Samo Burja; Different Perspectives on Russia & Ukraine

Samo Burja [00:00:00] No one ceasing trade with China. Mind you, it's all focused on Russia. But China continues to trade with Russia. So China for the next five years is going to have very cheap energy compared to the rest of the planet and cheap resources compared to the rest of the planet. Meanwhile, it'll continue to export and be the world's factory unless the West decides to sanction China, which would be an even greater economic shock. My name is Benjamin Anderson. I'm an entrepreneur living in St. Louis, Missouri, and you are listening to the Vance Crow podcast.

Vance Crowe [00:00:33] Welcome back to the podcast. I'm glad you're here. Today we have another special edition focused on the Russia and Ukraine crisis, and we have a very special guest, longtime listeners of the podcast. Remember Sam Obria, who runs Bismarck Analysis, a company that advises clients on what is the likelihood that the country or the industry that you're in is going to survive? Do well thrive. How can you position yourself, your company, your industry, your country, to be best prepared for what the future holds? Samo is one of my favorite guests. He is very articulate, thinks about things very deeply, puts lots of his thoughts in writing, and is truly an excellent Twitter follower, Twitter follow somebody that you can listen to and really capture ideas that you don't hear anywhere else In this conversation, I really try and get at the idea of what is it that the Russians are thinking? I think that this is one of those perspectives that people often overlook because we get caught up in the the meu of information coming at us from all directions that seem like they're offering us different perspectives. It seems like we're hearing from everything from CNN to Fox to European News, and they all are saying the same thing, and so therefore we assume it must be true. But I find myself being really reluctant around this. It makes me uncomfortable to realize that actually there's other perspectives you could be having.

Vance Crowe [00:02:07] You could be trying to hear what do the Russians think? What do the Chinese think? What do other countries that are not as directly involved in this conflict, what do they think? What are their perspectives on who is right and wrong? How bad is the incursion and how should we be thinking about what's going on here? So it is a great honor to have Sam o on here to give us yet another perspective. If you know someone that can offer the Russian perspective or somebody from an Asian culture that is deeply knowledgeable in this area, be sure to let me know that I would love to have more people on with different perspectives. I, in truth, don't care at all what their perspective is in terms of whether they're right or wrong. What I wanna know is what do other people think? I think that's one of the greatest values that this podcast can bring. And in truth, I think really it's one of the best things that we can offer. A world in conflict right now is a, a way to try and get out of the mob mentality where we think we know what everybody is thinking and really challenge and test some of those assumptions to see if maybe we're a little bit limited in what we're thinking about. You know, when we wake ourselves up and we view ourselves as individuals, it allows us to walk away from being a part of the mob. And longtime listeners of the podcast know that I am deeply afraid of the mob, and I think you should be too, because once a mob gets going, there is no way to stop it. There's no reasoning with them. And the only thing that can happen is physical conflict. So it is my hope that we can do our best by being a part of this podcast, by listening to different perspectives and trying to understand different points of view.

Vance Crowe [00:03:46] If this is something you agree with, if this is a perspective that you like being able to hear things that you don't necessarily agree with, don't even necessarily like hearing, but are interested in these different perspectives, then you might wanna consider joining the Articulate Ventures Network. This is a group of people that gather, they are listeners of the podcast, people that love talking about interesting ideas that are willing to explore that challenge themselves and challenge others to think more deeply about things. And it's a private channel, so you're able to have the types of discussions that are difficult to have on these public social medias like Twitter and Facebook. And it really gives you a chance to build a community and a digital network that you know really gives you a way to look at the world in very interesting and new ways. So if you're interested in joining a group like this, you can go to Network Articulate Ventures to find out how to subscribe. Alright, well, without further ado, we are gonna head to my interview with the wonderful and insightful Sammo Bia. Samo Bia, welcome back to the podcast.

Samo Burja [00:04:53] Thank you, Vance. It's good to be here.

Vance Crowe [00:04:55] So it is Thursday, March 10th, and the world is watching what's going on between Russia and the Ukraine. From your perspective, what is the lay of the land?

Samo Burja [00:05:05] Well, the Russian invasions proceeding about as fast as you might expect, an actual mechanized warfare invasion of a country could go. A lot of people propose that the very fact that the Ukrainian government wasn't overpowered in the first 48 hours is self proof of a, you know, a failed Russian plan. I don't see any evidence of this. I think the case is the Russians are willing to slog through casualties and logistical difficulties, and they've always been willing to slog through from day one.

Vance Crowe [00:05:40] Yeah, I noticed that you had put out a tweet that caught the attention of a, of my, my network, and it was the, to the extent that the Ukrainians seem to be winning the war on social media, but that is not actually how kinetic wars are won. Can you talk a little bit about that?

Samo Burja [00:05:56] I, I think it's good to remember that Armenia's social media game was excellent in the Armenian Azerbaijan war, but Armenia still ended up losing that war. Now, of course, good public relations help with the politics of securing support from Western countries, but western countries have given Ukraine all the support. They really can, without risking further escalation from Russia. Yet Russia is still winning on the ground, still gaining territory day after day, again at a heavy cost, heavy economic cost, heavy human cost. But this was a cost they were always willing to pay.

