Have We Reached Peak Putin?

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The capture of a few pawns has cleared the chessboard, but the strategic choices already made have greatly reduced Putin's room to maneuver.

No tree grows to the sky. Once extremes are reached, trends reverse, often with symmetry: the decline often matches the ascent.

Which leads to an interesting question: have we reached Peak Putin?

Let's start our inquiry by noting that pundits from across the political spectrum are all busily chainsawing events up to fit into their little boxes of existing narratives: Cold War Redux, World War 3, neo-Nazis, etc.

One key driver of this stale parade of pre-packaged opinion is the instinctive urge to cheer for whatever team is on the field opposite the U.S. and President Obama. This natural urge leads to indefensible hypocrisy along the lines of "Brand X Imperialism bad, brand Y Imperialism good." If you oppose Imperialism and Great State meddling, then you can't oppose one brand of Great State meddling and support another brand.

Let's stipulate a few things to get them out of the way, so we can we proceed beyond the chainsaws and little ideological boxes.

1. All nations act in their own self-interest, and all states do so while claiming noble purposes that are patently absurd. To support one nation's actions in its self-interest while decrying another state's actions in its self-interest undermines one's claim to objectivity, to say the least. By all means, be a partisan, but lay open claim to being a partisan; anything less displays the same hypocrisy as that of self-serving states.

2. Crimea: done. the West had no leverage, and the U.S. hypocrisy was blatant: we favor democracy and self-rule only so long as the elections go our way. Uh, right.

3. Just because Ukrainians speak Russian doesn't mean they want to be annexed into Russia. Most Ukrainians speak both Ukrainian and Russian. By the logic of those claiming Russian speakers are naturally part of Russia, the U.S. could annex all of Canada (with perhaps the exception of French-speaking Quebec) on the grounds that Canadians speak English.

4. Desiring cordial economic and cultural ties with Russia is not the same as supporting annexation of Eastern Ukraine to Russia. The memory of those liquidated by Russians or given "tenners" in Siberian work/death camps has not yet been extinguished. All those convinced that Ukrainians want the warm and fuzzy embrace of Russia would do well to read the three volumes of The Gulag Archipelago by Aleksandr Solzhenitsyn:

The Gulag Archipelago: 1918-1956
The Gulag Archipelago 2
Gulag Archipelago 3

5. There is room for a non-neo-Nazi nationalism, but only if every nationalist isn't painted with a Neo-Nazi brush. There are reasonable nationalists in Ukraine but their voices aren't registering in the hyper-coverage of neo-Nazis, Western plans for World War 3, etc.

6. Being rabidly anti-American doesn't necessarily mean you have to automatically be rabidly pro-Putin. If you oppose Imperialism and Great State meddling, then be consistent if you want to retain any credibility.

If we set aside the Cold War Redux narrative, we are clear to see some interesting things that are neither pro nor con, they simply are.

1. Russia used its energy leverage over Europe with such great gusto that the blowback will reduce that leverage. Europe is scrambling to develop other sources of natural gas, and doing anything less would not be acting in Europe's self-interest.

2. Massing conscript troops and an army with limited ability to maintain its supply chain once inside Ukraine is another example of sparking blowback that will last for years and perhaps decades. Pressing your energy boot on Europe's neck was bound to create a strategic response, and massing troops on Ukraine's border has the same consequence.

3. While Putin's popularity is sky-high, domestic support for invading Ukraine is low. Should the poorly paid conscripts start coming home in body bags, Putin's domestic support will be revealed as an inch deep and a mile wide.

4. Russia's energy pacts with China and India are positive developments for Asian peace and development. China and India need more energy, Russia has surplus to sell--it's win-win not just for these nations but for the world. The peaceful trade of energy is a major plus for everyone.

5. But selling energy to Europe and selling energy to China and India are not equal: China and India have seen the way Russia has exploited its energy leverage in Europe, and Russia will find it has precious little political leverage over China and India, who will be sure to develop alternative sources of natural gas. The loss of political leverage over Europe will not be offset by an equivalent gain of leverage over China and India.

6. Russia has ruthlessly exploited its monopoly over natural gas by charging politically influenced prices: Poland, for example, pays a lot more for Russian natural gas than Germany, even though the gas flows through the same pipeline.

