March 3, 2014

And the plot thickens. Who's behind regime change in Ukraine.

Just hours after last weekend’s ouster of Ukrainian president Viktor Yanukovych, one of Pierre Omidyar’s newest hires at national security blog “The Intercept,” was already digging for the truth.

Marcy Wheeler, who is the new site’s “senior policy analyst,” speculated that the Ukraine revolution was likely a “coup” engineered by “deep” forces on behalf of “Pax Americana”:

<snip>

Wheeler is partly correct. Pando has confirmed that the American government – in the form of the US Agency for International Development (USAID) – played a major role in funding opposition groups prior to the revolution. Moreover, a large percentage of the rest of the funding to those same groups came from a US billionaire who has previously worked closely with US government agencies to further his own business interests. This was by no means a US-backed “coup,” but clear evidence shows that US investment was a force multiplier for many of the groups involved in overthrowing Yanukovych.

But that’s not the shocking part.

What’s shocking is the name of the billionaire who co-invested with the US government (or as Wheeler put it: the “dark deep force” acting on behalf of “Pax Americana”).

Yes, in the annals of independent media, this might be the strangest twist ever: According to financial disclosures and reports seen by Pando, the founder and publisher of Glenn Greenwald’s government-bashing blog,“The Intercept,” co-invested with the US government to help fund regime change in Ukraine.

Step out of the shadows…. Wheeler’s boss, Pierre Omidyar.

http://pando.com/2014/02/28/pierre-omidyar-co-funded-ukraine-revolution-groups-with-us-government-documents-show/

March 2, 2014

Behind the Barricades, Kiev (Photo series)

Because of the nature of this series, I've posted them on GD. The links are here...

http://www.democraticunderground.com/10024590401

http://www.democraticunderground.com/10024590404

http://www.democraticunderground.com/10024590408

http://www.democraticunderground.com/10024590417

February 26, 2014

Bank Runs, Currency Devaluation - What's next for Ukraine

Bank Run Full Frontal: Ukrainians Withdrew 7% Of All Deposits In Two Days

Well that escalated quickly. It seems the ouster of Yanukovych, heralded by so many in the West as a positive, has done nothing to quell the fear of further economic collapse in Ukraine:

• *UKRAINIANS WITHDREW AS MUCH AS 7% OF DEPOSITS FEB. 18-20: KUBIV
• *DEPOSIT WITHDRAWALS STILL HIGH IN THE EAST, KUBIV SAYS

http://www.zerohedge.com/news/2014-02-25/bank-run-full-frontal-ukrainians-withdrew-7-all-deposits-two-days

Ukraine's bonds resume fall; hryvnia hits record low

The hryvnia fell more than 6 percent on the day to 9.80 per dollar, on track for its biggest one-day loss since February 2009.

Ishitaa Sharma, a strategist at Citi said the hryvnia's slide was likely to add to jitters among the population, with many people left holding a depreciating currency.

"They are all looking for hard currency. There is no buyer out there for the hryvnia," Sharma said.

http://www.reuters.com/article/2014/02/25/ukraine-crisis-bonds-idUSL6N0LU3PS20140225

UPDATE: Current rate today is 10.15.

My Commentary on the above…

Bank Runs

Okay, so in practical terms, what does this mean? Well first, this 7% number I find a bit astounding. Why? Because in the euro zone, it’s a general requirement that 1% be held in reserve. And while in the USA there is a 10% requirement, that only applies to checking accounts. So in all practicality, that number is a whole lot lower. So a 7% withdrawal rate would eliminate all cash reserves in most banks in the USA and in the Eurozone.

But let's look at this even closer. It's not likely at all that major corporations with operations in Ukraine are holding anything beyond a couple weeks operating expenses in Ukrainian banks. They’re not considered to be all that reliable. So the 7% number has nothing to do with a couple of major corporations moving money out of the country. They never had that money there in the first place.

Of course, this is not surprising. Especially among the older population, there's a strong memory of the collapse of the USSR and the ensuing collapse of the banks. Those who remember those times understand full well that you should have minimal trust in banks and that once things appear to be going downhill, you get your money out quickly.