Vance Crowe [00:06:37] It's been an interesting thing. I was watching German media trying to get as many different perspectives on what's going on as I can. I, as far as I can tell, most of the European media, at least Western European and US media are all in lockstep. But I found it interesting that the German media was saying, bragging essentially, that they have given more weapons to the Ukrainians than any other arms trade in the history of Western civilization. To me, that is a signal to Russia that you're at war with them. Does Russia perceive it that way? The

Samo Burja [00:07:10] Russian perception is that there has been an undeclared war going on for a long time now, whether this perception coming from the highest levels of decision making in the Russian Federation, right, be it the President Mir Putin himself, be it his court advisors, be it the defense minister, the foreign minister LA of it, is the perspective that they have voiced for a very, very long time. From their point of view, this is just an escalation in that existing undeclared war. Now, I don't think they're going to retaliate and push back immediately, but they will see and believe all their premises to have been vindicated. They'll believe the West is far from a neutral actor intent on at all costs, increasing the damage to Russian forces. So their perspective isn't that, you know, the West is trying to help out a small country that's under attack. Their perspective is the West is willing to fight Russia to the less dead Ukrainian. So they don't even bizarrely, right? They don't view themselves as responsible for the relevant suffering in Ukraine. They view the West as co-responsible. And you know, while it is an unjust war, the Russians did invade the country. We do have to acknowledge we are increasing Ukrainian body count through this aid of weapons.

Vance Crowe [00:08:42] When you looked at the buildup to the war, was this something that was obvious? It was, it was of course going to happen that he was going to invade and people just miscalculated what they thought Putin was doing or something else?

Samo Burja [00:08:55] Well, I think that the cost of the buildup was always significant. Russia put something like 80% of its forces in a military district right next to Ukraine's border. This kind of buildup could only end through a pre-negotiated surrender of Ukraine on some important issue of policy, right? Not necessarily a surrender of policy, perhaps something as something significant, right? Something like the recognition of Russian control of Crimea so that the internationally recognized borders move to where the defacto borders were in 2014 and happened since 2014, plus perhaps a guarantee, maybe a constitutional amendment that Ukraine is never going to pursue entering nato. For understandable reasons, this wasn't acceptable to the Ukrainian government, and we in fact do not know whether the ultimatum given to the Ukrainian government was not even harsher. But that type of buildup must have a political payoff. It never made sense to think of it as a giant bl right? Just a way to rattle Western observers almost honestly. That's a little bit narcissistic of Western observers to begin with. We're not that important.

Vance Crowe [00:10:18] Yeah, I was listening to John Meme talk about the buildup, and this was like a six year, a lecture from six years ago, and he was saying, Hey everybody, we are being really antagonistic to the Russians and we don't actually have a huge strategic interest there. We are building up troops, we are definitely sending them arms and trying to encourage them to join the, the western border. Whereas if you did that to the United States, the Monroe Doctrine would say, absolutely not. We cannot have aggressive weapons near us. We're gonna do everything we can to push that back and outta the world. Do you agree? Were, were we an antagonistic for years and years leading up to this?

Samo Burja [00:11:01] Two things are simultaneously true. Russia never truly wanted an independent Ukraine, right? And simultaneously the West has been overextending by approaching Russian spheres of influence. It is unacceptable for Moscow, just as might be for any other great power to have the possibility of hypersonic missiles four minutes away from launch reaching your capital. If you imagine that Florida became an independent country and pursued a policy of all aligning itself with China and Russia entering a military alliance that would allow China or Russia to put hypersonic missiles right next to Miami. I don't think we would tolerate this. And we have evidence that we would not tolerate this, right? It's called the Cuban Missile Crisis, right? When Cuba flipped from capitalist west to communist east from a American client state to a communist state aligned with the Soviet Union and Soviet Union installed missiles in the 1960s, all measures available, including sponsoring an invasion, a failed invasion in the Bay of Pigs were undertaken by the US to neutralize this real strategic threat.

Vance Crowe [00:12:19] I I, I think that that kind of comparison does bring it home for people because I think, you know, the general narrative for regular people is Putin really wants Ukraine. He's deranged, he's like a power hungry maniac, and, and he doesn't care who he hurts to get these things. And like, there's probably pretty strong evidence from how he's killed his enemies. But that also that if the Ukraine wants to join nato, this is like intrinsically a good thing. It's, it seems almost like joining the un just, just like joining a club when people don't realize this means they're going to have weapons pointed towards Russia. And then in addition to that, they also are in a mutual pact that if Russia ever decides they have a border dispute with the Ukraine and they invade them, now they're going to war with many different countries.

Samo Burja [00:13:11] I think the perception of NATO as a neutral institution is inaccurate. NATO just is the Western alliance, okay? And NATO does intervene in other countries, not purely defensively, right? There have been NATO actions in the past during the Yugoslav war and so on. Further, you know, US troops are already right next to Russia, as are US military installations in the Baltic states. Of course now the perspective of countries like Ukraine, the Baltic states, is that their only hope of independence is to join this western alliance, but it is in fact an alliance that was always designed as a counter Russia alliance. That's the origin of nato. That has been its function since, you know, the 1950s onwards that never changed, right? When Russian leaders cautiously, you know, asked whether they could join NATO in the early two thousands. So I'm talking literally about Putin 20 years ago, you know, this was met with the cold reception, of course, allowing Russia to enter NATO defeats the purpose of nato. But then what is the purpose of nato, right? It is Russian containment.

Vance Crowe [00:14:29] It's been really difficult to be able to know what is going on in, in this area. And last night I was doing some research, I've been on this path trying to find people from Russia to come on and talk about it. And the few Russian people I know, they've not been interested. The connections I've made to other people, they're not interested. So I, the only thing you can do then is go watch news reports. The us some of our tech companies have banned things like Russia today and the media reports. If you watch anything, not just us, but Canada, anywhere through Western Europe, it's basically the same thing. How is anyone in a situation like this to get a perspective that is different than, you know, western media and their, their perception that it is Russia is all bad, everything they're doing is evil, and everything the west is doing is good and righteous and and pure of heart.

