Predict
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Predict

When playing the wag-the-dog game, don’t let the leash turn into a noose around your own neck!

An abrupt downward shift in Maslow’s pyramid is a hackneyed basis for a literary plot. Lord of the Flies by W. Golding. The Lost TV series. The world of ordinary relationships crumbles. Who was nothing can become everything.

And here we are today, witnessing such drama on a global scale. The West has been constructing a false world for so long that — when reality has shifted — it has fallen victim to its own lies and fatally overestimated its chances in the new game.

Never has the West Gone So Far Astray

In 2014, Senator Lindsey Graham said that Putin, whose economy is the size of Italy, was playing poker with a pair of twos and winning. In 2019, talking about Russia’s growing diplomatic and geopolitical clout, The Economist wondered, “How did a country with an economy the size of Spain achieve all this?”

If you convert Russia’s GDP from rubles to U.S. dollars, you really get something like Spain. That is, Russia looks like a measly couple of percent of influence in the world.

But the West has never been so grossly mistaken. The result has been not just a redistribution of power in the world, but also the questionability of whether the U.S. and Britain will survive.

Reliable Comparison Between Russia and the U.S.

The West uses GDP, the worst of all metrics.

In terms of PPP (the metric used everywhere from the IMF to the OECD), Russia is comparable not to Spain or Italy but at least to Germany (~$4.5T).

Given this, the estimate of Russia’s influence has multiplied. 2% turns into at least 5%.

GDP’s essence is broadly misunderstood. The culture of fudging GDP statistics, especially in the US, has been around for decades. PPP is much better at reflecting reality, but it, too, can’t free us from misconceptions.

Ephemeral vs. Real. Glamorous vs. Optimal

When it comes to hot global confrontation, the highest value is what guarantees a country survival, not entertainment or the formation of derivative financial instruments.

Netflix has a capitalization to earnings ratio three times higher than Nestlé, the world’s largest food company. This is a reflection of a market bubble, not physical reality. Netflix is a great service, but while a billion people are malnourished, Nestlé is important.

Major Western “services” are overvalued: investments with negative real rates; loans burdened by mandatory insurance and audits at predatory prices; patents on technologies long acquired (and improved since).

On the contrary, the importance of Russia is underestimated, when experts ignore that in global supply chains, Russia is at the base of Maslow’s pyramid. If you try to move Russia out of its position, everyone else will shake, and much more than Russia. Although Russia, for example, is not the world’s largest oil producer, it is the largest oil exporter, ahead of Saudi Arabia! When it comes to wheat, the most important food crop, Russia controls 20% of world exports. Same for nickel: 20.4%. Metallurgy: 20%. Frozen fish: 11.2%. Etc.

The key positions for so many important commodities make Russia one of the pillars of the world economy. Therefore, unlike “maximum sanctions” against Iran or Venezuela, an attempt to sever ties with Russia means dramatic global shocks.

Yes, few people will pay for virtual Netflix services these days. But even worse, few people are willing to pay for the very real Nestlé cocoa. People will buy food whose price does not include a fancy glamorous Western brand. They will buy food directly from Russia, China, Latin America, India, Brazil, and Indonesia, not from the Swiss headquarters of a multinational corporation. The same applies to all other goods.

On this basis, the assessment of Russia’s influence in our eyes has once again increased manifold. If we sensibly estimate the proportional importance of services in the world economy in comparison to electricity, weapons, fuel, heating, food, metals, then the Russian economy is an order of magnitude greater than the German economy and amounts to at least 20% of the world economy.

Russia’s Ability to Hold the Blow

Who will hold out longer in this economic war? The Russians or the Americans?

For more than three decades, Russians have lived under the pressure of inflation, averaging more than a dozen percent a year. It has become the norm for Russians. A large part of the Russian people, especially among those who make important decisions, lived and worked in the 90’s, when the decline in living standards was -90%. Once again: not nine, but ninety.

Who to bet on in this race, the Russians or the Americans? Who will be the first to revolt and overthrow their government?

The U.S. is extremely vulnerable because of the status of the dollar.

Even without a confrontation with Russia, the United States is on the precipice.

The most dangerous factor contributing to U.S. decline is the unreasonable deliberate conversion of the U.S. dollar and the entire Western financial system into weapons. While non-Western countries are increasingly being shown that access to dollars and transaction systems such as SWIFT depends on Washington’s policies, they are explosively de-dollarizing the world economy rather than strengthening the Western world order at all.

