Troops in Ukraine have cast a shadow over-optimism


Share This:

The recent significant progress of troops in Ukraine has cast a shadow over the optimism in the pro Kiev faction after the approval of additional aid by the US Congress in April. The fervent plea for assistance and the exaggerated significance attached to it now feel like memories.

It is now more evident than ever that Ukraines struggling war efforts cannot be resolved simply by resuming aid flow. Why did policymakers in Washington view the $60 billion amount as a solution to prevent the crisis?

A large portion of this funding will not even reach Ukraine. Will be used to replenish military supplies instead. This was a selling point of the bill. A boost, to the economy. However supporting the US defense industry won’t provide help to Ukraines besieged forces. Despite efforts to increase production currently 28,000 155mm artillery rounds are produced per month in the US and not all can be allocated for Ukraines use.
Russia manufactures 250,000 units, per month. Fires an average of 10,000 rounds daily. The situation in Kiev is dire due to manpower shortages and widespread corruption, which have been exposed by Russias advancements. Kiev is struggling to deploy its depleted forces to maintain the line while the absence of defenses around Kharkov is attributed to long standing corruption issues.

The question arises as to why there was belief that $60 billion could significantly impact Kievs situation. However answering this question proves challenging due, to the nature of policymaking in Washington characterized by a blend of thinking and political necessities. Some genuinely believed in the power of $60 billion while others merely aligned with agendas without genuine commitment. A complex interplay where discerning between motives can be perplexing.
Believing in the power of money is a sign of a time when a strong nation is, on the decline but hasn’t fully acknowledged it yet. It’s also a period when options for action’re limited. In the past maybe the US would have handled a crisis like Ukraine through diplomacy or by using its military strength to wage a significant proxy war. However today the US seems to struggle with finesse. Has seen its industrial capabilities diminish due to outsourcing and financial changes over many years. Having mostly dealt with insurgencies recently it now faces uncertainty when it comes to engaging in war with equals. Its main response seems to be offering financial aid packages with amounts of money. As the saying goes if all you have is a hammer every problem appears as a nail. Similarly if all they rely on is printing dollars they may think that money can solve any issue – even though its unclear what that money can achieve.

Interestingly this situation reveals something a faith in the might of money. Maybe not sincere belief; can we find beliefs, in Washington? Lets view it more as an ingrained mindset used to tackle challenges.
This situation reminds me of how we deal with crises. It’s not hard to see the conversation, about aid to Ukraine as something we’ve seen a lot lately; a rescue.

When we look back at history we can predict what might happen after the United States loses its position.READ MORE; Death of empires; History tells us what will follow the collapse of US hegemony
Imagine a scenario where Ukraine, like a to fail bank is on the brink of collapse and requires a bailout. Even though this bank is not located in Wall Streets core there are concerns about effects – if it goes down other banks might follow suit putting all banks at risk. While the banks owners may have practices policymakers are more worried about the shift in its stability; its supposed to hold steady at 1;1 but has now escalated to 1;10 (reflecting the ratio of artillery exchanges, between Ukrainian and Russian forces).Injecting a $60 billion rescue package into the banking system should at the least help extinguish the problems and soothe market anxieties.

Zoltan Poszar, a Credit Suisse chief strategist well known in financial circles recently shared an intriguing insight regarding the reflexive reaction of resorting to monetary solutions. Poszars discussion focused on a groups approach, to an issue and did not delve into policy making or Ukraine related matters. However his analysis hints at implications.

In 2021 with concerns about inflation resurfacing Poszar engaged with portfolio managers and arrived at an observation; there was uncertainty on how to interpret inflation. Many individuals in the sector today have limited recollection of the inflation challenges faced back in the 1980s. Therefore according to Poszar they viewed the spikes in inflation data as another fluctuation on their Bloomberg screens that could potentially be addressed by injecting more funds – what he terms as a “crisis of basis.” The defining events, for todays finance professionals are noted by Poszar as including the crisis of 1998 the Great Financial Crisis of 2008 several instances of notable market fluctuations post 2015 and most recently the pandemic.
In all these instances money was. Eventually the disruptions faded away.

To explain simply Poszars clients never faced a challenge that couldn’t be resolved.. At least temporarily fixed. By injecting funds in some form whether, through an emergency loan or quantitative easing. While this may be somewhat oversimplified it captures the essence of the prevailing mindset.