Samo Burja [00:15:23] It is becoming quite difficult. I think we're seeing the deglobalization of the internet, right? We're seeing the splitting of the internet, not just from China's great firewall, not just from Russian censorship, but from western censorship as well. You know, if you try to access Russian sites today from Germany, you're going to have a very hard time. Many of those websites have been blocked. I only, you know, I think this is only going to be escalated. So where can you go? I think that some Indian and Middle Eastern news sources will still present both perspectives. So it's still possible to find media that's from genuinely non-aligned countries. However, if you want to get the Russian perspective or the Chinese perspective specifically, it's going to be harder and harder to access that as the internet becomes less free, as it becomes more fragmented between the great powers.

Vance Crowe [00:16:20] And this is awful, because when we were kids, right? As the internet was being presented to us of like, think of all the wonderful things that will happen, one of the very, very top things was they were saying, look, before we go into attack Iraq, we can call up Iraqis and we can, we can ask them, right? You know, do you like Saddam Hussein or do you not? None of that is happening. And not only is it not happening because it's hard to find somebody from Russia, but our, our government is actively working against it, it seems like.

Samo Burja [00:16:51] Yes. And I, the justification for this is misinformation campaigns, while we're thinking of, you know, foreign misinformation, it's good to remember we never lacked domestic misinformation either. The propaganda war has been on for centuries, and it's only ever escalated with new technologies. Still, it used to be the case that we believed that, you know, Russian propaganda, we can hear it and they can't hear our stuff because our stuff is just better. It's more true, right? I think we're starting to be a little afraid. I think we're starting to fear critique from the outside of the system. And I think this is, yes, of course, sometimes they lie, sometimes, you know, fake news is spread, whatever, but some of their critiques are starting to ring true, right? If you watched RT Russia today, you wouldn't just see Russian propaganda. You'd see a real critique of the American and European systems. You cannot see that critique anymore.

Vance Crowe [00:17:55] And it's, it really is a, a taking away of a larger picture that I think is really important. Like I, I've really spent quite a bit of time trying to figure out what are all the different ways you could look at it? And last night, as I was get preparing for this interview, I noticed that there is a, a video of a beautiful woman with a kitten, and she had her hair out of a ponytail, and she looks frightened and she's running up a, a trail, and maybe she genuinely is frightened of attack helicopters of Russians that are coming. But it was shown on so many different media outlets that the only conclusion you could come to is they're either there's only one Getty image that they can all access, or this is a part of a campaign where they're tugging on the heartstrings like the little boy that had his home bombed. He's on every single channel, the beautiful woman with a kitten on every single channel. It, it is it, I have entered a world of fearing my own country's propaganda that I never imagined I would get to.

Samo Burja [00:18:58] Well, the key dangerous part of this is that people believe themselves to be the co-creators of what they see on social media. We've known for a while that that is not fully true. Algorithmic boosting and de boosting of content allow you to select from user-generated content and find any message you might want. Further, a lot of seemingly independent projects, spontaneous projects are by now well-funded media operations. So in a very real sense, social media has now evolved to be, you know, the kind of product that cable news was back in the day, right? There can be a single perspective, there can be an official government line, it can be backed up by all major sources and it can be completely wrong.

Vance Crowe [00:19:49] Well, and it, the, the biggest fear for me is like we watched, I was just speaking with a guy from Canada and we were talking about the Canadian trucker convoy, and he was saying the, it's still going on in Canada right now. They're still, you know, people are arrested, money is frozen, you know, it is all still going on. But that instantly evaporated from the national conversation in the United States about what's going on. And, and you watch people go from being experts on what Canada should do and the trucker convoy to having this sensation that they are experts on, you know, eastern European global politics. And their belief in this gives them, I don't know, I I think people feel compelled to go out on social media and fan the flames about how evil this is, which, how the Russians are behaving, which then gives our government more ability, more flexibility to, to, to do these actions. And it seems like far more engineered than I've ever observed before. Maybe this is always the way that it was, but it seems so much faster and more deliberate now.

Samo Burja [00:20:54] There's an escalation of it that's certainly true. Technology speeds up the way in which public, you know, consent can be manufactured. And I do think it's important to understand here that it's very easy to reliably manufacture the public's consent and again, to not just be critical of the United States, right? In Russia right now, the vast majority of the people support the president's actions. It doesn't mean that if they thought it through, they would really support an invasion of Ukraine. It's after all a country that's many familiar ties, right? There are many people who have family in Ukraine, in Russia, right? These are two, so society societies that have been tightly interwove, wo woven. But the media, the, you know, the media echo chamber that exists here exists in Russia as well. This is why I think we should keep in mind that it's very reliable to be able to produce mere consent from public opinion, at least in the short run, at least when hostilities are open and casualties are still low.

Vance Crowe [00:22:05] When you look at the intents of Russia, the, do you see the same fear that they're gonna march through Ukraine and then head straight into Poland, and then from Poland, it's not very far to to Germany the way it is presented to us.

Samo Burja [00:22:18] No, no, there's no danger of Russia overrunning Europe militarily. They are straining to occupy what is already Europe's largest country. You know, barring Russia, the correct way to think about this is that they are having a lot of trouble going through a country that's larger than Texas, right? Larger than Texas with a larger population and being armed by, you know, every major power in the world. They will definitely not want to provoke NATO into a full war. First off, a full war with NATO is a war. No one can win. And even if the nuclear factor wasn't on the table, they do not have the military capacity to defeat France, Germany, the United States, Britain, all of these countries, right? These countries that spend a lot on defense have a lot of hardware the Russians can hope to match. Now, having said all of this, I do think there's the possibility the conflict expands, in particular, the small country of Moldova right next to Ukraine is not a NATO member and already has a Russian backed breakaway republic that has existed there since 1991.

Vance Crowe [00:23:35] Yeah. And I think that the example of Georgia is, is a great example of if you're not a member of nato, they're not coming for you if, if Russia decides to come in because one, they're not obligated to. And, and two, I think as much as there's a lot of saber rattling, people don't want to go to a full scale war. Proxy wars seems so much safer, so much less costly for the west.

