated the entire country of Russia was suffering PTSD after the break up of the Soviet Union---there might well be something to that as crazy as it sounds.

Putin is around 80% now on his popularity support side---that is really hard to then say to them I am not going to defend Russians in eastern Ukraine after defending Russians in the Crimea--he would lose face.

We also have not looked at the Russian Orthodox Church and it's nationalist attitude towards the West as well and that role inside both the Russian population and on Putin who wears a Orthodox Church cross all the time.

From today's Interfax:

18:46 Following Crimea's accession Russians even more certain Russia deserves status of great power - poll

Ned McDonnell III

Fri, 04/25/2014 - 12:35pm

In reply to by Outlaw 09

Outlaw-09 and MoveForward, thanks for filling in the intellectual part of the side arguing for stiffer resolve.

Dayuhan, doing nothing -- or resigning ourselves to doing nothing because it is too late or involves Russia's back-yard (as defined by whom?) -- is far more speculative than taking credible steps toward deterrence or, in my case, push-back. Such a posture presumes to understand the Putineer's intentions and blithely ignores the amassed capability of Russia on the Ukraine border.

You are right that firming up the N.A.T.O. flank may not deter a roll-in of a Russian anschluß in Ukraine. But making that foreseeable attack a 'gimme' after Crimea may well change Putin's calculus: i.e., a pattern of wait until things calm down and strike later when people become acclimated to the most recent aggression as a new given.

In view of the Putinista's track record in Georgia and Ukraine, his current posture toward eastern Ukraine as well as the sophistication of the current Russian information warfare, are you really willing to risk that speculation of a new-found peace of mind by a proven aggressor?

Outlaw 09

Fri, 04/25/2014 - 11:59am

In reply to by Move Forward

MF---part of the current overall rather limited ability of even the larger NATO members is that they have virtually no heavy assets and no one wants to talk about that.

Germany for example just went through the reduction of three Leo 2 Tank Bdes.

Why the lack of heavy abilities---blame the West for having believed Russian intentions after 1994 and having placed way to much faith in the OCSE.

Literally all of NATO went through a disarmament phase with the destruction of heavy capability in order to meet the required OCSE agreement levels.

Who did not and who has not meet the OCSE compliance requirements and who still is not in compliance---Russia as they claimed they needed the heavy side for their jihadi fights. And when they did melt--it was T55/62s not the new 80/90s, but Germany did melt their Leo 2s as required as did the French with their heavy side as well as the Dutch.

Russia has also been in violation of the INF as well and no one in NATO nor the US has ever complained until now---strange is it not?

Move Forward

Fri, 04/25/2014 - 10:00am

In reply to by Dayuhan

Check out this Stripes.com article in the 25 April SWJ Roundup:

http://www.stripes.com/news/us-forces-take-lead-in-nato-s-response-to-u…

In it find these quotes about airborne forces being sent to Poland and the Baltic NATO countries:

<blockquote>On Wednesday, a company from the Vicenza-based 173rd Infantry Brigade Combat Team arrived at an air base in northwestern Poland, part of a commitment the U.S. announced Tuesday to send about 600 troops to Poland and the Baltics for training exercises.

As a second company of some 150 U.S. paratroops left Italy Thursday it was clear that the U.S. has committed far more resources to bolstering NATO members in eastern Europe that border Russia than their closer allies in Western Europe.

The paratroop company that flew out on Thursday headed to Latvia, the unit’s executive officer Maj. James Downing said, adding that by Monday two more companies will be on the ground in Lithuania and Estonia.</blockquote>

As you note, these forces and the USAF ones noted in the article may do nothing to deter or reverse actions in Ukraine. They do, however, send a message that Baltic NATO countries and Poland, etc. are off limits. More importantly, they exhibit U.S. leadership that may encourage other nations to contribute sanctions if not forces:

<blockquote>“The U.S. is the only country which is answering the problem,” said Witold Waszczykowski, a Polish diplomat and parliamentarian who previously served as the country’s foreign minister.

He said the 600 U.S. paratroops sent from Vicenza to Poland and the Baltics was the result of bilateral decisions between the U.S. and those countries.

“It was not a NATO decision,” he said. “I would expect NATO would soon explain its position. We hope they join with the U.S.”</blockquote>

You may well be correct that such forces do nothing to reverse Crimea or the seizure of east Ukraine. However, their presence could offer sanctuary and training for other Ukraine troops should Putin expand his aggression into west Ukraine. These troops could seek sanctuary in adjacent NATO countries and practice an insurgency into their homeland against pipelines and Russian troops. The alternative of doing nothing, certainly sends only a message of weakness and appeasement.

You have to start somewhere. Airborne troops are hopefully just a precursor of heavier U.S. force rotations and prepositioning that may follow along with the reemphasis of NATO. That emphasis and a 490,000 or larger active Army never should have been abandoned, just as it wasn't by 16 years of Democratic Presidents from '64-'68, '76-'80 and '92-2000. We owe a commitment to those smaller NATO nations that helped out beyond their proportional means in Afghanistan and Iraq. Perhaps we can shame the larger, richer nations into action.

