Accusations, posturing and hysterical finger pointing is the weird new normal in our world. It reminds me of an old market truism – ‘buy the rumors, sell the facts’. Amplified by continued demonization of all things Russian, including their newly re-elected president, I was curious to get current views here on the ground among connected influential Russians and just share them.
I called and met many friends, business partners and contacts in Russia whom I have known for years, some in business, politics and some in government. The result of my informal chats over tea or coffee was largely as I had expected, though it may be of interest to those not living and working in Russia. I spoke with many people, I will just cover three otherwise this opinion piece would make Tolstoy’s War & Peace look like a comic book.
The Skripal incident in Salisbury is just the latest dust up coming out of the UK/EU with accusations against Russia and Putin in particular. I decided to start with a man I have known for some time who is closely associated with the state security services. Michael’s reaction to this sad affair was rather emphatic, which in translation I have paraphrased: “What utter and complete rubbish. Yes, there are times when it may be judged in the interests of any nation, even the US, UK or the gaggle that is the EU to take extreme measures such as an ordered killing. Such cases truth be told are extremely rare and extreme. If they were then carried out, it would be planned and done with care without complexity, publicity or drama. In watching the news and listening to what the political leaders in the UK and now even the EU are saying it just beggars belief.
First, if a WMD such as Novichok or any VX were used I assure you that Mr. Skripal and his daughter would not be alive today in an ICU, nor would any first responders who arrived without NBC or similar Hazmat shielded body protection, or the photographers snapping close-up pictures of the place. In short, there would be quite a number of tragic deaths. This is as fishy as the “white helmets” in Syria working without Hazmat protection in areas where supposedly Sarin was deployed against people – it cannot happen without themselves being counted among the dead, or at best thoroughly incapacitated.
Personally, I have never heard of that substance or anything similar being used in anything other than controlled military testing environments many years ago. Secondly, using a nerve agent like a Novichok in reality is simply impractical to use on an individual target, you would have to be nuts, suicidal or delusional to consider it. I do not doubt that somebody attempted to poison the man, but in my opinion, tasked professionals did not carry it out. If it were state sanctioned, I am personally certain such a folly did not come from Russia, now or ever. There are other players who need such melodrama far more than us to suit their worldviews or paint their perspectives. Look, I know the bureaucracy of our security services, and this cluster-fuck would not have had any chance of consideration or approval – it is just that simple.
More likely, it was for a far more banal reason such as a local business or personal conflict, when such facts will no doubt reveal themselves clearly over time – then it will probably be relegated to some obscure column on the 10th page of a UK newspaper as an inconvenient truth. I cannot even speculate on what toxin was used, but it was not anything close to a military grade nerve agent.
I am not a little put out by what I call this new Twitter diplomacy, it makes noise and dances around issues but doesn’t do the job that must be done which is to sit down with counterparts and talk face to face. There seems to be a new PC stigma certainly in the US that must frighten politicians from meeting or speaking with Russians, it is absurd. That is the role of diplomacy, and that is the way to sorting out truth from lies. I am not aware of anything of value that happens without dialogue and Q&A which can only happen when people are willing to meet and sort things out. It is not Rocket Science after all.
As for the noise and accusations, I can only say that this reminds me of some Hollywood fantasy script. Vladimir Putin has been typecast by the west to be the embodiment of Le Chifre, Auric Goldfinger, Hugo Drax and Francisco Scaramanga all rolled into one, and Russia as a whole is cast as SPECTRE. This is all a ridiculously silly tragic diversion of everyone’s time and intellect, with very real and dangerous consequences, and to what purpose? It helps no-one, and all people shall ultimately lose with such undisciplined undiplomatic schizophrenia running amok.”
Another friend whom I met and spoke with about the current state of affairs is involved in Russian politics, and a highly placed champion of what is known locally as the liberal opposition. “I am very depressed. For most of my life, America symbolized for me the virtues of openness, truth, unfettered objective press, constitutional law, showing the rights and obligations which allow a democracy to function well in the world, regardless of who is at the helm. It was the example set for other countries to follow. It was like a story from some distant mythical land of long ago, perhaps a Camelot, and just as illusory it seems to me now.
Russia is still a work in progress, a tremendous amount of vision, sweat and effort have and will continue to be spent in the re-birth of my country from the chaos of less than nothing 20-/+ years ago. There is much that we have done that is successful, that we all are proud of, and we are the first to see what still has to be done – corruption, special interests, in short everything the rest of the nations on this planet also have to deal with in their own ways and in their own particular contexts.
