Like a textbook illustration of Hollywood continuity editing, the de-escalation of the war on Covid has transitioned seamlessly into the escalation of the Ukrainian war, with Vladimir Putin replacing Virus as public enemy number one. If the emergency changeover was predictable, the timing of the overlap seemed almost too smooth to be credible. Corporate media’s creative choreography, however, has secured a one-dimensional representation of Putin’s war, even adding special effects when needed: from video games like War Thunder, Arma 3 and Digital Combat Simulator, to clips of past disasters. In retrospect, the apocalyptic footage of people collapsing in Wuhan City in January 2020 now appears decidedly amateurish.

When Jean Baudrillard wrote that the ‘Gulf War did not take place’, he meant that its violence was overwritten as a media spectacle (simulacrum) that turned it into hyperreality: something so unequivocally and overwhelmingly real that it suspends any question, doubt, or disbelief regarding the intrinsic opacity of the referent. Covid and the Russian invasion are emphatic explosions of hyperreality. As such, they fall on us like a blanket that covers all reality in its complexity, replacing it with a pre-packaged model of false binary oppositions: healthy/sick, true/false, democratic/fascist, Good/Evil. How else could we explain the decision by Meta Platforms (Facebook and Instagram) to allow their users to call for violence against Russians (apparently a temporary change to their hate speech policy)? Or the suspension of a University course on Fyodor Dostoevsky because he was Russian? Or a private clinic’s refusal to treat Russians and Belarusians? Is it not clear that the pandemic and the Ukrainian affair mobilize the same war strategy?

There is no longer any connection between reality and its hyperreal caricature in the social metaverse. Putin’s war is the ideal continuation of the ‘war on Covid.’ The overarching aim is to obfuscate the real issue at stake, which consists of pulling mountains of cheap money into the debt-addicted economy. The emergency loop is the macroeconomic event of our time. Let us explore this claim further.

The Ukraine time-bomb

Two sets of questions are excluded from the hyperreal representation of ‘Putin’s war.’ First, the (obvious) geopolitical one: Ukraine was a ticking time-bomb ready to go off. NATO’s eastward expansion had culminated in the orchestration of the Ukrainian regime change of 2014, which, as US political scientist John Mearsheimer recently put it, “overthrew a pro-Russian leader and installed a pro-American leader” as part of a plan to “turn Ukraine into a western bulwark on Russia’s border.” In plain language, a coup (with repercussions like the Odessa massacre of May 2, 2014). If anyone needs confirmation, the Nuland-Pyatt leaked phone conversation of February 2014 will help: it shows the US State Department of the Obama administration planning the make-up of the new Ukrainian government just days before the Maidan square uprising that triggered the downfall of the Yanukovych government.

In recent years – while the self-proclaimed Donbas Republics and Roma minorities were under continuous attack by Ukraine’s ultranationalist militias (which caused thousands of victims) – US-led NATO had intensified its militarization of the country including working with Ukrainian neo-Nazis, whose role is far from marginal in a country whose parliament has decided to commemorate the birthday of Nazi collaborator Stepan Bandera as a national holiday. NATO acted in full knowledge that, for Russia, their deal with Ukraine would be equivalent to a declaration of war – as Putin stressed in his famous speech at the Munich Conference on Security Policy of February 11, 2007. NATO troops and military bases equipped with defensive anti-ballistic missiles (convertible into offensive nuclear weapons) have continued to be deployed in various regions of Eastern Europe. Here, then, comes the rhetorical question: if Russia had such artillery encircling the United States from, say, Cuba, Mexico, or Canada, would Joe Biden (or anyone else in his place) tolerate it? This is why the Ukrainian bomb, after decades of provocative moves, was ready to detonate.

Financial warfare

The second set of issues concerns the economic agenda, whose mode of appearance is that of financial warfare. Draconian sanctions by tough-talking Western leaders – mostly asset freezes and the exclusion of Russian banks from the SWIFT global payment system – are supposed to hurt Putin and his suddenly reprehensible ‘oligarchs’. However, it is far from certain whether this objective is achievable or even desirable. Can the US and the EU, whose major investment banks are exposed to Russian debt, really afford the financial game of chicken with Russia? And why would JP Morgan contradict the official narrative on the enemy’s economic implosion by recommending that its clients boost their positions in some of Russia’s corporate debt? De facto, the US megabank is betting on Russia’s speedy recovery.