7. Once Russia loses pricing power in Europe, it will not gain pricing power over China or India. Those nations have other sources and cannot be held hostage in the same way Poland et al. are currently held hostage.

This means Russia will be earning considerably less per therm of energy once it ships natural gas to China and India.

Slowly but surely, the global natural gas market is becoming more integrated. Those currently charging cartel/monopoly prices will see their energy earnings decline.

8. In terms of national income, Russia is as dependent on energy earnings as any other "resource curse" oil exporter. The loss of pricing power in Europe and a decline in energy income will become headwinds for the Russian state.

9. Putin's domestic popularity flows from nationalist pride in the Olympics and in reclaiming Crimea. But now that those high points are past, Putin's options are not so lopsided in his favor.

Threatening (or invading) Ukraine reminds everyone in Europe why they fear Russia, and why Russia is not truly European. Domestic support in Russia for annexing part of Ukraine is low, for good reason: who wants to be responsible for the costs, financial and political?

10. Reclaiming Crimea makes for good theater and is a geopolitical plus, but it does nothing to reverse Russia's real problems, which include corruption, wealth inequality, low birth rates, etc.

11. Russia's military looks good on paper and in photos, but it's not as prepared to mount a sustained campaign within Ukraine as advertised. Asymmetric warfare doesn't respect lines on a map.

12. If Putin had set out to reinvigorate NATO, he would do exactly what he has done to date. Anyone thinking the U.S. Deep State is in despair about Putin's moves has it backwards: everything Putin is doing is fueling blowback and resistance in nations that were potentially friendly to Russia. Nothing tells you who your friends are quite like troops massing on your neighbor's border.

As a refresher, here's a map of pipelines connecting African natural gas fields to Europe.



Given the context laid out above, it seems increasingly likely that we've reached Peak Putin. The capture of a few pawns has cleared the chessboard, but the strategic choices already made have greatly reduced Putin's room to maneuver.

Ukraine: A Deep State Analysis (February 27, 2014)

Ukraine: Follow the Energy (March 4, 2014)

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peter4805's picture

Putin / Paul 2016!

vie's picture

Peak Putin my ass.  China/Russia Gold backed currency, bitchez!

Or just let Iran/Syria v. Israel to blow up on it's own.

vie's picture

Indeed, who really believes it's US/NATO vs Russia anyways?  Seems more likely Obama and Putin are like, "So... What country should we divy up next?"

icanhasbailout's picture

Peak Charles Hugh Smith... we're past it.

ZerOhead's picture

Charles... you lost me at

1. All nations act in their own self-interest

Actually they tend to act in the perceived best interests of those who control the strings of national power. Rarely in the nations (the citizens collectively) best interests itself.

Just look at about anything the Cheney/Obama administration has done for Americans lately...

(Stupid wars, spying on its own citizens, neoliberal trade policy, neocon foreign policy, Banksters first, Obamacare etc etc...)

shovelhead's picture

Chuck is correct.

They own = their own.

You and I are just tenants who pay rent since 1913.

strannick's picture

Putin's defensive game has been a reaction to US hubris, in Ukraine and Syria. The sooner the rotten debt ridden husk of America keels over, the better for everyone. China Russia are creditor nations, far from peaking

Latina Lover's picture

Charles Smith, I respect your work but in this instance, I have to strongly disagree.   Putin had no option but to regain sovereignty over Crimea lest he lose the Russians Primary and only secure warm water port  Moreover, he secured tens billions of dollars in offshore oil and gas reserves (blocking Ukraine from same), and saved huge sums of money in terms of subsized gas to the Ukraine.  Having visited Crimea at least 8 times, I have no doubt most of the population was in favor of joining  Russia. It was historically a Russian state, 97% of the population speaks Russian (now a denied language in Ukraine), most of whom despised Kiev for corruption and incompetence.