Dayuhan

Fri, 04/25/2014 - 6:10am

In reply to by Ned McDonnell III

I don't think US armor in Europe, or for that matter missile defenses, would have made any difference at all in Putin's calculations on the Ukraine. He'd simply reason (correctly) that they wouldn't be used, and carry on. Similarly, I can't see how US deployments in Poland or the Baltics would deter further Russian action in the Ukraine at all... again, it's only a deterrent if you think it'll be used. It might deter action against Poland or the Baltics, but there's little to suggest that's imminent in any event.

Given the fragility of the Russian economy, economic leverage is the obvious response, but they will take time to work and they won't work at all if Europe isn't in the picture.

The idea that US firmness will "bring the Europeans around" is of course speculative, as are potential scenarios presented. We can speculate over anything, but the speculations generally tell us more about the assumptions of those doing the speculating than they do about the future.

Ned McDonnell III

Fri, 04/25/2014 - 1:01am

In reply to by JPWREL

Thank you MoveForward for a thoughtful analysis. JPWREL, the issue is risky, either way we respond. President Putin is now resorting to demagoguery on the ethnic-Russian issue to gain support and buy time at home after he and his coterie basically gained Crimea for nothing (interestingly, a few years after talking the USG into pulling armor from Europe and scrapping missile defenses in the name of a re-set into an elevator shaft).

With this ease of conquest (and as Crimea and Transnistria are nonetheless geographically alienated from Mater-Russia), President Putin's encore of annexing the rest of eastern Ukraine and pushing onto eastern Moldova is a 'consequence waiting to happen'. Either one believes that premise or not. Looking at capability rather than intention, I do believe that premise.

That is why I would argue that your prescribed course is far more risky though immediately convenient. There was no overwhelming call for a Russian intervention annexation; pre-crisis, only 41% of the people on the peninsula favoured closer ties with Russia. That level was similar to secessionist sympathies in Quebec.

Consider this scenario, if no deterrent or push-back is forthcoming. There will be a bloody insurgency in eastern Ukraine and a bloody counter-insurgency in Moldova against Transnistria. Both will be allied with Western Ukraine, drawing more and more Russian troops away from other trouble spots and stretching out supply lines.

Then Chechnya and Dagestan take advantage of the skewing of deployments of the Russian Army toward 'New Russia' by reinitiating blood-drenched urban fighting, this time with al-Qaeda affiliates et al. swarming in. That could spark violence in the 'Stans'. Then bleeding white, Russia would have to reduce aid to Syria, giving Sunnis extremists a big boost there, spilling into Western Iraq, perhaps precipitating a cross-cutting and utterly chaotic Sunni-Shi'a / Arab-Persian conflict.

The whole thing would resemble WWI except, in the least extensive of these scenarios (i.e., conflict in only Ukraine and Moldova), outside powers would be dealing with a population twice the size of Yugoslavia in 1991 and perhaps six times the population of the Balkans a century ago. What many seem to miss about a WWI analogy is that 1914 represented the end-point of a string of crises in the Balkans starting in 1908 (perhaps earlier); by 1914, France and Russia had been humiliated in recent wars.

That is to say: national egos were aflame and gradually descended into carnage in a scenario not completely alien to the start of WWII. If a lid is not placed on the Putinista's destructive demagoguery of playing the ethnic card and responding to internal pressures by resorting to external adventurism, there will be many, many people killed, possibly dragging the United States into a far bigger war and wasting many thousands of U.S. military personnel.

The U.S. has the power to lead up-front; firmness will bring the Europeans around. Sanctions, as MoveForward points out, could easily be construed as belligerent by President Putin. Even if not viewed that way, the sanctions might provide just enough hardship for Russia -- a nuclear power -- to implode into chaos, with various minorities availing themselves of the opportunity of an armed revolt.

The world is watching Syria, hoping that neither the Sunni jihadists nor Hizbullah get enough chemical weapons to do real damage to innocent population centers. Yes, any U.S. response may seem like patchwork as we try to summon up force quickly. It is our presence that is needed now. Abdicating longer-term regional stability because "President Obama does not like conflict" and we cannot pursue these modest measures perfectly frankly frightens me.

JPWREL, do you really want to risk the fall-out, described above, of appeasement now, hoping Putin will belch and proclaim that he is sated later? I do not. The deterrence and push-back cannot guarantee the avoidance of armed conflict. Nevertheless, these options appear to me to best course forward with the highest probability of saving lives of our soldiers and untold innocents down the road.

On the details of how to do it, I again refer you to others who understand that technical side far better than I.

P.S. Seems that Dean Wormer has just put Anumal House on dpuble-secret probation...hahaha...
http://finance.yahoo.com/news/john-kerry-just-gave-russia-223320960.html

JPWREL

Thu, 04/24/2014 - 11:44pm

In reply to by Move Forward

Sending troops and aircraft to Poland is not deterrence it is an effort to look like we are doing something when real military options do not exist. This is what great powers do and in days of yore the British or we would send a ship to show the flag. Now we send a squadron of F-16’s.

During the Cold War the NATO conventional establishment was large enough and powerful enough to act at least as an illusion of real deterrence when in fact we know that the real deterrence were nuclear weapons in the shawdows.

It is not likely that Moscow will be intimidated by an understrength and light American footprint in Poland. That operation is intended to cool down the Poles and not scare off the Russians. We have to at least make a visible effort to reward the Poles for hiring out their troops to us in Iraq and Afghanistan.

