This update on what has been a momentous several weeks in geopolitics starts with a caveat: The precise timing of any out-of-the-blue event—from the 1929 market crash to 2008’s real estate meltdown—never is predictable. The most you can say is that the stage is set and it’s essential to be alert.
Today we are transitioning to a new world order that comes with enormous risks. As we’ve argued before, the America of today is unrecognizable from the America that the post-WWII generation knew. That leaves us confronting a clear choice: either face reality and cooperate with the Greater South—which now includes 80% to 90% of the world’s population—or enter a chaotic future in which we play a diminished role, or even no role at all. While you won’t be reading or hearing about this from U.S. news outlets, every day brings us closer to where an out-of-the-blue catastrophe no longer will be truly out-of-the-blue but rather a foregone conclusion. Events of the last few weeks show that we are approaching that precipice at an accelerating rate.
We start with the August 16th meeting between Putin and Trump. While there is no recording of their several-hours-long conversation, several sources—mostly Russian—point to a narrative wholly consistent with what we know. Putin likely presented Trump with a huge carrot along with a chilling warning. The carrot was the chance to join the Global South as a prominent player in a new world order. For starters, the U.S. would have its pick of various projects, valued in the trillions of dollars, in the development of natural resources. Remember, a major portion of the world’s untapped natural resources is located in the Global South, with Russia the most resource-rich country in the world. In time, this massive carrot could allow the U.S. to continue to play a major role in the new world order. And who knows—maybe our old Yankee spirit and ingenuity might reemerge, letting the U.S. gain a preeminent position in that new order.
The stick—Putin’s second message—is Russia’s and China’s enormous lead in military technologies, including cyber tools as well as physical weaponry. That lead is so large that a major conflict between the Global South and America could be utterly catastrophic for America. Putin was making it plain that the U.S., this once-great hegemon, has no rational choice other than to cooperate.
On its face, the decision would seem a no-brainer. But there’s a barrier: an implacable, pathological resistance here—tied to a fierce mistrust of Russia and China—to the U.S. accepting anything less than a hegemonic role.
There are signs that Putin’s putative carrot and warning (or stick) hit home to Trump. Look at the press conference that followed the meeting: Trump looked dazed. His usual modus operandi is to speak first and then take questions from his audience. This time, it was Putin who spoke first, while Trump followed and simply acknowledged that the meeting had been fruitful, taking no questions. Most unusual is that he left the site as one of two passengers in a limo—the other passenger being Putin—a clear indication that he wanted further assurances about what Putin was offering, and, very likely, more information about the combined weaponry of China and Russia. Don’t forget that our own nuclear arsenal hasn’t been refurbished in more than 40 years. For goodness sakes, the Minuteman 3—a half-century-old system—remains a leading component of our nuclear deterrent. Could we even launch an effective military operation against either country with a first or second strike? I wouldn’t bet on it.
The Cyberattack You Didn’t Hear About Is the One that Should Really Scare You
In a recent blog we pointed to a cyber incursion in July against the architecture of Microsoft’s cloud. It was concealed from the public. If you searched for it, you’d be directed to an event that had a occurred a year earlier. While that previous event was serious, it pales in comparison to the more recent one. Yet only specialized cyber media reported on the more recent and far more disturbing incursion. How serious was it? For starters, it was far too sophisticated for a single player. Almost surely it was the work of a state actor—either China or Russia. It likely was meant as a warning that even a slightly more damaging foray could inflict devastating damage on Microsoft’s cloud infrastructure. Imagine the consequences if our entire internet was down for a week. It would wreak economic damage that would make the pandemic look like a walk in the park. And it would leave us sitting ducks for any sort of military action against us.
I don’t know if Putin raised this potential cyber threat in the meeting. But if he didn’t, he surely noted the military prowess of the China-Russia alliance. And Trump only had to wait until September 3 to witness China’s military parade celebrating China’s WWII victory over Japan. It was arguably the largest military parade ever staged. On display were Chinese weapons, including hypersonic and electromagnetic missile technology that is years ahead of anything we have.
Moreover, many weapons and defenses were not on display. For example, in May, China demonstrated an electromagnetic coil gun capable of firing 50 rounds per second—3,000 per minute—lightyears ahead of anything we have. Also not on display was China’s HQ-19 system, an antiballistic missile system that, in contrast to our best antiballistic missile systems such as THAAD, can intercept hypersonic missiles. The system was first displayed in late 2024 at a much smaller venue than the recent parade. Whether Russia has developed a comparable system is not known, but what is known is China’s willingness to sell the system to friendly nations. For example, Pakistan has purchased one. It’s odds-on that Putin told Trump about successor strategic missiles to Russia’s own Oreshnik. Launched from satellites, these successors are thought to hit targets with four times the kinetic energy of the Oreshnik. Even without a nuclear payload, these missiles serve as a nuclear deterrent.
