Ukrainian Gov’t is Fracturing – The Debt Default Contagion is Likely to Unfold
The Mayor of Kiev has distanced himself from Yanukovych. The Ukrainian parliament on Thursday passed a measure that would prohibit what Yanukovych has called his military “anti-terrorist operation” to restore order by sheer force, and called for all Interior Ministry troops to return to their bases. The politicians in Ukraine are running away from Yanukovych who is being seen simply as the entire problem and his dictatorial policy.
Yanukovych claims to have reached a preliminary deal struck overnight that would see him lose some of his powers, and a “caretaker government” should be created in 48 hours that would include representatives of the opposition. Whether or not Yanukovych truly honor his word remains to be seen since he has placed his personal desires before the hood of his people. He enacted a law making it 2 years in prison for more than 5 cars to follow each other after protesters first appeared at his residence before Independence Square was occupied. This led to signs being placed in cars – “Don’t Follow Me – I am the 5th Car”.
The head of Yanukovich’s party in parliament, Oleksander Yefremov, said the deal includes early presidential elections in December, and a constitutional vote in September, according to the Interfax news agency. The question remains, is Yanukovych simply buying time?
Yanukovych also promised constitutional reforms trimming presidential powers, that has been a key demand of the protesters, most of whom are college educated. These are the people who had dreams and saw them turn to dust. Yet there are other groups with very different ideas as well as anti-capitalism and anti-semetic.
“As the president of Ukraine and the guarantor of the Constitution, today I am fulfilling my duty before the people, before Ukraine and before God in the name of saving the nation, in the name of preserving people’s lives, in the name of peace and calm of our land,” the president said in a statement on his website.
The question become the national debt of the country and if we are on the verge of a default that will most likely spread as another contagion through emerging markets as we are seeing this civil unrest in many countries.
Caracas Burns – Following Kiev
The capital of Caracas and other Venezuelan cities have alsoseen major battles, as police confront protesters calling for the resignation of President Nicolas Maduro. There too protesters are economically suppressed by the government and again we see discontent rising from corruption. This demonstrates that while Kiev burns and captures the headlines – a contagion does exist and it will not require a clash between Russia and the USA – just economics.
Ukraine – the Bottom Line
If we removed all of the political rhetoric from both sides and reduce Ukraine to the fundamental issues, we will see the common economic denominator is emerging in Turkey, Southern Europe, and over in Asia. There is no conflict between Russia and the United States in all of these places. Those who like to point fingers from both sides blaming the other side for Ukraine, are missing the point – it is pure economics.
Divide Ukraine along the historical language faultline and call it a day. The US does not want to see Ukraine go back to Russia for it will signal the rise of the old Soviet power and the Russian point of view that the further loss of territory should never again be allowed to take place. This power struggle is by no means the core issue for if it were, then we should NOT be seeing civil unrest in all these other places. What is in Ukraine is not unique to Ukraine. We are even seeing the contagion with university students supporting Kiev in Moldavia. Split the country would be a good idea – but will it happen? It is doubtful that such a prospect will take place voluntarily. Look at Israel and Palestine. The wounds may never heal. The West will hate the East and the East will hate the West. There is no solution where one side dominates and oppresses the other. That will NEVER work.
Global Market Watch February 20th, 2014
Russian Point of View of Ukraine
Freedom of the Press has been under Assault in USA
Anyone who thinks that we have a free press in the United States just does not understand what is going on. It has been called the Obama Crackdown on the media. Obama has been anti-press perhaps more than any president. On top of this, we have journalists controlled by their editors. Trying to get at the real facts is never easy and increasingly we find the younger generations turning toward the internet as the mainstream press has been dying a slow death.
Press has been under assault in Europe, Russia and of course in Asia. This is all part of governments under economic pressure feeling their power fleeting away. The rising trend of political unrest on a global scale has a lot to do with the declining living standard as taxes rise and government corruption has been exposed everywhere.
The final stage in the fall of Rome was the collapse of the rule of law and the freedom of press/speech. Eventually, as taxes kept rising, people ultimately just walked away from their property. As the state then grabbed it, they found its value also became worthless as people refused to pay taxes on real property. This set in motion the migration out of the cities. The question today, remains paramount – where do we go now?