Currency Devaluation

So now, what are the practical effects of the second story? What do these numbers mean? For the last few years, the Ukrainian currency has generally been in a fairly stable range when compared to the US dollar at about an 8 to 1 ratio. Now the number is about 9.7 and I have already predicted the ratio hitting 12 to 1 before the May elections. Although now it appears even I may have been a bit optimistic about that. Time will tell.

At the 12 to 1 ratio, the practical effect of this is that any imported goods will see a 50% price increase as soon as it crosses the border. After that, there will likely be additional increases tacked on because the cost of transportation will also have increased. So, this must be good for domestic industries, correct?

Sadly, that is not correct. One of the biggest costs of any manufacturing operation is energy. Energy to run the factory, energy to build product, energy to extract resources, and energy to transport resources, both to and from a factory. Since energy is also an import, energy costs will rise 50% at least. I say at least because a recent agreement with Russia led to a 33% cut in the cost of Russian gas. Since it is not likely that Ukraine will uphold their end of that agreement, it's very likely that Russia will see no need to uphold their part of the agreement. And often, goods produced domestically have some imported content. That imported content will also cost more.

So, is this as bad as it gets? Sadly, the answer again is no. Everything that has happened up to this point has not yet taken into account austerity measures that will be imposed by any IMF agreement. Pensions and salaries at a minimum will be frozen; or worse, they may be cut. And on top of that, tax increases and new taxes will likely be introduced. The IMF will be paid back, one way or another.

Since the fall of the Soviet Union the population of Ukraine has already dropped about 10%. The current troubles will likely lead to a further drop, some to emigration and some to putting off having children. Those in the west of Ukraine will likely try to flee toward Europe, and can expect not to be welcomed. Those in the East would tend to head east toward Russia, an area they are more likely to get a warm welcome.

And I can tell you with absolute certainty that except maybe for the top 1%, nobody will be seeing raises this year anywhere close to 50%.

February 23, 2014

Shock over Ukraine

This article was likely written on Friday and posted on Saturday, so there are sections that are outdated already. Yet I found it to be a good read. Note that this is opinion of two people and not a hard news story.

I think that the current situation is such that everyone is in terrible shock over what's happening.

The EU representatives are shocked most of all. They were playing at being skillful diplomats, who stooped to work with the barbarous dictator of a third-world country. He was supposed to quiver with anticipation over his handout, in the form of an EU-Ukraine Association Agreement, which would have allowed him to don the mantle of the great Euro-integrator and win the 2015 elections.

Gazing down from their lofty diplomatic perch, these experts were blindsided when the barbarous dictator suddenly decided to do a bit of arithmetic, spotted a flaw in the deal (Ukrainian national bankruptcy) and swiftly decided to take his 46 million slaves away from the EU and give them to Moscow instead. And then, due to their ridiculous bureaucracy and complete lack of understanding of Ukrainian reality, they allowed an initially peaceful protest to develop into something like civil war.

<snip>

Ukrainian opposition leaders are in shock as well. They were all ready to use the energy of the demonstrators to advance their own political ambitions—but now these ambitions seem rather beside the point. They are politicians, not field commanders, and now they don't know what to do. Their task is an immensely intricate one: on the one hand, they must act like ardent revolutionaries, or the crowd will turn against them, haul them off the podium and string them up; on the other hand, they have to placate the Europeans and somehow make them believe that they still have influence, that this is still a peaceful protest, and that they are not leading illegal combatants to overthrow lawful authority, but legitimate, peaceful protesters. They still hope that the Europeans will give them jobs in the new puppet government once this is all over. So far, this is not working, and they themselves no longer believe that they are in control of anything. They sign agreements to end hostilities, and hostilities continue.

The barbarous dictator, Yanukovych, is in shock too. His luck has been quite good until now, but has suddenly run out. He rose from low ranks, became one of the kingpins of the Donbass region, survived the collapse of 2004 and then got rich and built himself a palatial estate complete with a Solid Gold Toilet. Up until now he had several different ways of winning the elections in 2015. After that, he could have borrowed a page from Lukashenko's playbook and fashioned himself into Ukraine's president-for-life. But now that dream is gone.

http://cluborlov.blogspot.com/2014/02/shock-over-ukraine.html

And a link for the artist: http://goo.gl/yVdhjq

February 19, 2014

What the Mainstream Media isn't telling you about the situation in Kiev.

