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Why It's Going to Be Impossible to Isolate Russia

Europe might want to act tough, but Russia holds too many cards.
 
 
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Photo Credit: RudolfSimon; Creative Commons / Wikimedia Commons

 
 
 
 

German Chancellor Angela Merkel could teach U.S. President Barack Obama one or two things about how to establish a dialogue with Russian President Vladimir Putin.

As if Obama would listen. He'd rather boost his constitutional law professor self, and pompously lecture an elite Eurocrat audience in the glittering Palais des Beaux-Arts in Brussels, like he did this Wednesday, on how Putin is the greatest threat to the U.S.-administered global order since World War II. Well, it didn't go that well; most Eurocrats were busy taking selfies or twittering.

Putin, meanwhile, met with the CEO of German engineering and electrical conglomerate Siemens, Joe Kaeser, at his official residence outside Moscow. Siemens invested more than U.S. $1.1 billion in Russia over the past two years, and that, Kaeser said, is bound to continue. Angela was certainly taking notes.

Obama couldn't behave otherwise. The constitutional law expert knows nothing about Russia, in his (meager) political career never had to understand how Russia works, and may even fear Russia — surrounded as he is by a coterie of spectacularly mediocre aids. His Brussels rhetorical tour de force yielded absolutely nothing — apart from the threat that if Putin persisted in his "aggression" against eastern Ukraine or even NATO members-countries the president of the United States would unroll a much stiffer sanction package.

What else is new, considering this by supreme CIA asset and former Pentagon head in the first Obama administration, Bob Gates, is what passes for political analysis in the U.S.

The $1 trillion game-changer

Demonized 24/7 by the sprawling Western propaganda machine as a ruthless aggressor, Putin and his Kremlin advisers just need to play Sun Tzu. The regime changers in Kiev are already mired in a vicious catfight. [1] And even Ukraine's acting Prime Minister Arseniy Petrovych "Yats" Yatsenyuk has identified the gloomy times ahead, stressing that the signature of the economic part of the association agreement between Ukraine and the E.U. has been postponed — so there will be no "negative consequences" for industrialized eastern Ukraine.

Translation: he knows this will be the kiss of death for Ukrainian industry, on top of it coupled with an imminent structural adjustment by the International Monetary Fund linked to the E.U. (maybe) bailing out a bankrupt Ukraine.

Asia Times Online's Spengler coined a formulation: "A specter is haunting Europe, and that is the specter of a Russian-Chinese alliance at the expense of Europe." The alliance is already on — manifested in the G-20, the BRICS and the Shanghai Cooperation Organization. There are military technology synergies on the horizon — the ultra-sophisticated S-500 air defense system is to be unveiled by Moscow, and Beijing would absolutely love to have it. But for the real fireworks, just wait a few weeks, when Putin visits Beijing in May.

That's when he will sign the famous $1 trillion gas deal according to which Gazprom will supply China's CNPC with 3.75 billion cubic feet of gas a day for 30 years, starting in 2018 (China's current daily gas demand is around 16 billion cubic feet).

Gazprom may still collect most of its profits from Europe, but Asia is its privileged future. On the competition front, the hyper-hyped U.S. shale "revolution" is a myth — as much as the notion the U.S. will be suddenly increasing exports of gas to the rest of the world any time soon.

Gazprom will use this mega-deal to boost investment in eastern Siberia — which sooner rather than later will be configured as the privileged hub for gas shipments to both Japan and South Korea. That's the ultimate (substantial) reason why Asia won't "isolate" Russia. (See Asia will not 'isolate' Russia, Asia Times Online, March 25, 2014.)

Not to mention the much-anticipated "thermonuclear" (for the petrodollar) possibility that Russia and China will agree payment for the Gazprom-CNPC deal may be in yuan or rubles. That will be the dawn of a basket of currencies as the new international reserve currency — a key BRICS objective and the ultimate, incendiary, new (economic) fact on the ground.

Time to invest in Pipelineistan