Moreover, Russia is the world’s largest producer of almost all raw materials, and with current levels of rising inflation across the globe it seems nearly impossible, or suicidal, to do without its supplies. Is this why Europe’s phasing out of Russian gas has led to importing coal… from Russia? The media are predicting that sanctions will cause the collapse of the ruble, and thus the end of Putin’s reign. However, Putin has been stocking up on FX reserves (foreign currencies) and especially gold. If the Russian economy tanks, he could issue bonds and cover their value with stocks of oil, gold, and gas. In short, he seems to have more leverage than our media would have us believe. Kicking Russia out of the USD-denominated SWIFT system would also give Putin more incentives to look for other markets and currencies to trade in (especially China), which in turn would further undermine the USD and hence just about everything else. The much-feared de-dollarization of the economy could quickly become reality. Therefore, what if sanctions are a decoy?

The Gazprom elephant in the (heated) room

While busy ramping up restrictive measures sold to the public as heroic deeds, EU and US leaders have from the start been careful to avoid cutting off some of Russia’s financial heavyweights, such as Sberbank (whose sanctioning is now opposed by Germany) and especially Gazprombank – why? Sberbank is Russia’s largest lender and asset holder, so a complete embargo would imply substantial collateral damage to Western banks. The real elephant in the room, however, is Gazprombank, for it manages payments for Russian oil and gas that EU countries are dependent on, and are still buying. Only around a quarter of the Russian banking sector is currently under sanctions – is this really meant to stop Putin?

Wolfgang Munchau (ex Financial Times authority) summed up EU (and US) hypocrisy with disarming simplicity: “The EU is cheering on the Ukrainian side from a safe distance, watching from warm living rooms, heated by Russian gas.” Insofar as Russia is a key trading partner for Europe (almost half of European gas comes from Russia), but also for the US (importer of Russian oil), sanctions are unlikely to materialise in reality as they do in the news. If, then, the ‘sanctions bazooka’ turns out to be a water pistol, or a boomerang, we need to look for answers elsewhere.

The tangled web we weave

Let us consider the West’s decision to supply thousands of weapons to Ukraine just as the Russian and Ukrainian delegations were sitting at the table of the first round of negotiations in Gomel (Belarus). Russia was demanding, as it did from the start, the neutral status of Ukraine, its demilitarisation, and the autonomy of Crimea and the Donbas Republics. Sending military aid to Ukraine was hardly going to help a successful outcome of the negotiations – or, for that matter, of the conflict. What strategy, then, is NATO pursuing? Differently put: what script has President Zelensky been reading from? By rejecting Putin’s conditions, does Zelensky think he can repel the Russian army on his own? Or is he hoping that NATO will step in and start WWIII? In either case, he would be insane. As a comedian turned politician less than four years ago (after playing the Ukrainian President in a TV series) Zelensky seems perfect for the role. But here the plot thickens.

Like his predecessor Poroshenko, Zelensky could be in possession of potentially compromising information about the Russiagate travesty, or the Biden family’s Ukrainian connections – including Hunter sitting on the board of Ukrainian gas giant Burisma in 2014, immediately after the Maidan Square events. To add further complexity, neocon Victoria Nuland (now Undersecretary of State) has declared before US Senate that “Ukraine has biological research facilities”, confirming Russian and Chinese allegations until then ridiculed as ‘conspiracy theory’ by the usual cohort of self-appointed fact-checkers. Why did Nuland feel the irresistible urge to drop the bio-lab bomb, contradicting Jen Psaki’s angry rebuttal of the previous day? Why did Nuland warn that the Russians should be stopped from reaching these ‘facilities’? Was her duet with senator Marco Rubio meant to hide some embarrassing truth about US-funded ‘Biological Threat Reduction’ programs in Ukraine? With the WHO now getting involved too, only one thing is certain: we are back in the thick of Cold War intrigue. And the question to ask is always the same: cui prodest?

Emergency addiction

While the above subtext may be relevant to make sense of the unfolding human tragedy, my view is that, ultimately, the Ukrainian affair has ‘macroeconomics’ written all over it. The reason is one that financial analysts, rather than philosophers, are more likely to grasp: a protracted conflict legitimizes pulling further debt from the future, while blame for the coming economic tsunami is apportioned to the latest reincarnation of Dr Strangelove. Essentially, with his military offensive ‘Mad Vlad’ has allowed the Federal Reserve (and other major Central Banks) to postpone the day of reckoning for our ultra-financialised economic system. Because cheap debt invested in more debt is what keeps the Titanic from sinking.