Samo Burja [00:24:00] I mean, objectively speaking, it is very much safer. It's not very costly. We get to feel very good about supporting Ukrainians. Our own casualties are low, we provide them weapons. You know, I honestly think the country is going to see a long, long period of recovery after this. It's going to take decades for it to replenish economically and demographically. There's no question that the war has been disastrous for Ukraine. The only question is, has it been good for anyone else? And you know, I think while Russia will achieve a military victory, it's not clear they'll achieve a political or economic victory out of this either.

Vance Crowe [00:24:44] It's hard to be able to tell what, what a political victory would look like for the Russians, because when you listen to US media, right, they're showing constant B-roll footage of people protesting, of people going withdrawing their money from banks and of oligarchs sitting outside of the country or even inside of the country saying these negative things about it. But I have to imagine Russia is showing the same thing to their people about, you know, things going wrong in the west.

Samo Burja [00:25:14] I I think they very much are and have been for a while. And notably they also can show the genuine complexities of Ukraine. There is in fact ethnic hatred now in Ukraine. It doesn't matter who started it, but there is, so if your pretext for invasion was to protect ethnic Russians living in Ukraine, well there's now evidence that they are persecuted. No, it is a self-justifying, a self-justifying process, a self-fulfilling prophecy. And you know, the Ukrainian government has always had extremist nationalist groups as part of the governing coalition, right? The so-called as Ofv battalion, you know, with its extreme far right ideology has been a major staple of Russian propaganda.

Vance Crowe [00:26:03] The, the, I think one of the most interesting things about the difference of a perspectives is when I listened to Putin describe the military force that they're sending into the Ukraine, the West describes it as like full on military war. You know, they've taken their entire military and to, to Putin. He's basically describing it as like a, you know, a seal team set

Samo Burja [00:26:26] Special military operations.

Vance Crowe [00:26:27] Yeah, just like this tiny little thing. And I mean, it seems to me that it's more than just a fuse special operations units, but you know, you would have no way of knowing that. It's just depends on which camera you're viewing it through.

Samo Burja [00:26:40] Exactly. The full scale of the war is not presented to Russians. However, however, the full scale of the war hasn't even begun. The Russians were reluctant to use heavy artillery. I think because they wanted to minimize civilian casualties during their invasion. They've now started using artillery, right? They were open to the possibility that Ukraine might surrender in the first few days. They wanted to advance over territory that would be less contested since it would be more sympathetic to Russia. But as the war continues, as the economic sanctions pile on, I think they will start using their heavier artillery when besieging various Ukrainian cities. So the scale of the war won't be possible to hide at that point. But at that point, honestly, the Russian population will be feeling pretty besieged. Most of these sanctions, mind you, that the west is imposing, they don't hurt the government, not directly, they hurt the population with the argument that if the population is hurt enough, economically, socially, legally, it can't help. But over federal government, this is not true. This has not been true in any country. When foreign sanctions are imposed on autocratic regimes, the autocratic regimes double down and the population accurately perceives itself as being under siege by the whole world.

Vance Crowe [00:28:08] And then that allows you to continue to give more and more power to your own government to try and fight on our behalf, right? If, if, if, if you felt like, Hey all, look at all these terrible things happening to us, we, they're not gonna go out and fight as individuals. They, they'll empower their government to, to kick back.

Samo Burja [00:28:24] 50 years of economic isolation of North Korea have done zero nothing to topple the government of North Korea. Now imagine the government of North Korea, except it has all the oil and gas it could want, all the food it could want, and 6,000 nuclear weapons. How in the world do people expect this government to fall? I just don't know.

Vance Crowe [00:28:47] So when we think about the, the, the future of Russia, or really the future of the globe, you had mentioned the deglobalization of the internet. Are we also going to watch the end of globalization? I mean, Russia is talking about if you're a country that's been producing something here, like Ikea or Apple, you leave your factories, we are gonna nationalize them and we're gonna have 'em for ourselves.

Samo Burja [00:29:10] It's a very reasonable response from Russia. What are they supposed to do? Wait for Ikea to disassemble its factory and reassemble it in Sweden? Come on. They can't even buy ikea's furniture anymore. The economic shock for Russia is real. There'll be a real high economic cost to this, but nationalization is a good counter response to what's happening. Nationalization breaks as these con arguably these sanctions themselves have broken a lot of the core assumptions of how trade is supposed to work in the modern world with these assumptions broken trust is broken, not just with Russia, but every country around the world. If you now do business with western companies, you know that your government, if it comes to conflict with Western governments, will in fact feel, you know, will in fact feel sanctions not just from the top, but from the middle. All of these large companies that are refusing to do business with Russia, there are many people in countries like India, like Brazil, who are thinking to themselves, could this happen to our country one day? And should we not keep these companies out as a matter of national security?

Vance Crowe [00:30:25] Yeah. All of a sudden China's process of owning 51% of any company that's in there, all of a sudden starts coming into clear focus that they maybe have more accurately predicted how the west will fight their battle, which through capitalism, you, you just start shutting down the ability for people to trade with you,

Samo Burja [00:30:44] Right? China's insistence on controlling all the companies within China and various measures to keep out Western technology giants especially start looking like common sense instead of authoritarian overreach.

Vance Crowe [00:30:59] So what have you learned about Russian, the Russian military that you didn't know before? They, they actually took action on such a large scale?

