International Forecaster Weekly

A Complex Chain Reaction

Obama's  announcement may not be good news for Ukraine, but it is for the rest of the world.   President Obama isn't dumb enough to go to war with Russia over the Crimea.   Thank God.  The World War III that some predicted will have to wait for another day.

Alfred Adask | March 29, 2014

Under the headline, "Obama:  No U.S. military action in Ukraine," The Washington Examiner reported that, on Wednesday, President Obama told an NBC affiliate that,
     "We are not going to be getting into a military excursion in Ukraine.  What we are going to do is mobilize all of our diplomatic resources to make sure that we've got a strong international coalition that sends a clear message. Ukraine should decide their own destiny. Russia right now is violating international law and the sovereignty of another country. Might doesn't make right."

     With just a couple more platitudes, Obama might've won the Guinness record for most platitudes in the least number of words.  Guinness might give him a plaque.  He could put it on the mantle next to his Nobel Prize for Peace.
     Apparently, the President who believes he can use drones to murder anyone who opposes him in foreign countries (including Americans) without judicial process, now also believes that "might does not make right".  He may not see a contradiction between his actions and his words, the contradiction is there.
     Obama also observed that "Ukraine should decide their own destiny".  But he didn't bother to explain why Crimea shouldn't be allowed to decide its destiny.
     President Obama also predicted that a "strong international coalition" would soon send a "clear, diplomatic message" to Russia, the Ukraine and the world.   Obama didn't say what that message might be, but in Texan, it'll probably be somthin' like, "bidness is bidness" and therefore the Ukraine (which is guaranteed by treaty to be protected by the US and the UK from Russia) will have to accept Russia's annexation of Crimea. 
     Obama's  announcement may not be good news for Ukraine, but it is for the rest of the world.   President Obama isn't dumb enough to go to war with Russia over the Crimea.   Thank God.  The World War III that some predicted will have to wait for another day.
     In fact, as I've said for most of two weeks, there's virtually nothing the US can do that's meaningful in relation to the Ukraine conflict.  There are two reasons for our inability to act in regard to Crimea:
1. We don't have sufficient resources to enter into a ground war with Russia.
2. We don't have a dog in the fight.  There are just four parties that have a direct, vested interest in Russia's annexation of Crimea:  1) Russia; 2) Crimea; 3) Ukraine and 4) EU (which depends on Russian natural gas to support the EU economy).
Russia and the Crimea are united against Ukraine.  Insofar as Ukraine threatens the pipelines that carry Russian natural gas t Europe, the EU could easily side with Russia and Crimea and against Ukraine in order to protect EU energy supplies.

