By Sylvia Demarest, Substack, 8/22/26

Introduction

The US has spent the last fifty years weaponizing the US financial system and the US dollar by imposing sanctions on many countries, corporations and individuals. In most cases, these sanctions were planned with and agreed to by US allies. The US and the EU have also jointly engaged in seizures of government and individual assets. Sanctions and asset seizures raise a serious question, are global assets, including the assets of foreign countries, safe in the US and the western financial system? Moreover, under international law, to be legal, sanctions require UN approval. Most US sanctions have not been approved by the UN.

One recent example of unilateral sanctions is the seizure Russian central bank assets and the imposition of severe economic sanctions on Russia in early 2022. The US, UK and EU imposed the “shock and awe” sanctions before Russia launched the Special Military Operation and invaded Ukraine. The trigger for the sanctions was Russia’s recognition of the Donbass republics along with entering a mutual defense pact with the republics that required Russia to intervene when the republics were attacked by Ukraine. The fact that the sanctions were so massive and were announced in coordination with the EU and the UK meant they had been planned and agreed to well in advance. These sanctions, which included banning Russia banks from using the SWIFT international clearing system, were supposed to weaken Russia economically and force President Putin from office. The sanctions failed. The main impact has been to force Russia and her allies to develop alternative structures.

Since Trump’s Inauguration the US has gone out of its way to tariff, harass, and insult a growing number of the countries of the world, including US allies. Trump has placed tariffs on countries, then taken them off, then threatened tariffs again. Trump has demanded that countries follow US dictates, demanded they invest billions in the US, denigrated their leaders and tried to undermine their governments.

US allies and other countries must be wondering what the possible benefit there could be to being a US ally, especially when Trump insinuates the US may not help them if they get into trouble.

Although the US has weaponized the dollar and the US financial system, we still expect foreigners to not only go along with US policy, and with US sanctions, but to also to stash their savings in the dollar, and the US stock and bond markets. It raises the question; does the US still know how to play the geo-strategic game?

Now the US is demanding that the entire world isolate and refuse to do any business with Iran or face US sanctions.

US Sanctions on Iran

US sanctions on Iran go all the way back to the hostage crisis of 1979. Over the years, the US and her allies have frequently added new sanction on Iran. In many ways, Iran is the most sanctioned country in the world. Now the US wants to place more sanctions on Iran which will include sanctioning any country or entity that does business with Iran. This time, US allies have not been consulted nor have they agreed to abide by these new sanctions.

Here’s Secretary of the US Treasury Scott Bessent: “Oil markets are misinterpreting what this economic pressure means. This is going to be the greatest coordinated economic isolation in the history of the world. We’re going to our allies and saying, you are either with us or against us. If you insist on doing business with Iran, transferring money, buying their oil, or doing seaborne ship transfers, the US Treasury and US gov’t will put their full might and force toward enforcing against you.”

The key bit: “We’re going to our allies.” This means, US allies have not yet agreed. What Bessent is implying is that he and Trump will have to get “allies” to agree. These are the same “allies” that have had tariffs imposed on them and have refused to supply navy ships to assist the US in opening the Strait of Hormuz.

Iran sells 80% of her oil to China. China is now expected to refuse to do any business with Iran. Here’s China’s reaction: China announces it does not accept U.S. sanctions against Iran. Here’s Philip Pilkington: “They’re (China?) ready for a big fight over secondary sanctions.” In fact, China has made it illegal for any Chinese entity to obey unilateral sanctions that are illegal under international law.

China’s Ministry of Foreign Affairs says baseless unilateral sanctions on Iran will only lead to further escalation: “China opposes unilateral sanctions that lack basis in international law and UN Security Council mandate. Military force and pressure tactics will only lead to escalation that serves no one’s interests. We call on parties to act responsibly and solve disputes through dialogue and negotiation.”

As this Substack has discussed, China has a virtual monopoly on rare earths and many other inputs that are essential for weapons and many essential products. Moreover, the US has made it clear that the intent is to weaken China and bring China under US economic and political control. How can the US expect China to fall into line and go along with sanctioning Iran?

Daniel Drumbrill nailed the US dilemma on X: “This is genuinely hilarious, and peak on-brand American tone-deafness.”

“The United States is now asking China, the same China it has spent years trying to economically isolate, sanction, and technologically contain, to help it economically isolate & sanction one of China’s own partners: Iran.”

“US Treasury Secretary Scott Bessent is telling Beijing to “get with the programme” and join Washington’s “most crushing economic operation” against Iran. “You are either with us or against us.” China is Iran’s largest oil customer. And yet America expects Beijing to help crush Tehran’s economy.”

“This is the same America that put Huawei on the Entity List, expanded the Foreign Direct Product Rule to strangle its supply chain, pressured allies to ban it from 5G, restricted advanced chips and manufacturing equipment, targeted DJI and Chinese drones, and placed hundreds of Chinese companies under export controls, all while talking about maintaining technological superiority and reducing economic dependence on China. That’s the kind of “with us” they were hoping China would continue playing along with.”

“After years of trying to isolate China, they now want China’s help isolating China’s ally.”

“The lack of self-awareness is almost impressive.”