As an 8+ year resident of Kiev and living about 1.5 miles from the main EuroMaidan protests, I've seen a lot the last few months that I had never expected to see. A lot of what I'm going to say here is going to be controversial, precisely because of the pseudo-coverage these events received in the USA.

In general, I've always had this idea that if people are out in the streets protesting in large numbers, they have a very good reason to do so. But when these protests started, I was having trouble finding exactly what that very good reason was. I mean, come on, you're protesting the failure to accept a trade agreement that would impose Greek style austerity and devastate numerous domestic industries in the process? Seeing that wasn't all that appealing to many, it morphed into a protest against corruption, which is obvious and rampant here and much more appealing to the general population. But many could not overlook a couple of things. One is the fascists leanings of one of the main groups behind the protests, and that the protests were incredibly well organized and well funded and claiming it all came from ordinary Ukrainians didn't compute. I smelled a rat early on, and so have in general been against these protests, though there have been occasions where they almost won me over, to be followed a day or two later by the street doing something so stupid that I could no longer be on their side.

Let me just link to a couple of articles that I believe describes the complexity of the situation the last few months in Kiev.

Debate: Is Ukraine's Opposition a Democratic Movement or a Force of Right-Wing Extremism?

Now, what was that agreement? It would have been an economic catastrophe for Ukraine. I'm not talking about the intellectuals or the people who are well placed, about ordinary Ukrainians. The Ukrainian economy is on the brink of a meltdown. It needed billions of dollars. What did the European Union offer them? The same austerity policies that are ravaging Europe, and nothing more. $600 million. It needed billions and billions.

There's one other thing. If you read the protocols of the European offer to Ukraine, which has been interpreted in the West as just about civilizational change, escaping Russia, economics, democracy, there is a big clause on military cooperation. In effect, by signing this, Ukraine would have had to abide by NATO's military policies. What would that mean? That would mean drawing a new Cold War line, which used to be in Berlin, right through the heart of Slavic civilization, on Russia's borders. So that's where we're at to now.

One other point: These right-wing people, whom Anton thinks are not significant, all reports, and I don't know when he was in Ukraine, maybe it was long ago and things have gone, but the reports that are coming out of Ukraine are the following. One, the moderates, that's the former heavyweight champion boxer, Vitali Klitschko, and others, have lost control of the street. They've asked the people who have been attacking the police with Molotov cocktails, and to vacate the buildings they've occupied, to stop. And the street will not stop, partly because, I'd say largely because, the street in Kiev is now controlled by these right-wing extremists. And that extremism has spread to western Ukraine, where these people are occupying government buildings. So, in fact, you have a political civil war underway.

http://www.democracynow.org/2014/1/30/debate_is_ukraines_opposition_a_democratic

Ukraine and the Rebirth of Fascism in Europe

For its part, the United States has strongly come down on the side of the opposition, regardless of its political character. In early December, members of the US ruling establishment such as John McCain and Victoria Nuland were seen at Maidan lending their support to the protesters. However, as the character of the opposition has become apparent in recent days, the US and Western ruling class and its media machine have done little to condemn the fascist upsurge. Instead, their representatives have met with representatives of Right Sector and deemed them to be "no threat." In other words, the US and its allies have given their tacit approval for the continuation and proliferation of the violence in the name of their ultimate goal: regime change.

In an attempt to pry Ukraine out of the Russian sphere of influence, the US-EU-NATO alliance has, not for the first time, allied itself with fascists. Of course, for decades, millions in Latin America were disappeared or murdered by fascist paramilitary forces armed and supported by the United States. The mujahideen of Afghanistan, which later transmogrified into Al Qaeda, also extreme ideological reactionaries, were created and financed by the United States for the purposes of destabilizing Russia. And of course, there is the painful reality of Libya and, most recently Syria, where the United States and its allies finance and support extremist jihadis against a government that has refused to align with the US and Israel. There is a disturbing pattern here that has never been lost on keen political observers: the United States always makes common cause with right wing extremists and fascists for geopolitical gain.

http://www.globalresearch.ca/ukraine-and-the-rebirth-of-fascism-in-europe/5366852


Ukrainian Left-Wing Activists' Appeal to UN, EU, and USA: Don't Back Civil War & Fascist Coup in Ukraine!

