While Americans fawned over Hollywood stars on Oscar night, Vladimir Putin executed a bold plan to return Ukraine to Russia’s fold, defying President Obama, the U.S. and our enfeebled Western alliance.
An “Iron Curtain” has descended in eastern portions of Ukraine, where stage-managed crowds have welcomed Russian forces. Meanwhile, families are fretting throughout western Ukraine, where Moscow’s influence is hardly a fond memory.
We are witnessing a geopolitical and human tragedy whose consequences for investors in fiat currencies such as the U.S. dollar, the euro and the Japanese yen could prove devastating.
The sinews of peace are stretched to the breaking point
In this naked aggression, Russia is following the dangerous precedent set by the U.S. in fomenting “regime change,” but it is using military force overtly.
Gone in less than one week are pretenses that Moscow respects the rights of sovereign nations to self-determination.
Gone as well may be the “Pax Americana” that broke out in 1991 with the demise of the Soviet Union.
Exploiting the potential demise of U.S. dollar dominance
Mr. Putin must understand that the “Achilles heel” of the global financial system in 2014 is its reliance on the “cheap” money loaned by Western central banks at interest rates lower than the annual increases in consumer prices.
The U.S. is much worse off in 2014 than at the start of the 2008 financial crisis. Economic stimulants such as deficit spending and monetary easing have not restored the U.S. and Western allies to a robust growth track.