Sunday 5th of October 2025

like it or not, putin proposes a values manifesto....

 

Russian president Vladimir Putin used his address at the Valdai forum on Thursday to issue a challenge: Western liberal societies are crumbling, convulsing in moral chaos, and Russia is emerging as a sanctuary of tradition. He warned of “gender terrorism” driving Europeans toward Russia, and spotlighted the televised killing of conservative American voice Charlie Kirk as evidence of the West’s internal collapse.

 

The hidden frontline: Here’s why Putin’s Valdai speech was actually a cultural manifesto
The Russian president’s Valdai address shifted the focus from war and geopolitics to values, identity, and the collapse of Western liberalism

 

The Valdai stage has long been where Moscow sketches the future as it sees it. In this explainer, we break down how Putin shifted the debate from geopolitics to a values battle that he says is already reshaping the world.

Where to find harbor from ‘gender terror’

In one of the most striking turns of his speech, Putin claimed that Western European societies have embarked on a campaign of gender ideology aggression – particularly targeting children – and that many people are escaping to Russia to avoid this “terror.” He was explicit: “There, ‘gender terrorism’ … in relation to children does not suit very many people, and people are seeking ‘quiet harbors’ – they come to us. With God’s blessing, we will support them.”

That is not metaphorical exaggeration – Putin meant it literally. He asserted that Europeans are literally crossing borders to find relief from cultural and identity policies that they view as oppressive.

Moreover, Russia has already extended a hand: it introduced a “Shared Values Visa” program in August 2024, allowing foreigners who share “traditional Russian spiritual and moral values” to seek temporary residency under relaxed conditions. Summaries from local authorities say applications have come from Germany, Latvia, the US, Italy, France, the UK, Estonia, Canada, and Lithuania.

Western fracture via murder on air

Turning to the brutal assassination of American conservative voice Charlie Kirk, Putin’s condemnation was unreserved and direct: “This is a disgusting atrocity, especially since it was broadcast live. We all essentially saw it. It was truly disgusting, horrific. First and foremost, of course, I offer my condolences to Mr. Kirk’s family and loved ones.”

He continued: “What happened is a sign of a deep rift in [US] society.”

By pointing out that the murder was live-streamed, Putin painted a world in which violence no longer stays behind closed door: the blurring of public spectacle and crime is a symptom of moral collapse in West. He implied that the United States – long extolled as a paragon of freedom – is itself disintegrating from within.

Yet Putin also struck a note of cautious optimism: “There is no need to escalate the situation from our side because the political leadership tries to set it straight in domestic policy. I think the US is going this way.”

In other words, Putin said he believes the US may still be moving in the right direction – if it focuses inward and attempts to heal its fractures.

Kirk, who co-founded conservative action group Turning Point USA at just 18 years old, was killed by on September 10 as he was speaking to students at a college in Utah. A suspect arrested in connection to the case was “deeply indoctrinated with leftist ideology,” according to Governor Spencer Cox. In the wake of the incident, president Donald Trump vowed to pursue not only Kirk’s murderer but also what he called the “radical left” networks that fuel political violence.

Pay attention, Europe: The house is burning

A constant undercurrent in Putin’s speech was the contrast between Russia’s rooted identity and the West’s cultural disarray. He called on Western elites to “relax … and deal with their own problems”. Then, with rhetorical force, he laid out what he views as the West’s unraveling: “Look at what is happening in the streets of European cities, what is going on with the economy, the industry, European culture and identity, massive debts and the growing crisis of social security systems, uncontrolled migration, … rampant violence … and the radicalisation of leftist, ultra-liberal, racist, and other marginal groups.”

This was not rhetoric without context. Across Europe, public debt remains high – over 100% of GDP in Italy and France. Social security systems are under stress from aging populations. Frontex, the EU’s border control agency, recorded over 239,000 irregular crossings in 2024, a major political issue even as numbers fell from earlier peaks. Sweden has faced a wave of gang-related shootings, while Britain has grappled with knife crime and race-related clashes.

In the 2024 EU elections support for far-right parties increased in 22 out of 27 member states. Six EU member governments include far-right or hard-right parties. Far-right and radical parties are polling at historic highs in Germany and France, while protests and riots continue to rattle European capitals. 

