Putin's Reset

So it begins. On Sunday night, Vladimir Putin’s goons took over government facilities in three cities in eastern Ukraine. They are demanding a referendum on whether more Ukrainian territory should, like Crimea, become independent enroute to voting to be annexed by Russia.

If Putin sticks with his successful Crimean playbook, it is predictable that we’ll next see the overt insertion of more Russian troops, now lurking just across the border. When combined with special forces already believed to have been covertly deployed in eastern Ukraine, the stage will be set for a reprise of a Crimea-style vote-under-occupation. We know how that will come out.

Such developments – actual and incipient – suggest that the Kremlin kleptocrat (the Washington Free Beacon’s Bill Gertz reports that a network of corruption has put tens of billions in the personal bank accounts of Putin and his cronies) has not been dissuaded from further territorial aggrandizement by the West’s response to date.

That has involved the transfer of meals-ready-to-eat, not weapons, to a country ready to be eaten. It has involved sanctions on sixteen Russian officials, businessmen, and Bank Rossiya, the financial vehicle for much of Team Putin’s corrupt practices. The G-8 has become, at least temporarily, once again the G-7. And NASA has ratcheted down its dealings with Russia – apart, of course, from those involving manned access to space, for which we must currently depend on Moscow.

Apparently, it has dawned on the Obama administration that Putin’s success to date may not only be a precursor for what is to come with respect to other parts of Ukraine – and perhaps elsewhere in Russia’s so-called “near-abroad.” Other nations may be inspired to follow suit. Hence, Secretary of Defense Chuck Hagel’s “demanding” that China respect its neighbors at a moment when Beijing is increasingly doing just the opposite.

Matters are made considerably worse by the fact that the stakes involved with the cascading collapse of President Obama’s reset with Russia and its efforts to make nice with the Chinese (and, for that matter, virtually every other hostile regime) have gone up dramatically of late.

Putin has, from the beginning of the Crimea crisis, responded tit-for-tat to Western sanctions. He has also raised the price of Russian natural gas exports to Ukraine by over forty percent. That is naked economic warfare against Kiev and a warning to others in Europe who are also dependent on Moscow for energy.

In addition, Putin is indicating that he intends to accelerate efforts the Russians, Chinese, and Iranians, among others, have been making for years to displace the U.S. dollar as the world’s reserve currency. As Kevin Freeman, one of the country’s preeminent experts on economic warfare and author of two best-sellers, Secret Weapon and Game Plan, observes: “[Putin’s state-controlled media mouthpiece] Voice of Russia states that it is time for the attack on the dollar to commence.” 

Putin understands full well the geostrategic, as well as economic, implications were he to take down the dollar’s unique standing. As the Voice of Russia put on April 4, 2014:

The US dollar’s position as the base currency for global energy trading gives the U.S. a number of unfair advantages. It seems that Moscow is ready to take those advantages away.

The existence of “petrodollars” is one of the pillars of America’s economic might because it creates a significant external demand for American currency, allowing the U.S. to accumulate enormous debts without defaulting….

President Obama fatuously pursued an appeasing “reset” with Russia. Welcome to Putin’s reset.

Frank J. Gaffney, Jr. formerly acted as an Assistant Secretary of Defense under President Reagan. He is President of the Center for Security Policy (www.SecureFreedom.org), a columnist for Breitbart News Network and host of the nationally syndicated program, Secure Freedom Radio.