As for Peak Putin, it is the debt ridden west, choked by regulation and lack of freedom that is in decline.  Instead, Putins strong blocking move sent a clear message to NATO, this far and no more.

philipat's picture

I share the disappointment with the lower than normal standard of this piece by a normally superb writer. Specifically:

  1. Russia's energy sector has decreased from 40% of GDP to about 15% today. Russia is the largest consumer economy in Europe, which explains why US and German retailers are so keen on not folding to the Military-Industrial complex.
  2. Russia's National debt presently amounts to about 3% of GDP versus that of the US of about 100% and climbing.
  3. You do not even mention the real weapon that Russia can and will use as necessary, which is to seed the destruction of The Petro_Dollar by pricing all its energy contracts in Gold, Rubles. Yuan or any currency OTHER THAN USD. This will be the case initially in the Inda and China deals and with Europe will follow later.

I agree totally with the comments regarding hypocrisy with Ukraine and elsewhere but aren't the above listed matters of sufficient importance to be discussed in any serious strategic review of Russia's influnce on the 21st century, especially now that financial war has become as important as, if not more important than conventional warfare?

douglas's picture

Yeah Charles, stick to Economics please!

Poundsand's picture

Yes please.  This is horrible analysis.


2. Supply chain issues?  In Ukraine?  Hardly.

3. Russians are not Americans.

5. It's not about leverage over India and China, it's about leverage over the West.  Selling it to India and China increased it's leverage over Europe.  The energy isn't just to heat homes in the winter, it's the lifeblood of economies.

8. Energy pricing power declining because of headwinds?  Please, I guess the planet he is on has an unlimited supply and a shrinking thirst for it.

9. Until he hand's Obama his next defeat.

10. As does all of the West.

11. Again, please.  It's not like they are fighting on the other side of the globe with entirely unrealistic rules of engagement.

12. Okay.  Completely out to lunch on this one.  As if Europe wants to reinvigorate NATO.  Have you seen Europe's army lately?  And I have yet to see the headline where Germany is cranking up it's war machine, let alone anyone else.

Finally, talk about long supply chain issues, does he think those pipelines are actually safe?

yrbmegr's picture

Unlimited energy?  Check.  All you need is the second most abundant element in the earth's crust, 1100 W/m2 of virtually inexhaustible radiant energy, and some batteries.

BorisTheBlade's picture

Finally, talk about long supply chain issues, does he think those pipelines are actually safe?

Europe will have to reinstate its colonial policies in Africa to keep Nigeria, Niger, Algeria, Morocco, Tunisia and Lybia stable and compliant - all the countries on the way of respective pipelines to keep NatGas flowing from Africa. As for Putin, it's not a question of if he ran out of room to maneuver, he barely started ripping benefits of energy Empire he so carefully built, the question is whether collective West has ran out of feet to shoot itself at. Think not. Battle for Ukraine has just begun, Crimea was just an episode of prolonged confrontation to remind the West of Russia's negotiating position in the region.

Radical Marijuana's picture

RIGHT, Zer0head! I was going to write the same comment, but then I saw that you have already made that point.

Whoa Dammit's picture

Charles Hugh Smith has learned to love Big Brother.

angel_of_joy's picture

No. He's just out of his depth.

Again !

Quus Ant's picture

my thoughts as well.  Russia saw the game and wanted in.  There may be a confrontation between the major powers some time down the road, but right now there's still money on the table.  Split up the weak states and put on a good show for the rubes back home- remind them why they need the state. The Ruskies are comin'!  Or- the US is taking over! 

Just as with alQaeda- enemies are only declared as enemies when such distinction serves a purpose.  Common interest makes the best of friends.



Freddie's picture

When I saw that Putin and Russia have a $10 billion country fund being invested by BlackRock and goldman types - I think Russia and Putin are the smae side of the coin.

UrbanMiner's picture

Hardly, Putin is a Russian nationalist, Obama is a puppet of Zion. Putin represents Russia's interests, Obama represents the interests of a financial cabal. 

The move on Crimea was something Russia had no choice but to undertake, they were not going to lose access to their naval fleet, and they were not going to allow NATO to take it over. This is about Zion looking to set up the kill shot on their old arch enemy, the Eastern Orthodox Christian population of Russia. Period. Energy transit routes are secondary, everyone needs the energy, so it will flow, this is about containing Russia and reducing it finally to a client state with no ability to defend itself from civilizational extinction.

Why is Russia's population in decline? Who implemented and installed Bolshevism on the Russian people? What was the Russian White Army and why did they lose to the Bolsheviks?