“Still, it’s deeply satisfying to finally see meaningful pushback against the economic tools that have long been used to pressure, constrain, and punish countries around the world.”

The Strait of Hormuz

Martin Armstrong’s recent essay: “The Strait of Hormuz is Repricing the Entire World Economy” discusses the dilemma the US faces in dealing with the consequences of the illegal war on Iran–the impact of the closing of the Strait of Hormuz on prices and inflation. Here’s Armstrong:

“The politicians continue to speak about the Strait of Hormuz as though this were merely a regional dispute between Iran and its neighbors. That is complete nonsense. The strait is one of the most important arteries in the global economy, carrying roughly one-fifth of the world’s oil and gas shipments. Brent crude has moved above $91, but the headline price of oil is only the beginning. The real economic damage appears in shipping rates, insurance premiums, refinery margins, diesel prices, electricity costs, and ultimately government borrowing. War does not remain confined to the battlefield. It enters every household through inflation.”

“Washington claims the strait is open while Iran insists it remains closed. Both statements are political propaganda because it is the shipowners, insurers, and commodity traders who determine whether a waterway is commercially open. A tanker can theoretically pass through Hormuz, but that means nothing if the insurance premium becomes prohibitive or the crew refuses to accept the risk. Most politicians have never operated a business and do not understand that commerce depends upon confidence—not government declarations. Once confidence collapses, trade will retreat regardless of how many officials stand before cameras insisting that everything remains under control.”

“The more serious warning is coming from refined products, particularly diesel. Politicians obsess over crude because that is the price quoted every evening on television. Yet modern civilization runs on diesel. Trucks transport food and consumer goods, farmers operate machinery, construction companies run heavy equipment, and emergency generators protect hospitals and critical infrastructure. When diesel rises, the cost of virtually everything rises with it.”

Diesel is now above $5.00 a gallon in most places. Moreover, US diesel prices are currently sitting at just below $190 per barrel. That’s higher than all but three days in March-April and trending toward the all-time highs of 2022. All with crude prices much lower and the crack doing much of the work.

The Proxy War on Russia is also not going well–the impact on wheat exports and food prices

Simplicius goes through the reasons why the proxy war on Russia is failing and what Zelensky’s probable reaction will be: “The closer Ukraine comes to battlefield defeat, the more it will redirect all of its available resources to targeting Russian civilian infrastructure in order to spur some kind of popular uprising of discontent against Putin.”

“The problem for Ukraine is, this creates an accelerating feedback loop of self-defeat: the more resources Ukraine pours into hitting militarily insignificant targets, the more Russia’s actual military might remain unaffected by Ukrainian combat power, which means the faster Ukraine’s collapse will accelerate on the real front. In essence, Ukraine is vesting its entire strategy into a war against Russia’s civilian sentiment, which is as risky a move as it was for the US in Iran, wherein strikes against civil infrastructure turned even the diehard anti-clerical contingent against the US and enshrined their support of the Iranian leadership.”

One serious impact of the proxy war on Russia is on the export of wheat by both Ukraine and Russia, two of the largest wheat exporters globally. This unfortunate war will have a huge impact on future food prices if the export of wheat continues to be blocked. Here’s one reaction: “It’s worse for the #wheat market than Hormuz was for crude.” Capacity in the region cut from about 3.3mn tons a month to about 250,000 tons at Russia’s only remaining operational facility at the Black Sea port of Tuapse.

The three-year high reached in wheat futures in July could soon be surpassed as the war continues to block wheat exports.

One Other Potential Impact: The US Stock Market

The Economic Longwave points to the current “extreme valuations” of the current US stock market as financial managers navigate what he calls “late Financial Autum” in preparation for “Financial Winter.”

“According to the Advisor Perspectives composite of four major U.S. stock-market valuation measures, the market ended July 2026 at roughly 176% above its long-term geometric mean. This means that stocks are not merely expensive, it means that stock valuations are historically extreme. The composite includes: Crestmont P/E, Cyclically Adjusted P/E, Q Ratio, S&P Composite relative to its long-term regression trend. Individually, each measure has limitations. Taken together, however, they tell a powerful story.”

As this Substack has pointed out, the U.S. stock market is trading at valuation levels that exceed those seen around several of the most famous speculative peaks in modern financial history. This includes: the late 1920s; the late 1960s; the technology bubble of 2000; the post-pandemic speculative surge. Yet this creates a conundrum. Extreme valuations do not mean that valuations cannot get more extreme and while risk may be high, there is no way to know if or when the market might fall or how such a market decline might progress.

Right now, global money flows continue to support US stock prices, but this could change. As they say, the US is still “the cleanest dirt shirt”. The US stock and bond markets not only depend on global money flows but also hold the savings of not only millions of Americans, but the rest of the world.

Conclusion

We live in interesting, complex, and very dangerous times.

“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” Frédéric Bastiat’s “The Law”, 1850.

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By Uriel Araujo, InfoBrics, 8/24/26

The US national debt has surpassed $40 trillions for the first time amid fiscal pressures, the ongoing US-Israeli war with Iran and renewed inflation fears, with government borrowing on the rise.

The figure carries psychological weight, so to speak yet the real story here is the trajectory: gross federal debt reached 40.047 trillion on August 18, with about $32.3 trillion held by the public and around $7.8 trillion intragovernmental. It has more than doubled since 2017.

