Everything They’ve Told You About Russia Is A Lie

Russia may win… [Morning Reckoning] February 02, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Everything They’ve Told You About Russia Is A Lie - Sanctions and price caps are completely useless in the fight against Russia. - No, Russia hasn’t suffered big casualties. Ukraine has suffered far more. - NATO is out of weapons and ammo right when Russia’s big offensive will begin. Asti, Northern Italy February 2, 2023 [Sean Ring] SEAN RING Hi Reader, Buongiorno from beautiful Northern Italy! The great Austrian School economist Murray Rothbard once said: “Everything the government touches turns to crap.” I think we need a corollary to this statement, regarding the media. “Everything the mainstream media feeds you is bull crap.” And for the last year at least, and for much longer on the fringes, there is no story more lied about, falsified and fabricated than the Russia-Ukraine War. The Rude Awakening has covered this since I’ve been its editor. And much of the factual content in this piece is taken from my Rude newsletters. But as we’ve only just become acquainted here at the Morning Reckoning, I’m going to show you why I always thought it was lunacy to start in with the Russians. [Man Who Predicted Bitcoin Warns: “Don’t Buy Bitcoin!”]( [This Simple Chart]( James Altucher first predicted Bitcoin all the way back in 2013… And ever since, he’s been one of the biggest advocates for it. But now, he’s warning Americans that buying Bitcoin could be a big mistake… [Click here now to see why](. [LEARN MORE]( Russia Is Not Iran, Iraq or North Korea It’s not just Americans who misjudge Russia. The United Kingdom – America’s faithful lapdog – is utterly delusional when it comes to the Russians. A few weeks ago, I had a conversation with a great old friend of mine and what struck me when we spoke about the Russia/Ukraine kerfuffle was how he referred to Russia as a “little” country. Little? It’s typical BBChé brainwashing. I’m not just talking about landmass. (Russia is 70x larger than the UK. Times… not percent.) I’m not just talking about population. (Russia: 144.7 million; UK: 67.4 million.) Let’s compare their economies as well… Look at the difference between their GDPs on a PPP (purchasing power parity) basis: [chart] Credit: [Wikipedia]( Notice anything there? Yes, Russia’s economy is bigger than the UK’s. “Russia is just a gas station!” you say? How about “The UK is a giant laundromat!” in return? Russia has stuff. The UK launders money and has castles. And Russia’s stuff really, really matters to the world. [“The Situation Is Getting Worse By The Day”]( That’s what the President of the US Chamber of Commerce just said about the supply chain. If you thought the supply chain issues were over, think again… Things are about to get much, much worse. And everything from your local grocery store to your gas station could be impacted. That’s why I’m urging everyone I can to prepare now… [To see the #1 move to make before this problem gets any worse, click here now.]( [LEARN MORE]( Sanctions and Price Caps Even if you’ve taken a macroeconomics course from the most Keynesian-brainwashed professor, he’d tell you that both sanctions and price caps are stupid and never work. Both [The Wall Street Journal]( and [Politico]( wrote how even Iran, of all countries, escaped the full force of Western sanctions. What’s most galling is we’ve had recent proof that sanctions not only didn’t hurt Russia, but they also helped Russia develop expertise that didn’t have before! But before I prove that to you, let’s look at the stuff Russia has that we need. There’s nothing the US, EU, and UK has that Russia needs. Coca Cola, Harley Davidson and Gucci bags are all nice-to-haves. Don’t get me wrong, Russia’s Instagram “stars” have been crying for months. But there will be other avenues for them. There’s nothing in Europe or North America that Russia absolutely needs. And when I write, “nothing,” I mean nothing. Zip, zilch, nada. Sure, closing markets are never nice, but Russia isn’t going to starve anytime soon. And Russia has all the raw materials it could ever need to continue to build, operate, and grow. There are many things Russia has that the US and EU need. This is where the “English majors,” as [Dmitry Orlov]( calls them, have really miscalculated. The [US and France need Russian uranium]( for their nuclear power plants to operate. Not “want,” but need. Even if the US ramps up domestic production, it doesn’t have the technology right now to enrich uranium. Quite the pickle. Another example: remember how you were taught the US has the best oil in the world, “light, sweet” crude? Well, that’s great for making gasoline. But you can’t make diesel with it. You need heavy oil like Russian Urals to make diesel. What about palladium for catalytic converters? Here’s what