Samo Burja [00:31:08] I think the key, the key difficult thing to always predict is success or failure at logistics and war, right? Logistics is the core of war. I think the army, the Russian army has actually fought about as well as I would've expected, and I was a little bit contrarian. We wrote a detailed report on how Russia's military reforms had gone very well. They were met with stiffer than expected Ukrainian resistance, but more importantly, when their advances proceeded because again, they, they are overpowering Ukraine's military, that is not in question by the way. They're definitely overpowering Ukraine's military. They've advanced so far that they had difficulty supplying their own troops, their own vehicles with fuel, with ammunition and so on. These kinds of difficulties are inevitable when you first fight a large war. And you know, this is a case where the Russians are being a little dishonest, you know, I have to say, it's not just the West, the Russians are dishonest as well about what's happening. This is Russia's first big war in a very long time. I don't know of a single example of a state in the modern era fighting a large war for the first time without any serious logistical problems. The Russians are experiencing the inevitable growing pains of fighting a large war for the first time in decades.

Vance Crowe [00:32:41] It's been interesting, I think I actually got this from, from something you had written, was that the Russia really has kept this as a ground war. They didn't send in a bunch of bombers the way that we did into Iraq and just bomb them for three weeks before you come in. And then you're just kind of encountering rubble and whatever resistance is left. They've been much more about moving tanks and, and small scale artillery. Is that right?

Samo Burja [00:33:06] Yes. This did not surprise me at all because as we wrote in the Bismarck brief reports, Russian military doctrine was never oriented around securing air supremacy. It was only oriented around denying NATO air supremacy. So even as we speak, Russia has a difficult time manufacturing enough planes to ever match the west. This was never a possibility, even the peak of the power of the Soviet Union, they spent themselves into oblivion trying and of course failing to match US defense spending now adapting to this. They have relied much more heavily on artillery to bring the firepower necessary to, you know, secure victory on the battlefield or bring a city into submission. So the initial barrage of Russian missiles that we saw on day one, that was all that was ever planned. It wasn't that they tried and failed to establish their supremacy bombed the country for weeks on end the way the American style of war goes for it. Now they did just enough to open the operation. And the operation is a ground war, a land war where heavy anti-air defenses deny air supremacy to either Ukraine or its Western allies. Meanwhile, artillery does the, you know, dirty work of delivering firepower.

Vance Crowe [00:34:37] Do you think from the amount of civilians that have been killed and the amount of destruction that Russia is, you know, on target, was this about where they thought they would be? Have they killed more people than they thought they were going to? Like how is this playing out from their perspective?

Samo Burja [00:34:54] I think that they counted for higher casualties on both the Russian and on the Ukrainian side than Western military planners are comfortable with. This isn't to say that they wanted to kill new people. And as I already said, I do think that in their own way, they try to minimize civilian casualties early in the war, hoping the government would just surrender, hoping but not planning for it. You know, Russia had immense losses occupying the Chechen Republic, right? This autonomous region within Russia in the 1990s. But the Chechen Republic was a young society, right? Chechens basically have a much higher fertility than either either Russians or Ukrainians. They had plenty of manpower. Insurgency is a young man's game, so Russia is going to win militarily. But after it does, and of course this might still be an economic or political loss for Russia, you know, I actually think that the regions they choose to occupy of Ukraine, when they run their cost benefit analysis, I think they're not gonna have a stiff insurgency at all. The Ukrainians are just too old. The average age in Ukraine I think is like 47 or 48.

Vance Crowe [00:36:10] So you're saying that it'll be easier for the Russians to occupy it because there, there it'll be so much more difficult for them to mount an insurgency.

Samo Burja [00:36:20] The Russian occupation of the regions of Ukraine they take will be notably easier than the occupation of Iraq or the occupation of Chechnya, right? Because Iraq, Chechnya, Afghanistan, these are extremely young societies with lots of young men who have nothing to lose. Ukraine on the other hand, is just like Russia itself demographically drained, both due to immigration and due to decades of low fertility and high mortality.

Vance Crowe [00:36:50] That is a fascinating assessment. You know, I was looking up the population of Ukraine, and it's been going down in, in terms of millions of people. They're now at 44 million, but it wasn't that long ago. They were at 48 million, 50 million, something like that. And to think about them being older, you're right, when I was 20, it would've been a lot easier to get me to join up in the military. When you're 40, I'm, I'm not going out there to, to go hide in the woods to go pretend to, I mean, it's very unlikely that I would be doing that,

Samo Burja [00:37:17] Right? Right. And we should remember that, you know, we are expecting the defeat of the formal Ukrainian army and then a number of disunified resistance organizations are likely to show up. These organizations are not going to agree with each other as to what the post-war Ukraine should look like and what the lessons of this war are. All of these diverse political perspectives that I alluded to that exist within the Ukrainian government, right? Moderate liberals, you know, patriots, let's say extreme nationalists, pro-Russian, anti-Russian, each of these is gonna have their own organized military faction, recruiting partisans, recruiting people to fight. And perhaps western weapons are still going to flow into the country. So they're going to have some initial success, but I think we shouldn't assume they'll all be fighting together. This wasn't the case even during World War ii, during World War ii, when Nazi Germany say occupied Yugoslavia. There was in fact an ongoing civil war between the various resistance groups because they couldn't agree what the politics of the country should be after, you know, Nazi occupation is over. And I think unfortunately Ukraine is gonna have a similar problem.

Vance Crowe [00:38:33] You know, speaking of insurgents and people that are fighting that are not part of a formal military force. I was really astounded when, when the Ukrainian people, they're defending their country, you do whatever you need to do. That's, that's your own prerogative. But when they start civilians start throwing motov cocktails, you are now becoming a combatant. You, you know, like, and the encouragement of civilians to take those actions like that changes the state of, of the game you're playing because all of a sudden now the military fears the civilians as opposed to trying to go around them in some way.

Samo Burja [00:39:09] Yes. I mean, this type of relationship between soldiers and the population of occupied areas, this can escalate to very nasty places very quickly. I understand the desire to resist, and you know, I do think that until the war is lost, resistance is in a way understandable. But, you know, encouraging this is essentially encouraging people to sort of violate the laws of war. And then I don't think necessarily the Russians are going to adhere to those laws either in the long run, but, you know, there's no reason to race to that conclusion.

