US has lost to Russia in Ukraine and Beyond
Doomberg accurately predicted folly for Ukraine based on ill-advised sanctions imposed by clueless DC Lawmakers.
Good Afternoon - Let's talk about the fiasco in Ukraine and its implications for global energy markets and beyond.
At the inception of Russia's invasion the consensus in DC and Brussels was as follows:
- The Russian economy and currency (Ruble) would collapse under Western Sanctions:
"Russia 'deals from a position of weakness' in the commodities sector, “Russian imports have largely collapsed,” and 'Russia has lost companies representing ~40% of its GDP.'"
- Putin embarked Russia on an unsustainable path:
"Putin holds 'delusions of self-sufficiency and import substitution' and 'is resorting to patently unsustainable, dramatic fiscal and monetary intervention to smooth over these structural economic weaknesses.'"
- The world would band together to isolate Putin-Russia and choke off export-based revenue:
'"Looking ahead, there is no path out of economic oblivion for Russia as long as the allied countries remain unified in maintaining and increasing sanctions pressure against Russia.'"
Perhaps no source has better chronicled the fiasco of western policies against Russia better than Doomberg who stated at the time:
“Russia’s energy is going to find its way to the market, and, as perverse as it might sound, we should want it to. Instead of attacking the supply of Putin's energy, we should be doing everything in our power to increase ours. That is the only way to lower prices and materially impact the funding of his war machine. For highly inelastic products like oil and natural gas, price action works both ways."
Doomberg was right. Demand for Russian energy shifted from West to East, as the Global South eagerly stepped in to gobble up oil + natural gas on the cheap.
Fast forward 2+ years later, Russia's economy is robust, Europe is in recession + faces an ongoing energy crisis, and Ukraine is in complete shambles despite serious US resource commitment.
While more gaps between reality and DC delusion have been exposed (esp. depleted Western-military-industrial-capacity) the basic failure as Doomberg points out below is a total lack of understanding energy and economy.
"Western political leaders have no earthly idea how commodity markets work and vastly underestimate the technical prowess of their adversaries."
Such a damning characterization extends to mismanagement of the US economy. Instead of addressing an explosive fiscal catastrophe, divesting from Ukraine + Israeli Wars, restocking the SPR and stimulating US oil production, DC is doubling down on stupidity.
In sum, the global economy is fragile and energy markets remain vulnerable. Without competent leaders at the helm of what remains (for now) the world's most important economy, there are no safeguards for energy markets and beyond.
Stay safe, stay liquid.
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