There are people who want Russia decimated, for reasons that would take days to discuss, all this chatter about Russian imperialism, Russian aggression and so on is truly, in every sense of the word, Orwellian. Forget Stalin, and the Reds, these were overlays upon the Russian people. These were not Russian, they were social experiments imposed upon the Russian people, by the hand of Zion.

The cornerstone of the Christian world and the morality that allowed the movement away from tribalism stems from the teachings of Christ. Whether religious or not, the current of Christian thought was like a light upon the world, no matter how misrepresented it might have been from time to time and place to place.

Today the true home of Christianity is not in the corruption of Rome, it left Rome for Byzantium almost 1700 years ago and maintained a relative harmony and strength for over a thousand years surviving wave after wave of Rome's Crusader armies until the Ottomans, under the hand of their money masters, finally brought it down. Today we see the replication of that struggle, with the destruction via economic and military means of all countries carrying the banner of Eastern Orthodox faith (the remnant of Byzantium), a faith which is the primary buffer to global hegemony by the powers of Zion.

Russia, Ukraine, Greece, Serbia, Armenia, Cyprus, Georgia, etc all Eastern Orthodox, have endured and still experience extreme pressure under the powers of Zion. They must be crushed into social extinction/submission. Russia is by far the biggest thorn. The other thorn to Zion is rational Islam - see Syria, Libya, Iraq, Iran, etc. - a pattern emerges. In those nations with no real lasting moral fabric (atheist populations), no social cohesion to protect against massive immigration, and no obstacles to economic control there is 'prosperity' and 'freedom', like the United States, Britain, Canada, Sweden, France....

Yet despite the temporary 'freedoms' enjoyed' under the beneficence of the money masters of Zion, the morally bankrupt western nations are falling headlong into a spiritual blackhole, subsumed by techno-atheistic thinking, heading inevitably to their complete control under a Brave New World scenario dreamt into reality by Zion and their Rabid Messianic genius.

The hate is on for Russia and Russians, nothing new here, but don't be fooled by the external appearance, this is a conflict going back centuries, and it is coming to a climax real soon. 

kchrisc's picture

Any headline with a question mark is bullshit or propaganda.

Journalists are supposed to report/write facts as they are known. That a "story" has a question mark in the headline indicates that no facts will follow.

kchrisc's picture

It is also a HUGE tool of the propaganda media. They will have a headline stating what they want the brainwashed to believe but disguised as a question. The "article" will "blah, blah, blah," on with stuff, but the "idea plant" has already happened.

TaperProof's picture

No Putin is just getting warmed up.  There will at least be more financial warfare, retructuring how Russia does business to cut the US and the Dollar out etc.   Plus who knows what Washington will do to provoke further conflict, so on and so forth.

We are not at peak Putin

Chupacabra-322's picture

"Currency wars, trade wars, world wars."

-Gerald Celente.

mccvilb's picture

   Bloodless takeover of Crimea - pawn up, Putin,

   Crimean referendum, overwhelming turnout and euphoric win - two pawns up, Putin. For any grandmaster, game over.

   90% of Ukrainian troops stationed in Crimea defect to Russia - Putin castles, takes control of key positions. Putin up in time and material.

   Obama unilaterally orders fab 8 to kick Putin out. G-7 very concerned, sheepishly ask for a refund on Sochi lift tickets.  

   Obama's one-handed clap speech - Putin left speechless, along with the entire EU. Now realizes the O-man's a puppet of Jeruselem.

   US Sanctions, oh no! Putin laughs, returns favor. Straight exchange, a big disavantage to a player with lesser material.

   Kerry tries to confront Lavrov - a huge strategic blunder.

   Putin visits w Chinese then calls Barry, announces checkmate in five.

Freddie's picture

Apprently, 30,000 Alaskans want to rejoin Russia.  I guess they do not like Obama much.


DoChenRollingBearing's picture

Peak Putin? Maybe, this weekend's Barron's says $75 oil coming soon.

Peak everything? Maybe, I just saw the NEW Rolex Sky-Dweller... Price: $49,000...!

