Putin has played a long game that very few in the West comprehend whilst riding a commodity cycle that has defined the Russian economy for a century. As such, there is great danger that the West will continue to fail to understand Putin's strategy and intent, and will thus continue to make the same poor decisions that it has made concerning Russia since the Berlin Wall came down. The consequence of which is the current expanding crisis that is distracting from the containment of China, who is the true enemy of our time of both the West and Russia.
In this Murrinations Insight, we will seek to define and anticipate Putin’s intent concerning Ukraine and the West. The predictions of Russian expansion made back in 2009 in Breaking the Code of History have proven accurate and are the basis of the following analysis.
Putin The Leader
Putin, as stated in Breaking the Code of History, exemplifies the political 'hero' who surfaces during the low point in the cycle, much as Margaret Thatcher once did, to restore and rebuild a fallen nation. We also described him as one of the most effective leaders in the world, which has proven correct, as he has rebuilt Russian influence despite the negative national energy conferred through a demographic contraction.
His career in the KGB not only trained him with the thought process to hold onto power, it also gave him a network and power base that gave him stability. He has used this to covertly expand Russian influence globally by slipping under America's intelligence service radar screens while they were preoccupied with the Islamic treat. Putin’s life-long practice of Judo will have given him the intimate knowledge of visceral human combat that he has effectively transposed into the larger fractal of national security and conflict management, something no Western leader has a clue about.
Lastly, like many Russians, Putin plays chess, which has honed his strategic mind, something our Western leaders completely lack. He is decisive and ruthless, whilst being single-mindedly determined to expand Russian influence. It is an agenda that is very much linked with his personal survival and mantra to stay on top or die. In short, this is the last man you want as your enemy, and yet a sequence of Western leaders, through their arrogance, made him just so.
Putin is a chess player, as well as being a martial artist, so he sees the game as defined by a terrain of the battlefield, that has essentially not changed since we evaluated Russia in Breaking the Code of History, which is summarised below and expanded upon for events over the past 13 years.
- The old USSR Empire ended in 1990. As we shall describe later, Western arrogance towards its fallen foe was unnecessary and only created deep resentment. This was especially seen in the decades that followed when the EU and NATO incorporated the old USSR states into its structure as it migrated eastwards to the very borders of Russia. In so doing, it violated all the traditional Russian strategic constructs of using space to protect Moscow from invasion.
- The demographic of Russia remains the worst in the developed world and, as such, the underlying Russian system is not expansive. Based on our Five Stages of Empire model, Russia is today in a new phase of regionalisation, but with very low levels of national energy.
- The Russian energy of expansion comes from Putin himself and his drive to re-build the Russian empire to its former glory. With such a contradiction between low Russian national energy and Putin’s expansive aspirations, only a total autocracy would empower him to achieve his goals, which is exactly what he has created over two decades.
- To rebuild his new Russian Empire, Putin needs resources and, as national energy is low, that could never come from a traditional economy.
- However, Russia is not a traditional economy, but rather one based on commodity production. Hence, its economic fortunes are linked to the K wave. We have, in previous publications, already demonstrated that the peak of Soviet Cold War power was the peak of the K wave in 1975, and that the collapse came as the cycle ran down to its low point of 2000 when it restarted again.
- The restart of the K-cycle and the arrival of Putin into power offered him the opportunity to channel revenues into two areas: his and his oligarchs’ pockets and defence spending.
- Whilst the West existed in its hubristic state post the end of the Cold War, believing that victory had banished peer-to-peer conflict for 100 years, Putin sought to develop innovative new technologies that would circumvent and negate NATO’s advantage. Russian weapons designers have always been innovative and, over the past two decades, they have been hard at work and have built weapons that have significantly eroded NATO dominance, such that they can now hold NATO at risk. (Read Russian Submarine Tactics Should Be Ringing Alarm Bells Across The UK.)
- The first signs of a new Putin/Russian confidence came as the K wave made its A wave high in late 2008. The financial crisis’s deep price dip delayed its sustained impact on Russian state revenues, until the secondary and sustained highs of 2011 to 2014 which gave Russia huge revenue inflows over three years. It is no coincidence that it was during this period that Putin's newfound confidence allowed him to start to take advantage of Obama's weakness and thus he started to move his chess piece out onto the board, into spaces where the West had left a vacuum.
- Putin's intervention and annexations in Georgia and Syria were all manifestations of his expansive aspirations.
- Obama’s poorly judged pushback started when Putin insulted Obama in an open letter to the New York Times post the crossing of the chemical red line in Syria. Obama's egocentric response was that he became incensed and, consequently, the result was that America, coupled with the ever-expansive mandarins of the EU nations, fomented the revolution/election that overthrew the pro-Russian government. In so doing, it shifted Putin from an opportunistic expansionary mode to one of determined defence, like a rat trapped in a corner, as Ukraine always has been perceived by the Kremlin as a key strategic zone that protected the road to Moscow. Most importantly, this was the worst strategic mistake made by the West of many decades as it forced Putin into the arms of Xi, creating a Russian–Chinese alliance.
