The Molly McCann Memo: Vol 1, Issue 2
The Conflict in Ukraine
A lot of Americans are reeling as they watch an actual “hot” war unfold before our eyes in Ukraine. I shake my head as I scroll my Instagram and see all the “pray for Ukraine” posts from influencers who voted for Joe Biden and are confirmed adherents to the secular religion of The Climate. The obvious causal connections between their politics and the growing instability around the globe is, apparently, wholly lost on them. I am praying for Ukraine. I know everyone reading this Memo is praying for Ukraine, too. But I am also praying for America, because this war in Eurasia—which is no war of ours—could easily engulf the world in a terrible conflagration. It is imperative that we all keep our heads and support de-escalation.
This is Eurasia’s Conflict Not Ours
The West fundamentally misunderstands Russia (and China) because, as a society, we have bought into globalism, which disdains national sovereignty and embraces a form of “global governance” that can only work if all major powers are complacent and peaceful—i.e., it can only work in a fantasyland. Putin does not live in a fantasyland. Those of us who point this out are not idolizing Putin; we are stating a frightening reality. Nations that operate in fantasyland while their enemies operate in the real world will still face the real-world outcomes. We need to grapple with reality as quickly as possible to stop the conflict in Ukraine from spiraling the West into a kinetic world war and complete destruction.
Vladimir Putin opposes the West’s expansion east toward Russia. He does not want the countries on his periphery in the NATO alliance, which essentially makes them host-countries for the superpower he considers Russia’s rival (the United States). He also harbors expansionist dreams of his own. None of this is a secret. It is widely understood that Putin will never permit Ukraine to join NATO without war.
Western globalists, however, baselessly and recklessly encouraged Ukraine to think it could ultimately join the West and enter NATO. Ukraine is neither an ally nor a strategic priority for the United States. We have no business in that neck of the woods, and we should have always sought to deescalate tensions between Ukraine and Russia, not stoke them as Biden did in the last several months.
In December, Biden gave Ukraine further false hope when he suggested in a call with Zelensky that Ukraine might be able to join NATO. Predictably, this was met by pushback from Putin. Biden—who months earlier telegraphed his own feebleness by pulling out of Afghanistan, leaving American citizens at the mercy of the Taliban, and senselessly ceding the strategically-located Bagram to our enemies—blustered back at Russia using the tired platitudes of the Bush era. His bluster was reckless because not only are we not prepared to meet Russia with kinetic force (nor should we even tiptoe near such activity), but we are also not prepared to truly deter or punish Russia through financial avenues. Biden’s continued saber rattling in the last weeks leading up to this conflict was irresponsible to the point of derangement. With this invasion, Putin has called Biden’s bluff and placed the United States in a very precarious position.
To sum up, Ukraine was not going to join NATO, and we were never going to commit troops or bring the muscle necessary to defend Ukraine. Not only were we never going to put boots on the ground, thanks to Leftist policies, America and Western Europe are not in a strong position to peacefully deter Russia. There is a reason Putin has moved now, and it is because Europe is already prostrate at his feet and, critically, the United States has precipitously declined in power in the short but calamitous first year of the Biden administration.
Green Energy Has Debilitated the West
Western European countries are committed to green energy policies that are destroying them. Consumed by their obsession with climate change, they have been pursuing incredibly destructive energy policies for years and shutting down their own national energy supplies to chase after renewables. But green energy still doesn’t cut it in the real world. With eyes wide open, Europe crippled itself and now must import a significant percentage of its gas from Russia. This has enriched Russia and has handed Russia devastating leverage over the West. In 2020, 40% of natural gas imports to the EU were from Russia. As the WSJ noted, “[t]he foundation of Russian power today is the energy industry, which funds Russia’s foreign policy, including its formidable armed forces. Russia is an energy superpower in no small part because European consumers buy Russian gas.”
Germany is the prime example. It is the EU’s most powerful member-state, and yet it is also the most reliant on Russian gas. Twenty years ago, Germany determined to phase out nuclear power and in recent years axed its coal production in an effort to limit CO2. Germany is now heavily reliant on Russia for its energy and is the biggest purchaser of Russian gas in the world.
Europe’s current quandary would be laughable if it were not so serious. Again, they have structured their nations for a fantasyland that only operates successfully when all world actors are of goodwill. They have offered up their national stability at the altar of green energy. Now Russia holds the power.
Energy makes the world go ‘round. Food prices are skyrocketing in part because gas is feedstock for fertilizer. Carbon dioxide is a byproduct of fertilizer and is used for a variety of purposes from stunning animals before they are slaughtered to vacuum packs and dry ice for food storage to producing the fizz for sodas and sparkling waters. These are just a few small examples of how oil/energy permeates our lives.
