Trump vs. Biden
Russia. With a quarter of the world’s natural gas reserves, a sixth of the world’s coal reserves and one of the world’s most important oil producers, Russia is the only European Petro-State.
This isn’t about to change and will continue to place Russia in a position to be a strategically critical nation on the world stage, be it by a broad consensus or a narrow one.
If the U.S. could crush Russia, it would have done so by now, but even after $80bn in aid to the Ukrainians, half of the $160bn sum already sent to help the Ukrainian army to breach the 1,000-kilometer defense line, this strategy has largely failed.
While NATO countries have attempted to starve the Russians, by moving to buy oil from Northern African countries such as Algeria, and to buying LNG from the USA and Qatar, Russia easily found a large market for its cheap oil, courtesy of the price caps that were imposed on them.
These have driven India and China into the arms of Russia, which now provides much more oil to both of these, even though the shipping costs are higher, since they can buy the oil for lower than for what Persian Gulf exporters sell it.
So, while the European phase of the Russian oil exports and natural gas exports has effectively ended, Russia has adapted to the new reality quickly.
It is true that their current revenues are far lower than before, but because they started with low debt/GDP levels, they can afford to run giant deficits, until the political will for the war in the West wanes. Right now it looks like it did for the U.S. in Vietnam or Afghanistan, where Americans simply stopped caring at some point.
Putin has used the war to put more people to work in jobs that pay higher salaries than what was otherwise available.
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So, while the war has alienated Moscow from the world stage, it has not weakened it internally or financially in a meaningful fashion.
Its biggest threat is that, as the war lingers, it causes a shortage of workers, a problem that cannot be solved.
Therefore, we believe that what Russia is going to do is to continue to fight in a way that frustrates Americans and Europeans, so that political consent to keep sending foreign aid will wane.
Donald Trump will, of course, run a platform that he can end the war swiftly and without spending a fortune on sending weapons to Ukraine.
What Biden is learning is that a weak Russia is not only dangerous, since Putin might get desperate, but also that when one of the biggest petrol stations is disabled, everyone suffers.
In other words, Russia must be dealt and negotiated with, not by trying to bring it into submission (since it would never do it and the cost would be too high, if not impossible altogether), but instead by acknowledging Putin as a fierce competitor that the U.S. must work with, in some capacity.
The notion that because Russia is comprised of many ethnic groups, it is easy to de-stabilize, is not that valid anymore, and we personally don’t believe that geo-political experts understand that today most Russians think of themselves as such and don’t pledge allegiance to ethnic minorities.
Putin can again be a determining factor in the presidential elections…
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