In Putin’s vision, these are not isolated crises but expressions of a deeper social rot, a reaction to an overbearing liberalism that brooks no argument. While the West chases identity fads, moral experiments, and ideological extremes, Russia is presented as anchored in tradition, sovereignty, and continuity. Putin’s comparisons are not accident – he is inviting his audience to see stability versus decay, civilization versus collapse.

The imminent death of the old (liberal) world order

Putin told the Valdai audience that for many states, the liberal world order that emerged after the Cold War seemed “acceptable, even convenient.” It demanded little more than compliance in exchange for comfort. “The rules were simple,” he said. “Accept the terms, fit into the system, take your allotted share – and be happy. Others would think and decide for you.”

Some governments were happy to play along, collecting what Putin described as a “small but guaranteed bonus.” Others who objected were brushed aside as eccentrics. The particularly stubborn, he added, were “taught lessons by the self-proclaimed global grandees.”

The result, in his words, was predictable: “Not a single global problem was resolved – instead, new ones keep emerging. Institutions of global governance either no longer work at all, or have largely lost their effectiveness.”

Putin’s critique rests on widely observed failures. The UN Security Council remains paralyzed. The WTO’s appeals system has been frozen since 2019, leaving disputes unresolved. Climate agreements have not reversed rising emissions, while the IMF and World Bank are accused across the Global South of enforcing austerity rather than delivering development.

In Putin’s telling, the old (liberal) order was never a path to progress but a hierarchy of obedience – and today it is collapsing under the weight of its own contradictions.

Bottom Line

Putin’s Valdai 2025 speech was not a defensive posture – it presented a vision, that is slowly but surely manifesting. He cast Europe’s migration of values as evidence of cultural exhaustion, used the spectacle of Charlie Kirk’s assassination as proof of social unraveling, and declared that the liberal order has exhausted its moral and political claims. In his view, Russia does not wait in the wings: it is already acting as refuge, anchor, and torchbearer for a world seeking stability and tradition.

To read Putin’s Valdai is to understand that he no longer sees the future as a contest of military might or economic blocs alone – but a values battle, in which he intends Russia to stand on firm, unyielding ground.

https://www.rt.com/russia/625874-putin-valdai-cultural-manifesto/

 

===========================

 

Russian President Vladimir Putin attended a session of the annual Valdai Discussion Club in Sochi on Thursday. The Russian leader delivered a keynote speech, took part in a panel discussion, and answered questions from the audience.

Over the course of nearly four hours, Putin touched on a wide range of issues, including the conflict in Ukraine, the evolution of global politics, ties with the US, and what he described as the decline of Western civilization.

Multipolar world as a response to Western hegemony

The world is undergoing “rapid and drastic changes,” Putin said, adding that it is “easy to get lost” in a model where nothing is truly “determined.”

The rise of a multipolar world is a natural response to the heavy-handed policies of the West, he argued.

“Multipolarity has become a direct consequence of attempts to establish and preserve global hegemony, a response by the international system and history itself to the obsessive desire to arrange everyone into a single hierarchy, with Western countries at the top. The failure of such an endeavor was only a matter of time,” he stated.

Erosion of democracy

Putin insisted that the very concept of democracy is deteriorating in the West.

“Democratic electoral procedures have been turned into farce, attempts to manipulate the will of the people – it won’t work. We’ve seen this in Romania, for example… It happens in many countries,” he said.

In 2024, Romania’s top court annulled the results of the presidential election, citing fraud and foreign meddling, while frontrunner Calin Georgescu was barred from participating in the rerun.

Putin also said institutions such as the OSCE have become politicized and biased, while the EU is no longer the “powerful civilizational center” it once was.

The West should focus on its own problems

Putin dismissed claims that Russia intends to attack the EU or NATO, saying politicians who promote this are either “grossly incompetent” or “crooked” and lying to their citizens.

“Honestly, all I want to say is: Relax, sleep well, or address your own issues,” Putin said, urging the EU to focus on migration and economic problems instead.

Russia can’t afford to be weak

History shows that weakness is not an option for Russia, Putin argued. For some, he said, “it creates temptation, an illusion that disagreements with us can be resolved through force.”

