What We Are Not Being Told About Ukraine

Another day passes and there is now hardly a word in mainstream media print and broadcast news about Ukraine. Has it all blown over you might well ask. Actually while a localised and limited shooting war would have been tragic for the people of Ukraine, Russia and some surrounding territories it would have afected people in the EU, Britain and the USA very little.

What’s happening now poses a far greater threat to our prosperity both in the short and long term and to the kind of future we can look forward to. Jere’s a summary of some stories that were not reported in western media.

Russia Threatens to Drop The Dollar and Crash The U.S. Economy if Sanctions Are Imposed – West Goes Ahead With Sanctions Anyway

On Tuesday Reuters reported that a Kremlin aid Sergei Glazyev had announced that if the U.S. were to impose sanctions on Russia Moscow may drop the dollar as a reserve currency and refuse to pay off any loans to U.S. banks saying that Moscow could recommend that all holders of U.S. treasuries sell them if Washington freezes the U.S. accounts of Russian businesses and individuals.

“We would find a way not just to reduce our dependency on the United States to zero but to emerge from those sanctions with great benefits for ourselves,” said Glazyev. “An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system”

That statement is startling by itself, but the true gravity of this situation is only evident when you consider it in context. China has taken Russia’s side in the Ukraine conflict (they are after all allies) and China holds the lion’s share of U.S. treasuries. If Russia puts out the call to drop the dollar China would have a choice: either hold on to those treasuries while the dollar slides (losing their shirt in the process) or join Russia and dump their holdings as well. It should be pretty obvious which way China would go.

As The Guardian reports however, that the USA has unilaterally decided to go ahead with sanctions against Russsia in retaliation for Putin’s refusal to back down and withdraw Russian troops from Crimea.

US imposes visa restrictions on Russian officials as Obama signs sanctions order
Employing his favourite tool for by passing the democratic process, On March 6 The Emperor Obama signed an executive order extending US sactions against Russia. (Read More on sanctions story at The Guardian)

Getting into an economic war with Russia would create a pile of problems for the Obama Administration, first it would drive a wedge between the USA and it’s EU allies most of which are heavily dependent on Russian gas for their domestic and industrial supplies. Secondly, failing to consider the consequences of Russia’s allies responding to such a move by applying sanctions of their own is, typically asinine. When Obama signed the sanctions order, authorizing economic action against the Russians he may have performed his usual arrested adolescent feat of convincing himself that we he speaks, nobody could possibly disagree with him.

Experience of dealing with other world leaders has taught him nothing in this respect. So was the massianic one hoping that on realising they had incurred his displeasure Russia would capitulate, beg for mercy and start dancing to Washington’s beat. It’s hard to imagine The White House corps of diplomats, advisors and political scientists could be so thick, but Obama has had five years to fill key roles with his personal rent boys appointees. Maybe they were just too busy planning the next frat party to think things through properly.

Either way, the outcome is the same. The U.S. government’s constant meddling in the domestic affairs of sovereign states has now embroiled it in a geopolitical game of chicken and if one side or the other does not blink soon there will be an almighty fracas.

Unfortunately though they initially picked a fight with the corrupt but democratically elected government of Ukraine in the hope of humiliating Russia by drawing its neighbour and close ally into the US / EU / NATO sphere of influence, by sponsoring regime change the USA has brought itself into conflict with the world’s 8th largest economy (by GDP), having already for a while been at loggerheads with China, the second largest economy and holder of huge amounts of US debt.

In the latest development India sided with Putin by announcing Russia’s interests in Crimea are legitimate (Times of India).

The question now is how will the rest of the world react. Iran’s position is a foregone conclusion and Saudi Arabia will demand a heavy price for its support, even from a traditional ally. With Japan, like the EU, hamstrung by economic difficulties and Australia and Canada likely to offer token support while Britain’s David Cameron’s hands will be tied by Parliament that in the wake of futile wars in Iraq and Afghanistan has become somewhat isolationist.

The lines of economic warfare have been drawn up, and as sides are being picked it looks as if the USA is backed by weaklings, wusses and economic basket cases. Get ready to kiss your savings goodbye. And find a good recipe for bone broth.

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2 Responses to “What We Are Not Being Told About Ukraine”

  1. MichaelStMark Says:

    Sounds a pretty accurate – though uncomfortable – analysis.
    To perhaps summarize in familiar street terms this very possible scenario..like rats off a sinking ship?

    • ianrthorpe Says:

      It became even more uncomfortable with the latest economiv news – Russian and Chinese organisatios are dumping the US dollar as if it’s going out of fashion – which suggests it is.

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