the nutcases over at the [World Economic Forum]( had to say: In terms of raw materials, Russia is also the second-largest exporter of cobalt, one of the key elements used in making rechargeable batteries. It is also the world’s second-largest supplier of vanadium, which is used in large-scale energy storage and in steelmaking. The country is the sixth-largest exporter of gold, accounting for 4.4% of the world’s supply, and the 10th biggest supplier of lead. Russia accounts for 10% of the world’s supply of nickel, which is used to make stainless steel and vehicle batteries. The price of nickel soared by 250% in a day on fears that sanctions would hit supplies, and the London Metal Exchange even suspended trading of the metal because of the unprecedented price rises. Russian exports of platinum account for 12.3% of global supply, and the country is the world’s fourth-largest exporter of tungsten. The country also supplies smaller quantities of manganese (which is used in glassmaking, drinks cans and as paint pigment) and zinc (used in making car bodies). Russia covers about 3.5% of global demand for copper, and copper prices have hit record highs this month. After knowing this, would you want to fight these guys, or cut a very large peace/free trade deal? And that’s not all! Watch this video in which [Putin bragged about how sanctions made the Russians use their brains](. If you doubt Putin’s words – I don’t blame you. But on the topic that the 2014 sanctions helped Russia become the world’s number one wheat exporter, have a look at this chart from [Progressive Farmer]( from before the war: [chart] Russia never built helicopter and marine engines before. It does now. And while it doesn’t dominate the world stage, watch this video (with the captions on) to see [Putin brag]( about how the ruble is now more stable because they’re not just an oil and gas country anymore. Sure the ruble bobbed and weaved when the war started… First it hung around $78 in the beginning, popped up to over $110 shortly thereafter, and crashed to almost $50 as we neared July. But since then, it’s slowly been building back up to the $70 it finds itself today… the rollercoaster seems behind us. And let me remind you: The people who look at those numbers and scream “CAPITAL CONTROLS!” are the same people who frantically watched CNBC yesterday wondering what its central bank would do to manipulate interest rates. It’s important to call out that kind of hypocrisy. The bottom line is this: these sanctions aren’t fit for purpose. No sanctions are. Russia Isn’t Losing This War I wrote the previous sections into this piece because I want you to know where I’m coming from. Now we look at the war and forward. This is important: Russia is not – I repeat “not” – losing this war. Sure, Russia was sloppy at first. And Putin really thought he’d be welcomed as a liberator (sound familiar?). But Russia is not only NOTlosing this war but may very well win it soon. Why would I say such a thing? First, because I don’t listen to the numbskulls at ABC, CBS, NBC or BBC. Second, the people I do listen to are either on the ground or ex-military. To wit, [Gonzalo Lira uploaded a great video to YouTube]( yesterday that I watched with mouth agape. To summarize quickly, he says NATO doesn’t have the weapons to fight the full war the neocons are egging on. And he also says the Pentagon and its allies want to negotiate a settlement with Russia. The RAND Corporation just published a document called “ [Avoiding a Long War]( to that effect. But the Russians don’t trust the West at all… so the Russians won’t negotiate. And it gets worse for the West… NATO Is Toothless Russia has mobilized some [650,000 soldiers]( for the next phase of the war. They won’t be that underprepared or sloppy again. But what about NATO? Not even 100,000 soldiers. NATO just doesn’t have the resources. And even if they did, they can’t move them around. The Ukrainian railroad and road systems are gone. Bombed out. And what’s scarier is that for every Russian soldier that’s been killed in battle, Ukraine has lost eight. This won’t end well for the Ukrainians. The Russians simply can’t lose this war because they’re building something much bigger. An Age-Old Existential Battle Between Land and Sea Another good friend of mine always likes to say I’m overexaggerating the threat to the US and the USD. “As long as the US Navy is patrolling the seas, the world isn’t going to change all that much.” Which is technically right… if you believe we still live in a sea-based world. But what the Russians, Chinese, Iranians and Indians (and Turks as well, perhaps) are building is a land-based world. That’s why China’s Belt and Road Initiative is now a must for the “World Island.” Halford Mackinder, a British geographer, summarized his [Heartland Theory]( thus: Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world. Mackinder’s