Geo-Strategy #10: Putin's Strategic Imagination

Vladimir Putin loves his country, Russia, and believes that Western consumerism has corrupted his nation. He recognizes that the source of Western consumerism is the American Empire. Therefore, to completely free his people, he needs to destroy the Empire.

Historically, empires die when three things happen concurrently.

The Three Conditions for Imperial Collapse

1. Overextension

The main reason why empires die is overextension—when they fight too many wars at once. The reason they become overextended is hubris. In military strategy, hubris is the idea of blindness: you are blind to your own limitations, you are blind to the strategy of your opponents, and you are blind to the overall geopolitical picture.

An example is American strategy nowadays. America is fighting Russia in Ukraine and fighting Hamas in Israel, with the threat of Iran on the horizon. Yet, for whatever reason, most American policymakers believe that the real threat is China. They insist we must prepare for China in a Taiwan Strait conflict, believing China will eventually invade Taiwan and we must be ready. This week, America also announced massive tariffs on Chinese electrical vehicles. America is engaged in all these wars at once, antagonizing Russia, Iran, and China at the same time. That is overextension because of hubris.

2. Debt

The source of American power is the US dollar. Remember that in 1945, at Bretton Woods, there was an agreement that the US dollar would become the reserve currency of the world. The phrase for that is exorbitant privilege, which means that America has the right to manufacture gold from nothing, and the world has to buy it because that's what underpins global trade.

When you can do that, however, your nation eventually becomes fat, lazy, and corrupt. When money just falls from the sky, you get used to borrowing money. All America does right now is print money, not make money. The problem with this is that eventually, the world is not going to want to use US dollars anymore because each time you use it, you're being taxed by the Americans.

This is what BRICS+ is about. It is an organization established initially by Brazil, Russia, India, China, and South Africa to create its own financial system to counter the US financial system. Now, more countries have joined BRICS, most prominently Saudi Arabia, the UAE, and Iran. These countries are important because they are the basis for the petrodollar. US dollars can be used to purchase oil, and that's why the US dollar is worth so much. If these countries go to BRICS and opt out of the US financial system, then this American mountain of debt—$35 trillion—comes crashing down.

3. Civil Dissent

The third way to kill an empire is civil dissent or internal discord—basically, civil war. What we're seeing in America right now is growing political polarization between the left and the right. This happens because people no longer believe the binding myths and stories that build a nation. Nowadays, young people no longer believe that America is the source of good in this world.

An example of why this is happening is Israel, which is committing what some call a genocide in Gaza. Israel is attacking Rafah and killing a lot of children; most people who are dying in this war are children. America is not doing anything to stop this; in fact, America is the one providing Israel with all the weapons. So, young people are turning against the idea of America as the "good empire."

There's an amazing statistic that one-quarter of young Americans now believe that Osama bin Laden was a good guy. When I grew up, Osama bin Laden was considered Satan because he was responsible for terrorism around the world and for the 9/11 attacks. This just shows you that the ideas and myths that bind the country together are falling apart, and that's what's causing the nation to fall apart.

The more overcommitted America is, the more debt it creates, and the more civil discord it creates. This is how you kill an empire: when all three things reach a tipping point, the empire dies. The most likely outcome for America is that it descends into civil war.

Putin's Strategy in Action

The Ukraine War

The first thing that Putin did was the Ukraine war. In February 2022, Putin invaded Ukraine. At that time, America was confident that three things would happen:

1. Ukraine would destroy the Russian army and perhaps even march to Moscow and overthrow Putin. That's what the news media was reporting at the time—that the Ukrainian military was so much stronger and more confident than the Russian forces.
2. The Russian economy would be destroyed because America was imposing sanctions on Russia. America controls the global financial system and the ability to trade, so it sanctioned Russia and said, "You are no longer allowed to sell your oil on the global market." The belief was that this would cause Russia to collapse overnight. A lot of Western multinationals left Russia, and the United States froze $300 billion in Russian assets in US banks.
3. NATO would become much stronger and more united, and it would make Russia into a pariah state, meaning that no one would want to ever associate with Russia again.

That was the argument back then. Today, what we have seen is that the complete opposite has happened.

First of all, Russia has basically won the war through attrition. Ukraine has lost maybe 500,000 men in this war, so they have no more manpower. If you don't have manpower, you're not going to be able to fight this war. This war has basically been lost, and Russia is dominant. Russia has achieved its main strategic objectives, which is control of the Donbas region in eastern Ukraine.

