What it will be like to live in a post-sanction world

On Jan. 14 President-Elect Donald Trump spoke with the Wall Street Journal and reiterated his desire towards seeking to improve relations with both Russia and China, and at the same time masterfully playing his obfuscation card with the media on what policies he truly intends to implement.  In fact, his ability to promote both sides of an issue to different audiences has become one of The Donald's most powerful traits... which is the ability to go back and forth on a given topic without getting labeled with the politically divisive term 'flip-flopper'.

The political establishment is completely baffled in how a successful business mogul functions, as seen by their utter failures in trying to pigeon-hole Trump during the primaries, and later in the general election.  And this bafflement has continued during the confirmation stage where no matter how much 'fake news' they can throw at him, not only does he repel it with ease but he has made their attacks do more damage to themselves than to their intended target.

Ironically this has also been the case with America's attempts at imposing economic sanctions over the past five years, and especially against Russia in what has grown into a geo-political war going far beyond the original issue over Ukraine.  In fact, the only real winner from the sanctions has been the intended target Russia, while the biggest losers have been Europe, and to a certain extent the United States.

Russia is not going to automatically go back to foreign food suppliers if the country decides to lift the food embargo, Alexei Alekseyenko, an aide to the chief of the Russian agricultural watchdog Rosselkhoznadzor, said on Friday.

“That will be difficult because a long time has passed and many changes took place. There will be no automatic return to the earlier list of suppliers that existed before introduction of our retaliatory economic measures,” Alekseyenko said on the sidelines of the Gaidar Forum. He added that it would be necessary to send Russian experts in order to check foreign companies that want to supply food products to Russia. “But that is a rather difficult and long process especially as we must cut expenses on checks of foreign companies,” Alexeyenko said.

— Sputnik News

These words spoken by a member of Russia's Agricultural Ministry last week lay the groundwork for what the world may look like in a post-sanction outcome.  Because in the three years since Washington deceptively blamed Putin and Moscow for the events that took place during and after the Maidan Coup, several power centers and allegiances have shifted irreparably, that in the end it may even culminate in the ending of the American Empire as the sole superpower over global affairs.

The End of the European Union

The measurable damage is loss of growth, in lost wages, losses in contributions to the social system and in tax revenue. This is true for the past 12 months, and it is valid for the years ahead. The people in Germany and the EU will pay the price through lost prosperity and stability. The unmeasurable damage lies in an elevated geopolitical risk situation for the people in the EU.”

— Off-Gaurdian.org

These words were spoken by Folker Hellmeyer, the chief economist at Bremer Landesbank back in 2015, and a year before the Brexit vote that has begun a domino effect throughout European institutions both large and small.  And yet the consequences of walking lock-step with the United States on sanctions are still in their beginning stages as Europe debates more with their own internal bureaucracies than in finding real solutions that center on the fact that the world is shifting Eastward.

The End of the Petro-Dollar System

When the United States closed the gold window in 1971, it for all intents and purposes put a clock on the remaining time that America would remain in control over the global monetary and financial systems.  And through this agreement they staked their future on backing the dollar with oil, expecting that cartels like OPEC would remain the most dominant energy body in the world.  But with oil and natural gas being a finite resource when limited to small geographic areas like the Middle East, and the United States itself disrupting their operations periodically by going to war with members of OPEC such as Iraq, Iran, and Libya, Washington in essence cut the time that dollar hegemony would reign by a vast amount, which allowed producers like Russia to seize control and eventually bring about the end of the petro-dollar system.

The Middle East is no longer an 'American Lake'

At the height of the Roman Empire, their dominion allowed them to have complete control over the Mediterranean Sea, and it became known in history books as the 'Roman Lake'.  And for America, its version of the 'American Lake' was its domination and authority over most of the Middle East, and its ability to impose its will any time it wanted on most Arab countries.  But as Washington began campaigns beginning in the 1990's of both military and economic wars against some of these nations like Libya, Iran, Iraq, and later Syria, the results two decades later are that these and other Arab governments, including the most important in Saudi Arabia, have shifted away from the U.S. and have solidified their allegiances with Russia and China to ensure they could not be conquered at will by U.S. neo-con agendas.

Saudi Arabia’s sovereign wealth fund is to invest up to $10 billion in Russia over the next five years, in a move signalling a thawing in relations between the two countries.

Saudi Arabia’s Public Investment Fund (PIF), the country’s sovereign wealth investment vehicle, agreed on Monday to invest $10 billion over the next five years approximately in the Russia Direct Investment Fund (RDIF), a government-run investment fund.

Speaking to CNBC on Tuesday, RDIF’s Chief Executive Kirill Dmitriev said that he thought the investment would be “very important” for Russia.

“The first seven projects have received preliminary approval, and RDIF expects to close 10 deals before the end of the year,” Dmitriev said when announcing the deal which is the largest foreign direct investment in the country in the last four years.

“This deal is about building an important partnership. Russia needs to be an integrated global player. We are also going to invest in Saudi Arabia, which is a very attractive market for us so the deal is very interesting,” he told CNBC.


The U.S. needs to rebuild its Productivity or Die

Over the past five years the U.S. has either chosen to, or been forced into isolation by nations who simply don't want to play under the old rules of Washington and dollar hegemony.  And this has been seen in how many countries, including long-standing allies in Europe, that have willingly joined with China towards playing a part in the new trade and banking paradigms rising in the East.  And while China's economy still relies heavily upon consumers in the U.S. buying Chinese produced goods, the reality is that producers can always find new markets while those who produce little inevitably decline as a economic power.

The United States stands at a crossroads, and what President-Elect Donald Trump chooses to do over the next four years could determine not only the fate of America itself, but whether it becomes looked at as a pariah versus a legitimate actor on the world stage.  100 years ago empires tried desperately to stop the changes that were taking place among the vassal states they controlled, but history proves time and time again that you cannot fight paradigm shifts... and those empires that tried are now simply footnotes in the dustbins of history.

We are beginning a new phase across the entire globe that will shape the rest of the 21st century.  And it begins with the decisions and choices America makes in this soon to be post-sanction world.  Yet it will take a leader who is willing to accept a smaller piece of the pie for the U.S. to successfully transition into this brave new paradigm, and the only question that remains is whether Donald Trump is the right individual at the right time to lead his ship into these new uncharted waters.