How The US Got Beaten In Its Own Game In Ukraine: The Full Story

It was supposed to be simple — the US was going to apply the Afghanistan playbook in Ukraine against Russia. It was going to bog it down in a low-level conflict that would starve it of money and resources. It would strain the Russian society and it would put economic and political pressure on the Russian elite to replace the existing administration — another Brzezinski plan.

It worked in Afghanistan before. The US funded Islamist insurgency through Operation Cyclone to draw the politically and economically isolated USSR into a costly, lengthy counter-insurgency operation and then mounted an economic warfare against it by manipulating the oil price through its Gulf allies to cripple the Soviet economy. The result was a push for reform from within the Soviet elite, justified by the resentment among the population for the ongoing war and the lack of consumer goods. It succeeded in the dissolution of the USSR and the imposition of US-aligned governments.

There was no reason for it to not work again. In the eyes of the US, Russia was sufficiently isolated, economically unstable, and without any tangible allies. Its economy was thought to be based on oil and gas sales, it was described as a ‘gas station posing as a country’. So much so that the US establishment did not hesitate to advocate this plan openly as if its success was an inevitability. One kick at the door, and the whole building would come down.

So The US Jumped On The Ukraine War As A Golden Opportunity

And it pulled all the stops. Pushed Ukraine to commit to a full-scale war. Diverted major US taxpayer money as military aid to Ukraine. Transferred whatever weapon it could from its arsenal to Ukraine. Pushed its allies/satellites to do the same. It gave intelligence, helped in planning, and even sent ‘mercenaries’ to aid Ukraine.

Major propaganda was directed at Russia through both the US state establishment and the US and the EU private media establishments. Russia was weak, its soldiers were tired, clueless, incompetent, and about to give up. Russia was using 1950s tanks, missiles, and rifles. Russia was running out of missiles. Ukraine was soon to arrive at Moscow gates. Everything to the contrary of what came out of the US and US-friendly European establishments was Russian propaganda. Ukraine was already winning the war and Russia was about to be beaten in a matter of months.

On the economic side, it started a total economic war. Froze all the Russian funds that were kept in US-controlled assets from dollar reserves to stocks. It even went for the assets of rich, private Russian citizens. It forced Europe to do the same in the Euro front. All of these were to make sure that Russia would not have the finances to do anything including trading with any other country.

The coup de grace of the economic war was the expelling of Russia from the international payments system SWIFT. This would make sure that Russia wouldn’t be able to trade with the rest of the world as SWIFT was the uncontested international financial system on which all international trade took place. Coupled with the confiscated/stolen Russian assets, this would bring Russia’s international trade to a halt and cripple its economy in an instant.

At that moment, the US started putting diplomatic pressure on all the countries in the world to cut ties with Russia. It already got Europe to sanction Russia and cut ties with it. Now it was going to complete the siege by isolating it from the rest of the world. Russia was already expelled from SWIFT. Any country that still continued to trade with Russia through any means would also risk the same: Getting expelled from SWIFT through US pressure, immediately stopping its international trade, and putting it in the same position Cuba has been in since the early 1960s — becoming an international trade pariah that nobody could trade with even if they wanted to. In the past, the threat of getting expelled from SWIFT worked wonders in ‘persuading’ any non-aligned country to go along with whatever US diplomacy ‘suggested’ them to do. US State Department started touring the world, pressuring countries to cut economic and diplomatic ties with Russia, already sure of the results.

But At That Point, Things Started Going South

In the UN, the rest of the world condemned the Russian military action in Ukraine like how the UN does for any hostile military action initiated by any country.

But…

They did not cut economic and diplomatic ties with Russia…

Some started to do even more business with Russia and started to fill the void left by the European businesses that left Russia due to the sanctions that the US pressured the EU to implement against Russia.

Foremost, China and India both started to buy exponentially larger quantities of Russian oil and gas. Russian state revenues skyrocketed. Both countries also stepped in to fill the gap left by European businesses. When a large, bipartisan delegation of MPs from the British parliament traveled to India to pressure them to cut ties with Russia, the Indian foreign minister avoided seeing them on their arrival and instead went in person to meet the Chinese state emissaries who came for a visit to India in the same hours that both delegations arrived at night, sending a major message. Later, when asked by journalists why India wasn’t cutting ties with Russia over Ukraine, the Indian FM put it diplomatically, but directly:

“…’Europe Has to Grow Out of Mindset That Its Problems Are World’s Problems’…”

The US also received the same treatment whichever country it went to pressure to cut ties with Russia. It was either diplomatically received but dismissed or outright ignored. The majority of what is called the emerging ‘Global South’, chose to stay neutral or outright side with Russia in this matter. The ones that opted for a neutral diplomatic tone chose to increase economic ties with Russia. Even some countries that diplomatically came out strongly against Russia did so as well. Russian gas, and oil exports soared, and the Russian state coffers overflew with foreign funds.