1. The pretext for organizing the Euromaidan in Kiev was the refusal of the Government and the President of Ukraine to sign an Association Agreement with the EU. We draw your attention to the content of this document, for the sake of which the Parliamentary opposition led people to the Maidan. The heart of the Agreement is the complete loss of Ukraine's sovereignty through the transfer to supranational agencies (the Council of Association and the Committee on Trade) of decision-making authority, placing them juridically above the Constitution and laws of Ukraine. It has been unconditionally proven that this contradicts the Declaration on the National Sovereignty of Ukraine, the Constitution of Ukraine, and decisions of the Constitutional Court of Ukraine. It also contradicts the expression of the will of the people of Ukraine in the referenda of March 17 and December 1, 1991.

Implementation of the Association Agreement with the EU would indisputably lead to the destruction of the country's economy, industry, agriculture, service sector, and science.

http://www.thomhartmann.com/forum/2014/01/ukrainian-left-wing-activists-appeal-un-eu-and-usa-dont-back-civil-war-fascist-coup-uk#sthash.wVZRxuTe.dpuf


Russia Under Attack

In a number of my articles I have explained that the Soviet Union served as a constraint on US power. The Soviet collapse unleashed the neoconservative drive for US world hegemony. Russia under Putin, China, and Iran are the only constraints on the neoconservative agenda.

Russia’s nuclear missiles and military technology make Russia the strongest military obstacle to US hegemony. To neutralize Russia, Washington broke the Reagan-Gorbachev agreements and expanded NATO into former constituent parts of the Soviet Empire and now intends to bring former constituent parts of Russia herself–Georgia and Ukraine–into NATO. Washington withdrew from the treaty that banned anti-ballistic missiles and has established anti-ballistic missile bases on Russia’s frontier. Washington changed its nuclear war doctrine to permit nuclear first strike.

All of this is aimed at degrading Russia’s deterrent, thereby reducing the ability of Russia to resist Washington’s will.

The Russian government (and also the government of Ukraine) foolishly permitted large numbers of US funded NGOs to operate as Washington’s agents under cover of “human rights organizations,” “building democracy,” etc. The “pussy riot” event was an operation designed to put Putin and Russia in a bad light. (The women were useful dupes.) The Western media attacks on the Sochi Olympics are part of the ridiculing and demonizing of Putin and Russia. Washington is determined that Putin and Russia will not be permitted any appearance of success in any area, whether diplomacy, sports, or human rights.

http://www.paulcraigroberts.org/2014/02/14/russia-attack-paul-craig-roberts/

February 18, 2014

The Kiev Riots - They're back on. View from my window this morning...

Less than a mile away.

February 14, 2014

Journalistic malpractice & the dangers of Russia-bashing

Sochi on my mind: It is hard to think of an issue more politicized in Western media than the topic of Russia. It is commonplace to hear, read, and watch media reports claiming the worst possible things about Russia and Russians. 

Criticisms are magnified even more when the subject is Vladimir Putin. While Russia does have a long list of issues to grapple with (like just about every other country in the world), the kind of media coverage it receives in turn engenders a serious security threat to the international system. Russia bashing is dangerous for us all.

Whether one likes it or not, Russia is an important power in the world. Having a seat on the UN Security Council confirms its voice will be heard. In fact, Russia often represents the concerns of most of the globe on the Security Council, although this is hardly ever pointed out by the western powers on the Council, particularly the United States. Russia is not a spoiler; rather it holds back the unilateral tendencies held by those in Western capitals. It is almost unthinkable that anyone in the mainstream would ever inform audiences of this reality.

<snip>

The level of journalistic malpractice committed against Russia blinds Western electorates, poisons public opinion, and emboldens the reckless political class. The denigration of the Sochi Games was to be expected. Cheap shots, lazy reporting and maniacal commentary are a form of entertainment served up by Western mainstream media. The Games have come and will soon pass into history. But their impact will be felt long after.


http://rt.com/op-edge/western-media-russia-bashing-293/