The Straight Dope on Ukraine

Author: Rafael Wolf | Libertarian Candidate, Michigan House of Representatives

Editor: Bonnie Warren

What set of spectacles are you wearing? Are you looking at the world through rose colored glasses or are you wearing skeptical spectacles?

Highlights to think about throughout our discussion:

• The Petrodollar
• Dedollarisation
• The SWIFT System and Central Banks
• The US Military and NATO
• The US LNG industry (Liquefied Natural Gas)
• Boogie Men (Who You Should Hate)
• Ukrainian Cannon Fodder: US vs Russia & China

Summary:

What you must first understand, is that the United States of America is a business model. In this business model, you will discover dependencies, economies relying on commodities, burdened with a long history of evidence dating back to before the founding of our nation. To understand things holistically, we must begin connecting the dots through historical facts, looking at events from a macro perspective over time, later focusing in on the micro, or the specifics. These events and circumstances shape current outcomes. Many books have been written on these topics by intelligent people, some of whom have worked inside the system, as an example, the State Department or the US Treasury. In the business model of America, elected officials, who most people vote into office and support ideologically, are controlled by corporations, wealthy donors, and self-interest. If you, like many voters, believe that politicians and government officials care about you, (pro tip!) they do not. Their loyalty is to their sponsors. Corporations and wealthy citizens fund major political parties (the duopoly), individual campaigns, news propaganda about policy on how you should think, or what you should care about. These sponsors fund brain trusts, universities, and lobbying firms to “influence” said politicians or the public, and so much more. There is money to be made by those in power, those who can afford to make the rules, both at the corporate level, and at the political level. After all, money spent within this system generates significant ROI (Return On Investment).

Make no mistake, the Democratic Party and the Republican Party are private businesses, not public institutions and they manage trillions of dollars annually. The duopoly exists as a business model within a larger business model, akin to a “subsidiary,” and similarly structured as businesses with CEO’s, VP’s, upper management, middle management, and a workforce. They have brands; they have marketing; they have budgets, organizational charts, and more, with many other parallels to multi-billion dollar, almost multi-trillion dollar businesses, depending on your perspective. They are managed as a subsidiary, or sister company, within the business model of the United States. It is within this business model framework that we need to filter the straight dope on the Ukraine, and the business of war, or for that matter, our political world view with respect to politics within the United States, including politics within the State of Michigan. It is this business model framework, in fact, that you can use to filter most of history, including current events.

The Brutal Back Story: Our Economic History:

The United States abandoned the gold standard in 1971 under the Nixon administration, officially ending the Bretton Woods System of monetary management, and eventually giving birth (1974) to what is known as “the petrodollar,” through the assistance of Saudi Arabia and OPEC (Organization of the Petroleum Exporting Countries). The petrodollar is important to understand, because it is what makes the US dollar “the world’s reserve currency.” All oil sales must be transacted using the US dollar. Every oil-using country, therefore, requires the US dollar to buy and sell oil in the world marketplace. Oil is the number one commodity traded the world over – it is the largest commodity – and it is used by one hundred percent of the world. You may be thinking, “I thought that the US was so totally badass and awesome that people just wanted our US dollars! Murica! Freedom! Liberty! F#@k yeah!” No, the only reason any foreign nation needs the US dollar is to buy and sell petroleum products, or other major commodities, because they, too, are generally traded in US dollars. (It is a complicated issue – if you would like to read more about it in detail, investopedia has done a wonderful job of breaking it all down here.) Pro tip! The entire world operates on petroleum, not Dunkin Donuts! Consequently, the petrodollar is what gives the United States the financial power and “wealth” it enjoys today. This economic dominance is why, as a nation, we deficit spend, and why other countries are dependent on, subservient to, you choose the phrase you want to use here, the United States for economic survival. (See! There IS a reason why the United States overspends like a drunken sailor – the investopedia piece discusses it in detail. I highly recommend you read that piece after finishing this one.) The petrodollar gives our government, yes, your elected officials, the power to right-hand-five-finger-slap another nation with financial sanctions, blocking its use of US dollars through another system called SWIFT, or “The SWIFT System.” SWIFT was created as part of the Central Banking System in 1973. SWIFT is a global messaging system, like e-mail, and it allows one nation’s central bank to instruct another nation’s central bank on how to settle or pay for oil, settling or paying, of course, in US dollars. Eighty percent of the world’s goods, whether they be oil or not, are settled and paid for in US dollars, because every nation has them, every nation knows what a dollar is worth (in theory), and every nation currently accepts dollars as payment in international trade. This creates an unusually high demand for dollars, and is what increases its perceived value. US dollars in the form of T-Bills are seen as a “safe haven asset” in times of crisis, although recent sanctions on Russia’s US dollar reserves puts that idea into question. Other nations have taken notice of this activity.