The US tried to stem the tide in another way — it tried to impose a ‘price cap’ for buying Russian oil. Leaving aside it was an idea that contradicted the concept of free trade, it was difficult to understand how it would even be enforced. When the EU tried to implement that cap for what little Russian oil it was buying, Russia just started selling to other countries at higher prices and the EU lost what little it had left of the cheap Russian oil and gas. The rest of the world did not heed the price cap at all.

Russian oil price cap has largely failed, new report finds

At that point, the US turned to try and stem the tide and cripple Russia economically by preventing Russia from trading in dollars or euros by enforcing their existing ban on Russia using the SWIFT international payment system to cut them off from the international financial system that is controlled by the US.

Which Made Everything Far, Far Worse…

In response to these attempts by the US, China, and Russia rolled out the international financial payment systems that they have been keeping waiting. The Russian one is called SPFS, the Chinese one is called CIPS.

The impact of these SWIFT alternatives has been phenomenal:

The countries that formerly had to use the dollar for international trade started dropping dollars and trading in their own currencies as both SPFS and CIPS were outside US control and the US had no means to ‘encourage’ the use of dollars for international trade on these platforms. India started trading with Russia in Rupees. Saudi Arabia started trading with China in Yuan. Russia and Iran started trading in their own currencies among themselves. Even France started buying gas from China with the Yuan. This started a wave of de-dollarization.

De-dollarization kicks into high gear

As countries dumped dollars to trade in their own currency or maintain currency reserves of the countries that they were trading with, this had an immense impact on the US economy. Unused dollars started flowing back to the US, pushing inflation up. Federal Reserve had to increase interest rates to stem the tide. This, in turn, had a shock effect on the US economy as the low-interest, cash-aflush economy ended and corporations and banks alike started going bankrupt everywhere, moving the US economy into a new paradigm.

US Investors And Industries Must Adapt To The New Economy

This was totally unexpected. The US expected Russia to fold up and go bankrupt. It did not expect ~80% of the world to side with Russia and then dump the dollar on top of that. The war that was intended to destroy Russia turned into a war that destroyed the total control and primacy of the US in the global financial system and the world economy.

But at least, the war itself could cause Russia to fall. That way, the US could pull out a victory from a trainwreck — or rather, that’s what they thought.

But The Actual War Itself Also Went South

Instead of taking the bait and taking over the majority or entirety of Ukraine and then getting bogged down in constant insurgent warfare in an Afghanistan format as the US planned, Russia just took over the pro-Russia, Russian-speaking regions and stopped at the easily defensible Dnieper River boundaries, then fortified its positions.

All kinds of battlefield and humanitarian provocations, baiting, and media propaganda that the US and its satellites levied against Russia, depicting them as ‘incapable cowards’ because they ‘weren’t able to take over Ukraine’ despite Russia not having ever declared such an objective did not avail. Russia dug in and started conducting low-level attrition warfare.

The US kept pumping money, armaments, and intelligence into Ukraine to change the situation. It sent an endless stream of dollars to Ukraine from state coffers. It forced its satellites, especially European ones, to send billions of dollars to Ukraine and also transfer all the armaments that they could transfer. From Leopard tanks to M1 tanks, from high-level ex-Soviet aircraft to the latest missile systems. Everything that could be spared went to Ukraine.

But none of them got any results.

Russia used cheap 1970s ATGMs to destroy the most modern Western tanks. It turns out that the best Leopard is still susceptible to a 1970s ATGM. And if one ATGM didn’t do the job, firing two seemed to do it. If not two, three.

It was one ~15 million dollar Western tank versus 2–3 ATGMs 10,000 dollars each. It was a mathematically impossible equation to win against.

The air warfare got equally funnier — Russia was using $30,000 drones to strike targets whereas Ukraine was using ~$5 million Patriot missiles to shoot them down. Not hitting the actual targets and instead letting the air defense missiles shoot down the drones has become a better tactic for Russia: The gigantic economic drain of the cost disparage between the attacker and the defenders was a bigger hit on not only the Ukrainian economy but also on the NATO economy than Russia actually destroying targets — something which it was capable of doing so with the endless supply of missiles it had, despite being told by the Western media that it ran out of them months ago.

Of course, this was a very desirable situation from the perspective of arms producers: As Ukraine kept spending missiles, tanks, and other equipment, all of these were being replaced by the arms industry at exorbitant costs.

Ukraine War is great for the portfolio, as defense stocks enjoy a banner year

It was an attrition war. And it was a war that Russia would mathematically win. All indicators pointed in that direction and the US also noticed the trend.