Does anyone really think that Obama is going to finish his second term by provoking hostilities with Russia over Ukraine? He will warn and bluster and when push comes to shove unleash Joe Biden to bombard them with bombast. But he is not going to fight another war.

PS: Germany not the US is the lynchpin of eastern Europe and Angel Merkel will not wreak her governing coalition to please the United States or anyone else for that matter.

Move Forward

Thu, 04/24/2014 - 10:26pm

In reply to by JPWREL

Why don't you comprehend the concept of deterrence? Placing U.S. ground and air forces in Poland and other NATO countries is not conventional combat. The American people would accept forces in NATO countries to defend them against the same type of aggression that Putin has proven to embrace. If ground and air force deterrence led to escalation that abandoned MAD, Europe would have been a smoldering, radioactive continent decades ago. You may be correct, however, about the Germans not wanting to participate from this article:

http://www.tabletmag.com/jewish-news-and-politics/170076/germany-hitler…?

In the last paragraph you will find this quote:

<blockquote>Most Germans, however, want nothing of the sort; only 38 percent support any sanctions on Russia. Another poll found that 49 percent of Germans want their country to take a “middle position” between Russia and the West, only 45 percent favor Berlin joining a united Western response. The country seems to sympathize with Social Democrat MP Ralf Stegner, who described Schäuble’s comments as “definitely not useful.”</blockquote>

Schauble's comment, as a government minister speaking about the Crimea, caused great controversy when he stated at a school:

<blockquote>“We know this from history,” Schaüble, a veteran of the ruling Christian Democratic Union, said. “Hitler used such methods in Sudetenland—and a lot more.”</blockquote> This comment even led Angela Merkel to distance herself saying that Crimea was a "standalone case."

You also stated this:

<blockquote>The only real option available if we want to influence events in that part of the world is to resort to diplomatic action and economic sanctions similar to what we impose on Iran. Even with that option Europeans may not willingly follow our lead since they realize that we have nothing at stake in the issue in comparison to them. One can hardly expect Germany to wreak its economy at the bidding of Washington.</blockquote>

This is why at least initially the U.S. will need to lead from the front, not the back. The front is adjacent to Ukraine and other northern Baltic states adjacent to Russia. Iran sanctions are about the worst possible example you could offer for sanctions working. At some point, since we won't act, Israel will and then we will be dragged into the conflict. Meanwhile, Secretary of State Kerry has upped the ante on sanction threats against Russia. Do we recall how oil sanctions against Japan prior to WWII actually led to that war rather than preventing it?

This discussion has been a bit of a departure from reality. Firstly, the United States is not going to engage the Russians in conventional combat. The American people will not accept that as an outcome. And even more so our most important European allies in NATO such as Germany and the UK are adamantly opposed to such a course of action.

Russia is a nuclear-armed country and there is no reason to believe that either the Russian or American governments could contain such a conflict to just conventional weapons. When national pride and political ego’s are on the line there is no guarantee that conflicts can be restricted and escalation is a distinct possibility.

The only real option available if we want to influence events in that part of the world is to resort to diplomatic action and economic sanctions similar to what we impose on Iran. Even with that option Europeans may not willingly follow our lead since they realize that we have nothing at stake in the issue in comparison to them. One can hardly expect Germany to wreak its economy at the bidding of Washington.

Finally, Ukraine is not Belgium or Denmark. Kiev is just as corrupt with a criminalized oligarchy as is Moscow. They are hardly a worthy cause to kill American, German or British soldiers.

Outlaw 09

Thu, 04/24/2014 - 10:29am

Now we know what those supposedly not close to the Ukrainian border Russian troops are doing. Is this the beginning of the slow west ward movement by the Russian Army in order to not to have to dash into the Ukraine or a simple show of force---tend to go with it is the beginning of movement into the Ukraine under the guise of an "exercise".

during the Cold War this was the standard fear and what was watched like a hawk---war starts out of an "exercise". So much for the good contacts between SecDef and the Russian Defense Minister.

Catch the second press release "flight activities near the State Border"---State Border to who would be the next question.

What happens if the pilots "accidently" land combined arms troops on the wrong side of the border?

Taken from Interfax today:

16:48 RUSSIAN BATTALION TACTICAL COMBINED-ARMS GROUPS FROM SOUTHERN, WESTERN MILITARY DISTRICTS START DRILLS IN RESPONSE TO SITUATION IN SOUTHEAST UKRAINE - SHOIGU

16:48 SHOIGU: IN FRAMEWORK OF DRILLS AVIATION TO CARRY OUT FLIGHTS TO EXERCISE ACTIONS NEAR STATE BORDER

Outlaw 09

Thu, 04/24/2014 - 10:06am

Here is a current history "mistake" that is interesting in that the Russians are issuing a new medal for "the Return of the Crimea".

Check the dates on the medal which are actually important as Russians tend to wear them on their civilian clothes for all kinds of official events.

The date of the campaign begins on 20 Feb which was one day before the EU brokered agreement on 21 Feb and the then president fled on 22 Feb so did the Russians slip up in the hectic to get a medal issued or is it the actual date of their true military campaign if one remembers the Maidan on 20 Feb with all the killing going on.

