75 years ago, Winston Churchill declared that the world was divided into two camps. The Cold War had begun. Last week, Vladimir Putin made the same observation to a different audience.
He lacks the rhetorical brilliance of Winston Churchill. And indeed, he does not have the mantle of victory that the British prime minister had after the Second World War. Last week, however, Vladimir Putin delivered a message that was, I fear, as prophetic as Churchill's speech 75 years ago in Fulton, Missouri.
Dubbed the "Iron Curtain" speech, Churchill vividly described how the Soviet Union had effectively taken control of most of Eastern Europe. Within minutes, he crushed the United States' dream of a cohesive and peaceful world after those long years of conflict. Churchill was a splash of cold water on naive dreams of post-war harmony. Instead, came more than 40 years of the "Cold War".
Last week, Putin delivered the same message, albeit to a different audience. Speaking before the Shanghai Cooperation Organization, he sounded more like an economist than a statesman. And we all know how boring economists can be!
Putin described the opposition as those pushing for a "unipolar" world. This was a diplomatic way of referring to "supporters of the New World Order". Basically, he aimed directly at the United States and the European Union. And all the players you know: the United Nations, the Bank for International Settlements, the World Economic Forum, and so on.
Perhaps it was a matter of translation, but Putin brushed aside soaring "iron curtain" rhetoric and called the actions of the collective West "absolutely ugly and unacceptable." Putin thus drew a line between the old guard, America and Europe. And the new guard, Russia, China, India, Iran and possibly others, including Brazil.
And just as deftly as Churchill called the division of the old world, Putin has sparked this new global fission. All of this appears to have been precipitated by Russia's special military action in Ukraine. The conflict quickly escalated, from a limited incursion by the Russian military to near-universal sanctions by the unipolar countries of the West. Ukraine has undoubtedly become the defining event in this global division.
Now, if the old 'Cold War' past is a prologue to this new 'Cold War 2', then there are some things we can expect. First, there are likely to be military and diplomatic clashes. However, there are likely to be other areas of conflict, such as economic struggle. Countries will use financial and productive leverage to weaken and shrink the adversary. The US used its economic power very effectively against the Soviets.
The US was the world's industrial and manufacturing power throughout the Cold War. Inaccessible and unstoppable, this country was able to produce almost 100% of everything it needed. What little we needed to import, such as oil, we concluded by contract and agreement.
The Soviets and Chinese were far behind the Americans in manufacturing and production. American agriculture was at a cutting edge and provided exports to countries all over the world.
Except for agriculture, none of those American superlatives exist today. America no longer has an economy that can provide everything we need. America is the most unstable economy in history. Last year, America had to import $1 trillion worth of goods to keep the system commercially operational. All the problems in the so-called "Supply Chain" are actually caused by our lack of production.
The European Union is not left behind depending on foreign suppliers. It is the shortage of Russian oil that drives the headlines. Overall, however, the EU's trade deficit is second only to the US as the world's two largest trade deficits.
On the other hand, the main trade surpluses come from Russia and China. With a trade surplus in Iran and Brazil. India's recent deficit has been related to high energy import prices, but by moving closer to Russia, this should disappear.
Generally, all the chips are on the other side of the table, pulled by the two largest exporting economies in the world, Russia and China.
While on our side of the table are the two biggest importers: the US and Europe. Entities whose economies cannot function without essential imports that come from the other side of the table,
We see it in the Europeans' struggle for energy and the Americans' struggle with the "Supply Chain".
The world has completely changed 180 degrees. The economic dominance of the West from the last Cold War is gone. Today, the collective West is dependent on other suppliers, primarily Russia and China.
An old TV ad said, "This isn't your grandfather's Cold War." The problem with the West is that our grandfather is still in power.
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