Six months earlier, the Congressional Budget Office had projected that gross federal debt would reach about $39.4 trillion by the end of the fiscal year. This faster-than-expected accumulation reflects, among other things, increased borrowing needs, including the fiscal effects of Middle East spending, while higher oil prices and bond yields add to inflationary and debt-service pressures. The 30-year Treasury yield hit 5.33 percent, its highest since 2007.

To be clear, the United States still issues the world’s main reserve currency, borrows in its own money and retains deep markets. No Greek-style crisis seems to be imminent yet. The problem here is what the debt constrains: interest costs are already huge while deficits stay large.

Washington must finance its Social Security, Medicare, defense increases, the Iran war, missile replenishment, industrial policy, infrastructure, tax cuts and possible further commitments in Europe and Asia. This creates a difficult equation: the US tries to sustain the world’s most expensive military and the leading reserve-currency system while fiscal room shrinks.

The military angle is what makes the debt more revealing: the ongoing munitions crisis does not necessarily mean America has suddenly grown weak – yet it shows military power has become costlier and harder to scale. The recent Council on Foreign Relations report is clear: the Iran war has drained high-end interceptors and stand-off weapons. Patriot, THAAD and Tomahawk inventories are significantly reduced – and restocking takes years.

In the same tone, CSIS calls rebuilding the missile inventory a “multiyear project” that opens a window of vulnerability in the Western Pacific.

From an American perspective, the answer would not be just throwing another $50 billion: it would require factories, supply chains, skilled labor, multiyear contracts and sustained spending over years.

A recent 22.9 billion dollar Tomahawk deal, for one thing, aims to lift production to more than 1,000 a year. Having sophisticated weapons after all is not the same as having enough for prolonged conflict.

The aircraft carrier situation points the same way: the (temporary) lack of a US carrier in the Western Pacific does not mean America “left” Asia. Alliances and bases remain. But moving the USS George Washington from Japan to relieve the Abraham Lincoln means one theater is consuming assets needed elsewhere. That is strategic overstretch: America can fight, but must increasingly choose where – to put it simply.

Human strain is also real, with a mental health problem: sailors on the Abraham Lincoln have reportedly tried suicidally to “go overboard” after record deployments. Recruitment may have improved recently, but public health, motivation and industrial capacity have simply not: it is always worth recalling that China’s shipbuilding capacity has been estimated at more than 200 times that of the US.

The obvious conclusion is that a Great Power that struggles to man ships or restock weapons will struggle to sustain multi-front high-intensity war, to put it mildly.

And then the Strategic Petroleum Reserve (SPR) adds an energy layer to this picture: it has fallen below 300 million barrels, the lowest level in over four decades.

Add to that disruptions around the Strait of Hormuz that have removed roughly 5–6 million barrels a day from global oil flows, leaving less buffer.

In this context, war raises oil prices, inflation and debt-service costs while also driving weapons depletion and costly rearmament. Those loops reinforce each other.

Meanwhile, China has reduced its holdings of US Treasuries to 633.4 billion dollars, the lowest since 2008. This is not evidence of a sudden sell-off, but it is consistent with Beijing’s longer-term diversification away from the US Treasuries.

The euro accounts for roughly 20% of global official foreign-exchange reserves, compared with about 58% for the dollar, while the Chinese renminbi remains near 2%.

De-dollarization is thus gradual: the dollar remains “number one,” but its share of reserves is declining as central banks diversify into other currencies and gold, whose purchases remain high amid geopolitical uncertainty. Gold, after all, is no one’s liability.

The euro in turn may benefit from this diversification, but it is no automatic substitute for the dollar; the Iran war has itself weighed on the euro through higher energy costs.

Meanwhile, America’s “exorbitant privilege” increasingly carries heavier costs, as military commitments, debt service and domestic spending compete for shrinking fiscal space. At some point the “warfare state” collides with the welfare state.

In any case, China still holds large dollar assets – its strategic interest arguably lies in a world where Washington can no longer turn dollar dominance into unlimited leverage. With US debt, depleted weapons stocks, stretched Pacific deployments and a diminished SPR set against China’s industrial edge, the superpower dispute today is increasingly about whether American intervention can remain financially and politically sustainable.

In other words, the 40 trillion dollar debt reveals the financial constraints underlying American power, while depleted missiles stocks expose its industrial constraints. The low SPR in turn points to an energy-security limit. And carrier shifts show the limits of force allocation. Taken together they are yet another sign of a shift from unipolar dominance toward a more constrained multipolar order.

America remains the strongest single power, yet it can no longer convert financial strength into military reach without paying a clearer price. That change should shape future US choices, given the increasing constraints on the sustainability of American primacy.

***

CIA director Ratcliffe arrives in Moscow on secret visit, US reports claim

Euronews, 8/25/26

CIA Director John Ratcliffe reportedly arrived in Moscow on an unannounced trip on Tuesday, according to US media outlets.

CBS News reported that Ratcliffe was in the Russian capital, citing sources familiar with the situation.

Neither Washington nor Moscow have confirmed Ratcliffe’s presence, and it was not immediately clear who the US spy chief was expected to meet or what would be discussed.