Secondly, not only has the Russian economy not been destroyed, but it's been doing extremely well. The reason why is that ultimately, all economies—China, India, Europe, Africa, the Middle East—need resources for their economies to work. You need oil, you need food, and Russia has a lot of oil and food. That's why countries have been going to Russia and making side deals. Also, Russia has been transitioning to a war economy, so its manufacturing base has been increasing. Overall, the economy has been doing a lot better. US sanctions have not been working.

Third, NATO has become more divided and less united. Germany, which is the most powerful country in Europe, is completely dependent on Russian resources to fuel its economy. That's how the German economy works: it's a manufacturing economy that takes cheap Russian gas, manufactures it into cars, and sells them to China. But the United States blew up the Nord Stream pipeline, which delivered gas from Russia to Germany, and it's imposing a trade war on China. Basically, the German economy is about to collapse, and Germans are very angry about this.

The Ukraine war has been a tremendous success for Putin. It's shown that America is a paper tiger, and it's also creating a lot of civil dissent in America because the majority of Americans are asking the question: "Why are we giving Ukraine hundreds of billions of dollars when our people don't even have health insurance?"

The other thing that this Ukraine war has exposed is that the American Empire is overextended. To give Ukraine weapons, America is taking weapon systems from Japan, South Korea, and other places and giving them to Ukraine. America is not manufacturing more weapons; it's just taking weapon systems it has elsewhere and moving them to Ukraine. And of course, by giving all this money to Ukraine, it's causing American debt to go up. After Ukraine loses the war, this debt will be gone because Ukraine cannot pay it back.

The Israel-Hamas War

After the Ukraine war began, on October 7th of last year, Hamas launched an attack on Israel that killed about a thousand people. Israel responded by attacking Gaza, and by doing this, it has helped Putin and hurt the United States. This has happened mainly by:

1. Diminishing American Prestige. America is helping Israel commit what many around the world are calling a genocide. The entire world is basically turning against America. Even the young people in America are turning against America; these college protests will only expand.
2. Showing America's Lack of Control. America has shown it cannot control Israel. In fact, people say that Israel now controls America.
3. Threatening Regional Escalation. This war threatens to explode throughout the Middle East. At any point, Iran can enter the battle, and Hezbollah can enter the battle from the north. It's a powder keg, a lake of gasoline about to be lit on fire.

You can make the argument that either Putin knew about the Hamas attack or even encouraged the attack because the main winner of this Hamas attack is obviously Vladimir Putin, and the loser is America.

Predictions Moving Forward

If it is true that Putin's intention is to destroy the American Empire by focusing on these three fundamental weaknesses, and if it is true that he started the Ukraine war to further the deterioration of the Empire and is abetting Hamas, then we can predict that Putin will continue to do certain things.

• He will drag on the Ukraine war. He will not end it, seek peace, or negotiate peace terms. The reason is that Ukraine is turning out to be a black hole for NATO. NATO and the United States are pouring in all this money, weapons, and manpower, and it's just losing it all. In other words, Ukraine is a battlefield to increase American debt and create civil discord among NATO and America. Germany does not want to fight this war; Germany wants out. As long as this war keeps going, it's going to create more friction. But if Putin attacks Poland, then all of NATO is forced to fight him. He does not want to expand the war; he just wants the war to maintain the status quo and drag on.
• He will use Iran to distract America. To control the situation in Ukraine, he needs America to fight another war. The distraction will be Iran. For this to happen, Putin needs to talk to Iran and guarantee that Iran will be protected by the Russian nuclear umbrella, which means that America will not be allowed to use nuclear weapons when it invades Iran because Putin will respond with nuclear weapons of his own. As long as Putin comes to an agreement with Iran, then Iran will take the initiative and start to provoke America into a wider war. There are many ways Iran can do that: it can use Hezbollah to attack Israel, expand its nuclear program, or disrupt Red Sea shipping.
• He will leverage North Korea. As the United States becomes distracted in Ukraine and Iran, North Korea can now take the initiative. What North Korea can do is threaten to invade South Korea, where there are about 30,000 US troops. North Korea doesn't actually have to do anything, but the threat will force America to divert resources to South Korea. This will probably even force South Korea and the United States to start to bribe North Korea. We can expect North Korea to do this because Putin has given North Korea his assurance that he will protect it in the event of a war.
• BRICS will continue to expand. We will also see BRICS maybe formally announce a new currency or a new trading system to counteract the American-led system. Now, what people have said is that BRICS is not capable of replacing the US dollar, and that is true. But remember that BRICS doesn't have to actually replace the US dollar; it just has to threaten it. A lot of finance, a lot of money, is just confidence. You hold the US dollar because you're confident that it's valuable. Once you lose confidence in the US dollar, you will no longer want to use it.
• He will maintain a very close relationship with China. Putin will come to China more often, and he and Xi Jinping will hug each other more. The reality is, if you look at game theory, there are lots of geopolitical differences between Russia and China—much more so than between China and the United States. But Putin doesn't actually need China to do anything; all Putin needs is for China not to work with the United States. One way that the United States can survive or protect its empire is by working with China to triangulate against Russia. As long as China remains neutral, then Russia and Putin can continue to exert pressure on the American Empire.

