Guest Post: Obama And Putin Are Trapped In A Macho Game Of "Chicken"

Tyler Durden's picture

Submitted by Michael Snyder of The Economic Collapse blog,

The U.S. government and the Russian government have both been forced into positions where neither one of them can afford to back down.  If Barack Obama backs down, he will be greatly criticized for being "weak" and for having been beaten by Vladimir Putin once again.  If Putin backs down, he will be greatly criticized for being "weak" and for abandoning the Russians that live in Crimea.  In essence, Obama and Putin find themselves trapped in a macho game of "chicken" and critics on both sides stand ready to pounce on the one who backs down.  But this is not just an innocent game of "chicken" from a fifties movie.  This is the real deal, and if nobody backs down the entire world will pay the price.

Leaving aside who is to blame for a moment, it is really frightening to think that we may be approaching the tensest moment in U.S.-Russian relations since the Cuban missile crisis.

There has been much talk about Obama's "red lines", but the truth is that Crimea (and in particular the naval base at Sevastopol) is a "red line" for Russia.

There is nothing that Obama could ever do that could force the Russians out of Sevastopol.  They will never, ever willingly give up that naval base.

So what in the world does Obama expect to accomplish by imposing sanctions on Russia?  By treaty, Russia is allowed to have 25,000 troops in Crimea and Russia has not sent troops into the rest of Ukraine.

Economic sanctions are not going to cause Putin to back down.  Instead, they will just cause the Russians to retaliate.

In a letter that he sent to Congress this week, Obama claimed that the Ukrainian crisis is an "unusual and extraordinary threat to the national security and foreign policy of the United States."

Language like that is going to make it even more difficult for Obama to back down.

On Thursday, Obama announced "visa restrictions" on "those Russians and Ukrainians responsible for the Russian move into Ukraine's Crimean Peninsula", and a House panel passed a "symbolic resolution" that condemned Russia for its "occupation" of Crimea.

But those moves are fairly meaningless.  Leaders from both political parties are now pushing for very strong economic sanctions against Russia, and there does not appear to be many members of Congress that intend to stand in the way.

If the U.S. does hit Russia with harsh economic sanctions, what is going to happen?

Is Russia going to back down?

No way.

So let's just play out the coming moves like a game of chess for a moment...

-The U.S. slaps economic sanctions on Russia.

-Russia seizes the assets of U.S. companies that are doing business in Russia.

-The U.S. seizes Russian assets.

-The Russians refuse to pay their debts to U.S. banks.

-The U.S. government hits Russia with even stronger sanctions.

-Russia starts dumping U.S. debt and encourages other nations to start doing the same.

-The U.S. gets Europe to also hit Russia with economic sanctions.

-Russia cuts off the natural gas to Europe.  As I noted the other day, Russia supplies more than half the natural gas to a bunch of countries in Europe.

-The United States moves troops into western Ukraine.

-Russia starts selling oil for gold or for Russian rubles and encourages other nations to start abandoning the U.S. dollar in international trade.

Of course the order of many of these moves could ultimately turn out to be different, but I think that you can see the nightmare that this game of "chicken" could turn out to be.

And what would be the final result?

Nothing would be resolved, but the global economy would greatly suffer.

What makes all of this even more complicated is that about 60 percent of the people living in Crimea are actually ethnic Russians, and a majority of the population appears to want to leave Ukraine and be reunited with Russia.  The following comes from a Reuters article...

Crimea's parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum on the decision in 10 days' time in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.

 

The sudden acceleration of moves to bring Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, formally under Moscow's rule came as European Union leaders held an emergency summit groping for ways to pressure Russia to back down and accept mediation.

The Obama administration is calling the upcoming referendum "illegal" and says that it will not respect the will of the Crimean people no matter how the vote turns out.

But the people of Crimea are very serious about this, and of course they never would be pushing for reunification with Russia if they had not gotten approval from Putin...

The decision, which diplomats said could not have been made without Putin's approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

 

The vice premier of Crimea, home to Russia's Black Sea Fleet in Sevastopol, said a referendum on the status would take place on March 16. All state property would be "nationalized", the Russian ruble adopted and Ukrainian troops treated as occupiers and forced to surrender or leave, he said.

There is no way that the U.S. government is going to accept Crimea becoming part of Russia, and there is no way in the world that Russia is going to back down at this point.  Just consider what geopolitical expert Ian Bremmer of the Eurasia Group recently had to say...