We are not perfect, we know this well, but we will raise up our country in spite of any difficulties or pressures. There is a basic reality, we are Russian. We are not Americans or British or Germans, Italians, Turks, Japanese or Greeks. The several popularized brands of democracy that work in each of those nations is not what works for Russia in this time and space, it would be wrong, and forcing the issue will lead to failure. Russia is developing democratically, but in its own time and own terms – we have patience, and we will succeed eventually but not to the beat of any other nations drums or timelines.
It has taken a very painful period of soul searching for me to arrive at an undeniable truth, which was my degree of deep disenchantment. That the America I cherished is far from the ideal it has marketed to the world so well for decades. The strongest feeling I have is one of deep personal betrayal of both trust and faith. It was obvious back in the communist era that there was an ideological standoff, and that the American brand of democracy and the Soviet brand of communism were antithetical, oil and water, never to mix. It was Burger King versus Kotletki. This was an understandable state of affairs, and largely justified. There was an understanding that once the failed ideology of communism was off the table, and Russia turned to become an open market capitalist model with a developing political infrastructure, then there would no longer be any ideological conflict as our goals were largely the same as in the west.
Freedom to pray to whatever faith you ascribe to is deeply rooted nationwide, freedom to travel anywhere, freedom to make and spend your money as you wish, freedom to do business, freedom to responsibly and accountably protest or set out arguments for change can and are heard, freedom to vote or not to, and more. We have just had an election. Whatever others or I may wish for, it was indeed a democratic election without pressure. True, we all knew who would win, and the vast majority of our people are pleased with the win and supportive of the result.
That is the bottom line – the vast majority voted for,appreciate and do support this president. They do so in this time and place that demands consistency and follow-through, and while he may be the only realistic show in town today, he has proven himself capable and with the right intentions for the country’s internal interests. Eventually we may become an “either/or” country like America, but for now continuity and stability are preferable to experimentation and potential chaos – for we have seen both many times in our past. I can only imagine if we had an election hangover like the Trump/Clinton election paralyzing and dividing our country for more than a year after – no thank you.
Now it is apparent to me that the acceptance of Russia as a sovereign nation by the group of ‘free’ nations led by the US is wholly contingent on Russia accepting a subservient role, politically, economically and culturally. To my way of thinking, a sovereign nation has the power to do everything necessary to govern itself, such as making, executing, and applying its own laws; imposing and collecting taxes fairly; making war and peace as needed; and forming treaties or engaging in commerce with foreign nations. One example, for instance is the United States of America, which enjoys such status. I cannot say the same for many of the member nations within the EU construct, or the EU itself, even the UK, but that is their business and certainly not ours to tinker with, disparage or try to change. Russia is not exporting its views or waging any idealogical marketing campaigns, or evangelizing on how other nations should live their lives. Our priorities are first of all Russia, and keeping to our commitments with friends and allies, it’s as simple as that.
When I travel to America and several European countries, especially these past 5 years I return home almost speechless at the degree of orchestrated misunderstanding that has poisoned public perception through western media and politicians against Russia. The facts simply do not hold water if they ever are examined dispassionately.
Throughout it all I have tried to see things from a western perspective, I have gone to great lengths speaking with friends in many countries, most of whom are as shocked as I am at the positions taken in the west. I have seen disinformation and felt its claws throughout my youth in those communist times, but it pales compared to the media assault directed against my country today by the paragons of all that is supposedly free, correct and ethical. Perhaps having had the privilege to grow up and live inside such initially democratic systems, it makes it easier to disregard and make a parody of what made them special, or am I mistaken?
To my way of thinking and most Russians, being free and independent means not having to parrot the ideas of anyone, both as sovereign individuals or as a sovereign nation, it is as simple as that. Thinking and acting in the best interests of yourself, your family, town, and country. One of the many principles I have always respected that are embodied in the US constitution was that people were not to be pre-judged, they were accepted as being innocent until and unless proven guilty in an independent court of law. Those values have certainly been trashed at least on the international political and diplomatic front in the US, UK and Brussels. There is no dissonance in goals or values between Russia and the western world, this confrontation has been manufactured and marketed worldwide by the land of the free and home of the bravely exceptional, but to what democratic purpose if any? And why should it be at all when our peoples visions and values mostly correspond?”
A successful influential CEO who heads an international Russian based resources holding company. Much of what was said earlier were also part of Alex’s views, but his emphasis was trade and financial. “Conspiracies are usually nonsense, like the secret more than one person knows – it does not remain secret for long. That being said, something discordant is afoot in our world and the root causes of just about anything political or economic leads to, or is led by money. Today, and for the last 70+ years since Bretton Woods global money was the US Dollar. Since Nixon delinked gold from the dollar, and the simultaneous creation then of Petro Dollars, Euro Dollars and so forth, the breadth and depth of US Dollar domination in our world just kept growing. The global financial and trading system is dominated by the dollar, and by virtue of that domination, it has also become for lack of a more appropriate description – weaponized. It is a constantly threatening stick whether you eat of the carrot or not… not very democratic.