Slip up and or actual information on the actual start date for the Crimea operation?

http://inforesist.org/experts-named-12-facts-about-the-medal-for-the-re…

Edited.

The author, above, suggests that we recognize "how our history is affecting how we view this situation."

Herein, I do not see the United States/the West acting from the perspective of "post-empire nostalgia." Far from it.

Rather, I see the United States/the West continuing to act in accordance with its historical (then, imperial; now, neo-imperial) political objective, to wit: the transformation and incorporation of outlying states and societies (more into its [the West's] sphere of influence).

These actions, I suggest, being what got us into trouble in days past and again today.

Looking, once again, to history and how it may be affecting the present situation, let us propose that -- in both the Islamic and the Russian worlds (where the phenomenon of "post-empire nostalgia" is, indeed, present) -- the populations of both these regions (1) continue to blame their loss of their power and prestige on Western imperialism/neo-imperialism and (2) continue to feel threatened by same.

To sum up:

a. Concern that the United States/the West might act on the basis of "post-empire nostalgia?" This concern would seem to be misplaced. The West retains its imperial status and continues to act accordingly. That, it would appear, is what got us into our current predicaments in both the Islamic and Russian worlds.

b. Concern that the people in both the Islamic and Russian worlds are acting -- via post-empire nostalgia -- to counter what they see as continuing Western expansion/imperialism? This idea would seem to have legs.

Outlaw 09

Fri, 04/18/2014 - 7:15am

This goes to my previous comments about the article---yes it great to understand ourselves and even criticize the past ideology but unless we are truly ready to analyze what is now developing and or has developed in Russia and how it is driving their foreign policy then we cannot even begin to develop a strategy for the coming years as the Russia trend is not going to go away anytime soon.

There is a group of "realists" who claim that we have no strategic interest in the Ukraine, Ukraine is not a NATO member and why do we need to support the Ukraine-- built on the idea that US FP should be realistic about the world around them. But then was it not the US FP that has shouted out into the world the terms Rule of Law and Good Governance since 9/11 raising the expectations of many populations in other parts of the world.

This was taken from Putin's long TV marathon yesterday and goes to the heart of his new FP. We in the West really do need to understand this ethnic nationalism that is driving him and Russia and how does it tie into the four pillars of Russian national FP.

Also notice the reference to Odessa.

1. the military
2. the security services
3. the oligarchs
4. the Russian gangs

Taken from the Kiev Post online today.

What Ukrainians and the rest of the world see as Ukraine, Russian President Vladimir Putin sees as Novorossiya, or New Russia.

That Novorossiya is Ukrainian is a historical injustice, Putin said, in his hours-long live television question-and-answer session on April 17.

“I will remind you, using the terminology of the czarist times, this is Novorossiya: Kharkiv, Luhansk, Donetsk, Kherson, Mykolayiv, Odesa were not part of Ukraine in czarist times. These are territories that were passed on to Ukraine in the 1920s by the Soviet government.” Putin said. “Why did they do it? God only knows.”

After comments like these and others dismissing Ukraine’s sovereignty, is there any wonder why Ukrainians fear they will soon face a full-scale military invasion from the east?

Again I think it is important to reflect on the commonality of "post-empire nostalgia" that is found in both the Islamic and Russian worlds.

But are we focusing here, too much, on the notion of "nostalgia" only and not, as we should, on the political goals and objectives to which the appeal of "nostalgia" is being used?

In this regard consider, for example, this offering (which appears to discount the idea of "nationalism"):

http://soufangroup.com/tsg-intelbrief-continental-drift-turkish-and-rus…

Thus:

a. As the West seeks, post-the Cold War, to expand its informal empire (by transforming and incorporating other states and societies more along its [the West's] political, economic and social lines),

b. Other states and societies (specifically those that formed the nucleus of other cultural/civilizational empires) strategize -- and act -- so as to resist the West's warm embrace.

Modern conflict (as per Huntington?) to be found at the fault lines of these competing agendas. (Or, should we say, competing cultures/civilizations/ways of life.)

So: How to see the West's (and, indeed, the "Rest's) actions here?

Not as relates to "post-empire nostalgia," per se, but, rather, as relates to strategy, tactics, etc.

And these?

As relate to the opposed (see "a" and "b" above) political goals and objectives of different states, societies, civilizations and empires (former and present).

Outlaw 09

Thu, 04/17/2014 - 7:41am

In reply to by TheCurmudgeon

This was taken from Putin's National TV Call In Program---does it seem to a normal reader that Putin has direct intentions in the Ukraine or does it seem he is a peacenik?

Does it seem he wants a political solution via the Ukrainians or on his own specific terms as defined by his ethnic nationalism built on Czarist imperialism? If so where do we start the conversation on a new direction for reigning him in? Where has it been in our current SWJ discussions mentioned that Russia is a country ruled by four pillars---1) the military, 2) the security services, 3) the oligarchs and 4) Russian criminal gangs.

If that is the case where are our discussions to start? How does one build a strategy directed towards all four pillars--Putin is a product of all four wrapped in the mantel of an ethnic nationalist.