Energy independence equals global power. One of Donald Trump’s stated goals was to make America energy independent, and he accomplished that mission. That made us stronger; we had leverage at the table of global leaders and the world was safer and more stable as a result. One of President Biden’s first actions in office was to cancel Keystone XL, cutting off that energy source, decimating American jobs, and putting the Biden administration in the predicable position of begging OPEC and Russia to ramp up oil production. Biden also reversed Trump policies to reimpose the administrative hurdles that have further crippled our oil industry. Prices are now surging, enriching our enemies and subordinating the United States.
America in Peril
[Just before I published this post, news broke that "selected Russian banks" will be removed from SWIFT. It is not clear to me yet how targeted/complete this is. I hope very much and fervently pray that my concerns below about ejecting Russia from SWIFT are wrong. Nevertheless…]
A lot of people want the West to expel Russia from SWIFT. They believe this is a crippling sanction we can leverage against Russia. But I am very worried that expelling Russia could ultimately prove catastrophic. The chief reason I worry is because I think America’s status as the global reserve currency is far more fragile than other commentators seem to think it is.
The United States has been the global reserve currency since 1944. We are the reserve currency because the world trusts the strength of our economy and financial markets and has made the determination that money is safest in U.S. dollars. It is a statement of confidence in the stability of the U.S. dollar. Therefore, central banks around the globe hold our money and the world does business in USD. Reserve currency status has tremendous benefits for America. Despite our insane spending and skyrocketing inflation, we remain viable because the rest of the world still bets on us. But for our status as the reserve currency, we would be Argentina. If we lost our status as the reserve currency it would catastrophically alter life for every single American and fundamentally shift the global power
Putin is no fool, nor is he insane. He is ambitious and strategic. Last June, Putin removed the U.S. dollar from Russia’s sovereign wealth fund, specifically to make Russia less vulnerable to U.S. sanctions. Putin invested chiefly in the euro, the Chinese yuan, gold, and other currencies. More recently, as I discussed on my podcast a few weeks ago, China and Russia used the opening of the Beijing Olympics to announce a new alliance.
China has been working to topple America as the reserve currency for some time. These are very serious and very scary movements from our primary adversaries, adversaries that do not operate in the fantasyland of globalism. They are targeting our status as the reserve currency. They are implementing strategy that will have real world consequences.
I fear that if we kick Russia out of SWIFT, it will be painful for Russia, but that Russia will pivot to China and together they will further undermine our status as reserve currency. We are not invincible. Our economy is in a lot of trouble right now. Inflation just hit a 38-year high, we might be heading toward the worst real estate crash in American history, and most analysts agree we are careening toward a massive recession in 2023. It is not a good time for us to test our position as reserve currency.
A Coming World War?
Despite the posts you see on social media, Ukraine is not our ally, and we have little to no strategic interest in Ukraine. My heart bleeds for the people, and I am ashamed of America’s dereliction of duty to elect good leaders and maintain a strong and independent economy, but the reality remains unchanged. We cannot get into a war over Ukraine, and everything in our power must be done to avert any action that could touch off such a calamity. However, while Russia satisfies its thirst for expansion, our larger rival is trying to decide whether to strike while America is weak. That rival is, of course, communist China, and the object of its lust is Taiwan.
Taiwan is our ally, and unlike Ukraine, we are dependent on Taiwan. Taiwan manufactures the chips that are used in everything from cars to computers to washing machines. Both Japan and Australia have recently pledged to defend Taiwan in the event of an invasion, so we are truly looking at a potential world war if Beijing moves on Taiwan.
America is weak right now, and all the bad actors out there know it.
Although a lot of people are talking about war on mainland Europe, Ukraine is not mainland Europe. It is Eurasia, and it is not our battle to fight. If you don’t agree with that, consider the more practical issue: given the risk, it isn’t a battle that we can fight right now.
There are a lot of people out there using the tired reference of Neville Chamberlain and WWII to shame Americans into a more hawkish stance. But the reality is we are in a very delicate and uncertain zone. Ukraine could easily escalate into war between Russia and the United States; China could easily choose this moment to attack Taiwan; we could easily be facing a catastrophic conflict on multiple fronts. Now is not a good time for us to test our military strength, our cyber capabilities, or the stamina of our economy.
We need to remain rational not emotional, pray fervently for peace, and work hard to deescalate the violence in Eurasia. We have to hold the major powers at peace for as long as possible, because the only way we survive a world war is with Donald Trump at the helm, not Joe Biden and the Davos globalists calling the shots in Washington.