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The Ominous Message in 2 Centuries of Global Public Finances | CYNICONOMICS

The Ominous Message in 2 Centuries of Global Public Finances | CYNICONOMICS.

Posted on February 26, 2014 by ffwiley

After our recent article showing the history of non-defense budget balances for large, developed countries, some readers wondered how our results might change with defense spending included.

Here’s a new chart showing total budget balances:

 

fiscal balance with defense

As in the first chart, we started in 1816 with four countries (the U.S., U.K., France and Netherlands) and then added seven more at different points in time, while weighting each country by its GDP. (Click here for data sources and more details.)

New chart, same story

The message is basically the same, regardless of whether you isolate non-defense budget balances as in the earlier chart or look at total balances as above.

That is, current fiscal risks are unlike any the world has ever seen.

Echoing our thoughts from the earlier post:

The [growing deficits of the past 50 years] suggest that we’ve never been in a predicament comparable to today. Essentially, the world’s developed countries are following the same path that’s failed, time and again, in chronically insolvent nations of the developing world.

Look at it this way: the chart shows that we’ve turned the economic development process inside out. Ideally, advanced economies would stick to the disciplined financial practices that helped make them strong between the early-19th and mid-20th centuries, while emerging economies would “catch up” by building similar track records. Instead, advanced economies are catching down and threatening to throw the entire world into the kind of recurring crisis mode to which you’re accustomed if you live in, say, Buenos Aires.

The diminishing ability of wars to explain public finances

The new chart shows more clearly how the purposes of public borrowing have evolved. In the 19th and early-20th centuries, governments borrowed mostly to fund wars. In fact, any military history is incomplete without consideration of warring nations’ access to capital. You can argue that government borrowing not only enables wars, but that the ability to borrow heavily is a major determinant of whether your army wins or loses, more important in many cases than military prowess.

(Niall Ferguson claims exactly this in his bestseller, The Ascent of Money: A Financial History of the World

img

img

. Are you interested in the Napoleonic Wars, U.S. Civil War and World War 1 – three periods of significant public borrowing as shown in the chart? Ferguson links the ultimate outcomes of each of these wars to the victors’ superior access to government bond investors.) 

Fast forward to today, and deficits have broken free of the costs of tanks, bombs and warplanes. Considering current public finances, it’s hard to imagine another widespread war that doesn’t lead to financial mayhem. A surge in military spending would surely end any hopes that large, developed nations won’t eventually be forced into defaults and/or wealth confiscation.

Worse still, it’s looking more and more as though we’re headed for disaster even without a future spike in military spending. The risks of a severe fiscal crisis are obvious in our earlier chart showing non-defense budget balances, and they’re just as apparent with defense spending added back in.

Bonus chart

The chart below separates budget balances into two pieces – the non-defense portion (as in the earlier post) and defense spending. We’ll add more detail in the future, including a country-by-country breakdown of the underlying data.

fiscal balance ex-defense 2

The Ominous Message in 2 Centuries of Global Public Finances | CYNICONOMICS

The Ominous Message in 2 Centuries of Global Public Finances | CYNICONOMICS.

Posted on February 26, 2014 by ffwiley

After our recent article showing the history of non-defense budget balances for large, developed countries, some readers wondered how our results might change with defense spending included.

Here’s a new chart showing total budget balances:

 

fiscal balance with defense

As in the first chart, we started in 1816 with four countries (the U.S., U.K., France and Netherlands) and then added seven more at different points in time, while weighting each country by its GDP. (Click here for data sources and more details.)

New chart, same story

The message is basically the same, regardless of whether you isolate non-defense budget balances as in the earlier chart or look at total balances as above.

That is, current fiscal risks are unlike any the world has ever seen.

Echoing our thoughts from the earlier post:

The [growing deficits of the past 50 years] suggest that we’ve never been in a predicament comparable to today. Essentially, the world’s developed countries are following the same path that’s failed, time and again, in chronically insolvent nations of the developing world.

Look at it this way: the chart shows that we’ve turned the economic development process inside out. Ideally, advanced economies would stick to the disciplined financial practices that helped make them strong between the early-19th and mid-20th centuries, while emerging economies would “catch up” by building similar track records. Instead, advanced economies are catching down and threatening to throw the entire world into the kind of recurring crisis mode to which you’re accustomed if you live in, say, Buenos Aires.

