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Geopolitics

by Chris Martenson

Executive Summary

  • Ukraine's economic free fall
  • The real risk of Ukraine igniting the next world war
  • Why a lasting peace is unlikely
  • What you should do in preparation of escalating conflict between Russia and the West

If you have not yet read Part 1: The US' Suicidal Strategy On Ukraine, available free to all readers, please click here to read it first.

What's At Risk

Now we come to the hard part of this report, the part where we have to discuss what might happen next.  My analogy for this period of history is the year(s) before WW I.  Historians still cannot quite say what led up to the immense human disaster that we now call World War I, but enough failed diplomacy, bugled treaties, inept leadership, and inflexible political institutions were all grating against one another that a single assassination of a single archduke was a sufficient spark to set the whole pile ablaze.

Were those other failures not all stacked up like so much try tinder, a dozen archdukes could have been shot without anything more serious than a dozen solemn state funerals would have resulted. 

Similarly, today we have a conflict in Ukraine which nobody can exactly say what the US's compelling interests are with Ukraine because nobody really knows.  It's more a matter of principle, with that principle being the US gets to do what it wants, when it wants, and nobody is supposed to challenge that.

Putin said as much on Feb 7, 2015:

“There clearly is an attempt to restrain our development with different means,” he told trade union activists. “There is an attempt to perturb the existing world order… with one incontestable leader [Obama] who wants to remain as such thinking he is allowed everything while others are only allowed what he allows and only in his interests. This world order will never suit Russia.”

(Source)

Clearly Russia is no pushover country and has no interest in having dangerous coups and rising ultra-nationalism on its borders go unchecked, and this is why we are in such dangerous territory.  The US has not been up against a legitimate foe for such a long time, it may be like the school yard bully that fails to properly evaluate the new kids at school before picking a fight.

Russia is making its position known to the world.  It has been…

America Vs Russia: What’s At Risk
PREVIEW by Chris Martenson

Executive Summary

  • Ukraine's economic free fall
  • The real risk of Ukraine igniting the next world war
  • Why a lasting peace is unlikely
  • What you should do in preparation of escalating conflict between Russia and the West

If you have not yet read Part 1: The US' Suicidal Strategy On Ukraine, available free to all readers, please click here to read it first.

What's At Risk

Now we come to the hard part of this report, the part where we have to discuss what might happen next.  My analogy for this period of history is the year(s) before WW I.  Historians still cannot quite say what led up to the immense human disaster that we now call World War I, but enough failed diplomacy, bugled treaties, inept leadership, and inflexible political institutions were all grating against one another that a single assassination of a single archduke was a sufficient spark to set the whole pile ablaze.

Were those other failures not all stacked up like so much try tinder, a dozen archdukes could have been shot without anything more serious than a dozen solemn state funerals would have resulted. 

Similarly, today we have a conflict in Ukraine which nobody can exactly say what the US's compelling interests are with Ukraine because nobody really knows.  It's more a matter of principle, with that principle being the US gets to do what it wants, when it wants, and nobody is supposed to challenge that.

Putin said as much on Feb 7, 2015:

“There clearly is an attempt to restrain our development with different means,” he told trade union activists. “There is an attempt to perturb the existing world order… with one incontestable leader [Obama] who wants to remain as such thinking he is allowed everything while others are only allowed what he allows and only in his interests. This world order will never suit Russia.”

(Source)

Clearly Russia is no pushover country and has no interest in having dangerous coups and rising ultra-nationalism on its borders go unchecked, and this is why we are in such dangerous territory.  The US has not been up against a legitimate foe for such a long time, it may be like the school yard bully that fails to properly evaluate the new kids at school before picking a fight.

Russia is making its position known to the world.  It has been…

by Chris Martenson

Executive Summary

  • The 'Perfect Storm' of woe being applied to Russia
  • Why the West may end up hurt worse by its efforts than Russia is
  • Russia's most likely set of responses, and their global implications
  • Why are we willing to let our leaders play nuclear "Russian roulette", for stakes we don't agree with?