12:40 p.m. -- Putin has announced that the May 25 Ukrainian presidential elections cannot be considered legitimate because of the current unrest in the eastern part of the country, noting, “eastern candidates are being beaten and not allowed to meet people…And according to constitution – if it is not changed - Ukraine cannot hold elections if there is a living, legitimate president.”

The same president that raped, pillaged and plundered the Ukrainian National Bank and was the head of a massive corruption scheme benefiting his supporters but not the Ukrainian population as a whole.

Although Putin insists that disgraced former President Yanukovych remains the legitimate president of Ukraine, he said in March that Yanukovych was politically dead.

Rumors have been circulating over the past several days that Yanukovych may return to Ukraine as soon as April 20, Easter Sunday

If he returns then what is the US strategy?

IMHO he will return on the backs of Russian tanks and special ops personnel and into Kiev and soon rather than later---Putin has stated that fact a number of times recently.

The ideologies of WW1/2 have died long ago in 1989 when the Wall came down but we got sidelined with jihadi's and forgot the rest of the world and are now afraid to admit that--- thus the heated discussions incurring the past.

Outlaw 09

Thu, 04/17/2014 - 7:38am

In reply to by TheCurmudgeon

If the Putin Doctrine is in fact real and this Interfax press release from today verifies that-- just then what is the US strategy if the entire Ukraine goes under on Russian terms? I do not see his backing away from his own Doctrine anytime soon so what do we use as our counter thinking the old way or a new way---betting the old way as it is the easiest to explain to Americans.

Notice the use of the words "given the right use Army forces in the Ukraine"--that is the key to Russian thinking---he could have just said the Crimea but he did not.

Notice the last sentence--that is the Putin Doctrine as clearly stated as it can be---so what is our response to be and are we ready to incur the pain of countering it or do we go back to business as usual?

"We must do everything to help these people defend their rights and make an independent decision about the future. This is what we will be struggling for," the Russian president said.

April 17, 2014 13:44 Putin hopes he won't have to use Federation Council permission to send army to Ukraine (Part 2)

MOSCOW. April 17 (Interfax) - Russian President Vladimir Putin hopes he will not have to use the right to send army units to Ukraine he has been given by the parliament.

"Let me remind you that the Federation Council of Russia has granted the president the right to use the Armed Forces in Ukraine. I very much hope I will not have to use this right and we will manage to resolve all pressing, not to say, critical contemporary problems of Ukraine with political and diplomatic means," Putin said in a Q&A session.

He thinks Russia should do the utmost to help people in eastern Ukraine stand up for their rights.

"We must do everything to help these people defend their rights and make an independent decision about the future. This is what we will be struggling for," the Russian president said.

Ned McDonnell III

Tue, 04/22/2014 - 12:00pm

In reply to by Outlaw 09

As a second to Outlaw-09's previous remarks superior psy-ops of Russia, check out this 2½ minute comment on the political culture still pervasive in the Kremlin, at least in terms of information campaigns, agit-props and the rest.
http://www.c-span.org/video/?c4496359/whos-winning-ukraine-kgb
Here is the bio-brief on the speaker
http://en.wikipedia.org/wiki/John_Lenczowski
The talk from which this excerpt is snipped is worthwhile (all 77 minutes of it), particularly the first 28.6% of it (i.e., Mr Lenczowski's remarks).
http://www.c-span.org/video/?318958-1/resurgence-russian-political-warf…

Outlaw 09

Tue, 04/22/2014 - 7:40am

In reply to by Dayuhan

Dayuhan---this is just a cross section from Interfax today which reflects a number of press releases tied to the Russian economy---do these releases sound like those of a solid well functioning economy capable of withstanding a number of economic hits since the Crimea.

Go back and do a quick Interfax search for the same type of topics say two weeks before anything became known about the Crimea and you will not find anything similar being released--they are hurting now and there have been little if no really hard sanctions applied to them

April 22, 2014 13:15 Govt will honor all social obligations despite economic problems - Medvedev
MOSCOW. April 22 (Interfax) - For all the economic difficulties, the Russian social sector will not be affected, and the government will honor all the social obligations, said Russian Prime Minister Dmitry Medvedev.
"I want to state as follows: whatever happens around our country, whatever the difficulties our economy experiences, we shall fully honor all the social obligations we've assumed," Medvedev told the State Duma while presenting a government report.

13:13 RUSSIA TO MINIMIZE CONSEQUENCES OF POSSIBLE EU SANCTIONS BY TURNING TO OTHER MARKETS – MEDVEDEV

April 22, 2014 13:06 Blacklists swap will lead Russia, West into deadlock - Medvedev (Part 3)
MOSCOW. April 22 (Interfax) - The continuation of exchange of blacklists in the wake of the incorporation of Crimea into Russia will result in an absolute deadlock, said Russian Prime Minister Dmitry Medvedev.
"Of course, we can continue swapping blacklists but I do not even consider it necessary to prove now that this is an absolute deadlock," he said while presenting a government report to the Duma on Tuesday.
Already Russians have experienced the restrictions, and not just in getting visas: foreign partners have removed certain Russian banks from international payment systems, the prime minister said.
"For us, it is an additional incentive to create a national payment system that would hardly depend on the international situation and operate smoothly on a nationwide scale," Medvedev said.