He argued that the Ukraine conflict has transformed the Russian army into one of the most combat-ready forces in the world, with the ability to “rapidly adapt” to challenges.

“If we’re at war with the entire NATO bloc… we have to be confident in ourselves, and we are confident,”Putin said.

Asked about France’s seizure of an oil tanker allegedly belonging to the supposed ‘Russian shadow fleet’ used to bypass sanctions, Putin compared it to piracy. He downplayed the incident as an attempt to distract voters from domestic issues.

“What do you do with pirates? You destroy them. What else should be done to pirates? This doesn’t mean a war will break out across the world’s oceans tomorrow, but the risk of collisions will certainly increase sharply and significantly,” Putin said.

Not a paper tiger

Putin rejected US President Donald Trump’s recent description of Russia as a “paper tiger,” suggesting Trump may have been speaking ironically. He stressed that the Russian army has been steadily making gains and inflicting heavy casualties on Ukrainian troops.

What’s next? Well, in that case, go and confront this paper tiger. But, as you can see, the reality on the ground is different,” he said. 

Putin claimed that Ukraine lost nearly 45,000 soldiers in September alone, adding that Russia is de facto “at war with the whole of NATO.” At the same time, he praised Trump for being willing to listen to Russia’s arguments during negotiations.

Tomahawks would not tip the scale

Putin warned that the delivery of Tomahawk cruise missiles to Ukraine would not change the course of the conflict, but would further escalate tensions with the US.

Although some Western media outlets suggested that Trump was considering providing the missiles, Reuters reported on Thursday that shipments are unlikely since the US has none to spare.

The delivery of these weapons would mark “a new stage of escalation,” Putin said, arguing that Ukraine cannot operate them without direct US military involvement.

Murder of Charlie Kirk shows rift in US society

Putin expressed condolences to the family of American conservative activist Charlie Kirk, who was assassinated by a sniper last month in Utah.

The “despicable crime” was “a sign of a deep rift in society,” the Russian leader said.

https://www.rt.com/russia/625839-putin-valdai-speech-recap/

 

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YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

 

 

regime change....

https://www.youtube.com/watch?v=-oj3nV_XlwE

Europe's Shocking Plan to CHANGE Russia's Regime

 

The European Council wants to create a platform for “Russian democratic figures in exile” who are interested in “regime change” in Russia. The goal is to give a voice to those Russian figures in the West who are interested in ending the conflict in Ukraine and recognise Ukraine’s sovereignty and territorial integrity. Zelensky expects long range weapons from the US after a discussion with Donald Trump, mainly Tomahawk missiles. Vladimir Putin has responded and said that from his perspective, that would amount to a serious escalation because he doesn’t think that Kiev can launch those missiles themselves. Vladimir Putin said that the launch of Tomahawk missiles would directly involve US military personnel. Ukrainska Pravda has been nominated for the NOBEL Peace Prize.

 

READ FROM TOP.

 

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

predictions....

 

BY GUY SOMERSETYou're (Almost Certainly) Goin' to War, Sonny!

 

Congratulations, you just read the final sentence of the article.

Only, please go ahead and humor me by perusing the rest since it may be important.

(I'll do my best to keep it brief.)

Analysis vs. Prediction

In the interest of aforementioned brevity, allow me this much…to clarify, Analyses are not Predictions.

Sometimes you can have all the details, every insight, the best access, only to find things go awry.

People get bribed. Others are threatened. Maybe some politician sleeps with a girl (or a boy).

Anything can happen, and I've seen it happen — meticulously laid plans go askew for bizarre reasons.

So I am NOT, by any means, telling you what is going to occur…only what I see…and likewise fear.

In The Long, Long Ago…Summer, 2001

Curious things began happening right before the "happening” on good "ol September 11.

First, early that year a French girl with a prominent father in government began sending me emails (yes, children, they existed way back in the way back) regarding "abuses” of the Taliban. Weird.

It wasn't like her. So I took a closer gander and saw a curious flock of others she forwarded the same. That's not indicative. I didn't think so then, and I'm not even sure now. But it's something. A crumb.