Through the one-two punch of the petrodollar, and SWIFT being used by central banks throughout the world, the United States can block another country’s central bank access, and thus block that country from using their US dollars to buy necessities for their economy. This can easily choke a nation’s economy, making an example of them to other nations. Financial sanctions by the United States have become weapons. Like any successful bully, for others to fear the perpetrator, witnesses must first observe the aftermath of abuse. If you mess with US policy, you get the big stick of “no dollars” and economic sanctions! And that is just one piece of the power structure that the United States has built over time, through many political administrations, regardless of duopoly party membership. So, why might there be such bipartisan love for the petrodollar, SWIFT, and sanction power? Think about it. The business model benefits! It gives the US the power of coercion by financial force to do what is in the best interest of the US.

Furthermore, the United State exploits partnerships like NATO, calling upon their members to abstain from business with other nations or persons on the “naughty list.” Yes, such a list actually exists, and is housed with the US Treasury Department. Look for it here. Many sanctions are accomplished by executive order from the President of the United States, without due process of any law, international court, or jury trial (sound like “dictatorship”?). Again, another bipartisan effort by the duopoly, throughout their administrations, to protect the business model of the United States. Recently, some countries, in an attempt to minimize the financial power that the United States lords over them economically, have tried to “dedollarise.” When a nation state dedollarises, it is purposefully selecting currency other than the US dollar with which to buy, sell, and trade, threatening US power throughout the world. Many countries have already begun utilizing the second most popular reserve currency in the world, the Euro, which is commonplace throughout the European Union, and managed by the European Central Bank. Both China and Russia have been dedollarising for years, intentionally shifting away from US dollar “reserves” in favor of gold and the Euro. Coincidentally, Russia even stated it would consider accepting Bitcoin for payment of fossil fuels, a decentralized “store of value” not controlled by any nation state. Step back for a moment and consider the implications of BOTH Russia and China challenging the kneecap-busting, baseball-bat-to-the-shins approach the US has employed historically to punish other nations, as they conscientiously eliminate US dollars from their trade agreements. This economic shift is absolutely paramount to our understanding of what is currently happening in the Ukraine.

Here is a list of some countries that have dedollarised in recent times:

• Australia: Made an agreement with China.
• Brazil: Made an agreement with China.
• China: Launched CIPS (competes with SWIFT).
• The European Union: Buys oil from Iran through INSTEX (an effective method to circumvent US sanctions).
• India: Trades with Russia though Indian and Russian currency.
• Iran: Sells to China with gold backed Chinese dollars (yuans) and to the EU through INSTEX.
• Japan: Trades with China in native currencies.
• Russia: Created SPFS (competes with SWIFT). “At the end of 2020, there were 23 foreign banks connected to the SPFS from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan, and Switzerland.”
• Saudi Arabia: Involved in talks with China about settlement in Chinese yuan.
• Venzuela: “Prices its oil in euros, yuans, rubles, and other currencies.”

When you analyze this list, what you begin to notice is a rise in the number of countries implementing competing systems to the US for payment system for commodities. These systems threaten US sovereignty and the dollar as the world’s reserve currency. You observe China and Russia playing key roles in a much larger plan by multiple nations to dedollarise themselves and effectively abandon the US dollar. If the world is not required to purchase commodities in dollars, what is the US dollar actually needed for? That’s right – nothing beyond the local market. Therefore, global demand for the US dollar is down, not up! Demand for the dollar is misrepresented by the Federal Reserve when additional dollars are printed and put into the balance sheet, creating the appearance of demand. This would indicate that “the dollar” as we have known it since 1974, and thus US power as we have known it, is waning, “dying” if you will. You may not have realized it yet, but on the global stage, the US and the US dollar, are less important every day.

The Military

You may believe, or have heard, that the US military exists to “defend America,” or “fight for freedom,” or something similar, to justify its existence, like to “protect the innocent,” or “fight for democracy.” I know I have, and on many occasions recalled the mantra, “freedom isn’t free.” This apparently means that we must fight other countries to maintain our freedom, or dare I say, power? There are many worthwhile reasons the military exists, sure, to defend the US, for example, but it gets better than that, or…um, worse?!