The other side of the dollar is the inconvenient and massive debt pegged to that fiat currency throughout the world. This debt mainly finances the USA’s ability to project its sometimes peculiar brand of PC behavior, subsidized and financed by countries having little recourse other than to buy US bonds supporting such policies. It has come to the point that if you are well entrenched in dealing with only the US dollar, you must accept and accede to whatever behavior modification program Washington demands of you, or else go cold turkey for your dollar fix.
The EU and UK and several other allied to the US nations are a case in point – no serious discussion, no objective analysis, not much real professional diplomacy, and almost no respect for cultures whatsoever. It is sort of like the attitudes and Pavolvian abuse I used to get when simply enjoying a cigarette after class at Stanford on the quad…it isn’t forbidden, but you are regarded as a serial killer. Oh well, it is California, even by US standards they are off the wall.
George W. Bush once said ‘if you’re not with us, you’re against us’, well that pretty much could have been uttered today in DC as well. Let us remember the famous seemingly eternal Jackson–Vanik amendment to the Trade Act of 1974. It was originally intended to affect U.S. trade relations with countries of the Communist bloc that restrict freedom of emigration and other human rights. It remained in place and pressuring Russia long after communism was replaced by capitalism. When finally it was lifted in 2012 it was immediately substituted by the Magnitsky Act which is an example of unfounded and unproven rumor becoming legislation. Therefore, the stick remains in play regardless of anything, especially proof, only the word of a carpetbagger like Browder and his Hermitage with whom I am very familiar, hence incredulous. When Crimea re-joined Russia in 2014, even more trade limitations were introduced despite the reality that the majority of the population of Crimea yearned and voted to rejoin Russia, hence sanctions, even more sticks in our country’s wheels. It interested me to look into how many sanctions programs the United States has going today, the list is impressive and I even have it saved here on my iPhone, I’ll post it to you (he did, and here it is):
Active current US Sanctions Programs and date of inception: Balkans-Related Sanctions 02/03/2017, Belarus Sanctions 10/24/2017, Burundi Sanctions 06/02/2016, Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) 03/15/2018, Central African Republic Sanctions 12/13/2017, Counter Narcotics Trafficking Sanctions 03/06/2018, Counter Terrorism Sanctions 03/22/2018, Cuba Sanctions 02/09/2018, Cyber-related Sanctions 03/23/2018, Democratic Republic of the Congo-Related Sanctions 02/05/2018, Global Magnitsky Sanctions 12/21/2017, Iran Sanctions 01/12/2018, Iraq-Related Sanctions 12/27/2017, Lebanon-Related Sanctions 07/30/2010, Libya Sanctions 02/26/2018, Magnitsky Sanctions 12/20/2017, Non-Proliferation Sanctions 01/12/2018, North Korea Sanctions 03/01/2018, Rough Diamond Trade Controls 05/21/2008, Somalia Sanctions 07/05/2012, Sudan and Darfur Sanctions 10/12/2017, South Sudan-related Sanctions 09/06/2017, Syria Sanctions 06/21/2017, Transnational Criminal Organizations 01/30/2018, Ukraine-/Russia-Related Sanctions 03/15/2018, Venezuela-Related Sanctions 03/19/2018, Yemen-Related Sanctions 04/14/2015, Zimbabwe Sanctions.
Many sanctions. Yet how many of them are in reality broadly supported in the international arena? How many countries levy such controls over free trade to themselves influence America’s unilateral actions? We have not yet come to treaties and tariffs, the stuff of open trade or conversely trade wars. The United States has a number of treaties and agreements in place, I will also post them to you (he did so again):
Andean Community (1969), ASEAN–Australia–New Zealand Free Trade Area (AANZFTA) – 2010, ASEAN Free Trade Area (AFTA) 1992, Asia-Pacific Trade Agreement (APTA) 1975, Central American Integration System (SICA) 1993, Central European Free Trade Agreement (CEFTA) 1992, Commonwealth of Independent States Free Trade Area (CISFTA) 2011, Common Market for Eastern and Southern Africa (COMESA) 1994, G-3 Free Trade Agreement 1995, Greater Arab Free Trade Area (GAFTA) 1997, Dominican Republic–Central America Free Trade Agreement (DR-CAFTA) 2004, East African Community (EAC) 2005, European Economic Area (EEA; European Union–Norway–Iceland–Liechtenstein) 1994, European Union Customs Union (EUCU; European Union–Turkey–Monaco–San Marino–Andorra) 1958, European Free Trade Association (EFTA) 1960, Gulf Cooperation Council (GCC) 1981, International Grains Agreement 1995, North American Free Trade Agreement (NAFTA) 1994, Pacific Alliance Free Trade Area (PAFTA) 2012, Regional Comprehensive Economic Partnership (RCEP = ASEAN plus 6), South Asian Free Trade Area (SAFTA) 2004, Southern African Development Community Free Trade Area (SADCFTA) 1980, Southern Common Market (MERCOSUR) 1991.
