Why Putin is winning the new Cold War

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Mat finish-If history has taught us anything, it is that Russia has a habit of grinding down its enemies.

There are 7.2 billion people on this planet but the United States fears only one man - Vladimir Putin. That's because on virtually every front of the new Cold War, the Russian president is walloping the collective challenge of the West. Fear can make you do strange things - for the second year running, magazine has named Putin as the world's most powerful person.

It is said about the Russians that they take a long time to saddle their horses, but they ride awfully fast. After patiently nursing the collapsed Russian economy back to health from 1999 to 2007, Putin started pushing back against the western encirclement of his country. In Syria, Crimea and Ukraine, the West has faced humiliating setbacks and melted away at his approach. In the high-stakes game of energy, it will be Russian - not western - pipelines that will dominate the Eurasian landmass.

But instead of scorekeeping, a more instructive exercise would be to try and understand how Putin has managed to keep Russia ahead in the game.

More than any other leader, the Russian president by virtue of his KGB experience understands how the US operates. The American modus operandi - in sync with the British - is to organise coups, rebellions and counter-revolutions in countries where nationalist leaders come to power. Iran, Chile, Ecuador, Venezuela, Panama and Ukraine are the classic examples.

John Perkins writes in (2004) how he and other 'hitmen' like him were sent to developing countries as consultants to bribe or coerce diplomats, economists, administrators and politicians to do the bidding of the US. Often they succeeded, but if they failed then the CIA would send in the 'jackals' - professionally trained assassins who would engineer the deaths of those who stood in the way of complete American domination.

(Chilean prime minister Salvador Allende's assassination - the result of a request by PepsiCo chairman Donald Kendall to the company's former lawyer president Richard Nixon - is a classic example of a CIA jackal job.)

This one-two punch by economic hitmen and assassins was so effective in creating banana republics that the US rarely had to up the ante. Among the rare occasions the US had to use the military in pursuit of commercial aims was in Iraq, and to a limited extent in Libya.

Putin knows the US has attempted - and will continue to attempt - regime change in Russia. As a former KGB general stationed in East Germany, he knows the hitmen are looking for an opportunity. That's precisely why he kicked out rogue agencies such as USAid and the British Council, both of which are fronts for Anglo-American secret services.

"One of the things to understand is that he in particular studied counter-intelligence which is key in understanding why he's the critical player," writes Joaquin Flores in the Center For Syncretic Studies website. "Counter-intelligence is not just finding spies, but it's actually countering the work of other agents who are embedded or whose work involves embedding themselves to destroy institutions from within."

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Parallel to American black ops is naked war. The US economy - and that of its sidekick Britain - is a war economy. Kremlin adviser Sergei Glazyev said at a June round table in Moscow: "The Americans have gained from every war in Europe - World War I, World War II, the Cold War. The wars in Europe are the means of their economic miracle, their own prosperity."

The ongoing skirmishes in Ukraine are clearly a pretext to pull Russia into a direct military confrontation with the Ukrainian armed forces, in order to create a regional war in Europe.

Russia's response is two-pronged. One, by refusing to get into a shooting war with the Ukrainian thugs, it keeps the Americans frustrated. Washington's inaction in Ukraine was brilliantly described by a Chinese general as a symptom of America's strategic "erectile dysfunction".

Secondly, Putin is employing asymmetrical strategies to stop - and ultimately bring down - the American empire. A key element of this strategy is to strike at the key pillar of American power - the dollar. Russia - with support from fellow BRICS members China, India, Brazil and South Africa - is moving away from dollar-denominated trade, a step that will seriously impact the barely growing American economy.

According to financial portal Zero Hedge, "Glazyev's set of counter-measures specifically targets the core strength of the US war machine, i.e., the Fed's printing press. Putin's adviser proposes the creation of a 'broad anti-dollar alliance' of countries willing and able to drop the dollar from their international trade. Members of the alliance would also refrain from keeping currency reserves in dollar-denominated instruments. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression."

Ukraine could eventually turn out to be the catalyst for Europe's divorce from the US. This is because sanctions against Russia are threatening business houses in Germany and other western European countries, which have over the past two decades developed deep links with the Russian economy. "Somewhat surprisingly for Washington, the war for Ukraine may soon become the war for Europe's independence from the US and a war against the dollar," says Zero Hedge.

Moscow is also pushing for institutional changes. The $100 billion New Development Bank, co-owned by the BRICS, will not only counter the influence of western lending institutions but also stop the flow of cash from the developing countries to the West.

The current lending system is skewed in favour of western countries because loans by the World Bank and IMF come with a basketful of conditions. For instance, when these two outfits offer a loan, it can be used to purchase goods and services only from the West. Or the loan can be used only for building dams but not on, say, drinking water utilities.

Of course, the expertise and material for building dams will have to come from the US and Europe. And when the drinking water supply remains poor, it creates demand for - mostly western-owned - colas and bottled water. The new bank will, therefore, hit the West where it hurts most - in the pocket.

Even as Putin has been making all the right moves on the geopolitical chessboard, his opponents aren't sitting idle, watching their empire fold up. The Russian ruble is getting hammered even as the price of oil is being driven into the ground by the Saudis at the bidding of their American overlords. No surprises here - the Americans will relentlessly try to weaken Russia as it is the only country that stands between Washington and world domination.

However, Putin is a judoka who knows how to use his opponent's force against the opponent itself. He knows the West's salad days are over and it is not in a position to take on the Russian military. He's content to watch the Americans commit strategic overreach - taking on Russia and simultaneously trying to contain the irresistible rise of the BRICS.

Putin is fortunate that his heavyweight partners in the BRICS continue to back Russia in its tussle with the West. Both India and China agree Moscow has legitimate interests in Ukraine and Crimea. Recently, the BRICS ticked off Australia for its foolhardy proposal to ban Putin from the G20 summit.

Such assurances of support have emboldened Putin to show the West the finger. In 2012, he nonchalantly skipped the G8 summit, and earlier this year, he merely shrugged when the G8 went back to G7 - the pre-Cold War configuration. (With members such as Canada, the G7 is a joke anyway.)

If history has taught us anything, it is that Russia has a habit of grinding down its enemies

(This is an updated version of an article that appeared in the Moscow-based Rossiyskaya Gazeta Group's Russia & India Report)