Second, in March was a rather vocal bruhaha over ancient Buddhas which the Taliban were about to blow up for depicting figures, which is forbidden in most interpretations of Islam. We aren't getting into whether that was right or wrong or in-between as it is not material to our discussion today.

Unusual to me was that America did not bomb the Taliban over this affront, or at least carrot them into somehow covering the statues. Not because of the Artistic rationale, but in permitting the action in face of global outrage (seriously, people were very angry) it bolstered extremists to do worse.

Third, coming back to the United States in the late verano I was dressed in my typical "man out of time” uniform; i. e. business suit, silk necktie, alligator shoes. Despite this, for various reasons, security flagged me and we engaged a pleasant little tête-à-tête.

Now, I've been all over the world, many times. What I had not done until that juncture was be interviewed at length by men with machine guns (at least not back home in Uncle Sam Land). For definite, I had no reason to be alarmed, but it was very clear someone was anticipating something.

That's what you do in this line — watch for somewhat peculiar small things, which in minor doses mean nothing, but all "happen to happen” in conjuncture with each other…then you postulate.

Welcome to Your Life…Autumn, 2025

Many things are happening right now which make no sense…or at least, they make no sense according to the motivations given for their activation. Let's have a look…

Trump Mass Deportations — With Few Deportations

Honestly, Trump never (quite) promised Mass Deportations to his followers, but he implied them.

Whether one believes the hundred thousand or so thus removed qualify is personal perspective.

Only…what is the rationale for the manner? No use of the military, instead expansion of ICE. No Congressional revocation of "amnesty” laws, only Court challenges to said legislation. Few widespread raids of drug dens, several raids of home building stores.

All of the stated goals could be achieved by enacting regulation that proscribed Immediate Imprisonment for any Employer of an Invader as well as any Landlord who housed an Invader.

Following, the vast majority of Illegals would depart the country with only THEN being a need to use ICE to round up the stragglers. It would be far less socially divisive and far more practically effective.

Instead? It appears these prominent, frequently violent, dragnets are designed to incense The Public. Why? Again, possibly to fire up the base. Or perhaps start an inferno more noxious.

Trump Mass Amnesty — Many Industries Benefitting

Original Trump was against H1B Visas. Current Year Trump supports them. Original Trump was against Farm Amnesty. Current Year Trump just introduced it. Original Trump was going to remove the Haitians. Current Year Trump is allowing them to feast on cats.

Obviously, his Big Business supporters will not allow Current Year Trump to act. Then again, Current Year Trump is literally selling his own perfume from out the Oval, so he is himself Big Business now.

The operative fact is in a time when Microsoft just fired 9,000 workers to replace with Indian H1B Visas and Intel just fired 4,000 workers to replace with AI bots, Trump is not helping Real Americans.

Add to this Musk is (eventually) rolling out Autonomous Taxis which will be followed by Autonomous Trucks that combined will put at least 200,000 Americans out of work, with diners and gas stations as collateral damage, followed by grocery suppliers and snack distributors as well as many others.

If you dissent, Fat Boy Lonnie will — in his words — "f*ck your face” on account of you being in his way.

Finally, you have Amazon where approximately 1 in 5 former occupations is now done by a robot.

In the next few years there are going to be many Real Americans unemployed and many Fake Americans doing the remaining White Collar labor at half price and Farm Labor at even less.

That leads to a huge group of disenfranchised and unemployed males…almost what one might call an army.

Trump Health Care — Working Poor (and Middle Class) In Crisis

Those of you who read my pieces regularly know I did (almost) everything possible to derail the Tax Bill which provided for nearly anything…save when it came to care for a vast majority of The People.

Seriously, you know the state which benefitted most? Wyoming. Really? Yes, Sportsfans, because Jackson Hole is there, where a one-bedroom ranch-style home costs nearly a million bucks. The average Tax Savings in Wyoming for the Top One Percent will see rebates of over $130,000 each.

Meanwhile, the average "savings” for a No Tax On Tips earner will be…$400. At the same time, that is the precise type of worker most likely to lose their Medicaid or Affordable Care Act coverage.

