Ukraine - "Nyet means Nyet."
The Death of the Petrodollar
The Gladstone
Economic Newsletter
Volume 17, No. 4
March 20, 2022
Ukraine – “Nyet Means Nyet.”
and
The Death of the Petrodollar
DISCLAIMER: The following is not intended as investment advice, but is rather intended to promote your own analysis of markets and the economic climate. The author is not a registered investment professional. Any action taken as a result of this analysis carries a high degree of risk. This newsletter contains the personal opinion of the author.
Dear readers-
It has been another week of unrelenting propaganda from every western news outlet. If you spend the time to drill down to the real situation in the Ukraine (like I have), you will be completely dismayed and disconcerted at the level of outright lying being done by the western news sources. A bit later in this newsletter, we will examine the “Russian atrocities” actually committed by Ukrainian forces. This is not to say the Russians haven’t committed any, but I have yet to find a verifiable account of one.
How is the war progressing? I hate to break this to you, but Ukraine is not “on the verge of winning the war.” The Russians basically won the war in the first 72 hours. The war has gone for a total of 24 days so far, and the last week has not seen large territorial gains by the Russians. Rather, Russian forces, with their allies from the DPR and LPR, have concentrated on cleaning the Azov Battalion and other Ukrainian Army units out of Mariupol, and by taking territory to prevent the shelling of the city of Donetsk. It appears that most of the remaining Azov Battalion members are holed up in the Azovstal complex, the large steel works in Mariupol. The Russians have sent in the volunteer Chechen fighters to clean out the steel works. A steel works is the ideal defensive ground, but the Chechens have a reputation for bloodthirstiness, and the Azov Battalion deserves this. On a separate note, a Ukrainian missile with cluster bomb munitions hit downtown Donetsk this week, killing 20 civilians and wounding perhaps 100+ more. We have not heard a word of this from the Western press.
This is not a video game war. People are dying, and despite Russian efforts to avoid civilian targets and infrastructure, a lot of destruction is happening. The Ukrainians are basically encircled in cities and using civilians for cover. The Russians are determined to clean out Mariupol this time. In 2014, the separatist forces could not accomplish this, and Mariupol remained on the “to do list.” Mariupol has received a lot of damage, as the Russians and DPR forces have had to use artillery to root out the Azov Battalion defenders. Ukrainian armed forces members have been trying to escape among civilian refugee columns leaving Mariupol. The Azov Battalion has done everything possible to prevent civilians from evacuating Mariupol. The Azov and other nationalist formations of the Ukrainian Army have mined designated civilian escape corridors, shelled escaping civilians, and held civilians hostage. The western press ballyhooed that Russian forces held the patients of the critical care hospital in Mariupol hostage. Think about this for a second (like every news report on Ukraine). This is a critical care hospital, which means a fair amount of its patients are Azov Battalion and other wounded Ukrainian Army members. There will be trials for the atrocities the Ukrainians have committed in Mariupol and elsewhere. The Russian forces do not want the war criminals and others to escape. It makes sense to have a security cordon around the hospital.
What are the losses by both sides so far? In terms of dead or wounded, I frankly have no idea. However, in terms of material losses, here are the best estimates that I can find. These are not “apple to apple comparisons,” due to different categories being defined or counted:
Russian losses (supposedly based upon satellite interpretations) per a New York Times tweet on March 16th.
- 233 tanks - 474 armored vehicles - 52 comms & engineering vehicles - 69 air defense systems - 94 artillery systems - 13 fighter jets - 32 helicopters - 428 trucks & jeeps
Ukrainian losses per a Russian Ministry of Defense briefing on March 17th:
182 aircraft and helicopters, 177 unmanned aerial vehicles, 1,393 tanks and other armored combat vehicles, 134 multiple rocket launchers, 523 field artillery pieces and mortars, as well as 1,182 units of special military vehicles.
The Ukrainian Air Force was basically wiped out in the first days of the war. Also, the Russians have kept a limited number of troops in this military action, preferring to hold back the bulk of its forces to counter any stupidity by NATO against Russia. The Russians have far fewer troops that the combined forces of Ukraine. That being said, Russia is in this to the death. The Russians will not stop until their political and strategic objectives are met. Putin does not do things in half measures. This was a very calculated campaign by Russia to rid itself of the military, biologic warfare and strategic threat of having NATO established in Ukraine.
I had a good friend and reader take me to task on using the thesaker.is and southfront.org as sources. The reader wrote “I really think that you should step back and look at your sources for the last newsletter….You are spreading disinformation about a tragic war of choice.”
The simple fact of the matter is that these two sources, while written by a Russian living in Switzerland, and presumably Russians elsewhere in the case of South Front, have the most verifiable information on the war in Ukraine. The briefings by the Russian Ministry of Defense are a heck-of-a-lot more fact based than anything coming out of the Ukrainians or the western press. Zelensky’s last video message was obviously done in front of a green screen, with a bad image of a building in Kiev imposed on it for background. The man is obviously not in Kiev any longer. Zelensky is willing to fight to the last Ukrainian, as long as his western paymasters demand it. Russia offered acceptable peace terms, but the Ukrainian peace delegation is prevented from accepting these. I have come to the conclusion that the Ukraine war is an old-fashioned European land war that would have been settled by suing for peace in the past. Not this time. The Ukrainian secret police (the SBU) executed a member of their peace delegation on the streets of Kiev, for being a “traitor.” This is nowhere near normal behavior. The longer this war goes on, the less willing the Russians will accept a minor settlement. I stand by my earlier conclusion that Ukraine is going to be partitioned at the end of the day and have neutrality placed on the rump Ukraine state.