News of the visit came after a US Air Force Boeing C-17A Globemaster III transport aircraft landed at Moscow’s Vnukovo airport earlier in the day.

Flight-tracking data showed that the aircraft had arrived in Moscow from Riga. It landed in the Latvian capital on Sunday after departing from Camp Springs, Maryland, home to Joint Base Andrews near Washington.

The unexplained flight initially prompted speculation that senior US officials could be travelling to Moscow, including possibly President Donald Trump’s envoys Steve Witkoff and Jared Kushner, who have repeatedly held talks with Russian officials.

US diplomatic motorcade was also spotted travelling through the Russian capital after the aircraft landed.

Kremlin spokesman Dmitry Peskov said earlier on Tuesday that he had no information about the US military aircraft and that no meetings with representatives of the US administration were planned at the Kremlin this week.

The reported visit comes just a day after Ukraine marked its 35th Independence Day, with European leaders travelling to Kyiv to demonstrate their support for the country defending itself from Russia’s ongoing all-out war.

No serving representatives of the Trump administration attended Monday’s events. Witkoff and Kushner did not attend either, despite earlier speculation that the anniversary could bring their first visit to Ukraine.

Neither envoy has travelled to Kyiv since taking a leading role in the Trump administration’s diplomatic efforts, despite repeated meetings with Russian officials and Witkoff’s eight visits to Moscow.

Ratcliffe has maintained contacts with his Russian intelligence counterparts and previously participated in negotiations with Moscow.

He was directly involved in negotiations with a senior Russian intelligence official that led to the April 2025 release of US-Russian dual national Ksenia Karelina.

The last CIA director known to have travelled to Moscow was William Burns in November 2021, months before Russia launched its full-scale invasion of Ukraine.

By Ben Aris, Substack, 8/19/26

The Telegraph came out with a story yesterday: “Russians withdraw billions from banks on fears the Kremlin will confiscate savings” of the genre “Russia is about to collapse,” that has been a staple of Russia coverage for more than 20 years.

It’s BS. Not only are savings in deposit accounts not falling, they have doubled since the war in Ukraine began and are currently at an all-time high, and still rising by 10% pa. The exact opposite to the implied run on banks the piece is suggesting is going on.

Moreover, the confiscation thing is a meme that appeared about two years ago and has been virulently denied by the authorities several times. Plus, it makes no sense. CBR governor Elvia Nabiullina fully realises that if she did attempt to seize everyone’s savings that would wreck the financial system. According to banking professionals the rumour was started by real estate developers, who were trying to boost sales and get people to move their savings into bricks and mortar. And actually, that has happened to some extent as money has been on the move, but for an entirely different set of reasons.

I won’t go into all the details here, but I did a deep dive into what is going on (unlike The Telegraph, I looked all the numbers up) and what came out was a lot of interesting detail on the forces currently at play in the Russian economy and some very real problems that do exist in the banking sector.

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Briefly, if you can’t be bothered to wade through the piece, the story is pretty simple. Following the initial shock of invasion two important things happened: the labour shortage drove wages up dramatically; and interest rates spiked. Since 1991, Russians’ favourite store of wealth has been high-yielding bank accounts so cash has been flooding into bank accounts – you could earn 20% pa from just putting your rubles on deposit for most of the last couple of years. You try and get a return like that anywhere else – a guaranteed return that is also covered by the comprehensive and highly efficient deposit insurance scheme.

But this year a bunch of things changed. The two most important are that inflation expectations are up to around 15%, which is above the 14% overnight rates, so it makes more sense to spend your money than keep it. After Nabiullina put through 700bp of rate cuts, more cuts are on the cards making the inflation eating away at your savings problem worse => get cash and spend it.

Another is that the economy has stalled and swelling personal incomes have deflated so the savings rate has slowed simply as people are getting less money.

And the one point The Telegraph piece makes that is true is the demand for cash has jumped. But that is not because people fear confiscation, but simply the shadow economy has grown thanks to a 2pp hike in VAT: the situation for SMEs has deteriorated rapidly from the triple whammy of a sharp economic slowdown, falling disposable incomes and increased sales tax, so they have gone into cash to avoid paying taxes.

Another factor driving the switch to cash is the internet outages this year that forced people to change from contactless payments to cash – April was the worst month for disruptions and it was also the same month for a spike in cash withdrawals. That shows you how far Russia has gone towards a cashless economy – something you’d realise if you lived there: your phone is your wallet in Russia. They love gizmos.

As for the banking sector, it remains solid. Sberbank, which is about half the banking sector on its own, just reported record profits of $12.6bn and will pay a whopping dividend to the state. (Part of the reason is it can just buy OFZ that are paying over 13% using much cheaper depositor’s money. The Ukraine banking sector is also extremely profitable for the same reasons, buying OVDPs from MinFin.)

The one black spot is that NLPs have risen from about 4% of the loan book to over 11% now, which is not great. And the true number is almost certainly higher, as what banks do is restructure AWOL debt, pushing repayment down the road so they can keep bad debt off the “problem” list as they are required to provision for non-performing debt which eats up their capital – and they hate that. It’s an old trick that has gotten Russian banks through multiple crises. But as all the debt is provisioned thanks to Nabiullina’s clean up, that debt is covered ruble for ruble with cash so it can’t blow the sector up.

