Russian troops are now in parts of Ukraine.  Call it an invasion, call it an intervention, the fact is the Russian Army is in control of certain key areas inside Ukraine.  This is a bad situation, even if you are on the other side of the world.

The really bad news is that Russian leader Vladimir Putin has positioned Russia to hold all the cards in this international crisis.  The EU and US aren’t in a position to do much about it either, other than issue empty statements that belie their ability to influence events.  More than anything else though, the Ukraine Russia situation shows how out of touch both European and American elites are when it comes to international relations.  As Walter Russell Mead writes over at the American Interest:

Well bred and well read Americans live in an ideological and cultural cocoon and this makes them fatally slow to understand the very different motivations that animate actors ranging from the Tea Party to the Kremlin to, dare we say it, the Supreme Leader and Guide of the Islamic Republic of Iran.

You might thing events halfway around the world won’t have an impact on your daily life, but this one has potential to cause a serious economic disruptions worldwide.  Ukraine has been called the “Breadbasket of Europe” for centuries because of its agricultural output.  Russia is a top energy exporter to both Europe and former Soviet Republics, which has allowed it to become wealthy in recent years.  This gives Putin the ability to exert leverage on countries that depend upon Russian oil and natural gas to power their economies.  Price spikes due to shortages or embargoes could hit European economies hard, which in turn could cause already anemic economic growth to slow.

…and if Ukrainian farmers can’t plant their fields in the coming months due to ongoing civil unrest and Russian occupation, agricultural output will plummet in Europe’s second largest grain producer.  This in turn will lead to shortages and price increases of certain commodities, which will impact world markets.

With this in mind, what should a well-prepared person do?  If you haven’t done so already, make sure you have extra supplies of food on hand and be prepared for fuel price increases.  The situation in the Ukraine is fluid and could take several twists and turns before the situation stabilizes.  Just be aware that this crisis can have an impact on the interdependent, globalized economy we are all a part of.  Plan accordingly…

Update:  Here is a worthwhile article from the CSM about the economic impact of the crisis.