Two weeks ago, the Congress passed (and President Biden signed) four key pieces of legislation related to national security.
Three of the bills provided assistance to Ukraine, Israel and Taiwan. They received the most attention. The one that got the least attention was a mixed bag of provisions, such as a forced divestiture of TikTok.
Included in that bill was something called the REPO Act that authorizes the president to steal any Russian assets, including U.S. Treasury securities, that come under U.S. jurisdiction.
The impact of the REPO Act is limited by the fact that only about $10 billion of Russian sovereign assets are actually under U.S. jurisdiction. Yet the act contemplates that this theft will be a down payment on a much larger theft to be conducted by NATO allies in Europe.
$290 billion of Russian sovereign assets are being held in Europe. The act says that the assets stolen by the U.S. will be contributed to the Common Ukraine Fund.
No doubt, the U.S. will be the most powerful voice in the administration of the $290 billion common fund. The U.S. goal is to use the G7 summit in Apulia, Italy on June 13–15 as a platform for getting the other G7 members to go along with the Common Ukraine Fund and to steal any Russian assets under their jurisdiction.
So these people think that Russia will simply accept this act of theft without retaliating?
Putin Doesn’t Bluff
In 2014, the U.S. backed a coup d’état in Ukraine that deposed a duly elected leader. Three months later, Putin annexed Crimea from Ukraine and made it part of the Russian Federation. In 2021, NATO began formal processes to admit Ukraine as a member.
In February 2022, Russia began a special military operation that’s resulted in 500,000 dead Ukrainian soldiers. Some estimates are even higher. Ukraine’s chances of joining NATO are now zero.
In every case, U.S. analysts did not believe Putin would take the steps he did because they thought it might somehow weaken Putin or Russia. That’s mirror imaging at its worst. The truth is Putin doesn’t bluff. When he says he will do something, he does. When he says he will react to some Western act, the reaction takes place.
Putin said if the West steals Russian assets, Russia will retaliate by seizing billions of dollars of direct foreign investment in Russia owned by major European companies such as Siemens, Total, BP and others.
And sure enough, just days after Biden signed legislation to authorize the theft of Russian assets, a Russian court ordered $440 million be seized from JPMorgan.
The escalation in the asset seizure war has begun. Putin will win in the end. Unfortunately, escalation is also increasing on the geopolitical front. The U.S. and some of its European allies are becoming increasingly desperate about Ukraine’s ability to hold off Russia on the battlefield.
Countdown to Nuclear War
I’ve been warning about the dangers of escalation since the U.S. committed itself to Ukraine’s defense. Unfortunately, it’s playing out exactly as I predicted.
On 60 Minutes last night, House Democratic Leader Hakeem Jeffries said, “We can’t let Ukraine fall because if it does, then there’s a significant likelihood that America will have to get into the conflict — not simply with our money, but with our servicewomen and our servicemen.”
Ukraine’s going to fall, one way or the other. It might not be this year or even next year, although those are possibilities. But it will happen.
If Jeffries is correct that the U.S. will commit its military to confront Russia directly, then we’re signing ourselves up for a nuclear war because that’s where military confrontation will ultimately lead.
Every major simulated war game between the U.S. and Russia ends up going nuclear in the end.
Are we really prepared for that?
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