"Russia is not going to back down from Crimea, irrespective of U.S. pressure. Which means if the U.S. wants to find any resolution here, they’re going to have to find a way to come to terms with that. Now that the Crimean parliament has voted — clearly with Russian assent — we’ll have a referendum … and then further militarization of the peninsula by the Russians."

What we need is someone with extraordinary diplomatic skills to defuse this situation before it spirals out of control.

Unfortunately, we have Barack Obama, Valerie Jarrett and John Kerry running things.

What a mess.

So why is Ukraine such a big deal anyway?

In a recent article, Peter Farmer explained succinctly why Ukraine is so incredibly important...

The Ukraine is strategically-important for a number of reasons. It sits astride enormous petroleum and natural gas deposits found in the Black Sea region. The nation is also home to an extensive network of liquid natural gas pipelines which crisscross it; control the Ukraine and you control its pipelines - and thus the flow of energy into the hugely-lucrative European market. Western energy firms such as Exxon-Mobil, BP-Amoco and Chevron are locked in competition with the Russian energy giant Gazprom - for control/exploitation of as-yet-undeveloped petroleum deposits not only in the Ukraine, but in neighboring Poland and Romania. Fracking technologies and other new extraction methods have only added urgency to the competition. Income from fossil fuels development is the lifeblood of the new Russian economy. Threats to the regional hegemony of Gazprom are likely to be treated by Putin and Russia with the utmost urgency and seriousness.

 

The Crimean Peninsula is also home to the Black Sea fleet of the Russian navy, which leases its base at Sevastopol from the Ukrainian government. Since the Black Sea - via the Dardanelles - provides the only warm-water base with access to the Mediterranean Sea - it is of enormous importance to Russia. Its loss would be a crippling blow to the Russian fleet.

 

Finally, the Ukraine - once known as the "bread basket of Europe" - is home to arguably the finest temperate agricultural region in the world. Its topsoil is widely-acknowledged by agronomists to be among the world's best. Control the Ukraine and you control the grainery of Europe - and can exert tremendous leverage upon worldwide grain agricultural commodities prices.

If the U.S. insists on playing a game of brinksmanship over Ukraine, the consequences could be disastrous.

For one thing, as I mentioned above, the status of the petrodollar could be greatly threatened.  The following is how Jim Willie is analyzing the situation...

If the Kremlin demands Gold bullion (or even Russian Rubles) for oil payments, then the interventions to subvert the Ruble currency by the London and Wall Street houses will backfire and blow up in the bankster faces. Expect any surplus Rubles would be converted quickly to Gold bullion. If the Chinese demand that they are permitted to pay for oil shipments in Yuan currency, then the entire Petro-Dollar platform will be subjected to sledge hammers and wrecking balls. The new Petro-Yuan defacto standard will have been launched from the Shanghai outpost. If the Saudis curry favor to the Russians and Chinese by accepting non-USDollar payments for oil shipments, then the Petro-Dollar is dead and buried.

In addition, if Russia starts dumping U.S. debt and gets other nations (such as China) to start doing the same, that could create a nightmare scenario for the U.S. financial system very rapidly.

So let us hope and pray that cooler heads prevail....

But if the United States and Russia do declare "economic war" on each other, all hell could start breaking loose.

Unfortunately, there does not appear to be much hope of anyone backing down at this point.  In an editorial for the Washington Post, Henry Kissinger stated that it "is incompatible with the rules of the existing world order for Russia to annex Crimea."

Very interesting word choice.

So this is the situation we are facing...

-The U.S. government seems absolutely determined to "punish" Russia until it leaves Crimea.

-Russia is never going to leave Crimea, and has promised to "respond" harshly to any sanctions.

Most Americans are not paying much attention to what is going on in Ukraine, but this is a very, very big deal.

In the end, it could potentially affect the lives of virtually every man, woman and child on the planet.

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Kirk2NCC1701's picture

Disagree. Neither one is playing that game.
They're playing a different, far bigger game.
But both are also posturing to a Domestic and a Global Audience.

LetThemEatRand's picture

Well said.  The owners are playing Risk, and they are gleefully watching as we debate who is playing chess or checkers.

prains's picture

Oligarchs posturing for resources behind a smokscreen of sovereignty and natioanlism

Fredo Corleone's picture

"You can tell a macho, he has a funky walk
his western shirts and leather, always look so boss
Funky with his body, he's a king
call him Mister Eagle, dig his chains
You can best believe that, he's a macho man
likes to be the leader, he never dresses grand..."