     Implication:  The Ukraine may not like losing Crimea, but there's not much they can do about it and there's no one they can appeal to for support.
     *  On Thursday, The New York Times reported in "Ukraine Plans to Withdraw Troops from Russian-Occupied Crimea":
     "Bowing to reality . . .  the Ukrainian government said  that it had drawn up plans to evacuate all of its military personnel and their families [from the Crimean peninsula]  . . . .  [T]he evacuation announcement . . . effectively amounted to a surrender of Crimea."
     Insofar as 1) Russia won't invade Ukraine unless the Ukrainian government oppresses Russians within Ukraine; 2) the US has announced it will take no military action in Ukraine; and, 3) the Ukraine itself is evacuating its troops from Crimea; then, 4)  the "war" over Crimea (if there really was a "war" in this matter) is over.
     *  However, also on Thursday, the Voice of Russia reported in "Kiev's threat to confiscate Gazprom property will lead to the chain reaction, from which Ukraine will not benefit" that the Ukrainian government were still threatening  to seize Russian property, including property of Gazprom (which includes natural gas pipelines stretching from Russia, across Ukraine, and on to the EU).
     Russian Foreign Minister Sergei Lavrov said such seizures could precipitate a complex chain reaction, from which Ukraine would not benefit.  According to Lavrov,
     "'I think that it is in no one's interests to begin this battle. Property of Gazprom is not state property as with other business entities of ours.  And this initiative [of Ukraine] could lead to a quite complex chain reaction, from which I suppose Ukraine will not benefit'."
     Now it's getting interesting.
     While the EU, UK, and US do little or nothing to sanction Russia for annexing the Crimea and the Ukraine is withdrawing its troops from Crimea, the little Ukraine is attempting to impose "economic consequences" that have some teeth-seizing control (or perhaps destroying) the natural gas pipelines between Russia and the EU.
     The result could be a shooting war that no one really wants.
     Possible solutions?
1. The Ukraine might think twice and simply agree to return Crimea to Russia.
2. Russia might be able to bribe the individual leaders of Ukraine, or bribe the Ukraine government itself to abandon its resistance to the annexation of Crimea.  (If Russia offered to increase the rent it pays on the pipelines crossing Ukraine and everyone might be happy.) 
3. Fools may yet prevail, and we could see some sort of shooting war between Russia and Ukraine.  If we do, we can expect Russia to invade the eastern Ukraine (and maybe all of the Ukraine).  Once Russia invades, Ukraine will not only lose the Crimea but also eastern Ukraine to Russia. 
I don't expect a shooting war to break out, but if one does, we can expect that Ukraine will destroy Russian pipelines that run through Ukraine on their way to the EU. In which case, the EU will be angered-probably more at the Ukraine than at Russia.
     The strong probability is that the Ukraine's threats to seize Gazprom pipelines are not direct threats against Russia so much as an attempt to directly threaten the EU's energy supply in order to leverage the EU into helping Ukraine against Russia.
     However, a Ukraine attack on the Gazprom pipelines might cause Russia to attack and take control over the entire Ukraine and thus begin the "complex chain reaction" that Russian Foreign Minister Lavrov warned against.
     I.e., if a shooting war breaks out between Russia and Ukraine, some Ukrainians will be shot and killed.  The resulting Ukrainian rage will guarantee that a Ukrainian underground will be formed which will be dedicated to attacking Gazprom pipelines throughout Ukraine territory-even if the Ukrainian government reaches a peace agreement with Russia.  
     While the Ukrainians may hope that if they threaten the pipelines, the EU will be forced to join the Ukraine against Russia's annexation of the Crimea, that hope may be dashed if the EU decides to join Russia in protecting the Gazprom pipelines that run through the Ukraine.
     It could very well be that the "complex chain reaction" caused by Ukrainian attacks on the pipelines could hurt the Ukraine by strengthening the alliance between the EU and Russia and against the Ukraine.
     An even stronger alliance between the EU and Russia will be contrary to US interests.  Therefore, the US government-which has a treaty obligation to protect the Ukraine-will not only fail to defend the Ukraine, but  may work actively to compel Ukraine to agree to forfeit the Crimea or even parts of eastern Ukraine to Russia, rather than allow the Ukraine to inadvertently help strengthen the bond between Russia and the EU.
     *  The US can't secretly use Special Forces, or Ukrainian guerillas to foment more chaos in Ukraine.  Inevitably, such secrets will be revealed.  So, suppose the US helped fund the destruction of Gazprom pipelines this year.  That destruction would cause Russia to lose a primary source of income and thereby hurt Russia significantly.
     But, that same pipeline destruction would also deprive the EU of much of its energy supply and would certainly cause the EU to suffer much hardship.  That deprivation might even push the EU into an economic depression.  A depression in the EU might be enough to trigger a full-blown depression here in the US.
     Now, let's suppose that the US government's "secret" involvement in causing the Gazprom pipelines to be disabled came to be known to the governments of the EU and the American people.  The EU would be furious at the US for helping to shut off the EU's natural gas source.  US power relative to the EU would be further diminished.  The people of the US, learning that US meddling helped cause a European, and then American, economic depression would also be furious at the US government.
     This "complex chain reaction" makes it a virtual certainty that the US can't hope to "secretly" meddle in Ukrainian affairs to any significant degree.  Inevitably, the "secret" will be exposed and the resulting wrath of the European and American people will be turned on the US government.
     The US government can't win by siding with the Ukraine. 
Implication 1:  the little Ukraine is unable to protect itself against Russia and won't find any foreign governments to protect it.
