Commentary: The Prelude to the End of the Amerikan Era!

By Ian Welsh

April 25, 2014 - And so it begins. Russia is not restraining the separatists, the Kiev government is finally really sending in the troops, Barack Obama and EU leaders claim they will impose real sanctions and Russia and China are set to ink a deal to export Russian Gas to China, the world’s industrial heartland.

If the sanctions are imposed, for whatever reason (Russian invasion or not), they will force the creation of a second economic, non-dollar bloc. Russia is not Iran, and China is not going to cut off Russia to please the West; rather the contrary. The creation of a real non dollar bloc which can make almost anything people want, and which has access to essentially all key resources from oil to rare minerals, metals and food is an existential threat to the hegemony of the West and its allies like Japan and Korea.

Be clear: real sanctions will impose real costs on Russia, but it can bear them. It does not need to borrow money from the West; it cannot be Troika-ized. It has key resources that someone will buy, even if they can’t buy in dollars, because Yuan or rubles can, actually, buy most of what most countries need to buy.

Absent China, Russia cannot be isolated. Cannot. China is unlikely to cooperate. Sure, it could view eastern Russia near its borders as ripe, but Russia as a subordinate state in the Chinese sphere means it gets everything it really needs from the Russians anyway, plus backing in a military confrontation with the current developed world.

The Chinese are not stupid, they know that if a real war breaks out, it will be between them and Amerika. It is the rising power, the naturally most powerful and militarily powerful state in the world, recovering from a hiatus of a few centuries where it lost status. Russia has a lot to offer China, and the Chinese cannot be coerced by sanctions. Sanctioning China would backfire so hard that the U.S. would go into a real economic collapse: China makes the goods. Sanction China and it WILL break the patents and just make them anyway.

Reestablishing the manufacturing and distributing base back to the U.S. and its allies under such circumstances would be unbelievably difficult, especially since Russia, China and its allies control certain key resources like rare earths (other people could mine them in quantity but don’t, because Chinese rare earths are cheaper and we are stupid and greedy.)

Russia is already planning how to survive economic sanctions: how to sell its goods in rubles. People will buy, Russia is too big a producer to ignore. If Europe doesn’t want the growth that comes from using Russian gas and oil, well, China and others will be happy to take it.

Once a second bloc is created, it will no longer be possible to pull stunts like breaking Iran with sanctions: the Chinese/Russian bloc will have a veto.

Over Ukraine? I guarantee that if this is done, in 50 years historians will look back on this like we do on WWI - what were they thinking? The Balkans wasn’t worth WWI. Ukraine isn’t worth destroying Amerikan/Western hegemony. Well, not for Amerika. Others might think this is more of a good thing than bad.

But it is also the potential glide path to war, real war. WWIII.