The diminishing ability of wars to explain public finances

The new chart shows more clearly how the purposes of public borrowing have evolved. In the 19th and early-20th centuries, governments borrowed mostly to fund wars. In fact, any military history is incomplete without consideration of warring nations’ access to capital. You can argue that government borrowing not only enables wars, but that the ability to borrow heavily is a major determinant of whether your army wins or loses, more important in many cases than military prowess.

(Niall Ferguson claims exactly this in his bestseller, The Ascent of Money: A Financial History of the World

img

img

. Are you interested in the Napoleonic Wars, U.S. Civil War and World War 1 – three periods of significant public borrowing as shown in the chart? Ferguson links the ultimate outcomes of each of these wars to the victors’ superior access to government bond investors.) 

Fast forward to today, and deficits have broken free of the costs of tanks, bombs and warplanes. Considering current public finances, it’s hard to imagine another widespread war that doesn’t lead to financial mayhem. A surge in military spending would surely end any hopes that large, developed nations won’t eventually be forced into defaults and/or wealth confiscation.

Worse still, it’s looking more and more as though we’re headed for disaster even without a future spike in military spending. The risks of a severe fiscal crisis are obvious in our earlier chart showing non-defense budget balances, and they’re just as apparent with defense spending added back in.

Bonus chart

The chart below separates budget balances into two pieces – the non-defense portion (as in the earlier post) and defense spending. We’ll add more detail in the future, including a country-by-country breakdown of the underlying data.

fiscal balance ex-defense 2

Dream of U.S. Oil Independence Slams Against Shale Costs | CollapseNet

Dream of U.S. Oil Independence Slams Against Shale Costs | CollapseNet.

Off the World News Desk:

Dream of U.S. Oil Independence Slams Against Shale Costs 

“The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems.

Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60.

Consider Sanchez Energy Corp. The Houston-based company plans to spend as much as $600 million this year, almost double its estimated 2013 revenue, on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that’s pushed U.S. crude output to the highest in almost 26 years. Its Sante North 1H oil well pumped five times more water than crude, Sanchez Energy said in a Feb. 17 regulatory filing. Shares sank 7 percent.

We are beginning to live in a different world where getting more oil takes more energy, more effort and will be more expensive,” said Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin.

Drillers are pushing to maintain the pace of the unprecedented 39 percent gain in U.S. oil production since the end of 2011. Yet achieving U.S. energy self-sufficiency depends on easy credit and oil prices high enough to cover well costs. Even with crude above $100 a barrel, shale producers are spending money faster than they make it…”

MCR, Rice Farmer, and CollapseNet generally have been reporting on this since this website has been in existence. There is no “free lunch”, and one of the primary problems that comes with Peak Oil is that all the easy to get oil has been found and used (or is being pumped but is in decline), and finding and extracting what’s left will be more energy-intensive and cash-expensive. U.S. “energy independence” is a bigger fucking myth than Santa Claus…at least until the general public can no longer afford their energy-intensive lifestyles and oil demand drops off the cliff, which can also be referred to as the collapse of industrial civilization… – Wes

Dream of U.S. Oil Independence Slams Against Shale Costs | CollapseNet

Dream of U.S. Oil Independence Slams Against Shale Costs | CollapseNet.

Off the World News Desk:

Dream of U.S. Oil Independence Slams Against Shale Costs 

“The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems.

Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60.

Consider Sanchez Energy Corp. The Houston-based company plans to spend as much as $600 million this year, almost double its estimated 2013 revenue, on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that’s pushed U.S. crude output to the highest in almost 26 years. Its Sante North 1H oil well pumped five times more water than crude, Sanchez Energy said in a Feb. 17 regulatory filing. Shares sank 7 percent.

We are beginning to live in a different world where getting more oil takes more energy, more effort and will be more expensive,” said Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin.

Drillers are pushing to maintain the pace of the unprecedented 39 percent gain in U.S. oil production since the end of 2011. Yet achieving U.S. energy self-sufficiency depends on easy credit and oil prices high enough to cover well costs. Even with crude above $100 a barrel, shale producers are spending money faster than they make it…”

MCR, Rice Farmer, and CollapseNet generally have been reporting on this since this website has been in existence. There is no “free lunch”, and one of the primary problems that comes with Peak Oil is that all the easy to get oil has been found and used (or is being pumped but is in decline), and finding and extracting what’s left will be more energy-intensive and cash-expensive. U.S. “energy independence” is a bigger fucking myth than Santa Claus…at least until the general public can no longer afford their energy-intensive lifestyles and oil demand drops off the cliff, which can also be referred to as the collapse of industrial civilization… – Wes

Understanding The Stress Response: It Can Buy You Valuable Seconds | The Daily Sheeple

Understanding The Stress Response: It Can Buy You Valuable Seconds | The Daily Sheeple.