We aren't going to get into the minutiae, but at the most conservative estimate 2 Million workers (the "able bodied” deadbeat is largely a myth to sell the Middle Class into acquiescing) and at worst 20 Million are cut. Only, that is nonsense, because if a Father loses his job that has topple-on effects for a Family. Health Care is the Top Cause of Bankruptcy, and thus Divorce, and then Drug Addiction.

As if not enough, the SNAP benefit loss will affect in the least 40 Million. Even if you hate "the poors” for some reason, do you hate your local grocer as well? Because SNAP dollars keep a good many in business, even in Middle Class neighborhoods. Politics is not about "the thing” but about the effect.

Lastly, I will mention that for those who think the Local Food Banks can take the slack, you should be aware for every 1 meal a church kitchen or relief agency provides, the Government serves 9 meals.

Say that's grossly exaggerated by half. It continues to be 1 to 4 meals which will be lost…at a time of Mass Unemployment in many Industries (especially University Level and "Good Jobs” positions).

Iran Isn't Finished — It's Barely Started

The bombing against Iran failed. Not an opinion, merely a fact. We collapsed tunnels, but not else.

Moreover, the strike was telegraphed, so Iran had plenty of time to move those materials around.

Trump later ridiculed Iranians and publicly stated weeks of negotiations were a fake to lure them to death.

So not only did we fail to achieve the objective, we also ensured the aim of Iran will now be going nuclear.

Taiwan — Why Are We Checking Allies

For decades policy on Taiwan was Strategic Ambiguity. From era of Original Trump it's confrontation.

Biden did not help. After him, Trump has made numerous bellicose threats to China about strikes.

Don spoke in public threatening them with "bombing Beijing”…and true or not, Beijing is listening.

Then Trump pressed numerous Allies in the Pacific to clarify contributions in a potential Sino War over Taiwan.

Mercurial Russia — Escalation on the Horizon

Recently Trump announced he was "fed up” with Putin. Thankfully the Russians took this in stride.

Failing to appreciate the Slavic mentality, or more chillingly, to comprehend it, Trump escalates.

Patriot Systems are considered the most fearsome weapon available for export and three are allegedly slotted to be sent to Ukraine in the coming months — possibly more from Israel.

Several demands made by Trump in regard to the Ukraine Conflict are unreasonably harsh given the historical context of the region to many Russians.

Mineral Rights deals, Agricultural Corporations and Widespread Ukrainian Corruption all combine to prevent a conclusion to the fighting.

Military Meeting — Almost 800 Command Officers

This week President Trump, along with Secretary Hegseth, addressed 800 Command Officers.

The message? No more dilly-dallying…you men better get ready to fight.

Some neophytes may claim this was a "Speech Against Woke” but seasoned observers saw it for what it was…the "Get Ready” Phase (think six months) of something far more ominous.

Ultimate Goals — One Year From Now

Hopefully, Dear Reader, you will mock me in a year. I sincerely hope for that to be the case.

Yet here is the alternative — War.

  1. Immigration — Trump is making a show of the worst sort of "apprehensions” that not even his most fervent supporters can align; kidnapping grannies from the park is not The Plan. So why? Tanking support. When polls fall low enough Trump can quit ICE apprehensions and claim it was "What The People wanted. They changed their mind on the issues.” Meanwhile, Trump will have an internal ICE army with 100,000 agents; more than the FBI or the CIA…combined. For what? To quell Domestic Unrest over Jobs, Health Care and War.
  2. Automation — This has long been the actual threat, and AI is only another moniker. Whatever you choose to call it, many or most places of work will be obsolete well before anticipated. Those occupations which remain will be filled by "Provisional Americans” on the order of visa holders or temporary work permits, neither of which ever expire if Big Business demands it. Mass unemployment, closure of unexpected industries, psychological depression will all play out in ways difficult to predict; it will be akin to the Industrial Revolution itself, only absent new positions, as those replacement opportunities will themselves be filled by automation.
  3. Health Care — Most provisions of the Tax Bill do not come into effect until, for the Lower Classes, next year, and for the Middle Classes, after the next election cycle. It is by design. Once you understand the implications of the bill and widespread social ramifications you will be another two years out from any voting to be done. Meanwhile, hope you do not get sick. This will be at the same time your local grocery stands a good chance of closing, you will lose your job, where you until then received Health Care, and when Food Support is diminished.
  4. War — But you know what? There's one place you can get three square meals and free Health Care to boot…that is, in an Army boot. (Which shall rest firmly on your neck.)