"I've got to be a Macho Man !"

http://www.qualiafolk.com/wp-content/uploads/2011/12/VP.jpg

john39's picture

It took quite a bit of time and labor for the shadow government to maneuver Eurasia and Oceana into position for a war. Now just need Emmanuel Goldstein to pull a false flag to get the shooting started.

DeadFred's picture

This analysis overlooks Turkey closing the Borsphorus and Dardanelles to Russian shipping and Putin going all medieval on them. Go long Geiger counters everyone.

The Vineyard's picture

Macho?  I've met transvestites more manly than these two punks.  Bitches.

johnQpublic's picture

its all just a cooperational plan to camoflage the radiation from fukushima

 

let 'em finish, they'll get there

Cpl Hicks's picture

Yeah, Barry don't do macho.
No macho in the Choom gang.

RaceToTheBottom's picture

Oh, now you gone and done it.

You besmirched the bare chested Putinsky.

Prepare for the wrath of the curmudgeons, not yet outs, and has beens

Anusocracy's picture

The Russians are smart enough to see the US endgame: the destruction of Russia.

The Russians are finally telling the US that it will only happen by a nuclear war in which the US is destroyed also. As I've stated before, the US is the aggressor and has been for a very long time, so the US is the villain plain and clear.

Since my teens I have thought that intelligent life was incapable of evolving quickly enough avoid its own annihilation. You would have to kill off the four percent who are psychopaths just to get a slight chance of stopping it.

Most people can modify their behavior through domestication, like some animals, but like those animals, they can never become human.

LetThemEatRand's picture

I agree with everything you said except that the U.S. is "the villian."  There are more than one.  Russia is one too.  At the moment Russia is the underdog and it's fun to root for the underdog.  But Russia is no shoe shine boy and if it ever gets a leg up it will piss on us peons just like the U.S. is doing.

Flybyknight's picture

The US is clearly the instgator of this crisis as revealed by Victoria Nulands phone call to the US ambassador in Ukraine. Russia is a long way from perfect regarding personal freedom,  human rights etc. but I cannot recall any expansionist incidents from them since Cuba. (Afganistan is a local trouble spot to the Russians.) The USA on the other hand has spread violence destruction and deceit the world over.

RazvanM's picture

WTF? Transnistria (war on Moldavia by Russia) now an unrecognized enclave occupied by the Russian 14 Army, Cecenia, Georgia and now Ukraine.

DaddyO's picture

<Unfortunately, we have Barack Obama, Valerie Jarrett and John Kerry running things.><What a mess.>

Could have been talking about the USSA for the last 5 years!

DaddyO

prains's picture

Not sure how Deadbrain McCain or HairLip Harry McObomney was going to do you any better in retrospect and going down the list through Bitchlery Clinton, GWG Jeans, and on and on.......where is the dude in this compendium of fools!!!

11b40's picture

5 years?  Is your calander broken?  Mine can look back far longer than 5 years.  More like 65 years.

nmewn's picture

Meanwhile, the EU sits on its ass sucking its thumb in the corner, with a dirty diaper on, screaming for someone to come "change" it for them.

Man, must suck to be them ;-)

 

NoDebt's picture

Putin has been planning this for a LONG time.  He set up the pieces just where he wanted them on the board and now he's making his move.  Obama is doing his usual headless-chicken routine because he's in FULL-REACTIONARY mode, caught totally unaware, as per the usual.  Obama WILL admit checkmate on this one eventually (i.e. he'll throw it to the UN or the "international community" and drop the whole subject as they do nothing) becuase the options he has to reverse Putin's actions are so distateful as to be non-starters.  Plus, of course, he's a pussy, which Putin also knows.

prains's picture

but you surmise that this is a political problem when it is not. Politics is the veil which conceals the true motives, everything is about resources and control of them, the rest is to fill chatrooms with distractions.

ShrNfr's picture

Ah yes, when (not if) Russia gets the Crimea, it also gets the territorial waters off the Crimea. And those waters contain...

johnQpublic's picture

a clue for the next idol?

sil3nc3rxr's picture

Toxic waste?

Oh sorry, forgot it's not in Midwestern US!

StychoKiller's picture

Umm, "boomers" and pipelines?

NoDebt's picture

How in the name of God did you get that from what I wrote?  This is OBVIOUSLY about resources.  In particular, the resources that Russia wants (and will get) because Obama & Co. never paid attention to that part of the board and are left, once again, completely flat-footed and without a tenable position to push back or even defend to stalemate.  

prains's picture

because "pieces on a board" can imply anything especially when you never once used the word resources. too open ended an idea. plus how do know that the Oligarchs behind Obama and the Oligarchs behind Putin aren't playing good cop/bad cop to angle out the Euro Oligarchs from a very prized gas field. Once "Putin" has "control" the contracts can be let to whomever his Oligarchs choose. Maybe some of them will be American? 

