You will probably be familiar with this title, since only six months ago we published the article entitled «.«Chinese Queen's Gambit»in which we analysed the reasons why Xi Jinping had taken certain internal control measures. Well, now we are witnessing another chess game, this time on the European international geopolitical chessboard with Biden and Putin as opponents, under the watchful eye of Germany, the rest of the European countries and of course China, always waiting to take advantage of any resulting scenario.
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It is worth noting that this conflict between NATO (Biden), Ukraine and Russia (Putin) coincides with the US's negotiations with Iran on the nuclear issue and the applicable sanctions. The background to the whole conflict is none other than the global energy flow in the coming years. We could call it the New World Energy Order.
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That is why it should be recalled time and again that the start of the conflict was caused by the threat of Ukraine's imminent NATO membership, insistently urged by the USA, in order to be able to place heavy weapons on the Russian borderline itself. That and no other was the opening of the chess game and the conflict, in which Biden made the first hostile move. And this threatening opening has generated a logical response from Russia, which, baring its teeth, has amassed troops around Ukraine in an attempt to get Biden and NATO to return to square one and leave the chessboard as it was. We are therefore facing a confrontation that would not have occurred if Biden had not actively pushed for Ukraine's inclusion in the Western military alliance, despite the Western media's insistence on selling the idea that it was Putin who started the conflict by threatening to invade Ukraine unilaterally, something the Kremlin has denied to no avail. So we are dealing with a US action and a Russian reaction, and not the other way around, as all the Western media are selling it without the slightest rigour or blushes.
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Having made this necessary preamble, let us now turn to the conclusion itself. Let us start from the premise that any political-military conflict that does not lead to a classic open war, in disuse in the developed world since the Second World War, has relative winners and losers. And that often the most feasible outcome is the most plausible one, i.e. the one in which all parties involved suffer the least possible economic damage.
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In this US-NATO-Ukraine-Russia conflict, the least hurtful outcome would be a commitment by Ukraine not to join the Atlantic Alliance club, at least for a decade, in exchange for Russia also renouncing the incorporation of new Russophile territories in Eastern Ukraine or even giving back some of the territories it already holds in the Donbass. That is, more or less, back to square one of just a few months ago. Logically, to get to that point, Putin «demands» the major, i.e. that the NATO line returns to the borders where it was in 1999, when Estonia, Latvia, Lithuania, Slovenia, Romania, Slovakia and Bulgaria joined the Atlantic alliance. A Western military goal to what was then a very weak Russia. And Putin's impossible demand is the chrome he will be more than willing to concede if he gets a few more decades of Ukrainian independence from the Western military alliance.
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An agreement would make perfect sense for both parties, as explained by Gavekal in his report on Russia, as it would allow Ukraine's economic progression and the pacification of its endemic low-profile armed conflict with Russia in the east of the country, both of which are impossible to achieve if the conflict escalates. For Putin it would put out the fire on a new front of NATO's threatening rapprochement with Moscow for at least a few years. And for the EU it would be the lifeline it badly needs to avoid the energy suffocation it would face in the event that Russia decides to turn off the tap, not only on gas but also on oil.
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On the other hand, if the conflict escalates with galloping sanctions against Russia, the logical response will be to turn off the tap to Europe, and with that we will see fuel prices rise to infinity and beyond and an outrageous inflationary spike. That in turn would generate a radical increase in interest rates in an anaemic economic environment, i.e. a textbook runaway stagflation, which would trigger all sorts of market dislocations, risk premiums and also economic costs that would take a long time to recover (especially in Southern Europe). Putin knows this and is therefore willing to use his power to get the chessboard reversed to the starting position, i.e. 2021. Energy self-sufficient Biden does not have as much to lose as Europe. But the destabilisation of an EU with already semi-ripped north-south seams would create a scenario in which the Western bloc would be at a distinct disadvantage vis-à-vis a China-Russia alliance that is going through one of its best moments. As shown by this button in the form of a new gas pipeline and a 30-year supply agreement between Putin and Xi, which to top it all off is denominated in Euros.
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However, resolving the conflict via pact and de-escalation does not mean that there will not be some bombings and deaths, unfortunately. Negotiations are usually concluded in-extremis, both in time and in form, i.e. after skirmishes that seem to foreshadow imminent and inevitable military escalations. But let us remember that the economic cost of open war (read ground invasion and open NATO-Russia military confrontations) is unaffordable for Europe, high for Russia and extremely dangerous for the stability of the Western bloc USA-EU.
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Therefore, an agreement seems the most likely outcome. But it is likely to be an unofficial agreement, i.e. without light and stenographers or photos of the leaders shaking hands in front of journalists, but an agreement nonetheless. The only ones who would clearly lose in a scenario of de-escalation and a pact between Russia and the West would be the Russophobic and ultra-nazionalist Ukrainian politicians (yes, with a «z» for Nazis), once nurtured by the West to perpetrate the 2013 coup d'état that was whitewashed under the name of the Euromaidan revolution. Which by the way was not such but a violent regime change orchestrated by the West, as Rafael Poch well explained in this prescient article in 2014, which had little media coverage as was to be expected. As we said, these Ukrainian ultranationalists are perfectly sacrificable, in exchange for Europe not being blown apart by the energy suffocation that could result from the culmination of Ukraine's NATO membership.
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It is true, however, that a priori Biden has the least to lose if the conflict escalates, and that adds risk and uncertainty to the situation. Moreover, Putin knows that he will not get concessions if his military threat is not credible, and for that some bloodshed will probably be unavoidable. But, as we have already said, usually the options that end up being given in any conflict are the least costly economically for the parties, and in this case it is undoubtedly a temporary backtracking on Ukraine's inclusion in NATO and a return to square one in 2021 (not 1999 as Putin initially stated in his letter to the Three Wise Men). The Normandy Quartet knows that it is the four of them who have the most at stake in this conflict, and they are rushing to negotiate without the interference of those who have the least to lose, namely Biden and NATO.
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In all this turmoil, the gains of fishermen investing in Russia at the height of the conflict will, as always, be obvious only after the event. And as always the Chinese, the smartest in the class, They are already benefiting strategically from the Russian-European turbulent river and continue unstoppably towards world hegemony.