Since the demand for financial assets is sustained by the demand for debt, global emergencies fulfil precisely the request for more borrowing: mountains of cheap cash are created out of thin air and deployed as financial leverage. The appetite for borrowing is now properly endemic, for it also affects the real economy, households, and, crucially, governments. This is why global emergencies are the main driver of artificial monetary expansion, which in turn represents the capitalist forward-escape route from the valorisation crisis (inability to generate socially sufficient amounts of surplus-value and therefore real wealth) that has plagued our mode of production since the Third Industrial Revolution, and the implosion of the Bretton Woods system in the 1970s.

For the above reason, it seems legitimate to argue that all geopolitical events either originate in or are heavily conditioned by what happens in the financial Olympus. The Putin-pandemic, then, is driven by the same ruse that drove the Covid-pandemic: it gives Central Banks a free license to prolong their monumental printing sprees, which boost the markets while putting the world economy under further pressure. This is the one-way street of contemporary capitalism.

The debt crisis time-bomb

We should always keep the big picture firmly in mind: since 2009, all major Central Banks have been on an unprecedented money-creation binge, of which there is no end in sight. Churning out cheap debt by the trillion works a compensatory mechanism for a free-falling global economy increasingly dependent on an ‘everything bubble’ of grotesque proportions (which, of course, eventually will burst). The Atlanta Fed has now cut expectations for US GDP growth in the first quarter of 2022 to 0.0%, officially inaugurating a new age of stagflation that sends us back to the 1970s – though with no leeway to repeat what was done then to avoid collapse. Only by placing them against this background can we understand what current emergencies are for.

At present, the Fed is getting what only a war could guarantee. That is to say, the ideal justification for putting the brakes on the planned increase in interest rates (the cost of borrowing money). Even a 50 basis-point rate hike is now looking unlikely for 2022. After all, a war tends to be beneficial for the stock market – particularly when it prevents rate hikes that would expose the manipulative ploy of structural Quantitative Easing (Central Bank asset purchase). In all likelihood, the more tense the situation in Ukraine becomes, the more the bond market will stabilise and yields fall (the bond market acting as the canary in the coal mine for a potential market crash). Moreover, the suspension of the EU’s Stability and Growth Pact, decided in 2020 due to Covid, might now be extended sine die. Thus, despite recent signals to the contrary, the Ukrainian conflict could easily allow the EU to kick the ‘public-debt-crisis can’ down the road a little further.

The bottom line is that our debt-soaked economies continue to need more rather than less QE, for the simple reason that their debt far outweighs their GDP. This is why the Ukrainian crisis time-bomb is an extension of the debt crisis time-bomb. What the latter requires is a perennial QE regime calibrated through a cyclical succession of global emergencies: pandemics, terrorist campaigns, nuclear threats, trade wars, military conflicts, or, why not, the landing of aliens. Chaos needs to be invoked at every given opportunity, and with it, ideally, the figure of a brutal, bloodthirsty enemy. Whether it takes place in the media or in reality, it is the emergency loop that matters, because it keeps the monetary tap open. Let us not forget that capital is a blind process that abhors stagnation: it must be in constant motion, even when motion means accruing ever-larger amounts of unsustainable debt, whichever way possible.

Controlled demolition

Soaring inflation – which is baked into the Ukrainian cake as it was with Covid – facilitates the controlled demolition of society through the erosion of purchasing power. Saving financial markets today means depressing real demand. And as the sole holder of the privilege to create dollars out of nowhere, the Federal Reserve is always at least one step ahead of the game. As I have previously shown, the Fed’s balance sheet had started ballooning in September 2019, when astronomical amounts of mouse-clicked electronic cash were pumped into the ailing financial sector to prop it up artificially. After two years of relentless fear-mongering, storytelling, and printing, however, the Covid narrative had grown stale, and increasingly contradictory – as evidenced by the Canadian truckers’ protests. While ‘Covid deaths’ and ‘cases’ are not exactly abating, economy suddenly needed a new horror story to exploit, a new blanket to drop on the world. This is particularly urgent now that financial conditions are at tightest levels since 2016; meaning that if the Fed were to take the foot off the monetary accelerator, the world would plunge into a full-blown recession in record time.

Wary of improvising a military response that would lead to Armageddon, NATO and the Western elites are now engaging in asymmetric warfare with Russia. This will hit above all defenseless populations as well as economies already afflicted by two years of pandemic-induced economic contraction. Gas bills and commodity prices will continue to soar. But is this not what the Great Reset requires, as the neoliberal ‘end of history’ fantasy turns sour? An energy & food crisis is upon us, which will justify further oppressive socioeconomic policies – including, if necessary, the rule of martial law as recently experimented in democratic Canada. Difficult as it may be, then, we ought to put the geopolitical chessboard on one side and focus on the economic cause. Political choices of this calibre are dictated by conditions affecting the economy as a totality of increasingly dysfunctional social relations. If Putin is crazy – as everyone seems to be mindlessly repeating these days – he is no doubt in good company. I am not referring to Joe Biden’s mental health, but to the financial managers of social wealth and their cognitive dissonance, which is what contemporary capitalism (the system) demands of them.