Going back to my use of sources in this newsletter, for days before the Mariupol Theater event, thesaker.is was reporting that eyewitnesses in Mariupol saw the Azov Battalion rounding up civilians to hold hostage prior to planned atrocities to blame on the Russians. Let’s examine the Mariupol Theater “bombing” by the Russians:
Southfront.org reported the following:
“Around lunchtime on March 16, it was reported that nationalists from the UAF Azov battalion were preparing a provocation in the building of the Drama Theater in Mariupol. According to a one of the deserted members of Azov, Ukrainian militants established the headquarter in the basement of the Mariupol Drama Theater, and the theater hall was full of civilians, who were guarded by 12 Azov militants, so that they would not run away. The building should be blown up, and horrific images with numerous civilian casualties should be provided to the Western media, accusing Russia of an airstrike.
Later, by the evening of March 16, the reports were confirmed. Reports that the Russian army had allegedly struck at the Mariupol Drama Theater was spread in Ukrainian social media. There were about 1,000 civilians inside. The Ukrainian version was immediately picked up by the US media.
On the other hand, the information that the Azov headquarters moved from the building of the Drama Theater this afternoon was confirmed by various sources. The version about the alleged Russian airstrike looks implausible, since heavy street battles continue near the building. Such airstrikes by the Russian Aerospace Forces (VKS) are impossible without the risk of hitting their own servicemen.
Unfortunately, eyewitnesses from the area are confirming that the building was blown up. Refugees from Mariupol confirm that the Drama Theater was blown up by Azov fighters. A woman who evacuated with her children from Mariupol reported that neo-Nazis blew up the Drama Theater before they retreated.
“Leaving, they smashed the Drama Theater, just leaving, simply, people were brought to us with shrapnel wounds, and that’s it,” a local resident said.”
“On March 16, there were reports that Russian servicemen allegedly shot a queue of local residents in the store in Chernihiv. At the same time, all units of the Russian Armed Forces are located outside the city, blocking roads, and they are not conducting any offensive actions on the city. This information is confirmed by both sides of the conflict. Accordingly, if the shooting took place, it was likely the result of uncontrolled distribution of weapons to civilians.”
As Mariupol sees the last of the Ukrainian forces cleared out it, I am confident more eyewitness reports will confirm the atrocities perpetrated by the Azov Battalion. In the meantime the western press goes on screaming that it was a bomb dropped from a Russian plane that destroyed the theater. The western press also has a US citizen having been killed in the bread store line in Charnihiv. The journalist/photographer killed earlier was shot by Ukrainian checkpoint guards. I have no idea who or how the Fox news team has two killed.
Russian military intelligence throughout the campaign has been good. Earlier this week, the Russians launched cruise missiles against a training camp in Ukraine near the Polish border. This training camp was the site of hundreds of western volunteers (US, UK and Canadian) (or “armed mercenaries” per the Russians) for fighting in the war, and also the site of large stocks of western weapons and munitions given to the Ukrainians. It is thought that 100 or more of the site personnel died, and large amounts of the western supplied weapons were lost. Here is a firsthand account, by a former western volunteer. The volunteer describes the Ukrainians as being out of weapons and supplies:
https://gab.com/ASBMilitary/posts/107961806707367848
This post has basically been verified by the western press, which attacked the volunteer as being a “Boogaloo Boy” from the US. I believe the entire Ukrainian army is about out of ammunition and fuel.
Thesaker.is is also reporting a senior SBU officer defected to the Russians, and brought along the plans by the Ukrainian Government to stage a false flag attack against western diplomats in Lvov. There is also the report that the SBU has held a bunch of civilians in another town in preparation for staging another “Russian” atrocity. Don’t believe a word the western press is saying at this point. Examples of Ukrainian/western propaganda made up from whole cloth is the Snake Island story (brave Ukie garrison told Russian warship to “F.O.” before dying- instead they meekly gave up), the sinking of the Russian warship that killed the Snake Island defenders (instead it was pictured arriving in Sebastopol a few days after the account), and the “Ghost of Kiev” ( a Ukie air force pilot who shot down six Russian planes- he didn’t exist). Again, I try to sort out fact from fiction, and if you read thesaker.is (ignoring the vitriolic opinion pieces that happen sometimes in it) and southfront.org, you can get a sense of what really is happening in Ukraine.
It is clear now that the Western governments are going to experience “boomerang” effects from their sanctions against Russia. Boris Johnson went to the Saudis to beg for more oil production. He got told get on his Boris Bike and pedal back to the UK. Biden got told the same. The Saudis’ eyes have been opened to the fact that their petrodollars earned for oil exports can be blocked at any time. Consequently, the Saudis are discussing oil sales to China for yuan. The Indians have established a rupee-ruble exchange mechanism to obtain Russian oil exports and to supply Russia with manufactured goods. The world changed overnight. The rest of the world now knows the US and the G7 countries can and will impose totally illegal sanctions on anyone at any time. The world changed overnight. It will take some time for the US to feel all the effects of this change.
On to graphics this week (from various sources):
