by Robert M. Traxler
Gas prices hit a record high, interest rates are up and rising, there are shortages of baby formula, microchip shortages causing the auto industry to cut back, and now even Harley Davidson, an American icon, announced that the production line in Milwaukee of its motorcycles will close for an undetermined time. What is next?
I fear with the cost of petroleum-based fertilizer and insecticides going up and availability going down, coupled with the price of diesel fuel and a shortage of farming equipment and repair parts, will result in a shortage of grain, corn, wheat, soybeans and other agricultural products, along with the inevitable soaring prices.
The inflationary cycle was ongoing long before the Russian Federation attacked Ukraine; that is not in doubt, it was fueled by reducing oil production and increasing government control. The Russians saw an opportunity with President Joe Biden saying a small incursion of Ukraine was OK, just not a massive one. What he meant is anyone’s guess, but the Russians saw it as an invitation to invade and did.
The war in Ukraine has just listed among the latest causalities the second largest grain terminal the Nika-Tera grain terminal in the southern Ukrainian city of Mykolaiv; the facility was partially destroyed. President Vladimir Putin has said that ships using the port to ship grain around the world would not be attacked; ask yourself, would you use the facility if you owned a multimillion-dollar grain ship? Also ask yourself what the Russians have to gain from denying the world 6% of its grain. The answer is clear: dollars, billions of dollars. The Russian Federation exports 17% of the world’s grain; cut the world’s supply by 6% and increase the Russian Federation’s income and help pay for their war: food as an economic weapon of war.
The United States has reduced its grain production by 5% since 1979, with nearly 16% of the world’s production coming from our nation. Adding the cost of diesel and the fertilizer shortage to the world’s markets and American grain will add to the world shortage and price increase.
To the equation of grain as a weapon of war, we need to look at the fact that the European Union is the largest importer of grain in the world. Standing up to the Russians may have an unprogrammed impact on many of those nations supporting Ukraine.
Putin is dumb like a fox attacking the Nika-Tera facility; the Russians did not destroy the facility, only a part, and could put it back into service once they occupy Mykolaiv. If the Russians can control 23% of the world’s grain, they can dictate policy to most of the world, punishing those European nations that stand up to them and rewarding those who join a new stronger Union of Soviet Socialists Republics.
The Russian Federation can also use oil as a weapon, rewarding allies and punishing those who defy them. If the Russians control Ukraine they can reward or punish nations like China, Poland, Turkey and Egypt that import massive amounts of grain, seed oil, iron ore and iron from Ukraine. Add in the rare earth metals and the oil Ukraine exports, and we can see why the Russian Federation wants to control that nation first in its march to re-establish the Russian socialist utopia of the twentieth century.
To those who object to our aid to Ukraine, think that one over for a few minutes. If a nation can dictate who gets food and natural gas and oil, they can control large portions of Europe once again. After the USSR broke up, our national defense costs were drastically reduced, and it was called the peace dividend. Reconstitute the USSR and the world will change back to the bad old days of the Cold War and massive defense spending.
A few dozen long range multiple launch rocket systems and non-military people to crew them can stop a new cold war before it starts. The world cannot allow Ukraine to fall or to be broken up without a massive impact on the world as we know it, and an impact not favorable to the United States of America. My opinion.