     Implication 2:  The Russian annexation of Crimea to Russia is a done deal.  The sooner everyone-including Ukraine--recognizes that fact, the safer this unsafe world will be.
     Implication 3:   We increasingly live in a global economy wherein almost anything our governments do can result in a "complex chain reaction" that may not only hurt others, but may also hurt those who set the "complex chain" in motion.
     *  We are so interconnected that it's no longer clear if any big government can move to take advantage of weaker nations in a way that won't ultimately harm the big government which initiated that move.
     That's not necessarily bad.  In our brave, new world order, what goes around really might come around.  It could be that, based on our interconnectedness and inter-dependencies, the people of the world may be forced to become more moral.  Increasingly, we may not be able to act in an immoral way and still escape the consequences of our own immorality.  That's a good thing.
     But, in our brave, new, interconnected and inter-dependent world, we're also increasingly endangered.   What if some super-rich lunatic in the Ukraine, Uganda or Texas doesn't recognize the potential for "complex chain reactions"?  What if some greedy fool initiates an economic act that's intended to enrich himself alone but unintentionally starts one of these "complex chain reactions" that almost took place in the Ukraine and might've led to WWIII?
     *  We see other examples of "complex chain reactions" that increasingly inhibit governments, businesses and individuals.
     For example, nuclear war seems unthinkable because some the radiation that's released by a nuclear weapon detonated half-way around the world will inevitably circle the globe to fall back on the nation that launched the nuclear weapon.  That's a "complex chain reaction".
     Two of the immediate effects of industries in pursuit of more profits may be the consumption of too much energy and/or production of too much CO2.  Too much energy consumption and/or too much CO2 production may cause global warming that threatens the world with massive drought and famines.
     What about China, which is so busy industrializing that it's creating levels of pollution that can be measured all the way across the Pacific Ocean in California?
     How 'bout General Electric that sold the nuclear power plants to Fukushima, Japan, that are now threatening to poison much of the North Pacific and perhaps even the Northwestern US.  How's that for a "complex chain reaction"?
     The cell phones that delight the world may also be the source of electronic radiation that's killing the honey bees we depend on to pollinate much of our food.   That's another "complex chain reaction" that ultimately threatens us all.
     And what about China, which would dearly love to dispose of the US Treasuries it holds before they become worthless?  Could China suddenly dump all of its US Treasuries without collapsing the value of those Treasuries before they can sell them all?  In our brave, new interconnected world it will cost China more to sell its US bonds than it does to keep them.  How's that as evidence of another "complex chain reaction".
     *  I don't intend to engage in fear-mongering.  Still, as the world becomes increasingly interconnected and interdependent, it seems true that we all become increasingly subject to "complex chain reactions" that are hazardous to our health.  As a result, just one man who is sufficiently foolish or malicious and who has enough wealth or power could trigger a "complex chain reaction" that causes a global depression the deaths of millions.
     How many powerful people do you suppose there in this world who are sufficiently foolish or malicious to trigger a global depression? 
     No one knows.
     How long before one of those rich/powerful psychopaths triggers a "complex chain reaction" that harms us all?
     No one knows.
     And what are the odds that no such "complex chain of events" will never actually take place?
     No one knows.
     Does that ignorance disturb you?
     It does me.
     I'll bet that pervasive ignorance also disturbs people in positions of power.
     For example, consider Janet Yellen, the Federal Reserve's new Chairwoman.  Despite her education, intelligence and experience, she has to know that she's acting in a global financial and economic system that's so complex and interconnected as to be unprecedented and largely incomprehensible.
     And yet, Ms. Yellen is being called on every day to make decisions that could inadvertently trigger a "complex chain reaction" that could kill millions.
Would you want that burden?
     I wouldn't.
     To me, it seems inevitable that one day whoever sits as the Federal Reserve's chairman will make a mistake that will set of an unexpectedly "complex chain reaction" that kills millions and plunges much of the world into darkness.   I wouldn't want that responsibility.
Admittedly, such catastrophe is hypothetical and might not take place for another 20 years-maybe more.
     But, as the world becomes increasingly interconnected and increasingly interdependent, the odds of such catastrophe taking place can only increase.   However unlikely that such catastrophe takes place this year, the odds are higher that it will take place in A.D. 2015, and higher yet, that it'll take place in A.D. 2016.
     In the end, that hypothetical catastrophe seems inevitable.
     How do you shield yourself against these "complex chain reactions"?  It may be that you're currently dependent upon and "connected to" the increasingly global system of economics and finance.  But if you're inclined to protect yourself from a systemic failure of that global economy, you'll need to disconnect from that system and distance yourself from it as best you can.  You'll need to find or create a separate existence composed of a shelter and water supply that are off the grid, that are adequately stocked with food, tools, guns, ammunition, silver and gold.  You'll need  to make independent living possible and help you survive for a while if the system crashes in a "complex chain reaction" that affects all of its dependent persons.
     Even if you're well-prepared, your survival won't be guaranteed.  Why?  Because no one can accurately predict how the next big "complex chain reaction" will play out.
Nevertheless, if you're prepared, you'll have a better chance to survive and perhaps even prosper than most.