Have We Reached Peak Putin?

by Charles Hugh Smith

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. 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.

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