Taken all together this paints a picture for me of an extremely well-run financial sector, but an economy under pressure where the punters are making rational decisions about what to do with their wealth – and having options. During the hyperinflation of the 1990s people made the same sort of decisions: buying dollars (if you could get them) was obviously a favourite option but buying cars and washing machines were popular alternatives as they were easy to sell later when you wanted cash again. These days there are even more choices, like money market funds or apartments where the developers are subsidising mortgages to keep demand up – that’s a bet that interest rates will come down over the next 8-25 years, which is a pretty solid bet.

The final point is that the accumulated savings is now RUB70 trillion, which is an enormous pool of money – more than ten times the size of the budget deficit, so it could fund Russia’s war for a decade. The question facing MinFin is how to get that money. Confiscating it is a mindless solution that would be self-destruction.

But I have made this point before: Russia is not on a full war footing – nowhere near it. When the US joined WWII its budget deficit jumped to 22% of GDP and stayed there for three years. Russia’s budget deficit is “high” but it’s still only 2.9% of GDP – less than the EU’s “excessive deficit” threshold.

Still, while the deficit number is low in absolute terms and external debt is also less than 20% (the lowest in the world of any major economy by a wide margin), the cost of servicing the bonds needed to cover these shortfalls is extremely high – so high that it eating up as much money as if the debt was well over 100% of GDP – more than France and the UK are paying and they are both basket cases – so this is a real issue for the Kremlin.

During WWII both the US and the UK sold “war bonds” as a way to tap the population’s savings, which is a really obvious mechanism. And given the average Russian is ten-times more interest rate savvy than the average Brit or American, it would definitely work – if you offered enough, but with the population you could offer longer maturities than you could with banks. However, this idea has not even been floated yet. And there are plenty of other things the Kremlin could do to tap into this pool of liquidity that is doing nothing other than sitting about in the vaults.

So, a nice headline, that has led to some insights, but the bottom line is the quality of the reporting and analysis of what is really happening in Russia remains pretty thin as all these numbers are publicly available and easy to get. And even if you are not an expert in banking or economics then you have AI now to explain it to you.

By Kautilya The Contemplator, Substack, 8/5/26

After over four-and-a-half years of war, one question dominates commentary on Ukraine: Why is Russia advancing so slowly across the battlefield? Prior to the fall of Pokrovsk and Konstantynivka, the Washington-based Center for Strategic and International Studies (CSIS) reported that Russian forces were advancing seventy and fifty meters per day, respectively.1 Compared to the great offensives of the Second World War, this pace of progress is unimpressive, reinforcing a common narrative across the social media landscape that Russia’s campaign is strategically ineffective.

Such conclusions, however, assume that time is a key factor for success on the battlefield. Every village captured becomes a scorecard, while every month without a dramatic breakthrough is interpreted as evidence of failure. Moreover, observers forget that Russia is operating in the most heavily fortified, mined, surveilled and drone-saturated battlefield in the world today. Over a decade, NATO has helped Ukraine construct layered defensive fortifications while enabling Kiev to access Western intelligence, financing, military training and sophisticated weaponry. Russia is thus fighting to defeat a mobilized state whose military effort is sustained by the industrial, financial and intelligence resources of a much larger NATO coalition. As such, the question is not why this task is slow but why anyone should expect it to be fast.

This raises an even more fundamental question. Is the assessment of success the same for the Russian General Staff as it is for the external observer? While this essay does not claim be privy to the classified operational plans of the Russian military leadership, it does claim that there is a recognizable thread that runs through the writings of seven prominent Russian military thinkers in modern history – Aleksandr Svechin, Boris Shaposhnikov, Mikhail Tukhachevsky, Vladimir Triandafillov, Georgii Isserson, Nikolai Ogarkov and ultimately General Valery Gerasimov.

Across a century of profound change, these thinkers have focused on understanding the character of war, organizing the state accordingly, destroying the enemy’s operational system, sustaining offensive momentum and adapting military methods to technological change. Viewed through this intellectual tradition, territorial speed is only one variable in the General Staff’s calculations. Russian operational thought sheds light on several factors that might constrain Russian commanders from accelerating the campaign. These relate primarily to concerns around incurring higher casualties, exposing larger formations to destruction and risking exhausting the army before achieving the political objectives of this campaign.

Part I: Understanding the Character of the War

Aleksandr Svechin: Strategy Determines Operational Tempo

All military campaigns start with a deceptively simple question: How do individual battles produce strategic victory? For Aleksandr Svechin, known as the “Soviet Clausewitz” and for pioneering the concept of “operational art”, the answer lay in recognizing an intermediate level of warfare between tactics and strategy. Winning battles alone did not guarantee victory. Modern wars were won by linking tactical successes together through a sequence of operations designed to achieve political objectives.

Svechin explains in his foundational 1926 work Strategiya (Strategy):

«Боевые действия являются не чем-то самодовлеющим, а лишь основным материалом, из которого слагается операция… Нормально этот путь к конечной цели распадается на ряд операций… Мы называем операцией такой акт войны, в течение которого усилия войск без всяких перерывов направляются… к достижению определенной промежуточной цели.»2

“Combat actions are not something self-sufficient, but only the basic material from which an operation is formed… Normally, the path to the final objective is divided into a series of operations… We call an operation such an act of war during which the efforts of the troops are directed continuously toward the achievement of a particular intermediate objective.”

