Wednesday, February 22, 2017

RU switches to Plan B

As I mentioned earlier Yasenevo has gone into clean up mode. Any direct links between RU and DJT are being scrubbed. The only ones left out now are the Bratva ones. These are deniable and quite frankly irrelevant. No onee will take the word of a career criminal over a sitting President.

The main problem bothering the Kremlin is most likely DJT's "unpredictability". Now to be clear we know that he is not really unpredictable in the strictest sense, he is self-destructive and the machinery of the USG will ensure that he doesn't take the country down with him as he binges on tweets or something like that, but net effect of this destructive behavior plus USG's protectiveness is an "unpredictability" about him that is annoying.

By now President Putin knows that the entire Rosneft-> QHG -> Intertrust -> Blackstone Op is blown and there is no way of gently ending the sanctions. That $0.5T bonanza that would have paid for everything is not happening right now. I would go so far as to say that Climate Change fears due to increased gas exploitation are also probably misplaced as soon there will be no one to buy the stupid gas that people will spend billions extracting.

Hard options are only sort of on the table. I say "sort of" because *real* wars cost *real* money and RU doesn't have any.  The RU's foreign wars heretofore have been small scale interventions - division level maneuvers at max with no real attrition losses. The ease with which RU forces prevailed in Georgia, Crimea and Chechnya have created an aura of invincibility around President Putin. He is reluctant to put that aura to the test by going after hard targets like Ukraine, Belarus, Finland, Sweden, Norway or in any way by provoking a confrontation against NATO.

The Syrian intervention is literally testing Putin's aura of invincibility as it drags on day by day. A part of the problem of course are the Turks. No one really knows whose side Istanbul is on - some people think that Istanbul might not even be on its own side as the recent failed coup attempt evidenced.  Despite all the RU claims of having defeated ISIS, fact remains that ISIS still operates and the only ones gaining any ground are US backed Iraqis. Assad's guys are quite obviously content to sit around let others do all the work. The RuAF bombs stuff from time to time, but it mostly focuses on killing Assad's enemies, and that makes Basher even more secure and even less inclined to actually get off his ass and fight ISIS. Apart form a place to showcase the immense civilian killing power of the RU's missile arsenal, the entire Syrian theater doesn't really seem to be producing anything valuable for President Putin's survival. I mean it is great that RuNAV can base nuclear subs in Latakia,  but seriously who is going to pay for that deployment? and what can those subs do there that they can't do from Severomorsk?

That is why I feel the RU has shifted into plan B.

As historically demonstrated, the Moscow Principality will cut supply of fuel and food to the periphery citing austerity measures. The result will be a gradual but palpable decline in living standards along the periphery. Without food to eat or fuel to the keep them warm, the people of the periphery will be drawn towards Moscow in the hope that it throws them a piece of bread or a lump of coal. This will reduce internal dissonance and prolong the life of the Putin regime. That should stave off the public revolt. And oh people like Kadyrov have a finite lifetime over which they are actually useful - beyond that timescale - the Kremlin deals with them in the usual way.

Feeding the wolves in Moscow itself - that is a different matter. To do that Putin and his cohorts to make a quick buck. Their best bet now is to pump and dump the entire US stock market. Among several Trumpstruck investors (i.e. the rich but stupid crowd) there is a euphoric sense about the market. By strategically driving up prices of random stocks, RIS could create a space where they selectively pump and dump across several segments. This would be extremely hard to detect, and the net effect will be a completely inexplicable stock rally. The main indexes would all rise despite very few other economic signals aligning with the trend.

The rally will end as the Fed raises interest rates and cuts the flow of credit. This will ensure that people or AIs making margin calls have to shoulder much higher risks if they are to repay the money they have loaned. All it will take will be one fluctuation, one badly organized deal, one fund whose accounts are slightly off or even one major firm that suffers a terrible cyber attack. That will send the market into a speculative plunge where fear of losing money leads people lose even more money.

A spread of companies will then sluice of real money from the declining US stock market and funnel them into accounts under the control of the RU leadership. When the market has bottomed out the RU investors will buy large chunks with available cash. This will complete the short. The market will recover decades later but by then as RU foreign minister Lavrov indicates, we will be living in a "Post Western" world. There was an old scenario that had turned up in CIA related fiction - it was called Kholstomer. It had the basic functional elements of such a scheme described.

As can expected President Donald Trump will not do anything to stop the RU from executing Plan B. His first instinct honed over decades of "business" would be to feed on the dying carcass of the US economy. He and the GOP would find ways of monetizing the collapse of the US economy just like he found ways of turning his failed casinos into a way to bilk the US taxpayer.

I don't even know if there is something he can do - as in if there was something that could be done, would he be able to do it? or would his self destructive incompetence get in the way?

The exact response of the USG to the RU attack on its financial system will depend sensitively on the balance between President Trump's legendary self-destructiveness and the USG's own internal accountability mechanisms which will counter act.

In that light I feel all attempts to dilute accountability inside the NSC and the USG in general are basically RIS provocations aimed at weakening the USG's ability to protect the American economy.


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