• The military protects markets and shipping lanes (Capitalism 101 – Property).
• The military oppresses smaller, less powerful countries (Capitalism 102 – Plantations).
• The military generates economic activity (Capitalism 201 – GDP).
• The military creates jobs (Capitalism 202 – War Economy).
• The military makes money (Capitalism 301 – Benjamins).

The “armed forces,” aka, the military, including our “partners” like NATO, exist to protect ocean-bound shipping lanes and foreign “markets.” Some departments of the armed forces help protect US “interests” on land. Armed forces may be deployed, for example, if an Eastern or African “dictator” attempts to dedollarise and use some other currency or form of payment for their natural resources (oil!). In this case, ground troops, drones, cyber units, and air teams are deployed to attack the nation of interest with physical force. Perhaps a CIA coup would work, or maybe the previously discussed, good ol’ sanction trick will suffice. What happens when a Somali pirate ship attacks a US cargo vessel in the ocean, taking hostages? The US Navy appears with snipers to take care of business, which has nothing to do with “war” or defending the United States from non-existential threats, like someone taking away your freedom. Bonus fact! Hollywood makes a movie about these events, a film that serves as propaganda, making the public believe the United States cares about what happens to captain and crew (Captain Phillips). Similarly, other countries, conjunctively with NATO alliances, have contributed to protecting cargo vessels carrying goods through ocean shipping lanes. Why? Because they, too, have business interests in the timely deliveries of goods! Most, if not all, political actions can be understood in terms of “the business model.” And we are not the only nation with a business model – all nations have economic and business interests. The business model is timeless, untamperable – you cannot mess with it! It isn’t about protecting captain and crew, as Hollywood depicts, but rather, it is about protecting economic activity. A ship could be worth $100 million dollars alone, loaded with cargo and goods, perhaps hundreds of millions more of “economic activity,” as items are offloaded, warehoused, transported, stocked, marketed, inventoried, sold, taxed, consumed, and discarded. In the business model, this is often called “the lifecycle.” It is not uncommon for a nation to protect a large piece of “the supply chain” by use of military force, aka “policing,” or to protect profits by oppressing another country. The supply chain typically starts with digging up, cutting down, or harvesting some resource from another foreign land. In a successfully oppressive system, the country doing the digging makes poverty wages, and is managed by a US multinational corporation, like Texeco or the Dole Fruit Company, so it can maximize shareholder value and make the DOW go up! Why do you think the US armed forces occupies over 750 military bases around the globe?

Now you know the reasons – to protect markets and shipping lanes, to keep a watchful eye on the engine of capitalism, which is growth and consumption. Part of being “the world police” is not policing other countries, as many would suggest, but rather about greasing the wheels of capitalism.

The armed forces, or other apparatuses like the CIA, are also useful to oppress and threaten smaller countries that are unfriendly to US policy, which we, again, have a long record and history of protecting. The armed forces can even be employed as independent, economic engines, as there is more money to be made in war than there is in peace. Did you know that the United States is the preferred “broker” of military weapons according to manufacturers of weapons in the United States? The United States, as a broker between nation states, receives a 3.2% commission on all weapon sales, consultation, and management of arms, all at no cost to the tax payer! Lucky us! A US government administrative agency, the DSCA, or Defense Security Cooperation Agency, administers the Foreign Military Sales (FMS) program for the Department of Defense (DOD). Team America!

Foreign Military Sales (FMS) is the U.S. Government’s program for transferring defense articles, services, and training to our international partners and international organizations. The FMS program is funded by administrative charges to foreign purchasers and is operated at no cost to taxpayers. The Defense Security Cooperation Agency (DSCA) administers the FMS program for the Department of Defense (DOD).

You can read all about it in their FAQ regarding how this system works. The DSCA sells weapons of all types, mind you, to over 189 countries. Wow! I wonder what their return policy is after Christmas? Do they have a punch card or loyalty reward program? Of course they have it. Hey! I see you may want to rent before you buy – we get it – how about a lease program? Of course we have that, too. But wait! There’s more! It’s all right there in the PDF, and makes for an interesting read, particularly within the context of the United States functioning as a business.