Russia’s Ability to Forge Alliances

Today, with President Joe Biden publicly abandoning America’s longstanding policy of strategic ambiguity on Taiwan, when there is already a war in Ukraine, the world is splitting into political-economic blocs.

The West accounts for only 13% of the world’s population, while China and Russia account for about 20%. This leaves about two-thirds of humanity unaligned. No one will be able to maintain a neutral position, Putin openly warned in his June 17, 2022 speech.

After counting the countries involved in the current sanctions against Russia, it is hard to say around whom the new iron curtain is being lowered — around the U.S. or around the U.S. adversaries. Important potential U.S. allies, such as India and Saudi Arabia, have been particularly vocal about their refusal to mindlessly follow Washington’s keel.

Not surprisingly.

Foreign Policy magazine can blame Putin all it wants for the impending famine in Afghanistan. In Afghanistan itself, politicians and ordinary people can clearly see that the root of the evil is the United States, which stole $7 billion from them after its shameful flight last year.

People around the world are asking rhetorical questions: “Who bombed Yugoslavia and why? Who is sowing discord in the Middle East and North Africa?”

Whose worldview is more appealing to the as-yet-unaligned countries — the sodomite globalists with their constant attempts at interference or the traditionalist-oriented Russia and China with their firm diplomatic word?

When the non-aligned eventually choose sides, many in the West will be surprised by the results.

By overestimating its strength and believing its own lies, the U.S. has jumped into the abyss.

Covering up reality with propaganda can only work in the short term. Otherwise, a lot of resources are wasted, and from the outside it still looks stupid. The American establishment, manipulating pedigreed media resources, has not yet realized that they vastly overestimate the impact on their target audience. Moreover, they greatly underestimate the influence of propaganda on themselves.

Otherwise, how can we explain the fact that the West — in violation of all academic principles of hybrid warfare — imposed all significant sanctions against Russia at one time?

They had to be stretched for a couple of years at least. Trumps in such a war had to be laid out one by one, every six months, so that the enemy at each stage spent the resources to find secret paths. And as soon as the loopholes were found and dearly paid for, it would have been time to introduce a new restriction, destroying all the expensive anti-sanctions measures.

And now, after it became clear that few people in Russia care about the consequences of the sanctions, having realized their mistake, the West is behaving like a petty crook caught with his hand in an Oriental bazaar. It screams in indignation, waves its hands, but does not cross the red line in impotence.

This situation suits Russia just fine. Time is working for Russia. The era of Western domination is coming to an end, so America’s opponents should just wait for the U.S. to deflate under the weight of its mistakes.

Restoring economic justice would be a huge blow to the U.S., because it would mean the collapse of the dollar system, the degradation of the American economy, and a severe crisis along the lines of Russia’s turbulent nineties. Once the U.S. is completely plunged into crisis, which now looks inevitable, the West’s age-old pressure on the world will finally come to naught.

So all we have to do is wait, like the ambulance driver who takes a violent patient to the hospital, while she twitches on a stretcher and fretfully shrieks at the medics.

PS

Simulacrum of Western Technological Superiority

Breakthrough technologies based on newly discovered physical principles have not been created for 60 years. Neither in the West nor in other countries. But only the West is seriously trying to rely on its “technological superiority” in political matters. But what does it really have?

Not only does the West have no superiority in armaments, but it also lags behind Russia in nuclear weapons delivery systems. Simply put, the U.S. has no defense against Russian missiles.

Maybe control of social media and the media? Nah. Self-defeating. Half the U.S. population no longer believes the new American narrative, let alone the rest of the world.

Mass computerization? There is no competitive advantage in this. Everyone already has one. And besides, the efficiency of the computerized global supply chain has declined by a factor of 4.

So it’s still not a fact that ubiquitous computerization is worth the effort.

A new quality of agriculture? All interested players, including Russia, have had it for a long time.

For a long time, there was no credit to the West for the planet’s well-being. The West is now home to the grandchildren of those who really worked hard. The current U.S., EU and Japan residents are limited to exchnaging memes, teaching each other how to get rich (for money), and triming their poodles in cozy pet barbershops.

PS

We have been asked more than once why we do not always back up our words and even numerical statements with references, and do not sufficiently argue our often shocking statements. Why are we so unapologetic, while offering a quite practical framework for development?

The short answer is: When in Rome do as the Romans do.

Expanded answer:

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