Dr. Strangelove, anyone?

What continues to be crucial for us is to realize that, given the unprecedented levels of financial doping, capitalist societies depend on a succession of global threats where, however, the line between simulated and real risk is getting thinner and thinner. As argued by Marx, to financial managers capital appears, essentially, as an object that has broken its tie with its substance:

“In interest-bearing capital, therefore, this automatic fetish is elaborated into its pure form, self-valorizing value, money breeding money, and in this form it no longer bears any marks of its origin. The social relation is consummated in the relationship of a thing, money, to itself. Instead of the actual transformation of money into capital, we have here only the form of this devoid of content.”[i]

Today, capital’s near-total dissociation from its origin (value-productive labour) makes its psychotic core increasingly visible. While the current use of emergencies is perverse in its nature, psychotic episodes could be just around the corner. And yet, by typecasting Putin as ‘Mad Vlad’, we miss the madness and truly criminal vocation of contemporary capitalism. Let us repeat the key point: an implosive socioeconomic system sustained by financial leverage of the current magnitude desperately requires a continuous stream of emergencies as well as a Bond villain to blame. In turn, the industrial production of emergencies requires credible actors on the global stage, together with an audience who is willing to be shocked by cynical media propaganda.

Selective humanitarianism and the financial iceberg

While it would be easy to dig into our media’s acquiescence vis-à-vis US-led/NATO’s murderous wars (‘operations’) of the recent past, the current rampage against ‘oligarchs’ like Roman Abramovich is equally telling. Why now and not earlier? And why are our Western ‘oligarchs’ called ‘entrepreneurs’? Equally misplaced are slogans against Nazi-Putin, since he is mediating between the two powers that matters the most in Russia: Gazprom and the army. So how different is Putin from powerful political leaders in ‘democratic’ countries? Of course, as Todd Smith recently put it, “Putin’s no hero, in case anyone was confused. He’s just another elite who got caught on the wrong side of a certain ‘financial’ situation.” But why do our ‘democratic leaders’ conduct business (e.g., arms deals) with ‘dictators’ around the world? Why are we not told to wear a Syrian or Palestinian flag in support of innocent lives lost daily to Israeli bombing and shelling? The unparalleled levels of today’s hypocrisy – mixed with entirely unsurprising racist indignation about bombing blonde & blue-eyed, civilised European people rather than ‘less civilised’ Iraqis or Afghanis – are symptomatic of the degenerative sickness affecting our ‘world.’

The sad truth is that if the financial elites need further reasons to inflate the markets with freshly minted cash, the conflict might even escalate. Nothing is to be ruled out when the aim is to prolong the lifespan of a terminally ill economic system. Here is a paradox that should make us think: on the day Vladimir Putin invaded Ukraine and was officially crowned the new Hitler, financial markets registered the biggest intraday rebound since March 2020, when anti-Covid QE programs were launched to save the world. Let us be honest: despite the crocodile tears of world leaders, their problem is not Ukraine’s freedom, but the iceberg of financial leverage about to hit the Titanic.

What next?

Therefore, expect a drawn-out geopolitical crisis that will justify, even demand, Central Bank action against much-touted tapering policies (reduction of asset purchasing) and rate hikes. Expect a tsunami of global inflation, further impoverishment, and mass migration (of cheap labour) – all of which will be blamed on Putin. Expect the return of pandemic threats supporting ongoing endeavours to globalise vaccine passports and the digitalization of life. Expect a new arms race aimed at boosting stagnant GDPs around the world. Expect, if required by the economic environment, more military damage inflicted on helpless populations caught in the middle of the capitalist charade. Expect ‘false flags’ and relentless disinformation campaigns.

The Russian invasion will be milked beyond belief, because the longer it lasts, the more cash will be drawn from the future and borrowed into existence – exactly what happened with Covid. If the pandemic served to conceal the structural crisis of capitalism by passing it off as a microbiological crisis, Putin’s war achieves the same purpose by military means. However, today’s dominant monetary policy is nothing but crisis management gone mad: a destructive type of denial that will only accelerate the implosive process of our mode of social reproduction. A different future cannot even be imagined, let alone built, without being aware of this.


[i] Karl Marx, Capital: a Critique of Political Economy, volume 3 (London: Penguin 1991), p. 200 (chapter 24).