This formed the foundation of Soviet Operational Art. Tactical engagements were valuable insofar as they supported the operational design. Operations in turn were significant only as long as political objectives were being pursued. Towns like Bakhmut or Avdiivka are not captured because of their intrinsic value, but because of the role they play within an operational campaign.

Svechin’s second enduring insight was that strategy must distinguish between wars seeking rapid annihilation (сокрушениe) and those requiring the progressive attrition of the enemy (измор). These were not moral preferences but strategic responses to different military conditions. As he explains:

«…грань между сокрушением и измором нужно искать не вне, а внутри вооруженного фронта.»3

The boundary between annihilation and attrition must be sought not outside, but within the armed front itself.

This distinction provides a useful perspective for assessing Ukraine. Instead of determining why Russia has not undertaken sweeping offensives for a breakthrough, Svechin would want to first determine whether the conditions for such a breakthrough exist. If they do not, the next question is whether successive operations have progressively weakened Ukraine’s ability to sustain organized resistance.

Boris Shaposhnikov: Mobilization Takes Time

While Svechin emphasized strategy, politics and the uncertainty of war, Boris Shaposhnikov focused on the General Staff and preparing the state for modern war. A Marshal of the Soviet Union, Shaposhnikov defined the General Staff as the institution responsible for coordinating the entire war. This included everything from national mobilization to industry and transportation. His landmark 3-volume work Mozg Armii (The Brain of the Army) remains a foundational text in Russian military education including the General Staff Academy of the Armed Forces. The book’s central insight is that the military system must be designed around the character of the conflict it is actually fighting:

«Характер будущей войны определяет и характер самой мобилизации».4
“The character of the future war determines the character of mobilization itself.”

This principle offers one explanation for Russia’s conduct after February 2022. What began as a limited coercive operation aimed to bring Ukraine to the negotiating table became a prolonged industrial war against a mobilized Ukrainian state supported by the full resources of NATO. Shaposhnikov may have advised that such a change would require not just tactical adaptation but the gradual reconstruction of the military system itself. This would entail generating formations, expanding industrial production, replacing equipment and sustaining repeated campaigns.

He explicitly connected a strategy of attrition with the progressive mobilization of forces not initially committed:

«Стратегия измора вызвала к жизни постепенность мобилизации, приведение в боевую готовность не использованных в начале войны сил и средств».

“The strategy of attrition brought forth the gradual character of mobilization – the bringing to combat readiness of forces and means not employed at the beginning of the war.”

President Vladimir Putin’s partial mobilization announcement of September 21, 2022, illustrates this principle. Following Ukraine’s counteroffensive that recaptured 12,000 square kilometers of territory under Russian control, Moscow realized that further mobilization was required to increase combat power. At the same time, committing additional manpower would not result in a rapid advance. The 300,000 reservists who were called-up had to be trained, equipped, organized and integrated into new and existing formations before they could generate operational effect.

Part II: The Search for Operational Depth

While Svechin and Shaposhnikov focused primarily on the relationship between strategy, mobilization and the state, Tukhachevsky, Triandafillov and Isserson further explored the operational level of war. Their thinking focused on answering how modern armies could restore operational maneuver against increasingly resilient and deep defensive formations. This was a common question that was left unresolved since the First World War.

Mikhail Tukhachevsky: Operational Disintegration Matters More than Territorial Speed

Tukhachevsky was a Marshal of the Soviet Union and one of the country’s foremost military reformers. Referred to as the “Red Napoleon,” he helped develop the conceptual foundations of “Glubokiy Boy” (Deep Battle) in the 1930s.

Tukhachevsky argued that modern armies fought as integrated systems sustained by logistics, manpower, communications, command structures and artillery that extended far beyond the front trenches. According to him:

«Как по фронту, так и в глубину боевой порядок должен быть поражаем атакой соединенных сил артиллерии и пехоты, а также и прочих родов войск по отдельным, наиболее важным, расчленениям его, при нейтрализации всех прочих.»5

“Both along the front and in depth, the enemy’s battle formation must be struck by the combined attack of artillery and infantry, as well as the other arms, against its individual and most important components, while the remainder are neutralized.”

If the adversary managed to preserve its resources to restore the front, then success at the tactical level would achieve little. Victory depended on disrupting the entire military system rather than just destroying frontline units. The decisive condition was operational disintegration.

From this perspective, Russia appears more focused on degrading Ukraine’s command, drone-support networks and logistics rather than occupying towns. Simultaneously, Ukraine also reveals the limits of Deep Battle. The constant presence of drones, minefields and long-range weapons systems makes it significantly harder to convert local tactical penetrations into wider operational collapse. While the technology has evolved, the operational objective remains consistent.