Lizzie Bennett
Underground Medic
March 2nd, 2014

10750147-x-ray-close-up-with-brain-and-skull-concept

Survival in extreme situations often depends on an individuals ability to respond to the threat they are faced with. The stress response in humans has for decades been referred to as the ‘fight or flight’ response.

Now if you have a couple of Uzi’s and enough ammunition none of this applies to you because you could probably wipe out any number of malcontents advancing towards your property. For the rest of you, well, I hope you find some use in what I have to say.

The Physiological Basics

When faced with a sudden or extreme threat, two body systems act together to give you the best possible chance of survival. The reaction is for the most part not under your control. Your brain and your body decide what happens, the biggest toughest guy in the bar may turn and run, the tiny young bar tender may not, 90% of what happens is decided by chemistry.

The sympathetic nervous system and the adrenal-cortical system get together at the first sign of a serious threat and if the threat persists for longer than a few more seconds both systems kick into high gear and adrenaline (epinepherine) noradrenaline (norepinepherine) and a couple of dozen other hormones flood the body and the fight or flight response is triggered.

•Pupils dilate to take in as much light as possible

•Blood-glucose levels increase

•Veins in the skin contract allowing extra blood flow to the muscles

•Smooth muscle relaxes to allow extra oxygen for the lungs

•Heart rate increases

•Blood pressure increases

•Non-essential systems shut down (digestion for example)

•The only focus is the task in hand

It is your reaction to this flood of chemicals that decides what happens next. The first, often vital seconds can be wasted whilst your body decides what to do, which option will give you the best chance of survival. Your brain is processing information much faster than usual and increasing or decreasing the levels as the situation dictates. Running for your life or staying to fight is not at this point entirely under your own control, though the 10% of you not being guided by this chemical battle will have a bearing on the final outcome. If you have thought through the likely scenarios, and come to a conclusion, you will not be wasting time working out what to do.

The Psychology Basics

Highly trained individuals are much more able to overcome the flight part of the response and stand their ground and fight. Equally, in a hopeless situation they’re training allows them to make the decision to retreat faster than the average person would. This should never be construed as cowardice, it is simply a tactical withdrawal that leaves them alive to fight another day.

Sadly some of those we may call ‘The Golden Horde’ may also possess the ability to make decisions faster than the average person. Those used to living on their wits will cope better in flight or fight situations than the average man simply because they have been in similar situations more often than Mr Average. Their most common reaction though is to fight, even when if they’d listened to the 10% of their brain not being controlled they would have realized it is unwise to do so.

It’s this that marks the difference between the gangs and highly trained individuals…those who are well trained know when to retreat for tactical reasons, gangs do it out of fear, and it’s this fear that can buy you time and make a hell of a difference to the outcome of a confrontation.

I know the urge to shoot at a roving gang going door to door down your street would be strong, but if you are at home, holed up with the family and you’re drastically outnumbered this may not have the outcome that is best for you or your family.

The urge to shoot first and hope you’re alive to ask questions later is almost overwhelming in such  situation, but sometimes you have to go with the 10% of you that isn’t under the control of biochemicals coursing around your body.

People hunting in gangs have a pack mentality, they are set on a course of action, and it often doesn’t enter their head that they will fail, they have not failed before, why should this occasion be any different?

That’s where control and logical thinking comes into it. Announcing to said gang that you are there by spraying the road with bullets is unlikely to deter them…they are armed, and past experience tells them that you are outnumbered. They are not thinking tactics, they are thinking of nothing but what they can steal from your home.

This makes them dumb, and relatively easy pickings for someone who is thinking tactically.

The Bones Of It

Now here I have to be careful. I have been advised by a Lizzie loyal police officer that spelling out some of the methods that can be used to stop these roving gangs could get me arrested. It’s a British thing, the government decided a while back we were not allowed to defend ourselves. It’s best just to give you some examples of how dangerous ‘kitchen chemistry’ can be, and why therefore you should NEVER resort to using such methods…

We are told never to mix chemical cleaners as dangerous gases can be formed as a result. The son of a friend of mine didn’t believe this so he tried it, and produced a nice cloud of a chlorine gas.