Plea for Help from Ukraine
Yanukovych has been shooting even women. He has no respect whatsoever for human rights. Here is a message from a Ukrainian girl.
Conversation Between Glen Downs & Armstrong
Conversation between Glen Downs on Capital Hill & Martin Armstrong on the Cycles of War, Ukraine & its impact on the world.
Part-I 12 minutes
Part-II 13 minutes
As Kiev Burns – Just the Beginning
Some people keep insisting that the events in Ukraine are caused by secret intervention from the West and in the process they are missing the importance of the trend. You can intervene all you want, but if the people are fat and happy – nothing but nothing will take place. Ukraine peaked really in 2000 and has not recovered. The Orange Revolution came in 2004 with a moderate bounce into 2007 and the collapse thereafter. No degree of intervention will change the attitude of a nation just as you cannot manipulate a market changing the long-term trend.
We are in a collapsing period of socialism – the final end game to Marxism. This began in 1989 with the events in China and the fall of the Berlin Wall. But it also marked the peak in Japan. The process is a gradual one and historically it moves from one region to the next.
This has manifested in the widespread corruption among the political class that appears absolutely everywhere driven by the decline in real economic growth and the worst will come with the social problems that will erupt when the masses of people in the West discover not merely are the banks in trouble, but the pension expectation for the future are a pipe dream.
This is the world’s biggest problem looking ahead. Do not confuse the political posturing with the underlying trend. NEVER in history do we see such events erupt simultaneously everywhere. They are aCONTAGION that spread from one region to the next. It is not a question of using weapons and Molotov cocktails against the authorities and killing policemen. If you think this is somehow funded by the West and is intentional, you are dead wrong and are dismissing the fact that this is somehow unique to Ukraine. This is a glimpse of what is spreading – it just takes time.
After 2015.75 when the full brunt of the economic decline is reignited with the economic downturn in the USA, then we will begin to see what is taking place right now in Ukraine will erupt around the globe. ALLgovernments will respond the SAMEway. The US government will fire upon its citizens no different and they call out tanks against the US veterans in 1932 also calling them criminals. DO NOT misinterpret what I am saying as myOPINION or support for one government v another. I am a student of history and I see no difference between governments regardless of the form. It is ALWAYS them against the people. What I am saying is very clear – this began over corruption and will escalate into political confrontation. To Putin, Ukraine is important and it is widely known he wants to rebuild the Soviet Union for power. Poland fears Ukraine in the hands of Russia for history suggests they will be next. Those in ALL government are concerned only withPOWER.
Government massacring its citizens in revolt over economic reasons has been commonplace throughout history. There were French massacres as well as English. not to forget the 1381 Revolt in England of Wat Tyler.
It is the pattern that is unfolding in Ukraine that is important. This is not about US v Russia. This is about the people v government and this is the MAJOR TREND that given time we will see unfold. The mass protests in Europe have been peaceful PRIOR to the turn in the Cycle of War. Now they will turn violent and with 60%+ of the youth unemployment in Southern Europe and 60%+ of students burdened with student loans waiting on tables buried in debt they cannot escape from as formal education has stripped their future dreams of grand designs, this is JUST THE BEGINNING of a serious trend starting to rise. Arguing that this would never have happened but for intervention from the West misses the entire trend that is global.
Yanukovych Opens Fire of Civilians – the Trump Card is Always War
Yanukovych will go down in history as a ruthless criminal. He has effectively ordered the massacre of civilians. Gun shots filled Independence Square and now more than 100 protesters have been murdered according to their reports. All out civil war is in motion and I fear that with this War Cycle turning up here in 2014, this incident will be the spark that ignites this cycle. Expect this to really escalate after the summer. This could result in the same shift in capital flows into the dollar that we saw during World War I and II.
The huge two spikes up in the dollar were caused by European War. The sharp rise against after World War II is the devaluations of currencies and the rise in the dollar with Bretton Woods. The pattern for the dollar does not show a long-term bear market. This pattern is indicative of a market that has yet to peak. The greatest spike rallies in the dollar are war driven.
