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Starting an economic war with Russia would be a bad idea in and of itself, but failing to calculate on the response of Russia’s allies to such a move is downright asinine. Of course when Obama signed the order last week authorizing sanctions targeting Russia he might have been bluffing. He might have hoped that Russia would beg for mercy and start marching to Washington’s tune. It’s hard to imagine that the white house with their army of advisors and political scientists could really be that stupid, but maybe I’m giving them too much credit. Maybe they just didn’t think this thing through.

One way or the other, the result is the same. The U.S. government has gotten itself into a geopolitical game of chicken and if someone doesn’t back down there will be a collision. Trouble is, though they initially picked a fight with Russia, the world’s 8th largest economy (by GDP), the outcome of this gambit depends almost entirely on which direction the rest of the world decides to swing. The lines of economic warfare have been drawn, and as sides are being picked it’s already clear that Washington is in over its head.

Of course the most important variable in this equation is China, the second largest economy in the world. Though China has refrained from making inflammatory remarks in either direction throughout this crisis, and though Obama is actively attempting to push Beijing to side with the West, it would be naive to think that there was ever any real question as to which way they will swing when push comes to shove. China is in Russia’s corner, period. It is however, somewhat surprising to see India signaling their support for Moscow. Standing up to the U.S. geopolitically is out of character for India, but times are changing. The balance of economic power has been shifting gradually away from the West for many years, and now the political weight is shifting as well.

With India, Russia and China quietly drawing closer you have the R, I, and C of the BRICS economic block and a third of the world’s population. In nominal terms their combined GDP is a little over 12 trillion, which is smaller than that of the United States, which weighs in at 16 trillion, but if you look at these numbers in the context of national debt a very different picture emerges. Russia’s, India’s and China’s national debts combined ring in a just over 4 trillion dollars, while the U.S. is sitting on a gargantuan 17 trillion dollars of debt. It also just so happens that China owns 1.3 trillion of that debt (8%). The U.S. economy may be bigger in raw numbers, but it’s also far more vulnerable.

The other variable in this equation is one that is never mentioned by Western media outlets: the Petrodollar. The fact that the U.S. dollar is the world’s reserve currency and the fact that oil can only be purchased on the global market with dollars is both a strength and a weakness for the United States. As long as the status quo holds Washington has enormous economic leverage. They can print money into existence on an epic scale and the demand for oil forces the rest of the planet to absorb the inflation. This is why they’ve been able to inject 85 billion dollars into the U.S. banking system every month since 2009 without setting off hyper-inflation (QE3). However pushing for sanctions against Russia is a surefire way to tip this gravy train over.

Russia has made it clear that they will retaliate against U.S. sanctions with measures of their own. The most significant being their threat to completely drop the dollar for all trade, dump its U.S. bonds, and to encourage others to do so as well. Russia is capable of such a response, and it would be foolish to assume that they are bluffing.

Though all sides would sustain damage in such an exchange the U.S. would be hit much harder; not so much because of the direct impact of Russia’s move, but rather due to the chain reaction this would set off. If Russia stops using the dollar for all of its trade and is able to keep its head above water, an international financial structure would emerge in parallel, and in competition with the current one. The full effect of such a shift can’t be calculated as if it were a question of market share. The U.S. dollar isn’t a real commodity that holds any real value. Its position is a result of a monopoly which is backed by the U.S. military. Taking away that monopoly wouldn’t be like cutting off a piece of the pie, it would be like popping a balloon.

There are only two ways this game of chicken can end: either in an utter disaster of unthinkable proportions, or as another diplomatic embarrassment for the Obama administration. Let’s hope for the latter.