What can Russia do?

Some Pundits believe that it is only a matter of time until Western Europe will  extend its influence from the Straights of Gibraltar to the peninsula of Kamchatka. In other words, the Pundits believe that Russia will implode and Putin will be overthrown by a desperate populace whose economy is in ruins.  Such Pundits seem to ignore Russian resiliency. They also ignore stern warnings from Putin.

Given that price of oil has fallen some 30%+ and that the Ruble has lost over 40% of its value, what can Russia do? Well, for one thing, Russia can overrun the Ukraine, if provoked enough. But, that is not the most potent retaliation the Russians can do. Their most potent weapons are to stop deliveries of natural gas to the West and suspend payments to Western banks. The first will cripple Europe's economy, the second will cripple European banks which are close to insolvent.

Unfortunately, Europe is run by idiots. The Russians are NOT giving up the Crimea (their only warm water port), but they are willing to respect Ukraine's integrity if a federated system can be achieved in Ukraine that respects the Russians' language and cultural rights in Donetsk and Luhansk. The Ukrainian govt has in fact agreed to such a solution. It will not work if Ukrainian troops continue to attack their two provinces, or if they try to get heavy weaponry from the West.