Freddie's picture

Barrons?  Seriously dud do you subscribe to that crap?  Well you arei bearings so you might need commodity data out of Barrons.  Anyone remember their buy signal on GM after it went public again after screwing the bond holders?  Barrons is a joke.  Alan Abelson?   F***king clown.

kaiserhoff's picture

Abelson's friends and enemies both enjoy the fact that he has been a bear since 1200 on the Dow.  Crazy but true.

But the individual stocks he has panned have turned out to be DAWGS.


DoChenRollingBearing's picture

Just a quick reminder to everyone, Alan Abelson has been dead almost a year now.

kaiserhoff's picture

Yes Peak Putin, Peak housing, peak Fed, peak gubbermint intervention.  Peak lame stream media.

Great Piece.  Putin has done more for European solidarity than all the wine and caviar in Christendom.

Let's hope they do something more about energy.

EatYourCornTakeyourPill's picture

Best written piece about Putin, I've read on here. The blowback Putin created over Crimea paves the road to his own demise. Russia's growth has been completely dependant on Gas/Oil, now that every sees the leverage first hand presented in their face. Alternatives are being aggressively pursued.

TheFutureReset's picture

If this consolidates opposition to Russia, doesn't everything the west has done over the last decades consolidated opposition to the West? 

I'm waiting for a pivot from Russia because the west has no creativity. Putin will get the next one too. 

We need a Reset

johny2's picture

sheeple of europe unite! the power of media propaganda machine over the population is quite amazing. peak propaganda.

Kirk2NCC1701's picture

As I recall, people have speculated that Obama's trip to KSA was about (a) getting the Saudis to drop the Crude prices and thus take money out of Russia's income stream, and (b) getting reassurance that KSA will continue to back the petrodollar.

Dropping the price of crude -- or trying to get people to believe it, in an attempt at self-fulfilling prophecy -- would cause the Russian oil oligarchs to worry and reduce their level of support for Putin.

A lot of Psy Ops and Tactical Ops going on.

RetiredSilverBug's picture

Not sure about Russia, but there was Peak Bush when he was elected. After that US% of global trade, manufacturing and GDP was only going down. It was impossible for country to survive without western support 10 years ago, but now one can get all that is needed - loans, weapons, energy, commodities, consumer goods, computers, servers, etc from Russia and China. West becomes optional (really)

tempo's picture

Neo cons want war because its profitable.

Sudden Debt's picture

yeah... let's get our gas from stable african countries...

disabledvet's picture

That's what they do in Texas.

Still...hard to argue with the oil play.
"Whoever has the oil can do as they please."

Obviously if we're talking natural gas processing there are a lot of business interests that would like to see Putin win.
And as well the USA won't be selling fuel to Europe anytime soon.

Complex issue "that can be made very simple by re-establishing relations with long lost brother."

RadioactiveRant's picture

American gas can't be exported but its relieved a lot of the ME supply that can now head to Europe rather than cross the Atlantic.

kaiserhoff's picture

Yes.  Many substitution effects, fuel oil in New England, gas and diesel for fleet vehicles, electricity production, etc.

effendi's picture

I noticed that as well.

The pipe starts in southern Nigeria (no corruption there).

Then goes through northern Nigeria (no whack job anti western muslims there).

Niger? A bastion of enlightenment

Algeria, the same Algeria that had 200,000+ dead in a civil war? The same Algeria that had a gas field occupied by murderous fanatics just a year ago?

A 200 mile gas pipeline from Egypt to Israel is bombed every other month, so a 3,000 mile gas pipeline will be so secure (not).

Plus will a single pipeline provide 30% of Europes gas? Don't think so 



Mine Is Bigger's picture

Yeah.  Besides, Russia can always sell nat gas to China, Japan and South Korea.

Cattender's picture

i wonder what happened to that FUCKING PLANE?????

Quus Ant's picture

probably wherever the rubble is from those buildings.

Cornholiovanderbilt's picture

Supposedly an IBM engineer dialed out from Diego Garcia.  I don't believe anything anymore so use discernment



Rakshas's picture

Seems to be having a "Hunt for Red October" moment; the official speculative narrative would  have you believe the "Pilot" managed to crash it into the perfectly inaccessible  spot in the ocean, deep deep deep and rough as hell on the surface ....... "perhaps one day the means will be available to do a more thorough examination of the wreckage..... Perhaps"

......on the other hand was the pilot's name Waldo by any chance??