Economics

Authored by Andrew Latham via RealClearWorld,

Russia’s 2015 military intervention in Syria was a bold assertion of its great power ambitions, rescuing Bashar al-Assad’s regime and projecting influence in the Middle East. However, recent rebel advances and Assad’s sudden deposal threaten to isolate Russia’s Khmeimim airbase and Tartus naval facility, undermining both the practical and symbolic foundations of Moscow’s global power status.

The fall of Assad promises to be a major blow to Russia, which is already bogged down in Ukraine. Its ramifications are likely to be felt across Moscow’s foreign policy, which could soon face some stark and unenviable choices.

The Russian presence in Syria is central to the Kremlin’s broader strategy of force projection. Its Mediterranean bases allow Moscow to sustain military operations in the Levant, North Africa, and beyond, countering U.S. influence. With the key city of Homs having fallen to the rebels, supply routes to Khmeimim and Tartus have been severed, forcing reliance on vulnerable air and sea routes. This will weaken Russia’s operational readiness and its ability to influence events in neighboring theaters, including Africa.

Khmeimim also serves as a logistical hub for Russian private military contractors (PMCs) like the Wagner Group, active in Libya, Mali, and the Central African Republic. These contractors are central to Moscow’s efforts to expand its influence in Africa, providing security and securing lucrative economic deals. With Khmeimim isolated, sustaining these operations would become costly and inefficient, reducing Moscow’s ability to achieve its geopolitical objectives on the continent.

The isolation of Khmeimim and Tartus will severely constrain Russia’s ability to sustain military operations in Syria and beyond, undermining its ability to conduct airstrikes, reconnaissance, and rapid-response missions. PMCs, reliant on robust logistics, will face disruptions, emboldening opposition forces and exposing the fragility of Russia’s African partnerships. These setbacks will ripple through Moscow’s strategic calculations, undercutting its influence and economic goals.

The symbolic consequences of a rebel victory will be even more damaging. Moscow has portrayed its intervention in Syria as a demonstration of its reliability as an ally and its ability to uphold the sovereignty of client states. The loss in Syria will puncture this narrative, exposing the limits of Russian power and credibility. Regional actors, including Iran, Turkey, and the Gulf states, will recalibrate their perceptions of Moscow’s influence, while African partners might pivot toward more reliable alternatives such as China or the West.

Domestically, the repercussions of a diminished role in Syria will be significant. President Vladimir Putin has marketed the Syrian intervention as a triumph of Russian statecraft, portraying it as a cornerstone of Russia’s resurgence on the global stage. While critics of Russia’s foreign interventions have questioned their costs for years, the fall of Assad could amplify these doubts in ways the prolonged conflict in Ukraine has not. Syria’s collapse would symbolize a failure of Russia’s ability to safeguard allied regimes, striking at the narrative of strategic competence that Putin has worked to project. Public perceptions of Russian strength, carefully curated through state-controlled media, could falter, creating broader political vulnerabilities. Moreover, Syria has served as a testing ground for Russian weapons systems, and reduced visibility in the region would weaken their appeal to buyers, further diminishing Russia’s geopolitical leverage and economic gains from arms exports. The rebel victory in Syria will resonate globally. For the United States and its allies, it will validate strategies to contain Russian influence and embolden further countermeasures. NATO could leverage Russia’s difficulties to underscore the limitations of its global reach, while China might accelerate efforts to dominate regions like Central Asia and Africa, further sidelining Moscow in regions where it traditionally competes.

Russia now faces a stark choice: escalate its military commitment to protect its strategic interests, such as its naval facility in Tartus and airbase in Khmeimim, or accept a diminished role in the region. Escalation would aim to preserve these assets and reassert influence but risks clashes with other regional powers and would strain resources already stretched by commitments in Ukraine and Africa. Retrenchment, however, would signal a devastating blow to Russia’s credibility as a reliable guarantor of allied regimes worldwide, sending a clear message to its partners in Africa, the Middle East, and beyond that Moscow cannot be counted on to defend its allies in times of crisis. This erosion of trust would undermine Russia’s broader global strategy and invite further challenges to its influence elsewhere.

Already there is evidence Russian warships have left Tartus, raising questions about Russia’s commitment to its Syrian bases. As Russia navigates this crisis, it must confront the limits of its resources and the fragility of its aspirations. Great power status requires not just military might but strategic resilience. The outcome of the Syrian conflict will shape the future of Russia’s role in the evolving international order. For Moscow, the stakes could not be higher.

Andrew Latham is Professor of Political Science at Macalester College and a Non-Resident Fellow at Defense Priorities.

In the fourth quarter of 2023, online shopping was a record-breaking 17% of all retail sales. Put another way, one out of every six dollars was spent online.

This graphic from Visual Capitalist’s Jenna Ross, in partnership with BGO, highlights the spike in ecommerce that occurs every year during the holiday season.

The Growing Popularity of Online Shopping

Over the last 15 years, the percentage of money consumers are spending online has more than tripled. The most online shopping always occurs in the fourth quarter due to Black Friday and holiday spending.

In the table below, we show online shopping as a percentage of total retail sales over time.

Source: U.S. Census Bureau. Data accessed November 19, 2024.

With people stretched for time during the busy holiday season, many opt for quick online orders and home deliveries. 