Over the next three to four years, we should see all these things happen.

Why would America want China's help?

You have an overextension problem. You don't want to be fighting too many wars at once, so you come to a peace with China and you don't have to worry about East Asia anymore. Second, China is a major buyer of US dollars because of its trade with America and because China buys a lot of oil. You want China to keep buying US dollars so you can sustain the debt. Third, there are a lot of geopolitical conflicts between Russia and China. Historically, Russia and China have fought many wars over the border. If you become friends with China, then Putin needs to take the defensive and focus more on protecting the Russia-China border.

Why would China be friends with Russia?

China right now feels threatened by the United States. The United States is launching an economic war against China, and if you look at a map, China is surrounded by US military bases. The problem is that China needs imports of oil and food to sustain its economy. If America ever launches an embargo against China, China collapses. In other words, China needs to open up new trade routes, and the best partner right now is Russia because it has a lot of access to energy and oil. Chinese policymakers know that the situation in China is terrible: the economy has collapsed, demographics have collapsed, and China is completely dependent on the world for oil and food. China is extremely vulnerable right now. If America says to the world, "China is our enemy," then China has no choice but to find a new friend. Unfortunately, the only friend that China has right now is Russia.

Why does the United States think that China will attack Taiwan?

America is always looking to start new wars. It has something called the military-industrial complex, and to justify all this defense spending, it needs to find new enemies. It believes that the greatest threat to the American Empire right now is China, even though there's no evidence this is the case. Right now, the relationship between the United States and China is that China sends America a lot of cheap goods, and the US gives China a lot of US dollars. Basically, the Communist Party is storing the wealth of the Chinese people in American banks. This is a great deal for both Wall Street and the Chinese Communist Party. There's no reason for these countries to be in conflict with each other, but unfortunately, American policymakers always need an enemy.

The Russian Strategic Imagination: The Case of Stalin

This makes Putin seem like a genius. For many reasons, Russian leaders have a strategic imagination; they just think differently and more strategically than anyone else. The example I want to use is Joseph Stalin.

Let's look at the world in 1939. There were about six global powers: the Soviet Union, Japan, the United States, the UK, Germany, and France.

• United States: Far away and neutral, suffering from the Great Depression.
• Japan: A war machine completely reliant on imports, especially oil. It was getting most of its oil from the United States, but the US was angry at Japan for invading China and was likely to cut off exports. Japan's only other choices for oil were the Soviet Far East or Southeast Asia.
• Soviet Union: A communist country trying hard to industrialize but lacking resources, technology, and expertise. It was a huge country but behind the West in manufacturing.
• Europe: The UK was an empire. Germany, under Hitler, was determined to reunite the lands it lost after World War I. France was the weakest of these powers but still had an empire.

Looking at this map in 1939 and using game theory, what should have happened? Who did everyone hate? The Soviet Union. First, it had a lot of resources and was not that strong. But there's a better reason: communism. The Great Depression was happening in the United States, and communism was a threat to the American government. Everyone was afraid of communism. Japan would have loved to invade the Soviet Union for its oil. Germany, under the Nazis, hated communism most of all. Hitler believed all Jews were communists. France and the UK also hated the Soviet Union.

In 1945, if we use game theory, we should have expected that the Soviet Union would have been partitioned. These powers would have invaded the country together and destroyed the threat of global communism once and for all.

But that's not what happened. In 1939, Hitler invaded Poland. The moment he did, France and Britain declared war on Germany. This was because of the Molotov-Ribbentrop Pact, an agreement between the Soviet Union and Germany to partition Poland. Germany and the Soviet Union invaded Poland together, but Britain and France declared war only on Germany, not the Soviet Union. That's pretty clever of Stalin. In fact, if this pact had not been signed, Hitler would not have attacked Poland. The other part of the pact was that the Soviet Union agreed to give Germany resources—oil and food—for its war machine.

Operation Barbarossa: Blunder or Genius?

In June 1941, Hitler invaded the Soviet Union in Operation Barbarossa. History will tell you that this was a tremendous success for Germany and a strategic failure for the Soviet Union—a grave mistake by Stalin. Why?

1. He refused to defend the border, giving direct orders to his 4-5 million troops not to provoke the Germans.
2. He ignored intelligence that Germany was about to invade.
3. He had purged the Red Army of its top generals.
4. Historians will tell you he did this because he trusted Hitler.