The stupid boy had duct taped two jam jars together and put one solution in each jar, the idea being to drip one drop at a time from one jar into the other. Of course when he knocked it over the fluids mixed, and he spent several hours in the emergency department with streaming eyes, gasping for breath, and some nice burns from splashes that had landed on his legs to boot. Here is a fact sheet telling you what you must not mix together and why.

Teenagers are indeed foolish. There are reports from police in the US that kids are making items  based on an episode of MacGuyver. There have been some nasty injuries, and it’s a good job they used plastic bottles not glass or things would have been a good deal worse. Glass shards can travel a hell of a long way from their original breakage point.

There is even a case of a church receptionist using wasp nest killer instead of pepper spray on police advice as it shoots way further than mace. Remeber not to get a flame near it as it is highly flammable and becomes something of a flame thrower!

I digress, sorry, back to tactics. Anything you can do to put these people on the back foot is to your advantage. Hidden tanglefoot, or even a board with nails whacked through becomes invisible at night, the prime time for attacks.

Unusual and unpleasant chemical smells, loud noises, anything that isn’t expected immediately increases the stress levels of those that seek to do you harm. If these items can be placed a little way off your property all the better, it allows you to leave a few more surprises on your drive or garden should they decide to continue their approach.

Now, if nothing else has deterred them and they are getting a little too close to the door then the time has come to show your hand and if you are not lead deprived as we are here in the UK…shoot.

The delay, the putting off of firing for a minute or two has given you a couple of distinct advantages:

  • You will be mentally calmer and therefore thinking more clearly. You know something they don’t, the basis of tactical warfare for centuries.
  • You will be more in control if the situation deteriorates into one that requires direct confrontation.
  • Some of the group are most likely injured and will therefore hold back. leaving less people for you to deal with.
  • They will be confused at coming across unanticipated obstacles. This can cause loss of concentration and hesitation.

Giving yourself time to listen to the 10% of your brain under your control can, in many circumstances pay dividends that brass and lead alone cannot deliver.

Take Care

Liz

Delivered by The Daily Sheeple


Contributed by Lizzie Bennett of Underground Medic.

Lizzie Bennett retired from her job as a senior operating department practitioner in the UK earlier this year. Her field was trauma and accident and emergency and she has served on major catastrophe teams around the UK. Lizzie publishes Underground Medic on the topic of preparedness.

Understanding The Stress Response: It Can Buy You Valuable Seconds | The Daily Sheeple

Understanding The Stress Response: It Can Buy You Valuable Seconds | The Daily Sheeple.

Lizzie Bennett
Underground Medic
March 2nd, 2014

10750147-x-ray-close-up-with-brain-and-skull-concept

Survival in extreme situations often depends on an individuals ability to respond to the threat they are faced with. The stress response in humans has for decades been referred to as the ‘fight or flight’ response.

Now if you have a couple of Uzi’s and enough ammunition none of this applies to you because you could probably wipe out any number of malcontents advancing towards your property. For the rest of you, well, I hope you find some use in what I have to say.

The Physiological Basics

When faced with a sudden or extreme threat, two body systems act together to give you the best possible chance of survival. The reaction is for the most part not under your control. Your brain and your body decide what happens, the biggest toughest guy in the bar may turn and run, the tiny young bar tender may not, 90% of what happens is decided by chemistry.

The sympathetic nervous system and the adrenal-cortical system get together at the first sign of a serious threat and if the threat persists for longer than a few more seconds both systems kick into high gear and adrenaline (epinepherine) noradrenaline (norepinepherine) and a couple of dozen other hormones flood the body and the fight or flight response is triggered.

•Pupils dilate to take in as much light as possible

•Blood-glucose levels increase

•Veins in the skin contract allowing extra blood flow to the muscles

•Smooth muscle relaxes to allow extra oxygen for the lungs

•Heart rate increases

•Blood pressure increases

•Non-essential systems shut down (digestion for example)

•The only focus is the task in hand

It is your reaction to this flood of chemicals that decides what happens next. The first, often vital seconds can be wasted whilst your body decides what to do, which option will give you the best chance of survival. Your brain is processing information much faster than usual and increasing or decreasing the levels as the situation dictates. Running for your life or staying to fight is not at this point entirely under your own control, though the 10% of you not being guided by this chemical battle will have a bearing on the final outcome. If you have thought through the likely scenarios, and come to a conclusion, you will not be wasting time working out what to do.