With such negotiated agreements and treaties in place, I am surprised that just recently the new administration in the US has declared that it shall unilaterally cancel, and then renegotiate many of them, notably NAFTA, and ASEAN that are making the news now.
This trend is extending beyond just trade. The number of international agreements have given birth to “judicial” or “legislative” bodies that have come to interpret and expand obligations well beyond what was set out in the underlying treaties, placing them beyond the effective control of domestic or international institutions. This trend has and does raise fears among nations that they will continue to see their sovereign authority erode, a sacrifice to populist political bluster and being force fed economic programs that may not be congruent with their own county’s needs or interests.
My pet theory is that some of the treaties the US is threatening to cancel will in fact be only very gently amended, but in exchange for this generosity, the US will expect a quid pro quo broad coalition of those same nations to stand behind its very specific tariff and trade war with China. Similarly as many members of the EU have been pressured to support the (probably) eternal sanctions against Russia. This at a time when America’s dominance in the Southeast Asian region is increasingly fragile, and likely to erode further without such broad backing – who knows, time will tell if my view has any weight.
What most if not all these free trade agreements have in common is that the US Dollar one way or another is the transferring medium. That in itself is not such a bad thing, but it is a unipolar monopoly, this has implications especially if like any reasonable businessman you want to diversify your risk exposure to something other than the fiat dollar, Euro, or Yen. This then leaves the Yuan as the last reserve currency in the basket, and this leads to another stink that also affects my Russia as we are neighbors, and that is the trade position US administration is now taking with China. A decision was made just this week unilaterally impose significant tariffs on imports from China, which is another stick on the back of the US rule-based global trading system camel. The sum by today’s standards is not much, only 60 billion US dollars, but it will have wide consequences, unintended or not.
I do a lot of good business with China, and aside from the numbers of business, there is a very important factor of ‘face’. It is of consequence, and it matters. It should not be taken lightly and should never be dismissed. Therefore, we will probably witness an escalating trade war between the US and China as well since Washington is pressing China to reduce its 375-billion-dollar trade surplus with the United States by 100 billion dollars as soon as possible. I often ask myself – who agreed and allowed such a trade imbalance in the first place? I am concerned that these sanctions and trade battles will undermine multilateral trading systems and destabilize the global economy that has apparently just started to recover from the US originated globally dollarized financial crisis 10 years ago.
The geopolitical surprises just seem to keep coming, as if it were not enough to sanction Russia, and initiate a trade war with China, there is the very real possibility in the coming days that the US will try to re-impose sanctions on Iran. This can only increase already high tensions between the two countries and the entire middle eastern region, but that is a whole epic by itself. As my Rabbi says – you will reap what you sow – that is the truth, we wait for the shoe to drop.
On Monday March 26th of this year, China will finally activate their Yuan denominated oil futures contract with a gold convertibility (As it turned out, around 12 million barrels of Shanghai’s most-active September contract changed hands in the first 55 minutes of trade, more than the most-active contract for Brent).
I have no doubt that Iran, and many others in the oil business will eventually see their way clear to using that exchange and avoid the strings of the US dollar. We in Russia are now preparing to sell $1 billion worth of yuan-denominated bonds in 2018, which will be a small supportive step for the yuan as it grows to be a significant global currency.
As concerns my company, we have positioned ourselves to trade our oil on the Shanghai exchange for Yuan-Gold. I do this because it is close to our disports, pipelines and customers, and makes diversified financial sense. Recently we have shifted our portfolio positions to reflect a much larger percentage in physical gold assets as we feel this will be key in the years to come. There is an extra plus too, I will sleep calmly at night knowing I am not contributing to the new 2018 US budget of $1.3 trillion in additional debt that will never be repaid with value!”
I have tried to faithfully capture the words, spirit and emotion of these talks; in any event, I hope it is of interest. Maybe I’ll cherry pick some other items in the future, but for now, this seems adequate.