The month that changed the world forever
Casus belli was brewing: Kiev was preparing a war
On March 25, the Ministry of Defence of the Russian Federation announced the interim results of the special military operation in Ukraine, launched on February 24, 2022. Its stated goals were the demilitarisation and denazification of Ukraine, which has become a real threat to Russia's security.
We already know at least a few reasons that look like a fully-fledged casus belli. Even before the start of the operation, a secret cipher telegram of the National Guard of Ukraine signed by the commander of the National Guard of Ukraine, Colonel-General Balan, dated January 22, 2022, which contained a detailed plan for a strike on Donbass that was to be delivered in early March was intercepted.
In fact, the advance strike of the Russian Armed Forces and republican troops disrupted a large-scale punitive action, for which Kiev concentrated about 300,000 personnel of the Ukrainian Armed Forces and all available military equipment. Operation Z saved tens, maybe hundreds of thousands of lives of civilians in Donbass.
They also received irrefutable evidence that American biolabs had been operating on the territory of Ukraine for years, the activities of which carried a direct threat to the territory of Russia. Perhaps to other regions of the planet as well. From the obtained documentation, it is known that experiments were conducted with bats, among other things. The latter circumstance seriously interested China, which Washington has been accusing for two years concerning the artificial origin of COVID-19.
The statements of the current President of Ukraine, Vladimir Zelensky, who announced plans to create nuclear weapons on February 19, 2022, were also not unfounded. After taking control of the Chernobyl and Zaporozhia nuclear power plants, it turned out that there are traces of such developments.
Indirectly, this was also confirmed in an interview with prankers Aleksey Stolyarov and Vladimir Kuznetsov by British Defence Minister Ben Wallace. Thinking the interlocutors was the Prime Minister of Ukraine Denis Shmygal, the head of the British defence department confirmed London's interest in the presence of nuclear weapons in Kiev.
Separately, it is worth mentioning the plans for an attack on the Russian Crimea discovered in Kherson, including schemes for passages in minefields, as well as commemorative signs for participation in a future operation.
Special military operation: everything is going according to plan
In terms of the demilitarisation of Ukraine, units of the Russian Armed Forces and the People's Militias of the L/DPR made significant progress during the month. During the month, the losses of Ukrainian troops amounted to about 30,000 people, including more than 14,000 - irrevocable and about 16,000 - sanitary.
From the 2,416 tanks and other armoured fighting vehicles that were in service with the Ukrainian army on February 24, 1,587 were destroyed. 112 out of 152 military aircraft were destroyed, 75 out of 149 helicopters, 35 out of 36 Bayraktar TB2 drones, 148 out of 180 S-300 and Buk M1 drones, and 117 out of 300 radars for various purposes.
16 main military airfields were destroyed, from which combat sorties of Ukrainian aviation were carried out, 39 arsenals were destroyed, where up to 70% of all Ukrainian military equipment reserves were stored, as well as fuel storage facilities. The Ukrainian army has no organised reserves left, and the supply of missiles and ammunition, fuel and food to Ukrainian troops has been almost completely stopped.
Separately, it is worth mentioning the successful "combat" tests of a wide range of Russian weapons, primarily missiles, which was a good demonstration of the strike potential of the Russian army and navy.
As it turned out, it’s possible to strike at distant objects with a lot of things, including tools originally designed to work on, say, surface targets. Various Ukrainian military facilities were hit by “Iskander”, “Kinzhal”, “Oniks”, “Bastion” and “Kalibr” missiles. The latter were actively launched from the Sevastopol water area, reaching Kiev, Rovno, Zhytomyr and Lvov. Their usage has shown that there are no problems to apply them to other potential theatres of military operations.
As of March 25, Russian troops have blocked Kiev, Kharkov, Chernigov, Sumy and Nikolaev, and the Kherson region and most of the Zaporozhia region are under full control, where civil-military administrations are already being organised to restore peaceful life in the liberated territories.
In the actual "cauldron", without reserves, fuel and a sufficient supply of ammunition, there is an enemy group near the borders of the DPR and LPR, which is gradually being "grinded up" - since the beginning of the operation, the group has lost 16,000 out of 59,000 people - 26% of the number - from which more than 7,000 are irretrievable losses. To date, 93% of the territory of the LPR has been liberated, a little more than half of the territory of the DPR, and fighting continues for Mariupol, where about 7,000 nationalists remain surrounded.
