• My eminent colleague Jim Rickards gave us a gem of a call last night.
• I got to listen to Jim with an open mind and my morning cup of coffee.
• He’s an intelligent, level-headed thinker worth listening to, especially in times of heightened emotion.

Happy Thursday!

One more day to go.

But this morning was a lovely treat for me.

I got to listen to Jim Rickards go off on one.

In a clear, sober - and sobering - look at the Russia-Ukraine situation, Jim dismantled what the lamestream media is saying about the now-hot conflict.

I agreed with everything he said wholeheartedly and learned a few new things that only strengthened my viewpoint.

In this edition of the Rude, I will share with you some of the things Jim mentioned and my interpretation of them.

Buckle up!

So Who’s the Fool in This Deadly Game?

Jim brought up a great metaphor, and it encapsulates the entire situation from first principles.

Warren Buffett is famed for saying it succinctly, so here it is:

Jim looks at the world today as a three actor poker game.

Those international actors are the United States, China, and Russia.

Those countries are the most important ones.  They’ve got the resources, know-how, and landmasses that matter.

Rickards noted that whenever you’ve got three people in a poker game, two of them always gang up on the one.

The odd one out is the fool in the game.

And the US is the odd one out this time.

Of course, most Americans don’t believe this at all.

Americans believe the toothless Europeans are in this game.

But they’re not.

So you’ve got a situation where China and Russia are teaming up against the Americans.

And this is a winning strategy… for China and Russia.

How do we know that?

Because it’s the very strategy America once used to defeat the Soviet Union.

Ending One Communist Regime and Empowering Another

I’ve written before about how Henry Kissinger gave away the game to the Chinese.

In his remarkable book The Hundred Year Marathon, Michael Pillsbury details how Henry Kissinger gave away America’s technological advantage to China in exchange for China not siding with the Soviets.

And while I don’t think what Kissinger did was worth it, I’ve got to admit the immediate goal was accomplished.

Only 20 years or so after Nixon went to China, the Soviet Union collapsed.

That’s because America and China made the Soviet Union the patsy at the table.

Of course, the Soviets knew what was happening and tried to get America to stop it, but their efforts were fruitless.

And while that outcome looked good on the surface for 30 years, now we’ve got Russia and China turning the tables on America.

America’s position isn’t looking so good right now.

So Jim’s point is that American policy overall is incorrect and misguided.

Back in the 1990s

The oligarchs took over the companies when Russia tried to start with capitalism.

“It’s a good place to end, but not a good place to start.”

The State Department minions who now have senior positions have never forgiven Putin for disrupting their terraforming plans.

Let’s get one thing straight: Vladimir Putin is not a nice man.  He’s not someone I’d want to go into business with.  He’s an ex-spy chief who plays for keeps.

But just because we don’t like someone, doesn’t mean we don’t have to deal with them.

And since those diplomats failed in the 90s, Putin has accomplished some things for Russia.

With the oligarchs, he gave them an ultimatum: keep the money, but stay out of politics.

Putin built bridges to the Orthodox church.

He’s also made Russia less dependent on the USD system, which really matters with the sanctions about to be imposed.

Russia is by no means perfect.  It’s still kleptocratic, and its judiciary isn’t strong enough.

But it’s functional, something it wasn’t when the Soviet Union fell.

Not History, But Security

In America, students stopped learning history and geography in high school.

There’s a flat plain between Moscow and the rest of Europe.

From Northern France, you can march straight to Russia without encountering so much as a hill.

It’s like Kansas.

Ukraine is smack in the east end of it.

And it’s not like we don’t have historical examples of Russia’s enemies trying it on.

Napoleon got there and froze to death, losing 90% of his troops.

Hitler did the same.  He couldn’t hold his supply lines.  Millions of lives were lost.

The only thing that saved Russia was the harsh winter.

So, Russia must create buffer zones.

It lost the Baltics to NATO.  It can’t afford to lose Ukraine.

Now, does that mean I think Ukraine should be under Russian rule?

Of course not.

Just like I don’t think Canada should be under American rule.

Or vice versa.

But that doesn’t mean we don’t have to deal with the situation at hand.

The Washington Presstitutes Made Talking Impossible

The DC Press Corps kneecapped Donald Trump at every turn.  Every time he tried to engage Putin, it was a disaster because the press lied about the Steele Dossier.

Jim explains it perfectly:

The way they played this for years. It paralyzed Trump, because if Trump had even picked up the phone and called Putin or made a trip to Moscow, it would have been seen that this proves our point that Trump's in Putin’s pocket.

Trump's a puppet on a string. Putin's the puppet master. That was the allegation.  None of it was true, but it was made to appear true.  But it paralyzed Trump.  It made it impossible for Trump to build bridges or negotiate with Putin because he was always going to be accused of being in Putin’s pocket, which he wasn't, but that was the accusation.

But ask yourself this: would you rather be at the poker table with Russia at your side against China or sitting alone dealing with those two against you?

Wrap Up

Listen to Jim’s report.  It’s excellent.

It’s also an antidote to cartographically challenged American presstitute journalists who’ve made a mess of things without understanding the consequences.

Well, those outcomes are coming home to roost now.

The people of Ukraine are in the direct firing line.

Higher energy prices will crush Europe’s economy - and they may even get a taste of war, themselves.

Americans will probably see $4.00/gallon gas… again.

This all could have been avoided with some astute diplomatic intrepidity.

Alas, that quality was nowhere to be found.

Let’s see how it turns out.

I pray for a swift end to the conflict, but I don’t see that happening.

Until tomorrow.

All the best,

Sean