The Ukraine Is Weak

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My title is a famous quote from the television series Seinfeld. Everyone who has studied history — or just played the board game Risk — knows that Ukraine is an important part of global geopolitics. This is also known as the Heartland Theory of 1904. And that refers to quite a bit of history itself…

Such theories and problems may seem like something from the distant past. But they may be about to become rather relevant once again — especially for investors.

When I recently interviewed Nigel Farage, the man behind Brexit, I asked him what the most important event of 2021 was. He said it was the botched withdrawal from Afghanistan. Because this held such symbolic meaning when it comes to the decline of empires, it has the potential to trigger a long list of geopolitical crises. If Pax Americana is over, what comes next?

We may be about to find out, according to Jim Rickards below.

Unfortunately, conflict in Ukraine is far from the only history that is repeating. The world’s vaccine obsession is reaching dangerous extremes in more and more nations. And when governments have the power to inject you with experimental medicine, there’s not much they can’t do…


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Nickolai Hubble,
Editor, Strategic Intelligence Australia

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I. The Russian invasion of Ukraine is coming. Biden makes himself irrelevant.

By now, it’s apparent that Russia will invade Ukraine in the near future. Whether this is in the winter of 2022 (when the weather is harsh, but the ground is firm) or in May 2022 (just after the ‘mud season’ in March) is unclear, but the invasion is coming.

Russia is moving up to 175,000 troops to its border with Ukraine, including infantry, armour, special forces, and air support. That’s about 10 divisions or one corps in the Russian order of battle. The objective will be to secure Eastern Ukraine around the provinces of Donetsk and Luhansk, join those provinces with the Russian-controlled Crimean Peninsula, and create a secure zone for passage of Russian naval vessels from Crimea through the Bosporus and into the Mediterranean Sea.

Another objective will be to create internal turmoil in Kiev (the lead city in Western Ukraine) and prevent any movement toward Ukraine joining NATO. At that point, Putin can rest. He has no desire to invade Poland or Germany or other parts of Central Europe.

Biden could stop this, but he won’t. This was revealed in the recent Biden-Putin summit conference, as described here

Biden warned Putin not to invade Ukraine and threatened actions if he did. But Biden’s threats were empty. Biden said he would send US troops to Western Europe if Putin invaded. What’s the point of sending troops afterthe invasion? If you were serious about stopping an attack, you would send the troops now.

I’m not condoning the invasion or the troops. I’m just stating the obvious about the timing.

Biden also threatened to cut off Russian natural gas exports to Germany through the Nord Stream 2 pipeline. That’s ridiculous. Russia has ample outlets for its natural gas, but Germany is desperately dependent on those Russian gas exports since Germany has shut down so many coal and nuclear plants. The only loser from a shutdown is our ally Germany, not Russia.

Finally, Biden threatened economic sanctions on Russia. But Russia has been under sanctions since 2014, and they have had no impact on Russian behaviour.

Russia has wisely diversified 21% of its total reserves into physical gold bullion that is immune from freezes, hacks, or sanctions. The gold can be used to pay for essential imports or as collateral for loans. Biden’s diplomacy is a failure, and his threats are empty.

Get ready for the invasion in the coming months. Smart investors will prepare the same way Russia did — by buying gold.

II. De Blasio is destroying New York City, even with one foot out the door.

Anyone familiar with New York City politics or political news generally knows that Bill de Blasio is the worst mayor in the 123-year history of the city. (New York was formally consolidated in 1898; it has been settled since 1624.) That’s not a political statement — it’s a matter of fact.

Democrats despise de Blasio’s decadent mayoralty as much as Republicans. De Blasio only has a little over two weeks remaining in his term. After eight years in office, one might expect him to put his feet up or maybe enjoy a victory lap and just cruise to the end of his term. That’s not the de Blasio way.

As an ideologue (and a dumb one at that), he’s determined to announce one neo-fascist policy after another in order to do permanent harm to the largest city in the US. This comes on top of all the harm already done.

