How Germany Won WWIII

By Karl Spain

Sounds strange, does it not? It happened though, and it’s over!

Here’s a quick recap for those of you who may have missed a very momentous last few months.

Early 2014 – Russian president Vladimir Putin is on the prowl. With a $500 billion war chest from vigorous (10m barrels a day, only U.S. and Saudi production are in that category) oil and gas sales volume, coupled with high prices, Putin is also enjoying a $100 Billion yearly cash flow infusion — and with pipeline deals (South Stream and the Chinese projects) either starting to begin construction and/or on the drawing board — he looked mighty untouchable as he rolled into Crimea. Germany and the U.S. were pissed, but didn’t react because they couldn’t. But German Chancellor Merkel starts talking to Putin, taking his measure.

A soccer game is the turning point. At the world cup in Brazil, after Putin has begun swallowing Ukraine, Merkel meets personally with Putin (she knows him well, going way back) and makes her decision. Germany will not be rolled over by Russian tanks after Putin gets on a Hitler like expansionist jag. Merkel may not admit it openly, but she understands this type of man, German’s have met one like him up close and personal, and they remember.

She decides to act. The German government machinery goes to work upon her return from South America and institutes a serious of official financial sanctions. Behind the scenes the pressure is even more effective. German, American and European corporate interests (with the exception of the Satan worshippers in charge at Exxon) begin pulling out, shutting down, closing off deals and financing structures, getting their people out, really severing economic ties. The effect was dramatic and its effectiveness even surprised Merkel and her advisors.

Next, Merkel and her allies stayed on plan though, and attacked the Ruble. Putin defended with some central bank currency defense but it was short lived, feeble even, (Like Hitler, Putin is no economist) and in one month, Merkel managed to drain away 10% of his cash pile, carefully squirreled away by Putin for 5 years now. Putin than stepped deeper in the doggie doo and abandoned the Ruble defense effort — letting the Ruble float without central bank support.

That failed spectacularly of course — and the Ruble collapse is now an ongoing story — which of course, is also why the entire Russian economy has also begun unraveling. Millions of ordinary Russians, whose mortgages are pegged to the Swiss franc, (bankers are reluctant to make mortgages in Russia, in Rubles, it’s considered too risky, I wonder why?) are now paying twice as much in Rubles (many ordinary Russians have to do a currency exchange each month in order to make their mortgage payments) as they did 6 months ago, for the same houses.

The propaganda lies about Putin’s popularity in Russia are just that, propaganda, and this mortgage debacle is just one reason. Russians depend upon imports for many things and the costs of all that as well as availability have all become big problems. You will not read about this however because they have a 2-story rule now in Russia, you’re allowed to write one bad story about the economy, Putin, or the war effort. Only one.

Merkel and Obama ran into some extraordinary luck at exactly the moment Putin wrapped up in Crimea and began raiding into eastern Ukraine with his local militia dressed commando’s. The U.S. energy boom, coupled with falling demand and a U.S./Saudi secret pack to break ISIS and Iran (and the Russians) with low energy prices is put into effect and was immediately effective.

Oil prices have plummeted to $70 a barrel. This is not an accident, the Saudi’s and Americans are purposing putting an extra million barrels of crude on the market everyday. Let’s look at that from Putin’s point of view. Two years ago, he had a $500 billion dollar hard currency reserve with a $100 billion a year cash flow infusion over and above his national obligations. Today, that reserve is stunned, minus $100 billion total in just 6 months and falling because the $100 billion a year in cash Putin had flowing in — has reversed direction and now, he’s actually NEGATIVE $100 Billion a year in cash.

Here’s the math for you non-believers, at 10m barrels a day, and prices at $125 a barrel just 2 years ago, Putin was selling $450 Billion in oil a year with production costs and national obligations totaling $350 Billion, leaving him with $100 Billion a year in fun money. At $70 a barrel, his revenue has fallen to $250 Billion a year. And he still has those $250 billion in production costs and $100 Billion in national obligations, so now he’s cash flow negative $100 billion a year at exactly the moment his reserve is being decimated to defend the Ruble, his banks, the economy and his pipeline deals, which have now all stalled.

How bad is this rout for Putin? Merkel is secretly worried she may have overdone it, crashed the Russian economy completely — and now there might be blowback on her, her people, her economy. Seriously. I predict the Germans ease up on Putin soon and the reason is simple, they’ve already beat him and don’t want to incite an overreaction on his part —- to what is essentially a war that was over before it really began.

 

 

 

About karlspain

20 year Newspaperman. Lifelong Inventor. Wrote 2 books so far, working on more. The Revelation, 1st book, about your brain & the universe, and math. Hooked together! God I trust, America I love, 2nd book, is the biography of Aris Mardirossian, a great man. Also owned a software company, an IT integration company, a gas station and a fuzzy logic software title along the way.
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