Were you offended or upset when President Trump made a deal with Saudi Arabia for $350 billion dollars in arms sales over a 10 year period (read about it here)? What about the arms deal President Obama belted out to the tune of $200 billion (read about it here), increasing arms sales from previous administrations by over 40%? Who says bipartisanship no longer exists in Washington? In the business model of the United States, both branches of management are bipartisan in war-making, war-profiteering, and killing. Cooperation between the left and the right, team red and team blue, can truly be amazing! When you vote for the establishment duopoly, it is “business as usual.”

Military stock performances from 2008 to present (Obama, Trump, AND Biden administrations) have outperformed each other. Take a look!

• Boeing: ~600% (2019); ~200% (2022)
• Lockheed Martin: ~542%
• Northrop Grumman: ~800%
• General Dynamics: ~271%

The Straight Dope

The straight dope on Ukraine can be broken down and sequenced into five steps:

Step 1: The United States, while in control of NATO, uses Ukrainian adoption into the organization to provoke Russia into an invasion, because Ukrainian adoption into NATO negatively impacts Russian national security. (Step 1 completed!)

Step 2: The provoked invasion of Ukraine not only boosts arms sales in Europe from US military weapons manufacturers by those needing to fortify their defenses, but also destabilizes the region, thereby creating a “war zone.” (Step 2 completed!)

Step 3: The United States maintains Russia and Russian “oligarchs” as enemies of the state, using the mechanism of sanctions to confiscate assets, consolidating opinion within an electorate that believes it is well informed through state media outlets like NPR, CNN, MSNBC, Fox News, ABC, The New York Times, etc., reinforcing State Department talking points. This electorate of likely voters, convinced to support US policy in patriotic ways, with “leaders” actually plunging it into a war driven by greed, proceeds blindly as directed. (Step 3 completed!)

Step 4: The United States scapegoats the Russian and Ukrainian conflict as the cause of inflation and rising gas prices, when in all actuality, the US monetary policy (“money-printing”) is responsible for inflated prices in addition to a few non-war related issues. It’s business as usual in the US of A! (Step 4 completed!)

Step 5: The United States punishes two countries at one time that no longer desire to use the US dollar for global trade, thereby maintaining the status of the dollar as the world’s reserve currency in the short term. (Please wait, processing…)

Did you catch step 5? Tally-ho, constituents! That is the straight dope on Ukraine. Check out what a US-backed propaganda machine, known as the Atlantic Council, has to say about it here.

In this game, Ford vs GM vs Chrysler, or “the big three,” translates into US, China, and Russia jockeying for power. The United States is scared of losing power. In turn, the government needs you to be frightened, so that you will back your elected officials’ war efforts – as a result, you will hate China, you will hate Russia, and you will support politicians to “go get him,” but for all the wrong reasons. We, as a nation, interested in trade and economy, should not hate other nations, or create an environment for citizens to hate them, yet, sadly, this is what cyclically happens throughout the generations.

The United States is not really interested in “fair trade,” “free markets,” or “liberty and justice for all.” Instead, we croon one mantra – “God bless America AND NO ONE ELSE!” The reason America is special, is not because we are a God- fearing nation, blessed, smart, pretty, lucky or anything else. We are unique because of interesting coincidences in history, a series of events, which has volumes of books written about them. The United States has taken advantage of opportunity time and time again for its own interests and benefit. China threatens the United States as the number one economy in the world by building the “Belt and Road” transportation network across land and sea, a network that depends on Russian cooperation. BFFs China and Russia are growing tighter, and more economically dependent, on one another every day.

Here is a map of the Chinese initiative that will take China’s economy to the next level, helping it surpass the economic output of the United States:

The Ukraine became an initiative partner in 2017. Interesting, no? Yes, interesting! Now let’s look at another map. Where does the Chinese Belt and Road go?

Infographic edited from: Merics.org

I’ve put a blue hexagon on the map, highlighting Ukraine, Russia, and the regions of interest to US business. Russia has an extensive railroad infrastructure that is part of the Chinese Belt and Road Initiative. Ukraine, and a few other countries on the Russian border, can be considered provocation zones the United States can exploit. The pink line to the south is a “planned” rail. If the region destabilizes, building ceases. No country can build during wartime – war is a vehicle of destruction, not progress. (Sorry Russia and China, we aren’t letting your goods into the EU through that Russian border right now – sanctions have closed it, and nobody can do business with you.) Not only do war and sanctions take economy away from Russia, they indirectly take economy away from China. The United States, by using the Ukraine, can punish two countries at once, countries that have chosen to partner against US interests by dedollarising, countries whose partnership threatens to compete with the United States in the European market, usurping its global economic power. Remember, the United States is a business, operating within a business model! Period.