So it attempted a hail mary: It poured major money and equipment into Ukraine, sent its own and NATO military personnel to lead them, and prepared a major counter-offensive for the summer of 2023. The Western corporate media raved about how Russia’s days were numbered and Ukraine would soon break through the Russian defenses and take over every region it lost, all the way to Crimea. Anyone questioning the narrative was labeled as a ‘Putin mouthpiece’ and the addition of a few ‘wonder weapons’ into the Ukrainian military lineup was shown as the ‘decisive’ factor that was going to turn the tide.

The counter-offensive started to great fanfare. It pushed forward and made headlines. But when the dust settled in a few weeks, it turned out that Ukraine wasn’t even able to reach the first line of deep Russian defenses at the front, having been stopped at the end of the no man’s land in between the opponents. The takeover of a few small villages that Russia readily evacuated was shown as ‘a great success’, but the reality eventually set in.

‘Strategic objectives not achieved’: Has Ukraine’s counteroffensive failed?

When Ukraine exhausted all the money, equipment, and manpower it had available, Russia slowly started advancing. It started to take over village after village and started pushing the front line toward one of its declared goals — the takeover of the historically Russian-speaking regions that were given to Ukraine by the Lenin administration in 1922.

The US thought it saw a light at the end of the tunnel when a new conflict started between Israel and the Palestinian administration in Gaza. It moved major forces to the Middle East and declared unwavering support for Israel, accompanied by major financial and military aid. It hoped to open another front in the Middle East to draw Russia into by spreading the conflict to Syria or even better, drawing in Iran and justifying a war against Iran. This would force Iran to divert the arms industry resources that it allocated to Russia in the Ukraine conflict — especially the famous, cheap drones — to the war on its doorstep, and force Russia to divert its own resources to Syria to defend its ally and also to the new conflict zones to prevent Iran from getting destroyed by the US and its ally Israel. It would be a win for the US in either case.

But things didn’t work out there either…

Israel’s opponents settled down into a dragged-out, low-level warfare just like the one that Russia is doing in Ukraine. All of Israel’s opponents ranging from Hamas and other armed Palestinian factions to Hezbollah and even the Houthi Yemeni administration are doing low-level engagements in which they spend very little resources while forcing Israel to divert its expensive aircraft, tanks, missiles, and manpower to counter them:

Hamas fighters get out of tunnels, destroy an Israeli tank, wound — not kill — a dozen Israeli infantry by firing a few ATGMs, and go back. Now Israel has to tow all the damaged tanks dozens of kilometers to spend money repairing them and take all the wounded soldiers to hospitals to treat them. All the wounded soldiers are set to get reparations paid to them by the Israeli government and all the disabled soldiers will get disability payments from the Israeli government for the rest of their lives, with a lot of them immediately having to retire — a much bigger drain on the Israeli economy than the actual war itself.

Hezbollah in the north is destroying Israeli military infrastructure by using cheap missiles and ATGMs every other day, from communications towers to bases. All of which need to be reconstructed by spending money. The Israeli civilians in the north had to evacuate the conflict zones, ending the economic activity in those zones and becoming a drain on the Israeli economy in the central regions.

The coup de grace has come from the Houthis in Yemen — first, they started firing cheap, long-range drones against Israeli ports and cities, which Israel had to destroy by firing expensive missiles just like how Ukraine had to do in Russia. The US helped defend Israel by shooting down those drones, but it soon saw the writing on the wall, which was no different than how things were in Ukraine.

Then, the Houthis did something disastrous for both Israel and the US: They declared that any ship passing from the Hormuz Strait would get destroyed or confiscated if it was going to any Israeli port, or considered aiding Israel in its war effort, regardless of its ownership. This had a major effect on world shipping — all big shipping companies stopped going through the Hormuz Strait to avoid the rising insurance costs and the potential cargo and ship loss. The world ship traffic got redirected and started going around South Africa, increasing shipping costs and pushing up inflation in the West. In addition to damaging all US and Western interests drastically, this also crippled Israel’s key southern port Eliat.

The US tried to muster an ‘international task force’ against the Houthis, but all its NATO allies except the UK refused to join, saying that they would only operate under a NATO initiative or by frustrating the attempt in other ways. Unable to confront the Houthis, now the US was virtually alone and overextended in a region for which it did not have enough resources to spare. Moreover, it also committed itself to boundless financial and military aid to Israel.

So instead of saving the US by opening another front that would drain Russia, the Israel-Palestine war ended up becoming another front that would drain the US instead.

The US now was facing an economic crisis at home due to rising costs, inflation, and bankruptcies crippling its economy while its overextended, expensive military and its proxy wars gulping ever-increasing amounts of money. The incumbent Biden administration was taking flak from its own electorate for its unwavering support for Israeli atrocities in Gaza even as they were criticized by the UN and its own allies, on the eve of an election.

This is where we are now. The US got totally beaten in its own game as Russia and its allies turned the tables around and applied the Afghanistan playbook to the US.

