During the early days of the Ukrainian coup the CBC referred to Russia in isolation and then "the rest of the world." This was quite hilarious coming from Peter Mansbridge who obviously was using his well prepared wilful ignorance to make the assumption that the rest of the world was against Russia. Today the comments were more guarded referring to the "western nations", the EU, NATO and other organizations that are already within U.S. hegemony anyway. One of the pundits argued that we need to keep pressure up and hopefully bring China onside. Really? Sure China has border and regional issues, but they are not going to stop acting in their own best interests just because Canada and other U.S. puppets want their support.
All this of course is to "change the behaviour of the Kremlin." Don't hold your breath. I watched a video with U.S. spokesperson John Bolton (if you don't know who he is, your knowledge of U.S. foreign affairs is lacking significantly) whom I disagree with intensely most of the time. His main argument however was quite well stated without any of the usual "indispensable" rhetoric. He said that EU and US sanctions were pinpricks and that Russia held all the cards - militarily, politically, and financially.
It stands in realistic contrast to Harper's statement, " Mr. Putin's reckless and unilateral actions will lead only to Russia's further economic and political isolation from the international community."
Okay let's see how this could play out. The ultimate finale would be nuclear war which would lead to global destruction, perceived first strike knock-out or not. So that end result would be quite final for all, and would be triggered probably by U.S. first use, as is part of their policy (go back and see John Bolton). That can be ignored, although it may come to pass.
The most current and realistic scenario are the economic sanctions threatened by the west. But how real are they?
Economic sanctions and unintended consequences
Imagine that Russian assets are seized and that the EU refuses to import Russian gas and oil. First off, Angela Merkel, instead of having Russian assets frozen would have German asses frozen. If Ms Merkel is considered justifiably concerned about Russia's intentions because she grew up in East Germany, then she also needs to consider that it was German war actions that created the occupation of Germany in the first place. Is she trying to repeat history?
Certainly, gas sanctions would have some impact on Russia, but how much? Russia and China already trade with the ruble and the yuan, with both resources and manufactured goods. They could begin trade with other countries in their own currencies which has several effects. First, less but still some money for Russia. Secondly, the other countries would have cheaper gas without having to exchange their money for US dollars. Third, the hit on the US dollar would put it at considerable risk as the world's global reserve petrodollar fiat currency.
Let's look at the latter more closely. Many people argue that the US wars in the Middle East and elsewhere are in order to harvest the oil wealth of the world for themselves. This is only partly true. The main truth is that the US dollar is the reserve currency essentially meaning that in order for international exchange to occur, they must use the US dollar as all items are priced in dollars (or they used to be). That is the main reason for wars in Iraq, Libya, Syria, Afghanistan et al - to support countries that will continue to use US dollars as their exchange currency, just as the wonderful democracy in Saudi Arabia does.
It is a petrodollar because oil has been the energy source for attempted US military and industrial hegemony over the world, and the world buys their oil and gas with US dollars.
Further it is also a fiat currency, adding another level of weakness to the dollar. Being a fiat currency means it is declared legal money, but it has nothing for support but the belief that a particular scrap of paper with some fancy ink on it has some intrinsic value. It doesn't, it is not even a promise of money as there is no gold or other valued resource supporting it - other than the apparent necessity to buy oil in dollars.
If the Russians start trading in other than US dollars, if Russia sells its dollar holdings on the exchange markets, if Russia sells it billions of US Treasury bonds on the market (as China has started to do) the US dollar will take a severe downturn, supported only by more of the trillions of dollars already in circulation without basis of value. If the US dollar goes down, it essentially becomes worthless as more and more other countries either try to front-run Russia in getting rid of their dollars, or accept their losses and start trading in rubles and yuan - and gold.
The U.S. is trillions of dollars in debt to much of the rest of the world and also within its domestic economics. The economy is one large bubble, supported by the printing of trillions more dollars each year, not backed by anything but a hope and a prayer that all will be well - and the US military. The US has been selling gold for two related purposes: to keep the dollar up, and keep the price of gold down. As the dollar looks weaker and weaker, more and more people in the eastern nations are buying gold, regardless of its generally lowering price. The west continues to sell, until eventually they will no longer be able to supply physical gold - and then China and Russia win the economic battle.
China has bought thousands of tons of gold as recorded through official channels and considering the secretive nature of their polity, probably thousands more tons unofficially. Russia has gold. India has gold. Brazil has gold. South Africa obviously has gold. The BRICS could be well on their way to establishing a gold standard currency of some form, or perhaps a basket of currencies, backed by gold. The U.S., if it wishes to remain within the realm of an economic power, second rate though it be, will have to adjust to this possible reality and hope they can somehow be included.
John Bolton is correct. The US has no cards in this game: they are living within a house of cards financially (okay, some cards, but all precariously balanced) a giant ponzi scheme; they could well be politically isolated from the "rest of the world" even though their sycophantic puppets will continue to support them (at least until the dollar collapses or their own asses are frozen); and militarily - well, if worse comes to worst, they could go nuclear, but that would end it all for all of us. Even John Bolton, a US war hawk, understands the stupidity of that scenario.
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