De Blasio allowed the city to burn during riots in the summer of 2020 and ordered the police to stand down while gangs looted Fifth Avenue, shootouts took place on Park Avenue in broad daylight, and random beatings plagued the subway system.

Beyond the crime, beatings, and looting, de Blasio went to great lengths to destroy the economy of the city with his pandemic mandates. Schools were closed for most of 2020 and 2021 for no good reason — children either don’t get COVID or experience the mildest cases. Socialising in school without masks was the best possible environment for children. Being cooped up at home with adults coming and going was the worst possible environment. De Blasio made sure kids had the latter. When schools were reopened, children had to wear masks, which causes them to breathe recirculated CO2 and leads to lethargy and shortened attention spans.

As if that wasn’t bad enough, de Blasio issues a series of executive orders designed to destroy the economy of the city. The first order required all indoor venues, public or private, to get evidence of full vaccination before allowing patrons, members, or diners to enter. This was done even though vaccines don’t prevent infection and don’t stop the spread of the virus.

De Blasio next extended the vaccine requirement to all city employees, public school staff, and city government contractors. Still not satisfied, de Blasio went off the deep end, as described in this article, by requiring all private businesses to require all employees to be vaccinated. There was no consultation with business officials, public-private associations, or other affected parties. These new mandates come into effect on 27 December.

The new mayor, Eric Adams, will be sworn in at midnight on 31 December. Businesses will probably ignore the mandate during the four-day effective period and hope that Adams rescinds the order. That’s possible, but the damage is already done.

New York has done everything possible to crush small business and handicap big business. Investors and entrepreneurs have a simple solution — relocate to Florida, Texas, Tennessee, or some other state where freedom is not just a slogan.

III. Omicron is here. And the vaccines are no help.

The Omicron variant of the SARS-CoV-2 virus, which causes COVID, is now firmly entrenched in the US. That’s no surprise. There’s a significant lag between the time a mutation first infects someone and when science identifies and isolates the new strain. In that gap, infected individuals inevitably travel or come in contact with others in such a way that the mutant virus spreads around the world before science even knows it exists.

Omicron is now present in over 40 countries, but that number will soon be 80, and then 120. The virus goes where it wants. Lockdowns don’t work and never will.

This article looks at data on the first 12 states in the US in which the Omicron variant was detected. There was a total of 22 cases as of 4 December 2021 (there are significantly more today). What’s interesting is the breakdown of those 22 cases between the vaccinated and unvaccinated.

There were eight infections among the vaccinated, seven among the unvaccinated, and seven cases in which the vaccination status was not reported. As a first approximation, the vaccinated are more likely to get COVID through Omicron than the unvaccinated, although this sample size is small. What this data shows beyond doubt is that vaccines do not prevent COVID infections and that this is not a pandemic of the unvaccinated. The vaccinated and unvaccinated are equally likely to become infected and spread the virus.

If the data is so clear, why are politicians persecuting the unvaccinated, imposing unneeded vaccine mandates, and ignoring the natural immunity held by almost 50 million Americans who have recovered from COVID? The answers vary.

Some politicians are just stupid and do what they’re told by corrupt public health officials. Some politicians know better but consider it politically expedient to ‘do something’, even if the something makes no sense. Most disturbing are those politicians who harbour a neo-fascist impulse and are using the pandemic to induce fear and intimidate the population into following orders and doing what they’re told.

The problem with the neo-fascist impulse is that it never goes away. That means the pandemic will never go away in the official sense because that would deprive the neo-fascists of their cover to pursue their political agenda of fear and control. Until citizens stand up to the petty dictators around us, the pandemic will never be over, and life will never return to normal. The choice between more intimidation and more freedom has rarely been clearer.

IV. In Europe, it’s as if the Second World War never happened. Fascism is back in style.

Students of history are continually baffled by the fact that political leaders make the same mistakes repeatedly. The entire point of studying history is to learn from the past and avoid blunders. The learning is real and valuable, but the ability to avoid blunders is attenuated.

The Peloponnesian Wars ended the golden age of Athens. The First World War ended another golden age in Europe. Neither war was necessary, and both wars far exceeded the costs in lives and treasure that the antagonists expected when the wars began. Still, they both happened for no good reason.