- Russian revenues suddenly declined in the latter part of 2014 to 2016 as the oil price collapsed and the tenuous nature of Russian revenues became apparent, as the K wave went into its B wave correction. It was during the five years from 2016 to 2020 that Putin was most vulnerable as national revenues fell and Russia suffered economic constrictions that led to increased social unrest.
- Putin found himself increasingly exposed such that Global Forecaster warned Western leadership that this retracement in commodity prices was the time to make a rapprochement with Putin's Russia and to end the Cold War forever on terms that both sides should be able to accept. Regrettably, the advice was not heeded, although Trump did, we believe, try. However, the remainder of the US body blocked every avenue, as they perceived him to be compromised by Putin, which he probably was!
- Putin's European gas play. As the energy usage of Europe shifted to gas with the green agenda, Putin sought to use this to create leverage over NATO/EU, a strategy that he has executed brilliantly and through Nord Stream 2 with the advantage of increasing ties with Germany, pulling them away from the rest of the EU and NATO. Initially, gas prices were low when Putin conceived this strategy; however, with the next bullish phase of the commodity cycle in play since March 2020, Russian revenues now benefit from both oil and gas, only emboldening Putin further.
- Putin's most vulnerable moment came in the 18 months post the market low in oil and gas in March 2020, which flattened the Russian economy and combined with the pandemic to produce a perfect storm. Collective behaviour always takes time to build momentum, and thus the market low and the onset of political descent meant it took a few months before the anti-Putin movement gained momentum. Led by Alexei Anatolievich Navalny, the Russian opposition leader, lawyer and anti-corruption activist, the movement resulted in large-scale anti-government demonstrations and Navalny running for office to advocate reforms against corruption in Russia, and President Vladimir Putin and his government. There can be no doubt that, in this case, Western intelligence agencies returned the gesture of Putin meddling in US politics, and would have done all they could to support Navalny’s revolution, but Putin's drastic and brutal action shut down the movement. From that point onward, Putin became even more enraged and determined to execute his plan for the new Russian Empire.
- The alliance with the CCP evolved during Putin’s period of vulnerability and has strengthened with time driven by their hatred of their common enemy, the West. Although Putin's nightmare would be to win WW3 with China and be left alone with the CCP, for now, he welcomes the weakening of the American forces in Europe as they are deployed to contain China, providing him with the opportunity to make his move.
- The dangers of revolution. To an autocratic leader such as Putin, whose currency is control, revolution is his greatest danger. The revolution/presidential election in 2014 in Ukraine, of an anti-Russian leader, would have drummed this point home. Even more so, the Navalny revolution would have added to that perspective. Thus, his definitive action that was taken recently in Kazakhstan, especially as the timing of the latter seems rather coincidental with the Ukraine crisis, raises the question of more Western fermentation of dissent. Thus, like all autocratic leaders, the levels of control over his population and vassal states over time is only increasing.
- The onset of the Bullish C wave of the commodity cycle has seen oil and gas surge and has restored Russian revenues and secured the base for Putin's expansion. Although prices look to be ready to correct lower in wave 2 and will do through 2022, Putin’s confidence will today be at an all-time high. This is something that the West needs to fully appreciate in the weeks ahead.
- The election of Biden and route from Kabul is the last piece of the puzzle for Putin and it means that with every other element in his plan, this is the time to strike. Biden is his ideal American leader to lean on, as a linear and, hence, very predictable thinker and a doddering, demented old man.
- Ukraine is not in America's nor NATO's sphere of influence and, as such, the West is overextended in the Russian backyard. In effect, it was a bridge too far, providing Putin with the ideal point of leverage.
- The Kazakhstan intervention – another signal of Putin's intent. Putin's dramatic and extremely brutal intervention with the deployment of Russia paratroopers over the past week, apparently by invitation, is a clear sign that he intends for key ex-nations of the USSR to remain as vassal states of Russia at all costs. This is a demonstration of his deadly intent towards returning Ukraine to his Russian fold.
- Checkmate. With the above chessboard, Putin has no doubt concluded that, after 20 years of planning, this is his time to move and he has placed America/NATO/EU in checkmate. Either his ridiculous demand is met, which ends NATO, or he invades Ukraine and secures his southern flank once and for all.
Putin's goals are as follows:
- To return Ukraine to Russian control by winning the war either by:
- isolating Ukraine from the West so that ultimately it surrenders, or
- by invading Ukraine in 2022, ending the problem in one strike.
- To reverse the migration eastwards of NATO especially in key countries traditionally perceived as vital to Russian security, like Ukraine. Sweden would not be a red line and probably neither would Finland, although Putin should be expected to use it as a negotiating card.
- To reduce the forward basing of the majority of NATO forces along the Russian border.
- To humiliate the West where possible as payback for the fall of the USSR.
- To have Russia treated as an equal to America and the EU.
These demands will inevitably be unacceptable to America or NATO, but Putin already knows that will be the case. There is an old saying that wars begin in the minds of men. In the case of Putin, his war with the West began a long time ago. In the case of Ukraine, the evidence suggests that he has already gone to war in his own mind, so the probability of an invasion of Ukraine in the weeks ahead is extremely high.
In our next Murrinations Insight, we will be discussing possible ways of escaping Putin’s checkmate: Time For A New American Russian Entente Cordiale
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