13:59 Russia must try to shift foreign trade to the ruble for ruble to become reserve currency – Medvedev

13:26 Russian GDP should grow in line with EU economies in 2014 - PM (Part 2)

14:02 Medvedev: 20%-40% of outflow was 'gray capital'

Just a note--remember a lot of this is for internal consumption but
1. trying to go to the ruble as a reserve currency demands foreign dealers and businesses will move in that direction which in the end will raise prices as they individuals will demand higher prices to offset the dangers of the ruble
2. the Russian economy as a hold was to grow by roughly 3.5 to 4.5% this year taken from official CB statements---now projected to be zero growth in a country that needs urgently growth as they are in a full recession
3. why is he trying to calm people that simple things like pensions will be paid
4. the capital outflow is projected to reach over 150B USD so the grey zone of 40% makes say 60B---what a hit to the Russian economy , internal investment and it so that foreign entities and Russians themselves do not trust the economy---simply voting with their feet

So in fact a nudge on a much lower oil price will in effect hit hard even for say six months.

Dayuhan

Wed, 04/23/2014 - 8:14pm

In reply to by Ned McDonnell III

Ok, so you approach the Saudis quietly and make a proposal. The Saudis tell you that much as they dislike the Russians, financial hara-kiri is not on their option list, any more than it would be on ours if our positions were reversed.

Now what? Maybe, just maybe, we could pump the SPR dry and hold the oil price below $85 for a while. The Russians will see what we're doing and wait it out, knowing quite well that when we're done we have to replenish the SPR and that will probably push the price over $120. In the meantime, Nigeria and Venezuela collapse and Mexico comes under massive stress. Worth it?

Like so many of the "options" thrown around on internet forums, this one sounds wonderful in theory but won't work in practice. That's a good thing to remember when we get round to blaming those who actually have to take responsibility for their decisions for not following our suggestions.

Ned McDonnell III

Wed, 04/23/2014 - 11:23am

In reply to by Dayuhan

Dayuhan,
You my well be correct about the oil pricing and the 1980s. Nevertheless, the scenarios presents an interesting response. The U.S., not N.A.T.O., is the country that assures safe passage of oil through the Persian Gulf. Four of the top ten importers of middle eastern oil are european members of N.A.T.O. (five members, including the U.S.). The Saudis have interests to protect in this situation, too.

Now, as to whether such a measure would be effective. Of course, there are no guarantees. My take is that the probability of success is sufficiently high -- and the outcome sufficiently strong -- to warrant trying it out. If that does not work, we (meaning the U.S. and N.A.T.O.) try something else. Pragmatism and necessity are converging, at least in my mind.

The one advantage of having no credibility is that this Admin. need not worry about looking bad. Now whether President Obama deserves this opprobrium or not is another question yet to be answered. This unpalatable image -- fair or foul -- does give the Administration the ability to lead innovatively, if President Obama avails himself of it.

In any case, good points. Thank you for a well-reasoned response; my money remains on what others have written.
Ned.

Dayuhan

Tue, 04/22/2014 - 7:36pm

In reply to by Ned McDonnell III

They don't reflect on efficacy, they reflect on probability. The people who watch oil markets most closely clearly don't expect that the Saudis are going to attack the Russians (and themselves) by jacking up production and forcing the price down.

NATO and the US may or may not do anything to push back... it's Europe that has the long term economic leverage. All I'm saying is that the oil price drop of the late 80s and 90s was not deliberately constructed as a weapon against the Soviets, and that trying to force oil prices down to punish the Russians now is a lot more problematic than it's claimed to be, largely because the key producers are not likely to go along. You'd have to look at the collateral damage aspect as well: a prolonged oil price drop would sink Venezuela and Nigeria and seriously hurt Mexico, among others. Of course that may not matter, and it's hypothetical in any event: as I said, the key producers are not likely to go along.

Russia might very well "sweep through the south and east of Ukraine to snatch up large gas fields and Bessarabian oil fields in Moldova", though I think they are less after oil and gas fields than the psychological impact or expansion: Moldovan reserves are really nothing special. The current strategy seems less to sweep than to nibble, and the next move seems likely to be a Crimea-style absorbtion of the currently contested areas in the east than an armored sweep across the south. We shall see.

Ned McDonnell III

Tue, 04/22/2014 - 4:22pm

In reply to by Dayuhan

http://www.businessweek.com/news/2014-03-26/soros-endorsed-sale-of-u-do…
The reason why futures prices are where they are reflects uncertainty; perhaps a mild up-tick and, otherwise accruing interest on the settlement amount placed in a bank account (as per the pricing arbitrage equation). Such arithmetic does not necessarily reflect the inefficacy of the proposed response.

That cpa-marts pricing may very well reflect the conclusion drawn by traders that neither the USG nor N.A.T.O. (in the absence of a clear leadership of the U.S.) will do anything to push-back on Ukraine. Looking over the last few weeks, which do you think is the more likely explanation? So, before, you start screaming B.S., tell me why the Russians won't sweep through the south and east of Ukraine to snatch up large gas fields and Bessarabian oil fields in Moldova.

Dayuhan

Tue, 04/22/2014 - 8:36am

In reply to by Outlaw 09

Yes, I know there was a sale from the SPR. That's not what we're talking about.

<i>Reference the RSA---they will do what they must since Syria and the Iranian negotiations---internal development is taking a second place regardless of what you think and read.</i>

WTF is "RSA"?