The Psychology Basics

Highly trained individuals are much more able to overcome the flight part of the response and stand their ground and fight. Equally, in a hopeless situation they’re training allows them to make the decision to retreat faster than the average person would. This should never be construed as cowardice, it is simply a tactical withdrawal that leaves them alive to fight another day.

Sadly some of those we may call ‘The Golden Horde’ may also possess the ability to make decisions faster than the average person. Those used to living on their wits will cope better in flight or fight situations than the average man simply because they have been in similar situations more often than Mr Average. Their most common reaction though is to fight, even when if they’d listened to the 10% of their brain not being controlled they would have realized it is unwise to do so.

It’s this that marks the difference between the gangs and highly trained individuals…those who are well trained know when to retreat for tactical reasons, gangs do it out of fear, and it’s this fear that can buy you time and make a hell of a difference to the outcome of a confrontation.

I know the urge to shoot at a roving gang going door to door down your street would be strong, but if you are at home, holed up with the family and you’re drastically outnumbered this may not have the outcome that is best for you or your family.

The urge to shoot first and hope you’re alive to ask questions later is almost overwhelming in such  situation, but sometimes you have to go with the 10% of you that isn’t under the control of biochemicals coursing around your body.

People hunting in gangs have a pack mentality, they are set on a course of action, and it often doesn’t enter their head that they will fail, they have not failed before, why should this occasion be any different?

That’s where control and logical thinking comes into it. Announcing to said gang that you are there by spraying the road with bullets is unlikely to deter them…they are armed, and past experience tells them that you are outnumbered. They are not thinking tactics, they are thinking of nothing but what they can steal from your home.

This makes them dumb, and relatively easy pickings for someone who is thinking tactically.

The Bones Of It

Now here I have to be careful. I have been advised by a Lizzie loyal police officer that spelling out some of the methods that can be used to stop these roving gangs could get me arrested. It’s a British thing, the government decided a while back we were not allowed to defend ourselves. It’s best just to give you some examples of how dangerous ‘kitchen chemistry’ can be, and why therefore you should NEVER resort to using such methods…

We are told never to mix chemical cleaners as dangerous gases can be formed as a result. The son of a friend of mine didn’t believe this so he tried it, and produced a nice cloud of a chlorine gas.

The stupid boy had duct taped two jam jars together and put one solution in each jar, the idea being to drip one drop at a time from one jar into the other. Of course when he knocked it over the fluids mixed, and he spent several hours in the emergency department with streaming eyes, gasping for breath, and some nice burns from splashes that had landed on his legs to boot. Here is a fact sheet telling you what you must not mix together and why.

Teenagers are indeed foolish. There are reports from police in the US that kids are making items  based on an episode of MacGuyver. There have been some nasty injuries, and it’s a good job they used plastic bottles not glass or things would have been a good deal worse. Glass shards can travel a hell of a long way from their original breakage point.

There is even a case of a church receptionist using wasp nest killer instead of pepper spray on police advice as it shoots way further than mace. Remeber not to get a flame near it as it is highly flammable and becomes something of a flame thrower!

I digress, sorry, back to tactics. Anything you can do to put these people on the back foot is to your advantage. Hidden tanglefoot, or even a board with nails whacked through becomes invisible at night, the prime time for attacks.

Unusual and unpleasant chemical smells, loud noises, anything that isn’t expected immediately increases the stress levels of those that seek to do you harm. If these items can be placed a little way off your property all the better, it allows you to leave a few more surprises on your drive or garden should they decide to continue their approach.

Now, if nothing else has deterred them and they are getting a little too close to the door then the time has come to show your hand and if you are not lead deprived as we are here in the UK…shoot.

The delay, the putting off of firing for a minute or two has given you a couple of distinct advantages:

  • You will be mentally calmer and therefore thinking more clearly. You know something they don’t, the basis of tactical warfare for centuries.
  • You will be more in control if the situation deteriorates into one that requires direct confrontation.
  • Some of the group are most likely injured and will therefore hold back. leaving less people for you to deal with.
  • They will be confused at coming across unanticipated obstacles. This can cause loss of concentration and hesitation.

Giving yourself time to listen to the 10% of your brain under your control can, in many circumstances pay dividends that brass and lead alone cannot deliver.