Vance Crowe [00:39:48] Yeah, I agree. I I also, you know, I had a guest on the podcast, good friend of mine, very sharp guy, Russian scholar, but even he was calling for the assassination of Putin, which I'm like, woo, you start doing that. Like this is, this is how all sorts of, of chaotic things can happen because right now Russia is run by one person, but imagine the, the disunity just the same way when you cut off the cartel heads, right? All of a sudden everybody's trying to occupy that power and things can get wildly out of control.

Samo Burja [00:40:19] For Russia to remove Putin would result in immediate power struggle, possibly among the generals. I don't think it would escalate to a full civil war. I think you would see a military coup very quickly. However, a military dictatorship can, ill afford to lose a war, even if it's the war Putin started. So we would not get a more reasonable leader or a more reasonable negotiator at the table. We would get a leader with vastly fewer options stuck in a much worse situation than Putin is. If there's going to be a negotiated piece between Ukraine and Russia that preserves the sovereignty of Ukraine, Putin's gonna be at the other side of that negotiating table.

Vance Crowe [00:41:04] Yeah, and I, I think anytime you start fantasizing about assassinations, it, it seems like they're very limited views of the future, very, very much about not being able to understand just how, how quickly things can spiral out of control. When you do look at what is possible for Europe, what levers do they have left to pull if they want to try and affect the outcome without going to war? What other levers available to them?

Samo Burja [00:41:33] Well, they are still buying Russian natural gas. I don't think they actually can stop buying it. I think it's really embarrassing. Germany is emphasizing how much weapons it's shipping to Ukraine, but it's not emphasizing how much money it's sending to Russia right now to buy its natural gas. The embarrassing reality is that if Europe really wanted to hurt Russia, they could take the head, they could have a winter of disquiet, of unhappiness, of deprivation as the heat goes out and as prices for electricity spike, if they did this, it would of course hurt Europe's economy in the short run. But it will hurt Russia's economy even more. They're not going to do this. They're too dependent, too comfortable, and they know it.

Vance Crowe [00:42:23] Yeah. And there's a, there's a lot of knock on things that are happening. So I was just reading in the ag world, BASF was using natural gas to be able to produce nutrients, you know, vitamins for livestock, and this is going to cause a massive shortage. So you already have all sorts of agricultural issues going on right now in the US You've got avian flu, you've got prices of, of inputs like fertilizer going through the roof, and now you're going to have animal nutrition go down. It seems to me that right now the west has not really had to endure much pain from this, but that ultimately these high prices aren't just going to be, it will be more than just the inflation caused by other actions the US did to itself. Now you're talking about way bigger impacts on things like food,

Samo Burja [00:43:15] Well, food, energy prices. Right. If I correctly remember, Ukraine is a major exporter as well of components needed for fertilizers.

Vance Crowe [00:43:26] Yeah, that's right. And, and, and we, there was no overabundance of them prior to this. Right? So Canada's had all kinds of problems being able to get fertilizer done to the us. I don't know if you've, you probably don't follow this, but bear, which bought Monsanto, which means they own Roundup, had to go out to the public and say, we are issuing a force majeure. We are saying acts of God have made it so we can't produce all of the Roundup we said we were gonna produce. Right?

Samo Burja [00:43:55] Right. If

Vance Crowe [00:43:56] People that are looking at their bricks and saying, oh, I might have to weed, hand weed my bricks, this might be a problem. You know, you don't realize if we run way low on glyphosate, this is like tens, hundreds, millions of, of acres of that, that you have to go out and hand weed. And we don't have the labor for it. And certainly around the world they don't, they don't have the labor for it. And how long until the impacts of things that are going on in Eastern Europe start really impacting Americans? When do you think we start really, I mean, I guess maybe at the gas tank already.

Samo Burja [00:44:29] I think the economic consequences over the next six months will become harder and harder to deny. And even if the situation were to es deescalate today, problems four, five, and six years down the line are now baked in, baked into the supply chains, baked into the economic logic of knock on effects.

Vance Crowe [00:44:54] So yeah. What do you, how do you predict this all shakes out you think Russia has done moving forward in the Ukraine in the next six months?

Samo Burja [00:45:04] No, I think Russia is going to occupy at least the eastern half of the country. I think military actions won't stop until they have something they can domestically present as a break. Victory territory is something that the population has an easy time understanding, and in fact, territory is strategically valuable for the reasons we discuss. Right? The further back you can push NATO missiles, the better it is for you. And you know, they basically don't expect any country around Russia that is not strongly aligned with Russia to stay out of nato. I think they're, they were expecting NATO expansion to reach and envelop all of Russia's former neighborhood. So economically speaking, I think the West is in for quite a crisis. I think this will be an economically very difficult time for Westerners. I think there will be a decline in living standards. Of course, there's a massive decline in living standards within Russia to be expected. But we're going to see a decline in living standards in the United States and Europe in the mid run American industry will recover because America can, to a significant degree, produce all the fossil fuels and natural resources that it needs. However, Europe is in a trickier position. Europe has no good options for acquiring resources and especially energy resources. Over time, the German economy will find itself more and more marginalized. And with the German economy, the EU as well, they might become more militarized simultaneously, but their old economic power will erode rapidly.

Samo Burja [00:46:44] The US meanwhile, depending on its exact policy, might end up seeing something of an industrial revival over a 20 or 30 year period. There will be some benefits to reshoring if it's done.

Vance Crowe [00:46:59] What do you think about the US dollar globally? I mean, now you can see that, like we were talking about before, you know, countries pulling out, they're using their economic power, apple pay, not working, Google Pay not working. So suddenly now, all these countries, in addition to knowing you don't want your factories there now relying on the dollar or relying on different financial instruments. Does this, how does this play out?