In general, the main tasks of the first stage of the operation have been completed. The combat potential of the armed forces of Ukraine has been significantly reduced, which allows us to focus our main efforts on achieving the main goal - the liberation of Donbass.
The perfect Storm
The special military operation in Ukraine is perceived by many as the point from which several global crises simultaneously began - the current energy, logistics, military, rationing, in some places - humanitarian, related to the mass migration from Ukraine, crises. According to some sources, at least 3.8 million people have already left the Ukrainian territory, and according to unofficial data - about 6-7 million people.
If we take into account that, according to some data, in particular, on the consumption of bread and some others, the population of Ukraine in 2020 was already about 35 million people, then it is quite possible to assume that by the autumn of 2022 its number will decrease to less than 30 million people, and possibly even 25 million.
Although the fighting on the territory of Ukraine, of course, turns out to be a very vivid episode, the special operation was only one of the factors of the ongoing breakdown of the world order system, which existed not even from the moment of the collapse of the USSR, but from 1971, when the "gold standard” was abolished, and the dollar finally became the world currency. More precisely, the petrodollar, which was created under the pretext of getting out of the 1973-1974 oil crisis, formed the existing exchange-traded system for trading energy futures and outlined the contours of the current international financial system.
The current state of global finance and economy is caused by objective reasons, in small part related to the special operation in Ukraine.
The energy crisis in the EU in a tangible form emerged a few months before the start of the Ukrainian events, just like the incredible by American standards increase in inflation. The West's own sanctions against Belarus during 2021, and then against Russia, provoked an increase in fertiliser prices, guaranteeing a food crisis at the end of this year.
Commenting on the situation, Zoltan Pozsar, a former analyst at the Federal Reserve and the US Treasury Department, and now supervising strategy issues at Credit Suisse (CS), wrote that the current crisis will lead to the emergence of a new global monetary order, which will ultimately undermine the current dollar system and ensure extremely high inflation in the West.
"This crisis is not like anything we have seen since President Nixon took the U.S. dollar off gold in 1971," Pozsar wrote. He directly speaks about the end of the existing currency system after the G7 countries seized Russia's gold and foreign exchange reserves.
"What had previously been thought of as risk-free became risk-free no more as non-existent credit risk was instantly substituted for very real confiscation risk," Pozsar writes. The former top Fed analyst is quite serious about running into cryptocurrencies – this, he says, "could be beneficial, if it still exists."
Literally every element associated with the world that has been familiar for decades is likely to cease to exist, and a new construction will appear instead.
Instead of the previous petrodollar system, a system of "gas rubles" and "petro yuan" may appear - this was already discussed in more detail in one of the previous RUSSTRAT materials. The current financial system will also be scrapped - not least because of the West's actual theft of some of Russia's gold and foreign exchange reserves.
"Russian commodities today are like subprime (collateralised debt obligations) were in 2008. Conversely, non-Russian commodities are like U.S. Treasury securities were back in 2008. One collapsing in price, and the other one surging in price, with margin calls on both regardless of which side you are on," Pozsar said.
Following Vladimir Putin's order to switch Russian gas trading to rubles, Western central banks, constrained by sanctions imposed by their own governments, will not be able to provide the support, such as emergency liquidity, needed to close payments. China, which has no problems with Russia, will have a major advantage over the United States.
The world is waiting for a confrontation between the old concept - "a currency based on trust in the United States", and the new one - "a currency backed by goods and energy resources".
"That's the birth of the Eurorenminbi market and China's first real step to break the hegemony of the Eurodollar market. That is also inflationary for the West and means less demand for long-term Treasuries," Pozsar said.
Recall that Saudi Arabia is negotiating with the largest buyer, China, to abandon the dollar. In combination with the Russian conversion of gas trade to rubles, the equivalent of about $300 billion will fall out of the dollar turnover annually.
The figure looks relatively small, but it’s necessary to remember that now for every “real" petrodollar there are at least 10 "virtual" ones issued on credit based on futures quotes, etc. Objectively, the rejection of the dollar by Russia, China and Saudi Arabia will have an impact on the US currency and inflation in the amount of $3 trillion.
If Russia and China did not have nuclear weapons, the United States would probably have already started fighting.