I call BS on the comment above. What's the basis for that statement, divine revelation? Have you seen anything in Saudi production figures or oil price movements since the start of the Syrian conflict that would suggest that the Saudis are increasing production to punish the Saudis? I don't: the Saudis pumped high for a while in 2013 to cover the drop due to the Libyan strikes, but overall what I see is a concerted effort to maintain stable supply and keep the price over $100.

Do you see any credible oil price forecast that seriously considers the possibility of a major price drop for the reasons cited? I see some debate from the future traders over weak Chinese industrial numbers and possible demand drops, but there's no discussion at all of the possibility you suggest... and nobody follows the market like the futures traders. Brent crude for June delivery is running at roughly $109 right now, so the markets sure don't expect anything to happen soon.

I don't see the Saudis or the Emiratis digging into their cash reserves to finance current fiscal needs, and if they didn't move the price to punish the Russians over Syria, they won't do it over the Ukraine. I think you're talking hot air here.

Outlaw 09

Tue, 04/22/2014 - 2:27am

In reply to by Dayuhan

Dayuhan---go back into the Council comments on the Ukraine and you will find from me a referenced link to the oil sale---it is out of the oil industry itself which I listen to for a reality check and not a research paper which is usually the view point of the author.

Go back in and research the individual countries and what they have stated each country needs as a basis price for their individual budgets and it ranges from 85 to 105 USD.

Reference the RSA---they will do what they must since Syria and the Iranian negotiations---internal development is taking a second place regardless of what you think and read.

Most of the large sour oil producers which is really only AD and the RSA have more than enough in their internal bank accounts to support internal development for at least the next five years with limited sales as most of their money has been invested and they are reaping the dividends and have been for years ie the RSA.

Dayuhan

Mon, 04/21/2014 - 7:59pm

In reply to by Ned McDonnell III

I've read fairly extensively on the oil glut, and I've yet to see a single serious scholar on the issue who believed that intentional manipulation to undermine the Soviets was a factor. I agree with them.

I think you're misreading the GCC producers completely. These countries rely on massive spending to keep their populations in check and their leaders in power. They have ambitious and expensive plans and they need to keep them on track. They remember the glut with something approaching horror, and they are in no way interested in kicking off anything that might repeat it. Of course they don't like the Russians, but again you have to remember that domestic policy trumps foreign policy, and they are way less afraid of the Russians and Iranians than they are of their own people... not to mention the recent precedent for aggressive neighbors exploiting domestic discord. Keeping the oil price high (meaning they keep their budgets balanced and fund their development plans without depleting their resources) is a core policy pillar for them, and I don't see them messing with it.

Ned McDonnell III

Mon, 04/21/2014 - 12:47pm

In reply to by Dayuhan

As I stated, the price crash occurred due to "all of the above"; there were other market pressures, like the Mexican debt crisis. This particular tactic might have emerged by needing to make a virtue of a necessity (i.e., taking advantage of market forces). The timing of the price crash roughly converged with that of the arrival of stingers in Afghanistan in 1985-86.

If my recollection is accurate, when the crash occurred, then Vice President George H.W. Bush called for a special surcharge on imported crude imports to maintain a pricing point of around forty dollars per barrel. Obviously, I may see a correlation that does not exist. Nevertheless, yesterday's coincidence becomes today's push-back.

The key point here is that Saudis likely have the resources to absorb price cuts long enough to undermine the Russian ambitions. That manipulation is definitely in their longer term interest as it is for those of the U.A.E. and Qatar. Again, tapping the U.S. Strategic Petroleum Reserve, as suggested wisely and repeatedly by Outlaw-09, will be the key first step for two reasons.

First, to assure allies of intention through initiative; more important, to provide cover for the Sunni emirates so they do not appear to be aggressors against Iran. This will entail getting several ducks in a row. In the meantime, we need to leave longer-term hard deterrence to military experts like MoveForward.

Dayuhan

Mon, 04/21/2014 - 9:15am

In reply to by Ned McDonnell III

<i>the Saudis cratered oil prices to undercut the U.S.S.R.'s financing of the Afghan war</i>

Any credible reference to back up that claim?

The Saudis did not deliberately "crater" the price of oil. Nobody did. It happened, but it wasn't something anyone did on purpose, least of all the Saudis.

I know that some have made this argument, but I've never seen any evidence that serious students of energy markets take it seriously.

Ned McDonnell III

Sun, 04/20/2014 - 9:25pm

In reply to by Dayuhan

Outlaw-09,

BINGO, though I had not realized it. As always, however, 'all of the above' applies. The O.P.E.C. cartel lost some discipline in the 1980s due to debt crises in certain exporting countries. Nevertheless, Dayuhan, you have overlooked a key point: the Saudis cratered oil prices to undercut the U.S.S.R.'s financing of the Afghan war. It worked. Love the 'routine test sales' out of the Strategic Petroleum Reserve (for the first time in two decades; much like the routine exercises of Russian 40,000 troops on the border.

As to Geneva...We, Ukraine and the E.U. are dealing with a country that has renounced its obligations under an international agreement; violated international law; and, violated the accepted rules of warfare. And we expect it to honour what is basically an unwritten and unenforceable gentlemen's agreement?