Samo Burja [00:47:26] I think if the Chinese were not already intending, they now intend to create a new global reserve currency and no, no one ceasing trade with China. Mind you, it's all focused on Russia, but China continues to trade with Russia. So China for the next five years is going to have very cheap energy compared to the rest of the planet and cheap resources compared to the rest of the planet. Meanwhile, it'll continue to export and be the world's factory unless the west decides to sanction China, which would be an even greater economic shock. So China will be economically well positioned and politically well positioned over the next five or 10 years to try to dislodge the dollar.

Vance Crowe [00:48:08] That is, that's wild. And when you consider the Federal Reserve coming out and saying, you know, there could be, I, I don't know the exact phrase, was it, there can be multiple reserve currencies or something to that extent.

Samo Burja [00:48:19] That's already an admission of defeat, isn't it?

Vance Crowe [00:48:21] Yeah. I mean, one that just a few years ago to have heard someone from the Fed utter that you would imagine they were just about ready to lose their job or something, those would be insane.

Samo Burja [00:48:32] We've already had a monetary and financial system that was under immense strain because of COVID. You know, this just might be, well, it's not even a straw, right? It's a whole heap of straw, but it might be the straw that breaks the camel's back.

Vance Crowe [00:48:47] Yeah, the, the, as one of my friends called it the d dollarization avalanche, you know, once it kicks off, now there's all sorts of reasons and countries that have, you know, decades and decades and decades of experience of why they would want a different reserve currency now blowing as much oxygen as possible on, on that fire. I mean, you can see China taking on huge reserves of commodities and you know, our, our commodity market in the US does a lot to hold up the dollar, right? You, if you

Samo Burja [00:49:18] All of a sudden

Vance Crowe [00:49:19] Stop needing to do trade, you're not selling corn or soybeans to China. This is a world changing event, or at least for the Americans.

Samo Burja [00:49:27] Well, we'll see how exactly the economics of it shakes up. There is a argument for a fundamental optimism on America's fundamentals, remains one of the largest countries in the world. The most populous, most resources, most, you know, intellectual resources too, right? You know, a still solid if decaying industrial base. However, however, I don't think the US as we knew it five years ago, is going to continue to exist. The society is going to transform the political entity, of course is going to endure. But can you imagine an America that's radically de financialized? Is that even still America?

Vance Crowe [00:50:11] That is a fascinating question actually. I mean, I don't even, I don't even know where to begin thinking about that. I mean, like our, all of New York City is based on, on, on, on, on finance without it, the, I don't even know what those buildings are doing there. To even, even go look at the, the, the big population areas of St. Louis. I mean, that is all based around financial management.

Samo Burja [00:50:35] Yes. And most of America's economic production is mediated through this financial layer, this financial layer. They'll find itself in crisis. Now, I don't think this will go all the way to some sort of suspension of private property or anything like that, but it might mean a return to a system much more similar to what the US had in the 1950s. Much less financialized, a few large companies that basically now also officially are understood to be quasi monopolists, right? So it's not that they're defacto monopolists or oligopolies. They in fact are called upon to do things not for the bottom line, but for what's good for the country. If you remember, you know, general Motors, general Electric, this sort of strange collaboration that could work at times very well between government and the largest companies. We might see a return to that.

Vance Crowe [00:51:28] Oh man, you were describing my nightmare scenario. This is the opposite of what, so what do you think about the, about cryptocurrency in this environment? I mean, you watched, you know, and, and we don't just think about Russia and the Ukraine. We look at what happened in Canada, right? Canada, they seized all the assets and the property of people that were involved in the trucker convoy. You see, it was,

Samo Burja [00:51:50] It was frozen, but yes, it, it was defacto seized, right? If you, if you have something that's frozen for a very long time, it's been seized. It's been destroyed. Yeah.

Vance Crowe [00:51:57] Fair enough. Right. What do you, do you think, is this just what cryptos are, look, crypto fights are looking for to say, yeah, see, we were right all along? Or do they actually have justification? Do you think this will propel the rise of cryptographic currencies?

Samo Burja [00:52:13] Well, I think cryptocurrencies have long made the case that there would be a decentralized, you know, sort of government resistant form of wealth. Russians right now who had their cryptocurrency and Coinbase have lost all of those savings. So as soon as you are relying on intermediating services, the very services that have allowed crypto to become much more power, you know, popular, a much more viable currency, those various services are the ones that make it once more vulnerable to government action. I don't think crypto is a safe haven from this type of, from these types of events.

Vance Crowe [00:52:55] Oh, that's, that's an interesting perspective. So from my point of view, if you don't own your private keys, right, you don't own Bitcoin, you own some kind of investment in Bitcoin, which would be Coinbase,

Samo Burja [00:53:06] Right?

Vance Crowe [00:53:07] But I would've imagined that the people that hold their own keys were somehow protected from, from this government. But you,

Samo Burja [00:53:13] Well, no basic they, they, they are to a significant extent, but the value of the Bitcoin that you're holding, actually holding, right? That value is very much tied to the people who are sort of, you know, you know, holding that investment in Bitcoin. If, for example, everyone at Coinbase, everyone who has their cryptocurrency in Coinbase is expropriate the value of Bitcoin goes down, not up even for the people who have their, you know, wallets in cold storage or whatever.

Vance Crowe [00:53:42] Yeah, fair. That actually, that's a great point. That is actually a, a very fair point. So what are the questions that people that are approaching Bismarck are coming to you and saying, Hey, we need to have a a, a vision, you know, six months or a year out now that we've watched this crisis unfold or this conflict unfold. What, how have the questions changed for what you guys are getting asked?