The growing "perfect storm" in the global economy, the West's attempts to preserve the liberal order that has developed over the past 40 years, and constant economic attacks on Russia – all these phenomena will develop regardless of the situation in Ukraine. In fact, after February 24, Russia's hands are completely untied, and it depends only on the Russian leadership what the future development of events will be.
Images of the future
Any of the options acceptable to Russia implies the successful achievement of the goals of a special operation in some buffer territory sufficient for Russia's security, while maintaining military and political control over it. We are not talking about occupation, it is enough to have a sovereign, predictable, non-Russophobic regime.
Where exactly the borders of the conditional "Novorossiya" will lie is still impossible to say. There are two intuitive options – the whole of Ukraine or a section along the Dnieper line, with control of the Black Sea region.
The second option, due to a combination of factors, should be considered less preferable in general. If the special operation is stopped and a settlement agreement is concluded with Ukraine, a large number of costs will arise in the new reduced borders, and what is not fully completed is very likely to "backfire" in a few years with a new level of conflict.
The settlement agreement will be submitted by Kiev itself (or Lvov, if the capital moves there) as a victory over Moscow will turn into a propaganda tool. The territory remaining under the control of the Ukrainian regime will be rapidly militarised - even if binding conditions are prescribed in the documents not to do this, the Western masters of Ukraine will find loopholes and workarounds to strengthen the military potential of the conditional "Galicia", up to weapons of mass destruction.
Achieving the political goals of denazification will be limited. On the territories controlled by Russia, the level of nationalist ideology will be reduced by changing the education, upbringing and work of law enforcement officers, but on the remaining territory of Ukraine, radicalisation will reach a qualitatively new level. The Ukrainian authorities have repeatedly stated their preference for the “Croatian scenario” in working with the undesirable, which in practice means absolute Nazification within their reach and reprisals against disloyal ones.
At the level of domestic Russian politics, the task will arise of explaining to the population, which has consolidated on the basis of the fight against Nazism, the reasons for stopping the special operation, as well as justifying the losses incurred in it. After all, the preservation of the Nazi regime in part of Ukraine will mean the failure to achieve the declared goals of the operation.
If we talk about the external aspect, it is possible that the suspension of the special operation will be perceived by many countries, including allies, as a loss of initiative by Russia and a sign of its weakness, which will lead to a decrease in status and an increased number of claims to Russia, including territorial ones.
It is worth paying attention to the sharp activation of Turkey in Transcaucasia, which coincided with the stabilisation of the Ukrainian front, and a new round of tension between Azerbaijan and Armenia, which looks like an attempt by Turkey to gain an even stronger foothold in the zone of Russian interests.
A “second wind” will be given to circles loyal to the West in Russia itself, which will create risks of sliding into the system of interaction with the world, from which Russia is now trying to get out not without success.
In Russia's existential conflict with the entire Western world, abandoning the declared claims will mean the defeat and consolidation of the Western model for decades to come. And there is no doubt that the collective West will try to settle the score with Russia in full for its fright.
The actions that the West is currently taking against Russia have nothing to do with the sanctions that are being imposed in order to achieve something. There is a full-scale economic and financial war going on, and the only limitation is the West's own interests.
The option of controlling the whole of Ukraine is more costly in terms of military, material and human resources. The territory of Ukraine is quite large, which means that it will require a large number of loyal civilian managers who understand local realities and are capable of labor feats. The first years of the new government will obviously be difficult, and the rotation of personnel will be huge.
Over 30 years of varying intensity of Nazification, Ukrainian nationalism has permeated the entire fabric of Ukrainian society, from law enforcement agencies to science, school education, and mass consciousness. A huge amount of work will go to the intelligence agencies, which will have to conduct counter-terrorism work like Syria or Chechnya.
These are not all the challenges we will face. However, it is this option that will maximise the achievement of the goals of Operation Z - demilitarisation and denazification.
Demilitarisation is proceeding quite successfully, but the necessary condition for denazification will be to gain military control over the entire territory of Ukraine, dismantle the entire framework of the Ukrainian socio-cultural and political system based on nationalism, and build administrative, command and security structures from scratch.
By implementing this difficult option, Russia will not only eliminate the threat from the south-western direction. Russia's status in the international arena will dramatically increase, and the destruction of the global liberal order will accelerate, which corresponds to other strategic tasks of the Russian Federation.