Last month peaceful protestors in Ottawa were frozen out of global financial networks.
This month, the aggressive wagers of physical war in Ukraine, the Russians, have been frozen out
Two disparate groups with nothing at all in common, save that they angered some of the most powerful forces in liberal progressivism today.
And whether Republicans like it or not, liberal progressives are now firmly into control of the world’s financial system.
Or are they?
What happens to crypto is likely to test that hypothesis, as it did with the Canadian truckers, and is now doing again with the Russian oligarchy.
President Putin’s been courting sanctions like these for years. Indeed, there’s a palpable sense at large that he had it coming, never mind if there’s is any justification for his grievances in Ukraine.
You can’t just go around very publicly poisoning your opponents and expect to retain any modicum of popularity.
Of course, sanctions themselves aren’t new. Whether or not they’ve ever been any good is another matter.
They were used against Mussolini in 1935, and busted.
They were used against South Africa and Rhodesia in the 1970s, and busted. And they’ve been used against President Putin before, and been ineffective.
The onset of the digital age has changed things, though.
Now, with a few strokes on a keyboard it’s possible to freeze the financial capabilities of shops selling coffee to Canadian truckers and the foreign-held assets of Central Bank of Russia.
No matter how big or small you are, those that control the financial system can come for your money.
And that’s never been possible before. Not in quite the same way.
Could Italy’s Central Bank have been targeted in the 1930s in the same way as Russia’s is now?
In fact, as Mussolini merrily invaded Abyssinia and simultaneously sent arms and succour to the nationalists in Spain - all while under sanctions from the League of Nations - the Italian economy was able to chug along quite nicely.
In part that was because Mussolini had balanced his budget in the 1920s, nationalized banks, and was largely able to insulate his country from the Great Depression.
But President Putin has to a degree followed this model. The general understanding is that the Russian budget can be balanced when oil is above US$40 per barrel. So perhaps the timing of this incursion into Ukraine isn’t so much about the end of the Winter Olympics, but the sustained strength in oil that we’ve witnessed over the past few months.
Putin also controls huge swathes of the Russian economy in the same way Mussolini did. His weakness is Russia’s huge overseas holdings of foreign currency reserves, now forfeit and held in electronic limbo in a manner without historical precedent.
But if he’s prepared to take that hit, Putin may find himself in a stronger position than most Western strategists appreciate.
We know that one thing Russia doesn’t lack is energy supplies, so there’ll be no issues there. The ruble has collapsed on foreign exchange markets, but the ruble’s been on the floor before. You only need to skim the pages of a 20th century history book to know that the Russian people have been through far worse than this.
Russia also has grain, and if it has Ukraine, it has even more grain. So, food will be available. GDP will likely take a big hit. But unlike the West, Russia doesn’t measure success in economic terms like GDP growth. Foreign policy and cultural identity remain important in a way that is only a distant memory in the corridors of power in the West that are now stalked by the liberal progressives.
Russia also has a powerful friend in China, and a way forward there in contemplating a completely separate economic order, that might be established along the old fault lines of the cold war.
Will crypto also help Russia swerve sanctions?
It might, to a degree. We saw Canada move to neutralize the platforms when the truckers started honking their horns in Ottawa, but individual wallets are harder to control. Some argue that Iran and North Korea have already developed the ability to circumvent the US-dominated global financial system by using crypto.
Russia is certainly taking such an option seriously, which is why there have been official requests from Ukraine to shut down Russian crypto accounts.
But crypto is also being used to provide funding to Ukrainians. And unlike the funds that flowed to the truckers in Ottawa, which became subject to preventative legal measures, neither the Canadian nor any other government is showing an inclination to stop that flow.
There’s a question of scale here, too.
The Canadian Truckers were fairly easy to reign in. They were truckers, not financiers, and were simply trying to make a point about vaccine mandates, a global concern, but legally speaking a domestic Canadian issue.
What they were not was ex-KGB operatives with a lifetime’s experience of misdirecting, misleading and plundering, and with decades of experience of global power-broking on their CVs.
Sending in the Mounties, freezing bank accounts and threatening crytpo platforms may work on recalcitrant populations in the West, but it’s not going to impress President Putin much.
When the sanctions were stepped up a gear, he reminded the world, without batting an eyelid, that he has a considerable nuclear arsenal.
Within the space of a few weeks, this issue of who controls the financial system has moved from the sanctioning of a few truck drivers to the threat of nuclear Armageddon.
And this may not be coincidence at all.
Instead, could it be that the cracks we are seeing in the system now, the constant crises that seem to dominate the global agenda, are in fact a series of ongoing signs that the liberal progressive order is after all beginning to lose control of the global financial system?
The rise of bitcoin is one thing.
Seizing the assets of a foreign central bank is another. Any non-aligned power is going to look at that, and extract at least a good part of its assets from the Western financial system purely on a matter of prudence. They can seize your money if you sell coffee to Canadian truckers. They can seize your money if you wage aggressive war against another country.
Between those two groups you could fit almost the entire world. And the entire world certainly does not want to have its money seized. It’s no wonder gold is punching up towards US$2,000, and its no wonder the propaganda war is revolving as much around crypto as it is about information.
What we are talking about is nothing less than the future of money itself.