Again, I believe that a concerted and well articulated leadership by President Obama or by the United States will get both the Germans and the Saudis to step up. Neither will risk being left out on a limb by this Administration. The Saudis have racked up $75 billion trade surplusses for a decade

The Saudis have the financial wherewithal and a compelling interest to coordinate with the U.S. and the E.U. to break the Russian pricing pressure. Releasing from the Strategic Petroleum Reserve would be the way for the U.S. to take a step toward leadership with an action. As it is now, soft power and its practitioners have lost credibility, at least in the short to intermediate term.

Dayuhan

Sun, 04/20/2014 - 8:31pm

In reply to by Outlaw 09

First of all, minor but an annoyance... KSA, Kingdom of Saudi Arabia. RSA is the Republic of South Africa. And when you say "RSA can still do down on oil production", don't you mean go up? Reducing production would raise prices, not lower them.

Yes, the Saudis increased production in the late 80s. So did practically every other producer: that's how the glut came about. This was not a conscious, orchestrated strategy aimed at the Soviets. It was chaos, unplanned and uncoordinated. When the oil price falls, producers have 2 ways to balance their budgets. One is to get together, reduce production, and raise the price. That's what OPEC was supposed to be able to do. When prices fell in the late 80s, though, OPEC failed. There was no trust, and eveyone resorted to the second method: pump more oil. OPEC quotas were ignored all around, everyone tried to earn more by selling more, and the price collapsed.

What you seem to be missing here is that the 90s were an incredibly bad decade for the Saudis. They had massive money issues and serious domestic discontent; many analysts were debating whether the monarchy would survive. The Saudis today have lots of money but lots of commitments also; they are spending to the hilt to try to keep their own house in order. Of course they don't like the Russians, but domestic policy trumps foreign policy, and there's no way the Saudis are going to mess with their own livelihood to target the Russians. They want the oil price high, and they are not going to mess with that. This is spinning a plan out of air; it relies on cooperation from those who are unlikely to cooperate, based on a nonexistent historical precedent.

The US could work the market for a while with SPR releases, but could they keep it low enough for long enough? I doubt it.

Outlaw 09

Fri, 04/18/2014 - 7:04am

In reply to by Dayuhan

Dayuhan---do your homework---RSA controls next to Abu Dhabi a majority of the sour oil production which is an equal quality to that exported out of the Urals which is a majority of what Russia exports.

The US refinery capacity is designed for sour oil and they were the biggest buyers of the 5M barrel sell recently.

If you research the period when the SU was struggling in oil earnings the RSA had in fact increased production way above global needs and dominated the market--why would be the underlining question and who was behind the decision to expand OPEC production pass global needs and taking the earnings hit?

Just the recent US sales announcement lowered the weekly oil price to the 85USD range and the RSA did not say a pip wonder why?

The RSA has been massively critical of Russian support to Assad and I mean not so subtle about the critique as they see the weapons supplies as being critical for Assad's' survival and they see the Russian support for Iran and even more pressing problem or the RSA especially since the Russians provide NNP support.

RSA oil budget calculations foresee an average daily rate of 85USD to be necessary to maintain their financial strength as does Russia which is giving a mixed message now recently due to major financial budget problems they are now talking of a price range of 105USD just needed to barely maintain their national budget---that is a major problem when your country is tied to two single export products that is so critical in supporting the national budget.

RSA can easily go down on production and AB will follow and still maintain their income ---we can sell SOR supplies at 500K barrels per day which was the run rate that collapsed the SU for over 2 full years and OPEC as a whole does not take a hit since a majority of the other members are on sweet oil production.

And Dayuhan this was exercised already or why do you think that there was a necessity to have a "test sale" for the first time since the last one in 90/91---come on even "test sales" have a message. Even the oil industry was caught off guard by the announcement and they are well informed about major sales.

Then yesterday via Interfax comes a one liner referencing an answer to the exact question poised to Putin during his TV marathons.

His response was even more telling---I am hoping the RSA does not lower the price via production.

The recent US sale was in the back of his mind when he answered---the avoided elegantly saying anything about the USs SOR which sits at over 750M barrels and growing.

Putin never lies when he gives speeches and or TV interviews---he just answers in half truths and never goes any further---he is rather good at that.

Dayuhan

Thu, 04/17/2014 - 7:05pm

In reply to by Outlaw 09

The KSA can't "lower their own sour oil prices". They don't set the price. They can increase production, but why would they? The Russians aren't threatening them, and it's not in their interest to sell more oil at a lower price. I think you're exaggerating the likely impact of SPR releases on world oil prices, considerably. Why wouldn't other oil producers, who want to conserve resources and keep prices high, simply cut back production by an equivalent amount to maintain the same pricing environment? While the low oil price environment that prevailed from 86 through the 90s was a major factor in the collapse of the Soviet Union, that was not (as is sometimes claimed) engineered by the US as a weapon against the Soviet Union. Energy prices are not that easy to control; if they were they wouldn't be where they are.

You can "run scenarios" all you want, but the output depends on the assumptions you program into the scenario. The real world often doesn't comply. Certainly you could conjure an immediate short term price drop with SPR releases. How long you could sustain it without other producers compensating with their own adjustments is another question.