Hitler might have learned from Napoleon that attacking Moscow is a bridge too far for the French or Germans, but he didn’t. The US today might learn from the late Roman Empire that open borders and decadence in the capital (Rome versus Washington) lead to disintegration, but we don’t seem to be paying attention. And so it goes.

The latest example is described in this article. The recent pandemic seems to have caused a COVID Derangement Syndrome in government leaders. COVID can be lethal and imposes costs, but it’s not the end of the world. Survival rates for all groups are 99.2%, and for those under 65 who are not obese or have other comorbidities, the survival rate is 99.8%.

The latest Omicron variant of SARS-CoV-2 (the virus that causes COVID) appears to be more contagious but less lethal than earlier variants. It may even mark the end of the pandemic as infections provide immunity without high costs in terms of hospitalisation and death. That’s how pandemics end.

Still, political leaders have not learned any lessons. They are working overtime to destroy economies, abuse children with masks and school closures, and trample on individual rights.

Ursula von der Leyen, head of the EU, is now calling for ‘mandatory’ vaccinations. Leaving aside the fact that vaccinations don’t stop infection and the spread of the virus, this is a violation of the Nuremberg Code adopted after the Second World War to prevent involuntary experimentation on humans of the kind carried out by the Nazis.

Despite government approvals, the vaccines are still experimental because long-term studies on efficacy and side effects have not been completed. The fact that the head of the EU hasn’t learned anything from the horrors of Nazi experimentation on humans is highly disturbing. Yet, to students of history, it comes as no surprise.

V. Rich and powerful elites really do live in a bubble. They lack common sense.

Sometimes it seems that the richer and more powerful you are, the more you are stuck in a bubble and out of touch with the real world. Wealth seems to be inversely proportional to common sense. Ray Dalio is a case in point.

Dalio is the head of Bridgewater Associates, one of the largest and most successful hedge funds in the world, with more than US $140 billion in assets under management. Dalio’s personal net worth is over US$18 billion.

As reported in this article, Dalio recently gave an interview in which he described Bridgewater’s approach to investing in Communist China. While acknowledging human rights abuses in China, Dalio essentially brushed them aside saying:

What they have is an autocratic system and one of the leaders described it that the US is a country of individuals and individualists…in China it is an extension of the family…as a top down country what they are doing is they behave like a strict parent.

He then described human rights issues as merely ‘political’ and compared Chinese abuses to ‘our own human rights issues’ in the US. He sloughed off the issue by saying this is not his ‘domain’ and one should ‘leave it to the government to make those decisions’.

To be clear, the US has some social problems, and there’s not a country in the world that doesn’t have at least some human rights issues to address. Still, China is a different order of magnitude — something closer to Stalinist Russia or Nazi Germany.

China is engaged in ethnic cleansing in both Tibet and Xinjiang. This involves a mixture of concentration camps for dissenters, thought re-education camps for indoctrination and brainwashing in Communist ideology, sterilisation of women who belong to ethnic minorities, forced abortions of ethnic women, slave labour, firing squads, destruction of religious temples and churches, eradication of cultural touchstones, and much more.

Dissenters and minorities are victims of forced organ removal without anaesthetic to supply a multibillion-dollar organ transplant industry. The victims are then disposed of in crematoria, exactly as was done by the Nazis. Those who argue for regional autonomy, free speech, or fair elections are branded as ‘national security threats’ and made to disappear in prison (or worse) without anything like due process or a rule of law. 

If Dalio can’t distinguish between that regime and others around the world, he’s unfit to be a leading voice on the global stage. High returns on investment are no substitute for human decency and common sense. Quite the opposite.

Going forward, those with a sense of history and perspective will do much better as investors than those running on a narrow gauge. Dalio pretends to be a student of history and geopolitics. His recent remarks show that he deserves a ‘D’ in the class at best…maybe an ‘F’.

All the best,

Jim Rickards Signature

Jim Rickards,
Strategist, Strategic Intelligence Australia

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