The rise in the British Pound to all time record highs against the US dollar took place also during the US Civil War. So to all those dollar haters who harp about money supply, the Fed, and just about everything else imaginable as to why the dollar should be worthless, the trump card is ALWAYS war.
Ukraine – The Funding Begins – Gun Shots Starting in Kiev
For months before the proposed alignment with the EU, there were signs all over Ukraine pro and con about joining Europe that was a campaign in part funded by the EU to sell the idea to Ukraine. This funding has been CONFUSED with the funding for the “rebels” to engage in revolution that Putin calls a coup. There is HUGEdifference from the funding Germany and the EU was providing to sell Ukraine on the idea of joining the Europe compared to funding a revolution as the Saudis are doing in Syria.
But overlooked, was the resentment with corruption. After all, Ukraine’s 2004 Orange Revolution that toppled the government without a shot fired. That too was over corruption. For you see, the Orange Revolution swept then-prime minister Yanukovych into power 2004 and that brought Tymoshenko out of power. It is widely viewed that Yanukovych stole his current position of power and his decision not to sign the deal with the EU centers on the EU’s demands that he release from jail former Prime Minister his political opponent who he had imprisoned. So you are starting to get a sense of the depth to this corruption.
The changes that followed the Orange Revolution simply weren’t deep enough and Yanukovych has always been more pro-Russian. To the Western Ukrainians, this is a chance to get on a different trajectory and they did not expect this would turn violent since there was no such resistance during the Orange Revolution. On this score, they are wrong.
This resentment toward corruption has been rising sharply once again. Make no mistake about it, at the core is ALWAYSeconomics. Ukraine is desperately in need of a cash injection because the government is so corrupt. Yanukovych, who has been in power since 2010, and he said that Ukraine could not afford to sign the EU deal. The question was really who was putting more money is his pocket.
Germany is now starting the funding or the “rebels” as is the USA. Russia is funding the mercenaries and gave Ukraine $2 billion with demands to crush the rebels. Russia is portraying this as a coup funded by the USA. Ironically, funding is now starting. Nobody funded the “rebels” initially for had they done so,they would have been armed. The Orange Revolution was bloodless and they expected the same result so they did not seek funding for that purpose.
Of course, there was funding for “promotion” selling the EU deal to the people coming from Germany and the EU. But this was more directed into a marketing campaign that filled the cities with signs and posters. That was NOT funding that was going in with the expectation of civil war. There is a GREAT difference. Nonetheless, the violent attacks by Yanukovych’s mercenaries is now showing the West they need to fund the rebels.
The constitutional reforms that are demanded by the protesters demonstrates that this is at its core about corruption and not about joining the EU or Russia as the media is playing up. Nor are the reforms just about money. This is all about political power. This is about Yanukovych who has effectively established a de facto dictatorship. The opposition have called for the ouster of Yanukovych and the ordering of new elections for he stole the elections and imprisoned the former President who ousted him. The general view is that control of the government is a dictatorship for far too much power rests with Yanukovych and not enough with parliament. There are no checks and balances. This is the corruption that lies at the core demand – something that Yanukovych will sooner murder the entire West before ever letting go of any power. This is the core issue and why thousands of protesters have staked their lives on their desire for political change. This is NOT about joining the EU v Russia. They wantHONEST government.
The very next day when protester approached his mansion, he enacted a law that it was illegal for more than 5 cars to travel together. He had his mercenaries not “killing” people but imprisoning them as hostages and others were being left in the forest stripped of all identification to die. One girl who was just helping the protesters as a nurse was seen at the train station taken by Yanukovych’s goons, and left in the forest at night to die.
BOTH the USA and EU will now fund the rebels as Russia will fund Yanukovych. At the political level, Ukraine is the pawn on the chessboard. The propaganda war is East v West. However, those power plays are masking the core issue that began with the Orange Revolution – corruption. Yanukovych is a dictator who will NEVERleave office. It is simple as that. There will be no REAL elections again in Ukraine. This is starting to spiral down into a confrontation that the entire world cannot ignore.