In recent weeks we’ve seen evidence that his interchange with Putin made a strong impression on Trump. He was quoted in the Financial Times as suggesting that peacekeepers in Ukraine should be Chinese soldiers—an anathema to European allies. Trump also recently withdrew the nomination of Landon Heid, known as a fierce China hawk, to a prominent position in setting U.S. trade policy.
What The Russia-China Energy Deal Means for The West
Next, we turn to Ukraine. If you only see U.S. news sources, you may not be aware that the war has turned into a rout. Indeed, it is almost certain that Russia, which has no interest in conquering Ukraine, still will extend its territorial gains to include Odesa and Mykolaiv, leaving Ukraine a landlocked nation—i.e., without access to the Black Sea. The source here was actually on full display during a briefing by Valery Gerasimov, one of Russia’s highest-ranking officials. In the background was a map of a divided Ukraine, in which the two port cities were behind the same black line that included the four oblasts—Donetsk, Kherson, Luhansk, and Zaporizhzhia—that were Russia’s initial targets. To refresh your memory, the oblasts are mostly Russian-speaking and are part of eastern Ukraine. Western Ukraine, which the West backed—and continues to back—speaks Ukrainian and practices its own form of Christian Orthodoxy. In the west, the most powerful group is the Banderites, who were fierce allies of Hitler during WWII. One of Russia’s major goals was to free eastern Ukraine from the daily shelling of civilians and to allow residents to speak Russian in classrooms and to practice their own version of Christian Orthodoxy.
As Russia is finishing its war in Ukraine, it is also busy preparing for a more rapid period of growth in tandem with the Greater South. Among September’s important economic events with geopolitical significance was a massive energy deal between China and Russia to create a second Siberian pipeline, Siberia 2. The deal is significant not only for its cost—about $14 billion—but because, as a dedicated source of additional gas to China, it puts the kibosh on any hopes Europe may have had to once again use cheap Russian gas for its industry. It also further strengthens Russian-Chinese ties. In addition to the new pipeline, Russia has been busy planning new corridors. No doubt Siberia 2 was a major reason that Hungary’s leader, Viktor Orban, recently said the E.U. was on a path to disintegration—a path from which he did not see an exit.
Meanwhile, between September 3 and 6, Russia held its annual Eastern Economic Forum in Vladivostok. The focus was not on pipelines but on corridors, in particular a massive one that will connect the Atlantic and Pacific Oceans by developing an Arctic Ocean passage between East and West. The massive project, termed the Transpolar Sea Route (TSR), will be developed close to the North Pole to avoid the territorial waters of neighboring countries. Many have called the corridor the Suez Canal of the 21st century. Participants in its development will include Finland, Canada, Russia, and China. We hope and pray it also will include the U.S. and perhaps even the E.U.
Another recent event of note was a special BRICS meeting called by Brazil. Presumably one topic was de-dollarization, which would pose yet another massive economic threat to a U.S. that disdains cooperation. We’ll be writing more about this in a future blog. A transcript of the meeting wasn’t released, probably because Putin made comments that he wanted to keep private. Our guess is that Putin and Xi, whom Trump is planning to visit in the near future, want to give Trump as much room as possible before the door closes for good. But it’s clear that the Global South is moving forward at an accelerating rate, leaving the proverbial door barely ajar.
Israel’s recent actions in Qatar put further pressure on American to come to terms with the Global South. Qatar is a sovereign country that relies on the U.S. protection. Israel targeted negotiators Hamas had picked to work with Israel toward a peace agreement. Like Israel’s actions in Iran when the U.S. was negotiating with that country over nuclear enrichment, the Qatar events—which clearly required U.S. assent, given that U.S. defenses were not brought into play—represent another black mark against the U.S. and the West in the eyes of the Middle East. Who can blame Saudi Arabia for thinking that if Israel can go after sovereign Qatar with the U.S.’s blessing, or at least assent, it could do the same to them.
Trump’s tacit acceptance of Russia’s actions in Ukraine and his softer stance on China point to Trump working very hard to build a peaceful world—a world in which America, perhaps after a severe but non-catastrophic jolt, can play a major part. But it’s clear that the situation with Israel points strongly to powerful opposing forces within the U.S. government. As we discussed above, we believe that China and Russia have done all they can to convince this opposition that its stance not only makes no sense but that it risks destroying the U.S., a country in whose future we all share. That makes it not a battle between good and bad but more accurately a battle between the rational and the deeply irrational. We will delve further into the origins of this irrationality in future blogs.
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