map looked like this: [chart] Credit: [Wikipedia]( Why is Eastern Europe, and hence, Ukraine, so important? Because it’s the only flat land route to invade Russia. And that’s what this is ultimately all about. The Heartland itself is mostly Russia. One can argue the warming of the Arctic is the best thing that could happen to Russia. That’s because they’ll have their own sea routes and won’t need even China’s ports. By the way, feast your eyes on the map below: [chart] Credit: [Wikipedia]( That’s China's Belt and Road Initiative and it essentially obviates the need for an open water navy. AKA what American taxpayers have been spending so much money on. Rail is faster and cheaper than water, if – and it’s a big if – they can get the whole thing off the ground. Just look at that map and ask yourself one question: If the Russians have all the resources they need, demand to be paid in rubles for them and can rail them anywhere on this world continent, what on earth do they need US dollars for? Answer: they don’t. And that’s the onion. I can’t overstate how disastrous this will be for the Western standard of living. If the West loses this war, and it most likely will, there would be no more petrodollar on which most Western consumers get a free ride. Wrap Up It’s time to look at the world with facts in hand. We never should’ve started with the Russians. And in all likelihood, they’re going to finish this war with a victory. After a decent interval of watching Europe stew in its own juices, the Russians will open up talks. But not before Europe throws off its status as an American vassal. The world is changing before our eyes. And I think we’ll have to let the chips fall where they may before we make a move. I’ll be back on Thursday to give you more of my take on the state of our financial world. Let me know what you think so far by emailing me [here](mailto:feedback@dailyreckoning.com). Be sure to tell me if there are any topics you’d like me to cover in future articles. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com [Biden’s “Hush-Hush” Plot Uncovered]( [This Simple Chart]( Right now, Joe Biden – along with 9 of the world’s largest banks – have initiated [a disturbing new experiment with YOUR cash](. It’s called “Project Cedar” – and up to now it’s been kept fairly “hush-hush”… But in [this urgent new exposé]( you’ll discover critical details behind Project Cedar and what Biden’s master plan really is. [Click here to learn the critical details before it impacts your money](. [LEARN MORE]( In Case You Missed It… Greg Guenthner, Contributing Editor An Idiot’s Guide to Bitcoin (Part 1) Baltimore, Maryland [Greg Guenthner] GREG GUENTHNER Good Morning Reader, It’s one of the most frequent critiques lobbed my way on social media, email, and even delivered in person via scathing, spittle-soaked tirades… You’re wrong about crypto! Yes, I am wrong. In fact, I’ve ignored crypto for years – so I’ve been wrong. The only positive aspect of my crypto-indifference is the consistency. Even when bitcoin was mooning, I remained skeptical. Full disclosure: I’ve never made a dime directly from crypto, though I’ve successfully traded many crypto-adjacent stocks. My only actual crypto buying experience came in 2021 when the market was going absolutely bonkers. I opened a Coinbase account and bought an insignificant amount of Bitcoin, Ethereum, and a few alt-coins. I had no grandiose plans of banking huge gains during this experiment. My goal was simply to have some skin in the game to force myself to track crypto during those insane rallies. At the time, I even joked that my official foray into crypto – even with “play money” – would mark the top of the speculative mania. Unfortunately, I was right about that part. I never sold my holdings, either. They’re still sitting there in my little Coinbase account, miles from their 2021 highs. While I didn’t bet the farm on crypto, many folks poured their hearts, souls, and retirement funds into these speculative ventures. The Covid Bubble convinced many investors that stocks (and crypto) only go up. Sadly, more than a few lives were turned upside down when it all fell apart. Same as it ever was… But like many of last year’s big losers, crypto is starting to show signs of life. This calls for deeper analysis – even from a self-professed crypto hater. [[CHART] Could Inflation Hit 20%+ In 2023?]