NoDebt's picture

Because "pieces on the board" is a Chess reference.  When you talk about Russian leaders you think in terms of Chess, because that's how they think.  They are born and raised on the game.  They think in terms of multi-faceted attack and defense ALWAYS.  Especially an ex-KGB officer.

The loss to America if Russia drives Europe on the rocks (or gains significant leverage over them) would be far greater than preserving the medium-shitty status quo of a "friendly partner" Europe and exerting our own influence over them.  If you want to bleed somebody, it's a lot easier to do it to a "friend" than somebody who's under the influence of one of your obvious competitors.

prains's picture

for me it all comes down to who the russians ulitmately want to sleep with....the chinese or americans.....this is all subtrefuge about resources and my take on it is the Americans are in on it with the russians because ultimately they will side with each other against the Chinese because they of all are the least trustworthy. Ukraine is a gas play for Oligarchs nothing more.

acetinker's picture

Prains, one question;  How do we know that Putin and Obama are not actually on the same team, acting in an elaborate play on the world's stage?  Wouldn't be the first time.

Buckaroo Banzai's picture

Bingo!

"I will have more flexibility after the election."

I'd say Barry looks more flexible than a figure skater right now!

acetinker's picture

This is the most worrying thing- I live in North America, but if I were forced to choose a leader between Hillary and Jeb, I'd probably choose suicide.

Gazooks's picture

no worries then

 

O's America's last CFR elected president

 

 

acetinker's picture

Huh, we both got 4 reds- and I hope with all my soul, that you're right.

johnQpublic's picture

between hellary and Jeb, i take jeb every time. His crime family is way more established. And if i had to look at Hellary for an extended length of time i'd dig my eyes out with a knitting needle.

prains's picture

ace

that's what i've been saying all along??

 

do you speek english

acetinker's picture

Prains, right now you've got 8 red arrows and zero green.  Mine is not among them- If we agree on this, and I do "speek" english, why'd you ask?

11b40's picture

What is this 'trustworthy' thing you speak of?

 

 

nmewn's picture

But he has a pen!!! And a phone! ;-)

Yes, Putin knows, they are brothers in socialist oligarchism that no one seems to grasp. The only difference between them is, Obama is a pussy deep down and Putin knows it.

NoDebt's picture

Putin let Obama believe they were brothers in socialist oligarchism.  Obama obviously bought it hook-line-and-sinker or wouldn't have been caught on an open mic telling him that he'll have "more flexibility after the elections".  Putin played him for the stupid, short-sighted community organizer he is.  To Obama this just "came out of the blue".  To Putin, this plan was YEARS in the making.

Wile-E-Coyote's picture

Really?  How would the US react if it was in danger of losing 30% of its energy supply with one swift thump of the emergency stop button?

It was the US government who fermented this crisis with that scrag arse Nuland spending $5bn dollars to sponsor Neo Nazis to over throw a democratically elected government.

The US is trying to corner Putin, what you expect a hard man to do. This was always going to happen one day; the US is running out of third world countries to bomb to oblivion.

 

Harbanger's picture

The US is starved for a leader.  People admire Putin mostly because of his love of country and manlyness.  What we have here instead is a progressive man-child who was given passes his entire life.  He loathes the country he represents and wants to transform it into some fucking twisted figment of his professorial collectivist imagination.

Babaloo's picture

"People admire Putin (?)"

Who admires Putin? "People" who are too stupid to know any better?
"People" who confuse stupidly aggressive behavior with "manliness?"

His only reason for invading Crimea was to fool people into thinking he has some kind of plan to reunify the old USSR and to appeal to dumbs shits who believe he's some kind of evil genius.

And it seems to have worked on half the people who read this board.

Harbanger's picture

Compared to Barry, he's a superhero.

LetThemEatRand's picture

You call yourself a libertarian and you want a strong leader?  That's what I thought.

TBT or not TBT's picture

He is saying that millions of other people want a strong leader.

LetThemEatRand's picture

Oh, it's the other guy and all of the other faux libertarians.

Do you want a strong leader or can we agree that "strong leader" and libertarianism are mutually exclusive?

johnQpublic's picture

minarchists would require a strong leader but with libertarian social views....