After Putin’s invasion of Crimea, the Ruble lost half its value. The Russian Central bank had to spend $130 billion to stabilize the Russian currency. So learning the lessons of 2014, Putin spent 7 years building up his Central Bank’s reserves. It was a critical part of Putin’s master plan to recreate the Russian Empire with himself as Tsar. The Central Bank increased its reserves from $368 billion seven years ago to $630 billion today. With this war chest, Russia would be well prepared to withstand the inevitable sanctions that would come with the invasion of Ukraine.
In addition to hardening his financial system, Putin unleashed a psyops campaign on the West that succeeded beyond his wildest dreams. He managed to get an incompetent, corrupt, reality show clown elected as President of the USA. This victory was made sweeter by the fact that Trump defeated Clinton. Putin hated the Clintons as he thought they presided over the dissolution and humiliation of mother Russia. He saw the breakup of the Soviet Empire to be the greatest disaster to befall the Russian people since the Mongol invasions.
Trump did not disappoint; he immediately set about destroying NATO and sowing discord, division, and distrust among America’s oldest allies in Europe. Putin had become the titular head of a global nativist, fascist movement that was threatening the social and political stability of Europe and America. Trump losing the election must have been a disappointment, but the damage was done. NATO and Europe were in disarray. Putin used the COVID pandemic and Brexit to further division and discord and aid his alt-right minions in sabotaging the West.
Inside Russia, Putin had methodically removed all opposition and surrounded himself with a corrupt collection of ass-kissers and oligarchs who owed their fortunes and survival to Putin. Early in his rise to power, Putin destroyed the richest man in Russia, Mikhail Khodorkovsky. Putin had him jailed for a decade, his company and fortune destroyed and after he was released from jail, exiled. An object lesson for any Oligarchs who might think that their wealth would allow them to start thinking independently. Putin now had absolute power and unfettered access to all the wealth of Russia to reward those loyal to him.
The Russian army had gone from success to success, in Georgia, Chechnya, Syria, and Ukraine. Russian military might was feared everywhere. Everything was ready. Putin must have looked at the fruits of his labor and thought himself a genius who no one could challenge. The Western media and western political leadership all bought into the Putin myth. Nothing now could stand in the way of Putin establishing a Russian Third Reich that would be greater than the Russian Empire or the USSR. Russia would take its rightful place on the world stage with Putin as supreme leader. A 21st century Ivan the Terrible who would inspire adoration from his minions and fear from his enemies.
The Master Plan in Action
Everything was ready for the launch of the next phase, the invasion of Ukraine. The Chinese reportedly requested that Putin delay the invasion until after the Olympics. An unfortunate delay, but Putin needed China to counterbalance the sanctions. So Putin finally unleashed his invincible military machine on a helpless Ukraine. What could go wrong after 7 years of careful preparation by a mastermind like Putin? Well… everything.
Russia’s Central bank stored about half its reserves in foreign banks. This would avoid the additional costs of cross-border transactions and give the Central Bank direct access to foreign currency and debt markets during the sanctions. It seems it never occurred to Putin that the Russian Central bank could be sanctioned. The Central banks of Iran, Venezuela, North Korea, and closer to home, the Central bank of Putin’s puppet breakaway state in Ukraine, the Donetsk People’s Republic Central Bank were sanctioned. Why wouldn’t the Russian Central Bank be at risk of being sanctioned? Overnight half the Russian Central bank's reserves, reserves that took 7 years to amass were frozen. The Ruble collapsed, the Russian stock market is still closed for fear that opening it will result in a 1929 style crash, the big Russian energy companies listed on foreign exchanges are trading at a tiny fraction of their former value and Putin’s oligarchs have collectively lost $83 billion so far. The Russian economy which had already been stunted by the rampant corruption of Putin’s kleptocracy is collapsing. - oops.
Putin was counting on a disunited Europe and a weak, senile American President. How did that work out for him? President Biden reunited the NATO coalition and undid all the damage that Trump had done in record time. An absolute brilliant example of diplomacy and statecraft. Not bad for a senile old man:) Even rabid right-winger, Hungarian President Viktor Orbán was totally onboard, pushing for shutting Russia out of the SWIFT system. Not only that but neutral countries Sweden and Finland are now considering NATO membership. Switzerland and Monaco, safe havens for the wealth of oligarchs and dictators the world over, whose economies are based on the principle of neutrality, have joined the sanctions. Germany has doubled its defense budget and for the first time is shipping lethal weapons outside Germany to Ukraine.
Then there is the biggest shocker of all, the performance of the Ukrainian defenders and the Russian army. The Russian invasion has been a complete and abject failure. The shocking performance of the Russian military has exposed grossly incompetent leadership, lack of planning, training, and logistics. Russian conscripts not only lack training, supplies, and support, they did not even know they were participating in an invasion. Russian morale is low and getting lower by the day. There have been lots of posts and news articles about the incredible bravery and skill of the Ukrainian army and civilians as well as the multiple failures of the Russian invasion force so I won’t repeat them here. Suffice it to say that the same kleptocracy that hollowed out the Russian economy has hollowed out the Russian military machine.
Turns Out the Emperor Has No Clothes
So behind the superpower bluster, Putin’s corruption poisoned Russia. It created a pipsqueak economy totally dependent on oil and gas and a keystone cops military incapable of backing up Putin’s swagger. Then there is the situation on the homefront. 7,000 Russians have been jailed protesting the war with Ukraine. The Ukrainian defense Ministry claims that it was the Russian FSB that leaked to them the information about an assassination team of 400 Chechens sent to kill the Ukrainian President. The Ukrainians immediately neutralized the threat. If that’s true, that should worry Putin. It seems some of his own are sharpening their knives in preparation for a coup. Russian soldiers are disabling their own equipment and surrendering in ever greater numbers without a fight.
At this point, there is no way Putin can win in Ukraine. He can slaughter innocents, reduce the cities to rubble and sacrifice thousands of Russian soldiers but he can’t achieve his strategic goals and he has wrecked the Russian economy in his futile quest. Putin is realizing he has created a perfect storm that will consume him and put an end to his dreams of a glorious third Russian Reich. As the world now knows that his army wouldn’t last a day against combined NATO and American forces, Putin has resorted to threatening to use nuclear weapons. A cornered megalomaniac with access to nuclear weapons is a very dangerous person. Now that they know that the emperor has no clothes, let’s hope the Russians take out the trash before he can spark a nuclear holocaust.