( [This Simple Chart]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [LEARN MORE]( A few important crypto questions on my mind right now: Is Crypto Winter over? Will Bitcoin snap back to life, retake its highs, and prove all the haters, losers, and dummies wrong? Has crypto earned a permanent seat at the table? Can we take it seriously as an investment, or is it a long-term zero? These are the questions I’m attempting to answer in this Idiot’s Guide to Crypto. So buckle up, grab a snack, and open your mind. What follows is a cold, hard look at how to detangle crypto’s prospects from a (mostly) unbiased third party. Just one disclaimer… If you came here seeking some laser-eyed fever dream, you’re not gonna like what comes next. Think Like a Crypto Outsider Before we begin breaking down Bitcoin and crypto’s prospects for 2023 and beyond, you need to understand how I’m approaching my analysis. For starters, I’m not qualified to discuss the technology behind crypto or its potential applications. After all, I am the idiot behind the Idiot’s Guide to Crypto – and I’m quite comfortable in this role. I have a rudimentary understanding of what Bitcoin is and how it is used. I have no interest in diving further down the rabbit hole. But I do possess a deep understanding of market mechanics. I know how price action works and the psychology driving bull and bear markets and investor behavior. I understand the madness of crowds and the power of boom-bust cycles. This is the information investors and speculators love to seek out when it confirms their previously held beliefs. Ironically, it’s the same information they dismiss as useless witchcraft when it begins to work against them. Ultimately, crypto’s answers will come through price discovery. If crypto is a winner-take-all market, Bitcoin’s value (should Bitcoin come out on top) will increase dramatically while lesser coins plummet. If multiple viable cryptos emerge from the early speculative phase, we’ll see a market of winners and losers, with “blue chip” cryptos and a few also-rans. If the entire idea of cryptocurrencies begins to fizzle, then… well, you get the idea. Again, no deeper knowledge is required to spot these trends. Sure, crypto will have more than its fair share of visionaries and technical experts beyond the pumpers and showboaters on social media. They might possess the brains and insider knowledge to capitalize on developments before this information becomes obvious to the marketplace. But, much like the stock market, the average participant has virtually no shot at figuring any of this out ahead of the crowd – no matter how many blog posts he reads. Ultimately, you don’t need to possess a deep understanding of crypto's inner workings to survive as a trader. Think like a crypto outsider, and you're less likely to get sucked into the compelling storylines that might cloud your investing judgment. [Governors warn of “Biden Blackouts”]( [This Simple Chart]( A former advisor to the CIA and Pentagon just made this dark prediction: Calamity Joe’s sabotage of the Nord Stream pipeline [His Evidence Here]( was suicide. In the next 75 days, Americans will face fuel shortages… …widespread BLACKOUTS… …empty grocery shelves… …up to $1000 energy bills… …drained retirement accounts, and… …a massive crime wave. [>>Welcome to Biden’s American Energy Armageddon<<]( [LEARN MORE]( Crypto = Tech Next, we need to acknowledge that crypto isn’t an asset class that lives on its own magical island, far from the gravity of market forces and the consequences of herd thinking. If the Covid Bubble taught crypto investors anything, it’s that crypto and the tech-growth trade are on the same wavelength, and will therefore react similarly to various market conditions. The crypto and speculative tech markets both broke out in the summer of 2020 as the lockdown trading phenomenon picked up steam, officially launching the final mania phase of the bubble. The charts aren’t identical. Yet both Bitcoin and the Ark Innovation ETF (ARKK) – a solid proxy for the tech-growth trade – posted their biggest moves in the second half of 2020 leading into the Q1 2021 blow-off top. [chart] Source: StockCharts.com Crypto and tech each attempted to rally in late 2021. But those moves failed, and an ugly bear market materialized. Even during 2022’s short relief rallies, crypto and tech have moved in lockstep. I don't know which one’s the dog and which one’s the tail just yet. But we might have a chance to figure out this riddle in the months ahead if these groups finally display something resembling a divergence. Until the market tells us otherwise, these trades are one and the same. Next week, I’ll dive deeper into what needs to happen in the crypto space to repair the damage and potentially plant the seeds for the next rally. I’ll also dive into the charts to try and figure out where we are in this cycle – and where Bitcoin might be headed in the weeks and months ahead. Let me know what you think so far by emailing me [here](mailto:feedback@dailyreckoning.com). Be sure to tell me if there are any topics you’d like me to cover in future articles. I’ll be back on Tuesday with your next market analysis! Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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