If you have not yet read The Road To War With Russia available free to all readers, please click here to read it first.

The Perfect Storm

Russia, like Venezuela and other oil exporting nations is facing a very large set of financial and economic problems as a result of the low oil prices. 

Besides the loss of oil export revenues, there are associated hits to their local currencies and rising yields on their sovereign debt which raises the cost of borrowing money.  This is a triple whammy and if it goes on long enough can lead to the outright default of the country on its debt, which is a hugely destabilizing moment. 

Russia faces 'perfect storm' as reserves vanish and derivatives flash default warnings

Jan 6, 2015

Russia’s foreign reserves have dropped to the lowest level since the Lehman crisis and are vanishing at an unsustainable rate as the country struggles to defends the rouble against capital flight.

Central bank data show that a blitz of currency intervention depleted reserves by $26bn in the two weeks to December 26, the fastest pace of erosion since the crisis in Ukraine erupted early last year.

Credit defaults swaps (CDS) measuring bankruptcy risk for Russia spiked violently on Tuesday, surging by 100 basis points to 630, before falling back slightly.

Markit says this implies a 32pc expectation of a sovereign default over the next five years, the highest since Western sanctions and crumbling oil prices combined to cripple the Russian economy.

Total reserves have fallen from $511bn to $388bn in a year. The Kremlin has already committed a third of what remains to bolster the domestic economy in 2015, greatly reducing the amount that can be used to defend the rouble.

(Source)

It's clear that Russia is experiencing quite a bit of difficulty from all this, and as we saw above, they pin a lot of the troubles on a concerted effort by the west to bring about exactly the conditions that are troubling them.

However, left out of all the stories about Russia's relative difficulties is that fact that with oil's price slide there are winners and losers in every corner of the globe.  In terms of the local impact based on the local currency Russia is the least impacted of them all because…

Why No One Should Want This To Devolve Further
PREVIEW by Chris Martenson

Executive Summary

  • The 'Perfect Storm' of woe being applied to Russia
  • Why the West may end up hurt worse by its efforts than Russia is
  • Russia's most likely set of responses, and their global implications
  • Why are we willing to let our leaders play nuclear "Russian roulette", for stakes we don't agree with?

If you have not yet read The Road To War With Russia available free to all readers, please click here to read it first.

The Perfect Storm

Russia, like Venezuela and other oil exporting nations is facing a very large set of financial and economic problems as a result of the low oil prices. 

Besides the loss of oil export revenues, there are associated hits to their local currencies and rising yields on their sovereign debt which raises the cost of borrowing money.  This is a triple whammy and if it goes on long enough can lead to the outright default of the country on its debt, which is a hugely destabilizing moment. 

Russia faces 'perfect storm' as reserves vanish and derivatives flash default warnings

Jan 6, 2015

Russia’s foreign reserves have dropped to the lowest level since the Lehman crisis and are vanishing at an unsustainable rate as the country struggles to defends the rouble against capital flight.

Central bank data show that a blitz of currency intervention depleted reserves by $26bn in the two weeks to December 26, the fastest pace of erosion since the crisis in Ukraine erupted early last year.

Credit defaults swaps (CDS) measuring bankruptcy risk for Russia spiked violently on Tuesday, surging by 100 basis points to 630, before falling back slightly.

Markit says this implies a 32pc expectation of a sovereign default over the next five years, the highest since Western sanctions and crumbling oil prices combined to cripple the Russian economy.

Total reserves have fallen from $511bn to $388bn in a year. The Kremlin has already committed a third of what remains to bolster the domestic economy in 2015, greatly reducing the amount that can be used to defend the rouble.

(Source)

It's clear that Russia is experiencing quite a bit of difficulty from all this, and as we saw above, they pin a lot of the troubles on a concerted effort by the west to bring about exactly the conditions that are troubling them.

However, left out of all the stories about Russia's relative difficulties is that fact that with oil's price slide there are winners and losers in every corner of the globe.  In terms of the local impact based on the local currency Russia is the least impacted of them all because…

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