Take Care

Liz

Delivered by The Daily Sheeple


Contributed by Lizzie Bennett of Underground Medic.

Lizzie Bennett retired from her job as a senior operating department practitioner in the UK earlier this year. Her field was trauma and accident and emergency and she has served on major catastrophe teams around the UK. Lizzie publishes Underground Medic on the topic of preparedness.

John Kerry Slams "Incredible Act Of Aggression", NATO Says Russia "Must Stop" | Zero Hedge

John Kerry Slams “Incredible Act Of Aggression”, NATO Says Russia “Must Stop” | Zero Hedge.

Just in case Obama’s Friday message of “costs” should Russia invade Ukraine, which it did, was lost in translation, here is NATO with the clarification, and more harsh language:

NATO Secretary-General Anders Fogh Rasmussen convened an emergency meeting of NATO ambassadors in Brussels on Sunday to discuss the situation in Ukraine.

Ahead of the meeting he issued the following statement:

I have convened the North Atlantic Council today because of Russia’s military action in Ukraine. And because of President Putin’s threats against this sovereign nation.

What Russia is doing now in Ukraine violates the principles of the United Nations Charter. It threatens peace and security in EuropeRussia must stop its military activities and its threats.

Today we will discuss their implications, for European peace and security, and for NATO’s relationship with Russia.

Afterwards, we will meet in the NATO-Ukraine Commission.

We support Ukraine’s territorial integrity and sovereignty. We support the right of the people of Ukraine to determine their own future without outside interference. And we emphasize the need for Ukraine to continue to uphold the democratic rights of all people and ensure that minority rights are protected.

Ukraine is our neighbour, and Ukraine is a valued partner for NATO.

We urge all parties to urgently continue all efforts to move away from this dangerous situation. In particular, I call on Russia to de-escalate tensions.

And just in case both Obama and NATO were misunderstood, here is Kerry appearing on CBS’ Face the Nation laying down the law, and even more harsh language:

U.S. Secretary of State John Kerry on Sunday condemned Russia’s “incredible act of aggression” in Ukraine and threatened “very serious repercussions” from the United States and other countries, including sanctions to isolate Russia economically.

You just don’t in the 21st century behave in 19th century fashion by invading another country on completely trumped up pre-text,” Kerry told the CBS program “Face the Nation.”

Kerry, however, added that Russia still has “a right set of choices” that can be made to defuse the crisis.

It’s an incredible act of aggression. It is really a stunning, willful choice by President (Vladimir) Putin to invade another country. Russia is in violation of the sovereignty of Ukraine. Russia is in violation of its international obligations,” Kerry added.

Kerry said U.S. President Barack Obama told Putin in a 90-minute phone call on Saturday that “there will be serious repercussions if this stands. The president … told Mr. Putin that it was imperative to find a different path, to roll back this invasion and un-do this act of invasion.”

Kerry said G8 nations and some other countries are “prepared to go to the hilt to isolate Russia” with a “broad array of options” available.

They’re prepared to put sanctions in place, they’re prepared to isolate Russia economically, the ruble is already going down. Russia has major economic challenges,” Kerry said, as he also mentioned visa bans, asset freezes and trade isolation as possible steps.

Some great soundbites: we can’t wait for the White House to release the obligatory photo op, which we assume would look somewhat different than this.

Russia’s response?

Kremlin spokesman Dmitry Peskov declined to comment on Sunday when asked for a response to harsh words from U.S. Secretary of State John Kerry, who condemned Russia’s “incredible act of aggression” in Ukraine. “No comment at the moment,” Peskov said.

Just laughter.

John Kerry Slams “Incredible Act Of Aggression”, NATO Says Russia “Must Stop” | Zero Hedge

John Kerry Slams “Incredible Act Of Aggression”, NATO Says Russia “Must Stop” | Zero Hedge.

Just in case Obama’s Friday message of “costs” should Russia invade Ukraine, which it did, was lost in translation, here is NATO with the clarification, and more harsh language:

NATO Secretary-General Anders Fogh Rasmussen convened an emergency meeting of NATO ambassadors in Brussels on Sunday to discuss the situation in Ukraine.

Ahead of the meeting he issued the following statement:

I have convened the North Atlantic Council today because of Russia’s military action in Ukraine. And because of President Putin’s threats against this sovereign nation.