This analysis is completely wrong. Let's use game theory to look at four possible scenarios in June 1941. Remember, those Soviet troops at the border were there because they had a plan to attack Germany, but the Germans struck first.

• Scenario A: Soviets attack first and encircle Berlin. What happens? The world unites against the Soviet Union. Japan comes from the East, and Britain and the United States come to the aid of Germany. The Soviet Union loses this war.
• Scenario B: Soviets attack and are stopped at the border. Japan still invades. Britain starts to negotiate with Germany because it cannot afford for the Soviet Union to overrun Europe. The Soviets would not win the war.
• Scenario C: Germans attack and the Soviets stop them at the border. What happens? They just destroy each other. The United States, Britain, and Japan are all laughing.
• Scenario D: Germans attack and they reach Moscow. This is what actually happened. What happens now? The other countries have to come and help the Soviet Union. Why? Because if Germany takes over the Soviet Union, it takes over its resources. You combine German technology and military power with Soviet resources, and they are invincible. The United States would be forever shut out of the world.

After the Germans invaded and the Soviet army was nearly destroyed, America immediately gave the Soviet Union a lot of aid. It's what we call Lend-Lease. From 1941 to 1945, America gave $200 billion to the Soviet Union for free—weapons, resources, technology, and food. America basically industrialized the Soviet Union. It gave the Soviets one-third of all ammunition, one-half of all aircraft, one-half of all tanks, and critical resources like copper and aluminum. It also gave them radio technology, railroad transportation, and heavy industry. The Soviet Union could then reverse-engineer all this technology.

The other benefit of having the Germans attack first was national unity. Now all the Soviets were united in the fight against Nazi Germany. This is what they call the Great Patriotic War. They were fighting for the love of Mother Russia. The Russians lost 26 million people in the war, but by losing this many, it made the entire nation refuse to surrender. They had the will to fight.

In history, you're taught that Operation Barbarossa proved Stalin was not a strategic genius. But if you do a game theory analysis, this was the best possible outcome for the Soviet Union. In 1939, the world should have united against the Soviet Union. Instead, the world united against Nazi Germany and gave the Soviet Union the technology, money, and resources to become a global superpower.

Hitler did everything that Stalin wanted him to do. Hitler invaded Poland, which caused France and Britain to declare war on him. Then Hitler attacked Soviet Russia, which brought America into the war and helped the Soviet Union become an empire. Hitler was completely played by Stalin.

How? In June 1941, Hitler did not have to invade the Soviet Union. He could have waited for Stalin to invade him. What convinced Hitler to do the most insane thing and invade Russia first? The answer is: Hitler trusted Stalin.

Imagine Hitler and Stalin having drinks. All Stalin has to do is say three words: "I trust you." "I, Joseph Stalin, trust you, Adolf Hitler. I don't trust anyone, not even my own mother, but I trust you." Why would Hitler invade then? Because Hitler thinks now that Stalin is an easy target. Stalin is a sheep; Hitler is a wolf. Therefore, I eat you. Stalin could only do this if he had multiple personalities. He had to be a sheep in front of Hitler; he couldn't just pretend.

The Russian vs. Western Mind

This is the Russian strategic imagination: the ability to feel the political winds, the ability to prophesize and predict, and the ability to be multiple individuals at once. That's how Stalin was able to win World War II, and this is why Putin will be able to destroy the American Empire.

The problem isn't Russia; the problem is the West. Western thinking comes from British thinking, which has three distinct characteristics.

The British are an island, so they think narrowly. Russia is the world's largest country, so it thinks broadly. Compare the narrow focus of Jane Austen with the huge epics of Leo Tolstoy.

The British believe in empiricism: we can only know what we experience and see. This leads to skepticism of abstract ideas. The Russians believe in mysticism: there are forces we don't understand, and individuals who are prophets sent by God.

The British believe in logic, like mathematics, where everything is connected step-by-step. The Russians believe in intuition; you can jump and imagine things without being strictly logical.

These three ideas—narrow, empirical, and logical—created the Western mind of today. This is what dominates academia. It's perfect if you want to build a bureaucracy. This is the bureaucratization of the imagination. You're not allowed to say things without evidence, logic, and experience.

The Russians don't have this, so they can think differently. The problem with the British system is that no great man could ever arise from that society because it creates a process-oriented, systemized, bureaucratic style of thinking. In the British system, no one like Putin can arise. But in the Russian system, someone like Stalin and Putin can. The problem, though, is that if you don't have a Putin or a Stalin, the Russian system becomes very weak. The British system doesn't need great leaders, but the Russian system does. And if you are a great leader, you are allowed to completely follow your intuition and imagination to do great things.