Do you think it's a coincidence the exact same time everything you took for granted in life — work, hometown industries, visiting the physician and eating regularly — is about to change that is the exact same time Trump and everyone else is increasing the International War Talk and Internal Security Apparatus?

When you want to force a Man to do something, you make sure he can't do anything else.

Analysis — The Grand Delusion

There is a tendency in social modeling to make things as theatrical as possible.

Usually, thankfully, it does not resolve itself in such a manner.

Also, occasionally, the very fact of appreciating a pattern can help you prevent its outcome.

What I see as of this moment are things "happening” which do not match their intentions. I see laws being passed which can result in only few resolutions that all cause widespread social unrest. I see extraordinary solutions: being made to ordinary problems.

Then you must ask yourself if I am incorrect in my analysis…what plausible contrary interpretations?

  1. Immigration — If there is a Mass Amnesty, then what purpose are 100,000 internal police?
  2. Automation — If half, or even a quarter, of all jobs are lost by 2030, how will people live?
  3. Health Care — If 20 Million lose Health Care, 40 Million lose regular meals, what results?
  4. War — If conflict is not the goal, why are negotiations routinely undermined or abandoned?

To my understanding, supported by currently disparate but rapidly coinciding events, the only intention must be to dilute cohesive American society, purposefully Unemploy tens of Millions, remove any Benefit System which might alleviate that social transition, then use these as fulcrum to cause many to enlist in military service — willingly — while dissenters are dealt with by interior force.

That is not mere speculation but only the most logical conclusion of the facts in evidence.

Am I right?

https://english.pravda.ru/opinion/164356-trump-immigration-raids/

 

READ FROM TOP.

 

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

connecting dots....

 

How a low-key remark by Putin reveals a deeper economic shift
The anchor of the global system is shifting from debt claims to real assets, and the implications are profound...

 

BY Henry Johnston

 

During his Valdai speech on Thursday, Russian President Vladimir Putin made the following rather dry statement:  

“It’s impossible to imagine that a drop in Russian oil production will maintain normal conditions in the global energy sector and the global economy.”

It certainly wasn’t the highlight of the night, and I haven’t seen it in the headlines of any of the recaps. The statement is, of course, true. Putin is saying: “you can’t kick us out.”

But let’s unpack this a bit and try to get a bird’s eye view of what this mundane statement implies in a much deeper sense – not in the sense of counting barrels of oil and the Brent price, but in terms of understanding the shifting tectonic plates.

Let’s first imagine what a Western leader might have said in the same tone, circa January 2022.

“It’s impossible to imagine that a country that loses access to dollars and Western capital markets will maintain normal economic conditions.” I don’t know if anybody actually said this in as many words, but that’s exactly what many were thinking.

Now, recall the G10 Rome meetings in late 1971, as the Bretton Woods-established gold peg of the dollar was being dismantled, when US Treasury Secretary John Connally famously told his European counterparts: “The dollar is our currency, but it’s your problem.” It is an oft-cited instance of American hubris.

In other words, despite its global use in trade and finance, the dollar would be managed for American economic interests.

When the collective West placed what were supposed to be crushing sanctions on Russia in 2022 in light of the Ukraine crisis, the idea was, again, “our currency (system), your problem.”

The message: the dollar will be managed for American geopolitical interests.

According to the conventional thinking, being cut off from the dollar system should have spelt doom for Russia. The many forecasters predicting exactly such a dire outcome weren’t necessarily simply Russophobes. They were working within a certain paradigm. Without access to its now frozen central-bank reserves, how would Russia stabilize the ruble? Without access to correspondent banking in dollars/euros, how would trade be settled? And without access to foreign capital markets, wouldn’t a funding crisis ensue? This type of thinking gave rise to these types of comments:

“We will provoke the collapse of the Russian economy,” in the words of French Finance Minister Bruno Le Maire about ten days into the war.