What Russia is doing now in Ukraine violates the principles of the United Nations Charter. It threatens peace and security in EuropeRussia must stop its military activities and its threats.

Today we will discuss their implications, for European peace and security, and for NATO’s relationship with Russia.

Afterwards, we will meet in the NATO-Ukraine Commission.

We support Ukraine’s territorial integrity and sovereignty. We support the right of the people of Ukraine to determine their own future without outside interference. And we emphasize the need for Ukraine to continue to uphold the democratic rights of all people and ensure that minority rights are protected.

Ukraine is our neighbour, and Ukraine is a valued partner for NATO.

We urge all parties to urgently continue all efforts to move away from this dangerous situation. In particular, I call on Russia to de-escalate tensions.

And just in case both Obama and NATO were misunderstood, here is Kerry appearing on CBS’ Face the Nation laying down the law, and even more harsh language:

U.S. Secretary of State John Kerry on Sunday condemned Russia’s “incredible act of aggression” in Ukraine and threatened “very serious repercussions” from the United States and other countries, including sanctions to isolate Russia economically.

You just don’t in the 21st century behave in 19th century fashion by invading another country on completely trumped up pre-text,” Kerry told the CBS program “Face the Nation.”

Kerry, however, added that Russia still has “a right set of choices” that can be made to defuse the crisis.

It’s an incredible act of aggression. It is really a stunning, willful choice by President (Vladimir) Putin to invade another country. Russia is in violation of the sovereignty of Ukraine. Russia is in violation of its international obligations,” Kerry added.

Kerry said U.S. President Barack Obama told Putin in a 90-minute phone call on Saturday that “there will be serious repercussions if this stands. The president … told Mr. Putin that it was imperative to find a different path, to roll back this invasion and un-do this act of invasion.”

Kerry said G8 nations and some other countries are “prepared to go to the hilt to isolate Russia” with a “broad array of options” available.

They’re prepared to put sanctions in place, they’re prepared to isolate Russia economically, the ruble is already going down. Russia has major economic challenges,” Kerry said, as he also mentioned visa bans, asset freezes and trade isolation as possible steps.

Some great soundbites: we can’t wait for the White House to release the obligatory photo op, which we assume would look somewhat different than this.

Russia’s response?

Kremlin spokesman Dmitry Peskov declined to comment on Sunday when asked for a response to harsh words from U.S. Secretary of State John Kerry, who condemned Russia’s “incredible act of aggression” in Ukraine. “No comment at the moment,” Peskov said.

Just laughter.

WW III…Ukraine Orders Full Military Mobilization, Acting PM Says Russian Actions "Declaration Of War" | Zero Hedge

Ukraine Orders Full Military Mobilization, Acting PM Says Russian Actions “Declaration Of War” | Zero Hedge.

With less than 6 hours left until FX trading opens, no resolution to the Ukraine crisis is in sight. Instead the situation has devolved even more and overnight Ukraine has ordered a full military mobilization in response to Russia’s build-up of its forces in Crimea. Prime Minster Arseniy Yatsenyuk said the country was “on the brink of disaster.” Several other measures were announced on Sunday by national security officials:

  • The armed forces would be put on “full combat readiness”.
  • Reserves to be mobilised and trained
  • Ukraine’s foreign minister will seek the help of US and UK leaders in guaranteeing its security
  • Emergency headquarters to be set up
  • Increased security at key sites, including nuclear plants.
  • Airspace closed to all non-civilian aircraft.

WSJ has more:

Ukrainian Prime Minister Arseniy Yatsenyuk said Sunday that his country was “on the brink of disaster” and personally blamed Russian President Vladimir Putin for bringing the two nations to the verge of war. Speaking to reporters at the Ukrainian parliament, Mr. Yatsenyuk called on the international community to rein in Mr. Putin and pressure him to remove troops from the Crimean peninsula, where a majority of residents are ethnic Russians but have Ukrainian passports.

 

“If President Putin wants to be the president who starts the war between two friendly and neighboring countries, he has [almost] reached this target,” Mr. Yatsenyuk said. “We are on the brink of disaster. There was no reason for the Russian Federation to invade Ukraine.”

 

 

Western diplomats doubt that the Ukrainian armed forces would be able to match up to the Russian forces already in control of the critical infrastructure and border points in the Crimea.