There is no way for the US to continue the Ukraine proxy war. The alternative to continuing the proxy war is the US itself joining the war, which means a global thermonuclear war. There is no way to herd its European satellites to enter the war against Russia either, as a lot of the US-friendly governments in its satellites are embattled by the rising discontent from their own population due to the extremely high inflation resulting from the US cutting Europe from cheap Russian energy impoverishing Europeans, bankrupting its companies and causing a total deindustrialization of Europe. Even if they wanted to, they now don’t have the money to do it either.

Q2 2023: Business bankruptcies at highest level since 2015

So What Happens Now?

The US will slowly back off from the Ukraine War. It needs to pressure the Ukrainian government, which it pressured so strongly to reject all Russian dialogue attempts earlier, to start talks with Russia.

The Biden Administration Is Quietly Shifting Its Strategy in Ukraine

The Ukrainian government led by Zelensky is totally unwilling and they are planning to start conscripting women en masse to make up for their unsustainable losses — something which is causing a major reaction from the Ukrainian population. Despite this, the Ukrainian government seems to be stubborn about continuing the war as if it had the means. Which will make the US either force them to accept or get them replaced with a more cooperative administration. There is increasing criticism of Zelensk in the Western media in order to build up pressure on his administration to go along with what the US wants.

Meanwhile, the Western media started changing its tune to prepare the domestic audience for the eventual defeat.

Of course, after having lied without a pause about the Russian collapse and the inevitable Ukrainian victory, it wouldn’t be possible to make their populace accept the actual reality as it is. So, they have to ‘manage perceptions’ by reframing everything:

According to this narrative, Ukraine giving away gigantic Russian-speaking regions along with all their precious natural resources to Russia will not be ‘a defeat’. A new goalpost is made up and that new goalpost is ‘victory means Russia taking over the entire Ukraine’, something which Russia never stated as an objective even if it had the military means and resources to do so. But the Western media will put such made-up goalposts into Russia’s mouth in an attempt to goad its gullible populace into believing that the West did not get defeated in its proxy war and all the turmoil and economic hardship that the people in the West went through was not for nothing.

This kind of ‘narrative-shifting’ and ‘opinion-shaping’ of the Western, especially Anglo-American public is easy enough, judging from how the US manufactured consent for its earlier wars and how it goaded its populace to support them.

However, there is a major elephant in the room: Russia knows that even if the territorial questions are settled, a US-controlled regime in Ukraine means that the US would just prop up that regime over the years to come and restart the war.

This is a major problem even before it comes to the stated objective of denazification of Ukraine — and when it comes to that particular objective, there is no way the CIA would discard its neonazi assets that it had been funding and training in Ukraine since the end of the Cold War.

Russia knows that the US can’t be trusted with any promise it makes. This is openly stated by the Russian government and diplomats by saying that the US is not ‘agreement capable’, based on how many treaties the US just violated after signing them in the past.

The cases of…

• The neutrality of the following governments Ukraine
• Ukraine staying out of NATO
• Ultranationalists, and Nazis stopping the persecution of Russian-speaking populations
• Russian-speaking populations in Ukraine regaining the rights that were taken away from them by recent legislation
• The US avoiding building up the Ukrainian military again for a war against Russia

…remain unsolved. The question of the transfer of Russian-speaking regions is not relevant as those are already almost entirely taken over by Russia and Russia does not need recognition of de facto reality on the ground by the US or Europe. The problem is that the US can’t be trusted by holding any promise it makes. Even if the current US government actually abides by the treaty it signs, the next government can just ignore it and go back to doing what it promised not to do. The CIA would be unlikely to heed any agreement and would continue its support for Ukrainian neonazis and ultranationalists in any case anyway.

There is no way to make the US or its European satellites abide by the terms that Russia needs to make peace in Ukraine. The terms of the Minsk treaty were not followed and even Germany and France violated the treaty that they were supposed to protect. So there is no reason for Russia to trust either the US or Europe.

Therefore the only way for lasting peace seems to be Ukraine becoming a neutral, buffer country between Europe and Russia like Finland — which was a very good deal for Finland as can be judged from the prosperity it brought. But any kind of Western-aligned government in Ukraine would renege on its promises and go back to what they were doing. Therefore, the only way for Ukraine to stay neutral seems to be either a Russian-aligned government coming to power in Ukraine, or a mechanism that will prevent the government from being controlled by US-aligned and Russian-aligned parties. It’s hard to see this happening without Russia effecting a regime change in Ukraine. Actually, it may be difficult even for the US to remove the ultranationalist/nazi clique that is currently in power in Kiev.

The next phase of the Ukraine war will revolve around the resolution of these unsolved issues. Russia will not step back from their red lines, especially Ukraine’s neutrality and denazification. For even temporary peace, Russia will require a solution to be found for those issues.