Previously Federal Reserve interest rate hikes used to trigger emerging market crises. Now appear to have a rebound effect on the US. However according to Poszar, the inflation experienced in 2021 was a beast that couldn’t be controlled by pouring money into it or even by raising interest rates (which is essentially another form of injecting money). This posed an problem for todays fund managers and traders he observed. The issue of inflation being resistant to one of the tools available. Liquidity injections. Adds a layer of complexity. While this is significant it’s a discussion, for another time.
In this discussion lets stick with the notion that relying on throwing money to solve problems has become deeply ingrained.

Timothy Geithner, who served as the head of the New York Fed and later as the US Treasury secretary, from 2009 offered a perspective on addressing financial instability. He suggested addressing crises by infusing an amount of funds and using a military analogy of deploying “overwhelming force” to convey credibility to the markets. This approach, derived from the lessons of 2008 has now become a practice in handling crises. The events in March 2020 involving stress in the Treasury market and the failures of First Republic Bank, Silicon Valley Bank and Signature Bank in 2023 prompted regulators to respond

This strategy is built on the understanding that market behavior can be influenced by perception and that storytelling plays a role alongside actions. When markets perceive commitments – whether towards supporting banks stabilizing markets, like Treasury or repo markets – as credible it helps prevent situations from escalating out of control.
In terms dealing with a crisis involves not just providing the necessary funds to address the core issues but also influencing public perception. This idea is not particularly controversial. John Maynard Keynes discussed the concept of ‘animal spirits – the irrational aspects that influence economic decision makers in their choices. Therefore if investors begin to doubt the stability of a market or institution resolving the situation requires a combination of measures and public relations strategies. Geithner grasped the implications of this when dealing with the common occurrences of financial crises.

Observing how the US has handled its involvement, in Ukraine through a series of “strong messages” and symbolic actions, nudging Ukrainians towards actions that have more PR value, than military significance one can’t help but notice shades of Geithners approach creeping into US policy decisions perhaps unconsciously. The $60 billion aid package was notably portrayed as a means to “reassure the market.”

However one could view Washingtons delivery of ” messages” from another perspective; as an attempt to uphold American deterrence amidst challenges.
Once a deterrent is established it becomes cost effective to maintain; however the process of re establishing it after its lost is both challenging and costly. Deterrence and controlling impulses can be viewed as interconnected concepts aiming to bridge the gap, between reality and perception.

The Center for Strategic and International Studies a defense think tank in Washington recently published an article by analyst Max Bergmann before the congressional vote on the aid package. The article eloquently highlights the significance of sentiment – referred to as “morale” in this context.

Bergmann suggests that approving the supplement could undermine Russias morale while simultaneously boosting Ukraines. While he refrains from predicting protests or President Vladimir Putins overthrow he believes it could shake the core of Russias system and introduce doubts into Russian society. The notion that “this war lacks rationale and was a mistake” might spread like wildfire posing a threat, to the system according to his analysis.
Bergmanns stance, on the balance between ‘magical thinking’ and ‘political imperatives remains a mystery. It appears he has embraced Geithners PR influenced concept of ” commitment” and believes it will have a significant impact.

This line of thought has influenced the decision making process in Washington regarding Ukraine. If finance plays a role in todays America akin to shipbuilding in 17th century Holland – an industry whose practices and mindset have deeply ingrained in the psyche – then it’s not surprising that Wall Street problem solving frameworks have extended into other policy areas. While the foreign policy establishment Congress and Wall Street are entities they all seem to follow a guiding mental framework.

Shelley once said that poets are “the legislators of the world.” It could be argued that in our era bankers and their allies in Washington who provide bailouts may hold this role. Ukraine is discovering firsthand that winning a war demands more, than flaunting wealth and conducting PR campaigns to deter critics.

Free Speech and Alternative Media are under attack by the Deep State. Chris Wick News needs reader support to survive and thrive. 

We are a privately owned website funded solely by donations from our readers, Every dollar helps. Contributions help keep the site active and help support the author (and his medical bills)

Please Contribute via  GoGetFunding

Share This:


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Share post:



More like this

Breakthrough Discovery: Scientists Unveil mRNA Vaccine ‘Off Switch’

A New Hope for mRNA Vaccine Recipients In a groundbreaking...

White House Declares All Biden Confusion Videos as ‘Deepfakes’

Fact-Checked by The Chris Wick News Community In a remarkable...

Rod Stewart Booed for Ukraine Support at German Concert

UK Pop Star Rod Stewart Faces Backlash Over Support...

The WEF Diet: How to Stop Global Boiling with Probiotic Cardboard and AI Chef Bot

In a startling revelation that has set the internet...