Vladimir Triandafillov: Sustaining Successive Echelons Limits Tempo

If Tukhachevsky provided the vision of Deep Battle, Vladimir Triandafillov explained how it could be achieved. In The Nature of the Operations of Modern Armies (1929), he argued that modern industrial armies could no longer be destroyed in one decisive battle:

«Если поставленная перед армией задача имеет не местное значение, а преследует решительную цель… должно быть предусмотрено значительное проникновение в глубину расположения противника, немедленное нанесение вслед за первым ударом второго, третьего и последующих, с тем чтобы довести противника до полного поражения.»6

“If the task assigned to the army is not merely local but seeks a decisive objective, then it must provide for a significant penetration into the enemy’s depth, followed immediately by a second, third, and subsequent blows, in order to bring the enemy to complete defeat.”

This insight formed the basis of the Soviet concept of successive echelons. Instead of committing all forces at once, the first echelon would penetrate the tactical defenses, following which succeeding echelons would penetrate the breach created and destroy the enemy’s logistics and command posts before it could restore the front again. Thus, victory emerged from sustaining offensive momentum through successive waves of combat power.

For Triandafillov, however, this was fundamentally a problem of logistics and force generation. Operational tempo depended upon sufficient troop density, reserves, engineering support, transportation and ammunition to sustain each echelon as the offensive advanced.

In Ukraine’s drone-saturated environment, where minefields, constant surveillance and precision munitions reveal each force concentration, the challenge of supporting successive echelons has become far more difficult than achieving the initial breakthrough. As such, deep operations must proceed gradually since logistics and follow-on forces determine the pace of advance.

Georgii Isserson: Campaigns Are Continuous, Not Isolated Operations

Isserson, another prolific writer on military strategy and a contemporary of Tukhachevsky and Triandafillov, further expanded the operational concepts in their works. He argued that modern war should no longer be understood as a succession of separate operations. In The Evolution of Operational Art (1937), he wrote:

«Современная операция не представляет собой единовременного оперативного усилия на одном участке. Она складывается из ряда непрерывных оперативных усилий, сливающихся в одно общее целое. Ряд последовательных операций составляет современную операцию.»7

“A modern operation does not constitute a single operational effort in one sector. It consists of a series of uninterrupted operational efforts merging into one unified whole. A series of successive operations constitutes the modern operation.”

Isserson provides another compelling answer as to why Russia’s campaign should be assessed by whether successive operations cumulatively degrade Ukraine’s ability for organized resistance rather than by the speed of territorial advances. The objective is to link a continuous series of operations that gradually attrit the enemy’s ability to wage war until it can no longer regenerate combat power.

Part III: Technology Changes But Operational Art Endures

Nikolai Ogarkov: The Reconnaissance-Strike Complex Changes How Operational Depth is Perceived

Marshal Nikolai Ogarkov, Chief of the Soviet General Staff during 1977-1984, became the leading proponent of the transformation of conventional warfare through the domains of information, precision strike and automated command systems that would eventually become known as the Revolution in Military Affairs (RMA). Based on the operational theory developed by Tukhachevsky, Triandafillov and Isserson, he contended that improvements in reconnaissance, communications and precision weaponry would radically alter how operational depth was achieved. The future army would no longer depend mainly on mechanized forces to breach the enemy’s rear, but would employ its operational depth to strike at all levels of the enemy’s operational system through what would become known as the reconnaissance-strike complex (RSC).

Ogarkov’s vision laid the intellectual foundation for the Russian military’s transformation after 2008. The reforms first launched by the former Minister of Defense Anatoly Serdyukov and subsequently by Sergey Shoigu and General Gerasimov, trace their origins to Ogarkov. These reforms focus on flattened command structures, high-readiness combined-arms formations, strategic joint commands, reconnaissance-strike loops, integrated service operations and non-nuclear strategic deterrence.

Ukraine represents the realization of that vision. Information now moves faster than armies. Targets are detected in seconds and strike cycles have been compressed from hours to minutes. Firepower can reach deep into the enemy’s operational rear without first physically occupying it. Operational depth is increasingly generated through reconnaissance, precision munitions and electronic warfare than by mechanized penetration alone.

Valery Gerasimov: Operational Art Meets the Transparent Battlefield

If Ogarkov foresaw the reconnaissance-strike battlefield, then General Valery Gerasimov is the first Russian Chief of the General Staff to conduct a large-scale conventional war on it. While his writings do not depart from the principles of Soviet operational art, they are modified to adapt to a time where surveillance, unmanned systems, electronic warfare and precision strikes dominate.

In fact, Gerasimov faces the problem of no longer gaining operational depth but sustaining the combat capabilities required to use it. Any concentration of forces and logistics is vulnerable to satellite surveillance followed by drone strikes. Command post operations need to be kept mobile and maneuver coordinated with electronic warfare to defeat the enemy’s reconnaissance-strike capabilities.

This provides one answer to the central question of the essay. The comparatively slow pace of Russian operations need not be interpreted as a lack of maneuver. In an open battlefield, the tempo of operation increasingly depends on the survivability of forces to seize temporary windows of opportunity to maneuver. Commanders thus face a dilemma between retaining their combat capability and accelerating territory capture.

All of this does not mean Russian operational theory has been flawlessly executed. It explains why commanders would prefer to preserve combat power instead of accelerating the advance across the frontlines at the risk of higher casualties. The analysis also does not rule out competing explanations around command problems, logistics issues or political constraints facing the Russian military. What matters is that the discussion on operational art provides another framework to assess the conduct of Russian operations.