Beyond convenience, deals also draw people to their screens. For instance, Amazon’s October Prime Day and Cyber Monday both offer deals catered to online shoppers. In 2024, Cyber Monday drew over 64 million U.S. shoppers—nearly three times higher than the 23 million people who shopped in stores.

To handle the increase in online shopping orders, U.S. retailers will need to have a plan for storing their products and transporting them to customers.

The Logistics of Online Orders

Free and fast shipping are top priorities for online shoppers. Nearly 40% would abandon a retailer with high shipping costs, while 32% would stop buying because of late deliveries. These high expectations, and the increase in ecommerce, is driving demand for real estate that can process online orders.

BGO’s industrial warehouse and logistics properties are strategically located to help reduce expenses and transport goods to consumers more quickly. During the busy holiday period, these properties run at full efficiency to meet the surging demand.

Learn what’s moving markets in BGO’s The Chief Economist newsletter.

Submitted by QTR’s Fringe Finance

I was happy to welcome my friend Peter Schiff back on to Fringe Finance this past week, where I was able to get his take on a couple of the items I wrote about on the blog last week – most importantly, whether or not he thinks markets will crash up (hyperinflation) or down (deflationary depression).

Schiff and I also talked about his perspectives on markets, government policies, and the future of Bitcoin and gold. I also asked Schiff about his miscalculations, primarily underestimating the length of time it would take for economic reckoning and on bitcoin.

Speaking from his residence in Puerto Rico, Schiff painted a dire picture of the U.S. economy, marked by excessive debt, misguided monetary policies, and misplaced optimism.

Schiff’s outlook on the markets remains grim. “The market is already very expensive,” he observed, highlighting that “the optimism factored in is misplaced.” He warned of an impending reckoning, exacerbated by years of deficit spending and inflationary policies: “We have a $36.2 trillion debt that’ll soon reach $40 trillion. This is unsustainable.”

“The market is already very expensive. It’s hard to see parabolic upside when optimism is misplaced. The markets are expecting good things to happen that aren’t going to happen.” – Peter Schiff

On whether markets are set to “crash up or crash down,” Schiff remarked, “Higher inflation is baked in, but that’s not good for the dollar. The markets are wrong to think it is.” His skepticism extends to the Federal Reserve, which he accused of sacrificing long-term economic health for short-term stability: “The Fed is a one-trick pony. Its solution to every problem is to inflate, mask the problem, and hope it goes away.”

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Schiff remains an unwavering advocate for gold, dismissing Bitcoin as a speculative bubble. He criticized Bitcoin’s lack of utility, stating, “It’s not digital gold; it’s not digital anything.” Contrasting it with gold, Schiff argued, “Gold has intrinsic value and has been a store of wealth for millennia. Bitcoin has failed to be money for 15 years.”

Taking aim at Michael Saylor’s proposal for the U.S. government to sell its gold reserves to buy Bitcoin, Schiff called it “a horrible idea” and dismissed Saylor’s comments as “self-serving.” He continued, “Bitcoin is not a reserve asset; it’s a speculative tool that has concentrated risk.”

Schiff also lambasted the speculative frenzy surrounding Bitcoin ETFs and institutional purchases: “Bitcoin ETFs and MicroStrategy have cornered 8% of Bitcoin’s total supply. That’s a bubble waiting to burst.”

“Bitcoin ETFs and MicroStrategy have already cornered 8% of Bitcoin’s supply. That’s concentration risk in a speculative bubble,” Schiff said. “Michael Saylor’s proposal for the U.S. to sell its gold for Bitcoin is not just a bad idea—it’s delusional. It’s putting all your eggs in one highly speculative basket.”

Schiff highlighted the worsening state of the U.S. economy: “People are working harder for less real income, drowning in debt, and paying 25% interest on credit cards. This is the reality behind the so-called recovery.” He lambasted the bipartisan reluctance to address deficits: “Trump promised to cut deficits but signed every debt-busting bill put on his desk. Nothing will change under his leadership.”

We also discussed:

• Market outlook: Speculation on whether markets will experience an inflationary rise or deflationary crash
• Federal Reserve policies: Predictions about the Fed’s actions concerning inflation and interest rates
• Inflation expectations: Discussion about how inflation impacts the economy and the U.S. dollar
• Government deficits: Criticism of rising budget and trade deficits under various administrations.
• Trump’s economic policies: Evaluation of Trump’s promises versus the reality of government spending and deficits
• Impact of tax cuts: Debate over whether tax cuts would stimulate the economy or worsen the deficit
• Military and welfare spending: Criticism of increases in military and welfare spending despite calls for fiscal restraint.
• Gold and currency: The comparative value of gold versus the U.S. dollar and other assets.
• Bitcoin and cryptocurrency: Analysis of Bitcoin’s perceived value, speculative nature, and potential risks.
• Comparative risk of assets: Comparison between speculative investment in Bitcoin and traditional markets.
• Historical trends in gold ETFs: Analysis of gold’s stability and its market dynamics versus Bitcoin.
• Government intervention in Bitcoin: Concerns over potential government involvement in Bitcoin markets
• Critique of modern monetary theory (MMT): Dismissal of MMT as a sustainable economic approach
• Economic bubbles and malinvestment: Concerns over the allocation of capital into unproductive sectors
• Debt servicing crisis: Warnings about rising interest payments on national debt
• Future economic predictions: Forecasts of a potential dollar crisis or significant inflationary period

You can watch the entire hourlong interview here. 

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