But the Russian economy didn’t collapse and in fact stabilized far faster than anyone expected. The thing is Russian oil and gas was still needed. And those who thought they didn’t need it (read the EU) found out the hard way that they did – even if the Europeans obscured the ramifications as much as possible through large fiscal support and subsidies. But it is no coincidence that ‘deindustrialization’ has become a household word in Europe. And somehow the political will to really clamp down hard on Russian energy never seems to materialize.

All of a sudden we have, from a Russian perspective: “Our commodities, your problem.”

The question now is: does this mean we’ve suddenly awoken to a strange new world? Are we now in a system where access to real things (like commodities) now trumps access to paper promises (like dollars)? Western policymakers’ futile attempts to cut Russian energy out of the world economy show that they understand only the monetary side of things. They see energy as a source of revenue for the Russian state – revenues thanks to which Russia is able to sustain its war effort. That the economy might actually fundamentally be an energy system and not a monetary system is incomprehensible to them. It is, in the strict Kuhnian sense, a different paradigm.

The BRICS countries talk a lot about a monetary reset being underway and about how new financial architecture is being created. It is fair to say that some of this rhetoric has been premature and that reports of the demise of the dollar system have been overstated. There have been a lot of checks written that BRICS and the Global South aren’t ready to cash.

Nevertheless, change is afoot, and what is taking shape has roughly the following contours: commodities are beginning, at the margins, to act as system-level collateral. By contrast, up to now, the system relied on trust in the issuer of paper claims (dollars, US Treasuries, euro-denominated assets). Gold accumulation by central banks has been massive – it is a quiet de-dollarization of reserves. Oil-for-yuan deals are modest but growing. And what can the commodity seller do with the yuan it receives? Convert them to gold on the Shanghai Gold Exchange. This may not yet be widespread, but the plumbing is there.

The anchor is shifting from debt claims to real assets – and this is bad news for countries whose economies are perched precariously atop a mountain of debt claims. Think of this as part hedge against Western sanctions and weaponization of the system, and part recognition that commodities have intrinsic durability that paper claims can’t always guarantee.  

Ultimately, of course, paper promises can be inflated. It’s not lost on anybody in the Global South that the dollar is down some 111% against gold in just two years and that US debt seems to be spiraling to infinity.

If the current system is one where money, credit, and financial assets are king, this means the constraints in this system are money-related. The crises tend to start with something like a spread blowing out, liquidity drying up, or collateral chains breaking. This is basically a money problem, not a real-economy problem. Remember the 1998 Asia currency meltdown; or the Global Financial Crisis of 2008; or Covid; or the UK gilt crisis of 2022; or the various US repo spikes. Such dislocations are dealt with by throwing balance sheet at them – swap lines, quantitative easing, backstops, emergency loans.

In 2022, we suddenly found out that Russian energy is not just another financial dislocation that can be covered with a swap line or emergency loan. From this, it follows that we need to think in terms of two economies: the real economy of energy, resources, goods and services, and a parallel financial economy of money and debt. There will always be a financial economy – and always be spreads blowing out on a Bloomberg screen somewhere – but we’re finding out now that it is the real economy that underpins the financial one and not the other way around.

But here’s the catch. When energy is abundant and cheap – and when money holds its value against energy – this energy foundation to the economy can be disregarded. The peak of renewables-based energy transition euphoria in Europe coincided with the peak of Russian supply of cheap hydrocarbons to Europe. A coincidence?

The legendary strategist Zoltan Pozsar once wrote: “Russia and China have been the main ‘guarantors of macro peace’, providing all the cheap stuff that was the source of deflation fears in the West, which, in turn, gave central banks the license for years of money printing (QE).”

I would add that this also gave the West license to dwell comfortably in the illusion that the economy is primarily a monetary system and not an energy-and-real-stuff system. Ironically, it was the reliable presence of cheap Russian oil and gas that helped this economic illiteracy fester.  

Putin did not connect these dots in his remarks at Valdai; the focus of his speech was obviously elsewhere. But the dots are there to be connected. And there are a lot of people in Moscow and Beijing to whom these dots are very apparent.

https://www.rt.com/news/625868-putin-valdai-world-economy/

 

READ FROM TOP.

 

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.