The history of Russian military thought thus suggests that battlefield speed has never been an end in itself. From Svechin to Gerasimov, it is the gradual degrading of the war-fighting system of the enemy that has been consistently sought in order to achieve political objectives. If this intellectual tradition is genuinely considered, the key question is not why Russia advances at such a slow pace, but whether the tempo of its operations is consistent with the strategic logic that has shaped Russian operational art for more than a century.

Kautilya The Contemplator is a reader-supported publication. To receive new posts and support my work, please consider becoming a free or paid subscriber. I will always be grateful for your support.

By Fred Weir, Christian Science Monitor, 8/19/26

Fred Weir is a Canadian journalist who has been based in Moscow for decades.

When Russia’s Supreme Court on Monday upheld the controversial decision to bar the liberal Yabloko party from running any candidates in next month’s elections for the state Duma, it focused on alleged infractions of electoral legislation.

But it doesn’t seem coincidental that the removal of Yabloko – which has participated in every federal election since 1993 – will eliminate the only voice that explicitly opposes the war in Ukraine. That means Russian voters won’t be able to express anti-war sentiments via their ballots.

The decision “is a self-exposure of the political system,” said Yabloko’s venerable founder, Grigory Yavlinsky. “It is obvious that the demand for peace and freedom has turned out to be much stronger today than the authorities expected.”

As the war escalates, with a new generation of Ukrainian drones striking deep into Russia’s heartland, destroying oil refineries and laying waste to consumer distribution centers, Russians are finding it increasingly difficult to ignore, or treat as a distant inconvenience. Like Mr. Yavlinsky, some Western analysts have speculated that the arrival of war’s destructive realities on their own doorstep might cause public patience to wear thin, or that the growing costs and economic strains will lead Russia’s elites to press the Kremlin to end the conflict.

War weariness on the rise

Ukrainian experts say the logic of hitting largely consumer targets is in part retribution for analogous Russian attacks, and that disrupted supply chains affect the military as well. But the hope that rising public pain might stimulate anti-war sentiment and activism is clearly part of Kyiv’s calculation.

In his evening address on Aug. 14, Ukrainian President Volodymyr Zelenskyy noted that “every level of pressure on Russia must bring that country – above all, its society – closer to wanting to end their war.”

Gauging Russian public opinion can be difficult, particularly under war conditions, but some are still trying to do it. Amid the intensified Ukrainian drone assault in July, over 70% of respondents to a survey conducted by the Levada Center, Russia’s only independent [western backed] polling agency, continue to support Russian forces in Ukraine, but almost two-thirds wanted to see peace negotiations.

However, only a quarter approved of making concessions to Ukraine and the West to reach peace, and half backed more assertive military action to bring Ukraine to the table. Half said they believed the Russian army is achieving its war goals, while about a third thought it is not winning.

“The strains have been with us for a long time, and now we have these drone attacks,” says Kirill Poputnikov, an architect in Yaroslavl, a city 160 miles northeast of Moscow that has seen multiple drone attacks, including early August strikes on a local refinery that caused massive fires and sent up thick clouds of black smoke. “If life were normal, then fuel shortages and such might make you feel panic, but with all this going on it’s just another irritating thing.”

In a July survey of Russians by the Levada Center, 57% of respondents assessed the political situation in the country as “tense,” an increase of 10% in just over a year. Only one in four described the situation as “calm,” a decrease of 14% since last year.

Another Levada poll reports that one of the most basic measures of public well-being – what’s sometimes called the “Happiness Index” – has fallen to near-record lows, with just 47% of respondents saying that they are, on balance, satisfied with their lives. Sociologists say that Russians generally tell pollsters that they’re “happy” as long as things are basically OK with health, family, and income.

A big hit to business

Perhaps the hardest-hit social sector is the small-business community, which was already in deep economic distress due to rising taxes, high interest rates, and falling consumer demand even before Ukrainian drones targeted critical warehouse hubs.

Kyiv’s war planners appear to have singled out the online retailer Wildberries, often described as Russia’s version of Amazon. Since July, they have destroyed an estimated 25% of its storage facilities, hitting sites as far away as the Urals city of Yekaterinburg, 1,250 miles from Ukraine’s border, and destroying billions of dollars worth of merchandise.

Lev Gudkov, scientific director of the Levada Center, says the mood among Russia’s approximately 7 million small-business people is one of “pessimism and hopelessness.” Many of them rely on Wildberries and its main competitor, Ozon, and the online nationwide reach they provide, to bring their goods to market. Some have seen their inventories literally go up in smoke and, despite promises of compensation, many are facing imminent bankruptcy.

“Trust in all branches of power – the government, the Duma and, to a lesser extent, the president – is falling,” Mr. Gudkov says.

Margarita Zavadskaya, an expert with the Finnish Institute of International Affairs in Helsinki, says that even beleaguered small-business people are unlikely to panic but – judging by past behavior – they will probably hunker down and find ways to survive, hoping that things will get better.

“We shouldn’t expect a mass flight of entrepreneurs from business, but more cautious behavior,” she says. “They can cut investment and hiring, keep more cash on hand, diversify warehouses and suppliers. These are the kind of actions they take when times get bad.