The World Economy Has Entered an Acute Phase of WWIII

Dr Ivanovitch - MSI Global
Dr. Michael Ivanovitch

Acts of Germany’s unconditional surrender signed in Reims on May 8, 1945, and in Berlin on May 9, 1945, have always been instruments of armistice rather than a lasting peace.

The West’s tenuous alliance with the U.S.S.R. during the war was just a thinly veiled cover for a deep mistrust and hostility that led the British Prime Minister Winston Churchill to commission in May 1945 a plan code-named “Operation Unthinkable.”

The plan included the use of 20-30 atomic bombs for a massive, devastating, terminal, Anglo-American attack on the Soviet state.

Fortunately, that plan was abandoned.

The Soviets would have had no response to such an attack. Their first nuclear 22 kilotons bomb was exploded five years later, on August 29, 1949, followed by a 50 megatons hydrogen bomb (“the tsar bomb”), 3800 times more powerful than their atomic bomb, on August 12, 1953.

The battle for Europe continued with a French-British military alliance in 1947 to protect themselves from Germany (sic) and the Soviet Union. Those two countries, joined by the Benelux, set up the Brussels Treaty Organization (aka Western Union) in 1948. A year later, on April 4, 1949, the U.S. came in as a new member to establish The North Atlantic Treaty Organization (NATO). According to its first secretary general, Lord Ismay, NATO’s mission was to “keep the Soviet Union out, the Americans in, and the Germans down.”

A breakdown of Russia-West relations

Moscow did not respond to that powerful military and political bloc until West Germany was permitted to rearm and to enter NATO in May 1955. For the Soviets that was a watershed event leading to their own alliance, called the Warsaw Pact, on May 4, 1955.

That sealed the faith of an irreconcilably hostile and divided Europe.

Some easing of tensions began to take hold with the fall of the Berlin Wall in November 1989, the Soviet agreement for German reunification in October 1990, the dissolution of the Warsaw Pact in July 1991, the end of the Soviet Union in December 1991, and the completion of the withdrawal of Soviet military forces from Eastern Europe in 1994.

Sadly, those events did not usher in an acceptable modus vivendi between Moscow and the West as waves of NATO expansions brought the military alliance to Russia’s doorsteps.

Predictably, Moscow felt offended and betrayed, because a credible account of verbal assurances given to Russia -- when its cooperation was needed for German reunification and its troop withdrawals – indicates that such NATO expansions would never happen.

That’s the process that led to a total loss of confidence in political and economic relations between Russia and the West, culminating with a coup d’état in Ukraine in 2014, Kiev’s loss of Crimea and a military conflagration in the russophone Donbas.     

Russia’s recent attempts to negotiate its security concerns with the West were dismissed out of hand, leaving Moscow to “military technical adjustments” to secure its western borders by wiping out military threats from Ukrainian territory.

Such an “adjustment” in Ukraine has put Russia at war with the West. In addition to years of economic warfare with sanctions against Russia, confiscations of Russian property and $350 billion of its foreign exchange reserves, the West is helping Ukraine with financial assistance, arms, military advisors, battlefield intelligence and active combatants.

Economic downturn will change the European war theater

What we now have is the beginning of an acute phase of WWIII, stylized as a “strategic competition” of the U.S.-led allies against Russia and China, labeled as “revisionist” powers seeking to upend the West’s world order.

But that, in fact, is nothing new. The chronology of events reviewed above shows that such a conflict went through various periods of intensity since the end of WWII. At the moment, China is taken as a principal economic and military threat, while a well-armed Russia is to be bled to exhaustion and prevented from establishing its “secure western borders.”

China’s strong economy, with a soaring global trade and a formidable defense posture is a much tougher target. And unlike the case of Russia, China’s neighbors, except for Japan, show no intention of joining Western economic and military warfare against Beijing.

That was apparently made clear during last week’s U.S.-ASEAN summit, where Americans were reportedly told that Asians had no problems with security -- but they lived by trade.

A point well taken by pragmatic Asians. They correctly see that economic sanctions have led to energy and food shortages, with recurring breakdowns in global supply chains. That, in turn, has aggravated an already accelerating inflation and sent U.S. and E.U. economies toward a recessionary tailspin of ex ante unknowable amplitude and duration.

I, therefore, believe that the unfolding economic downturn in the trans-Atlantic community will soon begin to play a decisive role in the European war theater.