Samo Burja [00:54:05] People are much more interested in various weapon systems. They're much more interested in, you know, the future of drone warfare or, you know, what's the role of anti-air or, you know, how good are the anti ttag missiles? And I think this is a little bit of a bias because that's just so salient. But for the six month period, for the two year period, people are really tracking energy. We've got multiple new commissions in people interested in the future of natural gas, the future of solar. You know, is solar fake? Is it actually going to reduce demand for fossil fuels? People are looking at nuclear again, they're wondering where they could build nuclear power plants. So the energy dimension is a big one. I have not seen as much interest as I expected in people just trying to disrupt the financial sector. That's because right now I think everyone's holding their breath and hoping against hope that somehow the financial house of cards we stand on doesn't collapse. But of course, if you were to disrupt that sector, this is the best time when the house of cards start crumbling, there'll be opportunities for FinTech innovation.

Vance Crowe [00:55:15] Yeah, I think that's one of the, the scariest parts about entering a war with a, with a, or entering some kind of conflict, whatever. We're in a cold war that we are with Russia, because it wouldn't take very much to upset our financial, just people's trust. Can I use my credit cards? Will my bank account be secure? All of these things that right now they're, they're so natural to us. We believe they could

Samo Burja [00:55:39] Yes,

Vance Crowe [00:55:39] Impenetrable. But once you show a crack in that all, all kinds of things could, could change about society, I think you're, you're very accurate in your assessment of what is our society, if not mediated through our financial markets.

Samo Burja [00:55:52] Right? Right. And there are alternatives to this. There are alternatives to the current way we do finance. We don't have to abandon the finance, but we've been overdue for deep, serious reforms for many decades. And these, this overhang, it's not only been driven by, you know, geopolitical transformations, it's been changed by the very technology, right? The very technology has been pressuring on us, tried to figure out something new and we haven't so far.

Vance Crowe [00:56:25] So this is completely based on a buddy of mine telling me all about it. A guy named Michael Ring. So I've not actually looked into this, but he was telling me that John Deere just made an announcement that they are now capable of retrofitting people's tractors to run entirely on ethanol and being able to produce that ethanol from corn. The, the challenge has been, can you make cylinders that can withstand the heat of ethanol? What do you think? Is this a viable option? Will we be running tractors on a hundred percent ethanol?

Samo Burja [00:56:56] Well, I think the energy ROI is the big question, right? If you're using ethanol to run your tractors to grow corn, does that cycle right of, you know, corn to ethanol to back to the tractor? Does that lose energy or gain energy? You know, I think it loses energy. So I don't think that's viable. It might on the margin, there might be times when it's cost-effective to do it, but I don't think this is a, a viable way to run an agricultural base. We remain for now, dependent on fossil fuels in a number of ways in modern agriculture, as I'm sure you and and your listeners well know.

Vance Crowe [00:57:37] So let's talk about US energy then. As, as this is clearly, people have started saying, Hey, why don't we start opening up our wells? Why don't we start opening up pipelines? Do you think the political will will be created to, to kick back on some of the pressure to shut these things down, not allow pipelines?

Samo Burja [00:57:58] I think some of that pressure will be, you know, some of the resistance to new pipelines will be overcome. But there is a basic problem where US oil is very light and it's been getting lighter over time. You need to mix it in with heavier oil. That until now we've been importing from Russia to refine effectively. America does a lot of the world's refining, not just a lot of the drilling for oil. So where exactly does this heavier oil come from is I think the greatest energy challenge? Natural gas, America's fine electricity. Well, you know, we're doing better than Germany, like oil, we're doing pretty well as well. But where are we going to get the heavy oil that makes the refining process efficient? They're looking at options like Venezuela and Iran right now. Not your first picks.

Vance Crowe [00:58:50] Oh, that's interesting. 'cause I had actually seen that the US had sent some envoy to, to Venezuela and it didn't, I didn't even pay any attention to it at all. But that's what they're doing is to go find this heavy oil. Right?

Samo Burja [00:59:02] Exactly, exactly. Fracking I think obviously is going to thrive, but fracking in itself doesn't solve the problem of what kind of oil you're getting out of the ground.

Vance Crowe [00:59:15] Well, SAMO, as people are being focused on Ukraine and Russia, that means they're not paying attention to other big things going on in the world. What would you recommend people keep an eye on as potentially the next big thing?

Samo Burja [00:59:31] Well, I think that energy policy is really central energy policy in Europe, energy policy in America. The second thing is China. I think we should very carefully be watching it for any changes in Chinese economic policy. I think that it's inevitable in the next five or six years that reunification with Taiwan will be pursued. It might not be pursued through military means, but it might be pursued through a form of economic warfare,

Vance Crowe [01:00:06] Five to six years. That is, that's interesting. That's one of those things that I think most people put it off as like, yeah, China's gonna continue to try that unification, but to put that timeline on it, five to six years, the people that I know that are familiar with what's going on in Taiwan already say they feel a big switch. Right. The, the people that are in power are holding referendums on things that the people don't want them to hold referendums on things like, well, in any case that, that there, they believe that there's a temperature change going on in that situation. And I've kind of just blown it off being like, ah, I don't know. I think that just like

Samo Burja [01:00:43] It's gonna drag on.

Vance Crowe [01:00:44] Yeah.

Samo Burja [01:00:45] Drag

Vance Crowe [01:00:45] On. It'll just never end. It'll never change.

Samo Burja [01:00:48] I think things never change until they suddenly do

Vance Crowe [01:00:54] Well, SAMO, I so deeply appreciate you coming on to do this special report on Ukraine. It's, it's a great honor to have you, and we're always deeply appreciative of your willingness to share your time and your, and your knowledge. Thank you so much.

Samo Burja [01:01:07] Thank you for having me on the show. It was, it was a great set of questions.