How about the liquefied natural gas (LNG) angle we discussed at the beginning of this article? Not only are sanctions hurting Russian partnerships, and thus, to a degree, China’s economy, Russia’s ability to remain a powerhouse globally in the natural gas business, providing Northern Europe with gas for heating their homes in cold winters, has been crippled. Commissioned in 2011, Russia built a gas pipeline into Germany that is both operational and profitable (Nord Steam 1); Nord Steam 2, commissioned in 2012, which has been completed, but is not yet operational, doubles Russia’s total delivery capacity and potentially its overall profitability. If Russia successfully increases its capacity to export LNG, what does that mean for US sales?

Three countries provide almost 70% of LNG to European markets:

Note that our portion of the “market share” has been growing larger, not smaller, over time. Since 2017, the United States has expanded its market, an increase now threatened by Russian gas supply from Nord Steam 2. Recalling our business model, does the US tax LNG? Pro tip! It most certainly does. The United States government makes money from natural resources – it leases the land to extract these resources, and it taxes them, just like it does in the gun-running business. The duopoly managing our country even subsidizes these companies in order to exploit those resources that make the most profits. Regardless of what is happening, the United States fares the richer, and the political parties running the government amass great wealth in innumerable ways. Damn Ukrainian lives! We need to protect our markets! We need to make money! We need to protect our power! We need to get elected so we can continue doing it! America Inc. needs the duopoly subsidiary to continue driving profits! In fact, President Joe Biden, in a new development, struck a deal with the EU to provide even more LNG! Our CEO masterfully executes, according to plan, the tasks of growing our market share, making money, and eliminating the competition. We thank you, Joe. Does the Ukraine thank you?

Conclusion

Sadly, the Ukrainian people have been reduced to cannon fodder in what is essentially a fight for economic power over the European market, and they don’t even know it. It is a battle for the US to hold onto its status as the world’s reserve currency. It is a battle for the US to hold onto LNG profits. It is a battle to boost and maintain arms sales and distribution across the globe. A business model, with fantastical philosophies of infinite growth and power, clinging to ideals propped up by wretched business partners* that have soured it over the past 100 years, has the capacity to abuse the rest of the world, while we, as citizens, stand by and watch (if you are even aware of this devolution). It’s time to change the model, and highly imperative that we do so, as quickly as possible, with each and every election.

(*the Democratic Party, Republican Party, the CIA, and the arms industry)

Although these foreign policy issues delve outside the bounds of politics here in the state of Michigan, including the race I am interested in – the race to secure a seat in the House of Representatives – there are parallels to the Ukraine and how the duopoly conducts business within the state of Michigan. Remember, you can better understand how things work if you filter what you observe through the simple understanding that political decisions are made as business decisions. We all understand there is no shortage of problems to solve here at home. As a whole, Libertarian candidates do not behave like business partners to US oligarchs and multinational corporations. Libertarians strive to protect the best interests of all who inhabit our planet, without the primary objective of economic gain. The philosophies and actions of the leaders mentioned in this article, who commit humanitarian atrocities for the sake of profit, under the guise of manufactured “fear of the other,” are deemed deplorable, as are the philosophies and actions, or lack thereof, of the elected officials here in our state. I hope to shed more light on these specific philosophies and actions in the coming months, through written pieces like this one, and by adding audio segments to help explain their content. Over time, I’ve come to learn that the actions of many of our leaders don’t actually solve problems, but in fact, create bigger, more complicated issues. These actions do not promote peace or fair trade, the pursuit of happiness, equality, and good will, but rather propel destructive, versus positive, forms of capitalism.

Candidates from the duopoly, at all levels, have built or operate within a banana republic, whether they know it or not, owned by corporations that fool the electorate into thinking that these officials actually represent them. They do not at any level represent your interests, they represent, as in all banana republics, the interest of their corporate donors, while at the same time selling you the ultimate fool’s gold – the illusion of representation. These leaders intentionally create barriers to political entry by outsiders, like those from third parties, in an attempt to maintain power over institutions of oppression. It happens every day, within the state of Michigan, within your county, within your township, and within your city.

In the next election, consider being an up-voter, looking beyond left or right to what it means to vote “up,” to a higher standard of government administration – one that you can be proud of – one that protects the health, safety, and well-being of every human being on our wonderful planet. Be a an up-voter! It’s your new clear option!

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