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Team CORBU Advisory Clients: given the early results of the European elections -- and further evidence that Putin’s hybrid | New Generation Warfare strategy [see here] is having some tactical and operational success -- will assign some homework voluntary “Sunday night reading” ahead of this weekend’s upcoming G7 Apulia Summit.

-Best. rja

The required reading is Putin’s speech and subsequent Q&A session with Sergey Karaganov [arguably the foremost Russian economic scholar in the post-Soviet era] at the St Petersburg International Economic Forum [SPIEF] last week -- and which you can read here, very beautifully translated on the Kremlin’s English website.

 

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While not going into a deep dive of the SPIEF address -- will simply note that the slate of Putin’s 10 economic priorities were the following:

  • Trade and market access
  • Global capital flows
  • Labor markets and inflation
  • Raising productivity
  • Technology and dual-use applications
  • Competition policy in SMEs
  • Domestic savings and investment balance
  • Income transfers and fiscal space
  • Immigration and offsetting population growth decline

eg, the very same program agenda one would find at any official sector gathering in US-NATO+ countries from Washington to Tokyo.

 

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WHY AM I TELLING YOU TO READ THIS ?

Besides the tradecraft of “know thy adversary” -- it’s for 3 reasons:

#1: Contrary to conventional wisdom, Putin spends the majority of his public address time on matters of economics and markets -- and relatively less on the more headline-grabbing psy-ops of security | military | or nuclear issues

[sidebar: some “free IP” for our defense and markets clients who are “fine-tuning” AI-driven predictive models of Putin’s next steps -- training on just the corpus of Putin’s SPIEF and Valdai Club speeches is really the best place to start]

#2: The US Biden Admin is very clearly wielding economic warfare against the Axis of Adversaries -- eg, see POTUS’ recent Time Magazine interview transcript here, where he notes things like:
      • China’s economy is “on the brink” [arguably, because he’s taken many policy actions to put it there]
      • China’s outbound FDI program [the “Belt and Road Initiative”] has failed and is now called the “Nuisance Graveyard Initiative”
      • China is racist or “xenophobic” -- therefore unable to solve its demographic-induced economic challenges

[sidebar: the latter is a big delta and campaign signal from POTUS -- market participants should expect more of this “Chinese xenophobia” theme into US election season]

#3: Even China central bank officials acknowledge all this economic warfare -- see PBoC monetary policy committee member HUANG Haizhou’s remarks [on WeChat here] at a recent Tsinghua University conference, noting that:
      • Post-pandemic, the US share of global GDP has risen -- the only economy to do so [and an obvious critique of Mao-XJP’s “West is in decline” ideology]
      • The US has therefore “utilized the pandemic crisis” to transform its economy and avert “secular stagnation” [eg, even citing the “Magnificent 7” tech stocks]
      • Wisely left unsaid by HUANG -- are the security and geopolitical implications of these latter two developments for Beijing-Moscow et al

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Will quickly close by noting that during the last XJP-Putin bilateral in Beijing -- Putin gifted the Chinese leader a copy of his purportedly favorite novel [see here and here -- note the dates, too] What is to be Done ? by Nikolay Chernyshevsky -- a Russian Imperialist-era story about a woman named Vera, who was in a love triangle, and:

  • Sought “economic independence” from the shackles of an arranged marriage
  • Secretly eloped with, Dmitry, an older and then-married man -- to create a new commune of feminist socialist laborers
  • And whose story culminated in a four-some -- where both Vera and Dmitry eventually found new [younger] loves -- and lived happily ever after all under the same roof [LOL !]

If you don’t “get it” by now, you’re not paying enough attention.

 

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[sidebar: the above Putin-Karaganov excerpt is a very illuminating and important exchange -- further revealing that the Russian side does indeed view themselves as the “big brother” of “little brother” China…]