 

Ukrainian leaders say that Russia has already sent an additional 6,000 troops to Crimea since tensions arose in the peninsula last week. The two countries have a military agreement that allows Moscow to base forces in the region, but Ukrainian officials accuse Moscow of violating that treaty by not informing Kiev of additional troops, and by moving forces without prior notice. Moscow says that it is in compliance of the accord.

 

Earlier Sunday, Ukraine’s interior minister said Russian officials had approached Ukrainian officers remaining in Crimea and offered them immediate Russian citizenship.

 

“Across the entire territory of Crimea, Russian emissaries and military officers have invited the remaining Ukrainian interior ministry troops to take Russian citizenship and immediately receive Russian passports,” Arsen Avakov wrote on his Facebook page. “This appeal has been aimed at upper and middle officer corps troops.”

 

Mr. Avakov denied that Ukrainian forces had threatened the Russian-speaking population on the largely pro-Russian peninsula, and blamed Russian forces for the sharp militarization of the region.

 

“In Crimea, there are no forces from the interior ministry or the regular army threatening citizens of the Russian Federation or the Russian-speaking population,” he said. “And also no self-defense units from Maidan have arrived from Kiev. All destabilization in the Crimea has come from and been masterminded in Russia.”

The BBC adds that it has seen what appear to be Russian troops digging trenches on the Crimean border.  Furthermore, a standoff between Ukrainian troops who have fortified a base in the crimean city of Privolnoye, borth place of the late USSR president Mikhail Gorbachev, and Russians who have surrounded them, may be the match that set it all off. Fox reports that hundreds of unidentified gunmen surrounded a Ukraine’s infantry base in Privolnoye in its Crimea region Sunday. The convoy included at least 13 troop vehicles each containing 30 soldiers and four armored vehicles with mounted machine guns. The vehicles — which have Russian license plates — have surrounded the base and are blocking Ukrainian soldiers from entering or leaving it.

This is the current state of the standoff:

Extraordinary standoff. #Ukraine soldiers defiant behind gates of Perevalne base. Won’t surrender. #Crimea pic.twitter.com/uLfphYAXGB

— James Mates (@jamesmatesitv) March 2, 2014

#Privolnoye: 100s of #Russian guns surround #Ukraine #Crimean base, blocking these soldiers http://t.co/9nFII4FWhF pic.twitter.com/wl9Esxiat9

— Ottawa Stare™ (@OttawaStare) March 2, 2014

In response, acting Prime Minister Arseniy Yatsenyuk said the move by Russian forces to surround military bases in Crimea was “a declaration of war.”

 His comments were echoed by acting president Oleksandr Turchynov, who said Ukraine had closed its airspace to non-civilian aircraft. Among the other statements by Yatsenyuk, as reported by the WSJ:

  • Ukrainian PM: ‘If President Putin Wants to Be the President Who Starts the War Between Two Friendly and Neighboring Countries, He Has [Almost] Reached This Target’
  • Ukrainian PM: ‘We are on the brink of disaster’
  • Ukrainian PM: ‘There Was No Reason for the Russian Federation to Invade Ukraine
  • Ukrainian PM: We Believe Western Partners and Entire Western Community Will Support Entire Territorial Integrity of Ukraine
  • Ukrainian PM: We Believe They Will Do Everything They Can to Stop Russian Military Aggression in Ukraine
  • Ukrainian Defense Ministry: All Ukraine’s Border Patrol Ships Moved Out of Crimean Ports to Odessa
  • Ukraine PM: Every Half Hour There Are Provocations in Crimea and Ukraine Refuses to Respond to These Provocations
  • Ukraine PM: Ukraine Hasn’t Given Permission to Russia to Deploy an Additional 6,000 troops to Crimea

All told, some 6,000 extra Russian troops and 30 additional armoured vehicles are now in Crimea, Ukrainian Defence Minister Ihor Tenyukh said on Saturday.

An interactive map of the key Ukraine battlefields is shown below:

Finallly, there was the traditional escalation in Western diplomacy with both France and Britain announcing they are putting on hold their plans for participation in the G-8 conference to be held in Sochi.

It gets better. From the WSJ:

France is not considering any military action in response to Russia’s decision to deploy troops inside Ukraine, French Foreign Minister Laurent Fabius said Sunday, as Western countries instead sought to renew diplomatic pressure on Moscow.

 

In an interview with French TV, Mr. Fabius said Poland had requested a meeting of the North Atlantic Treaty Organization, or NATO, military alliance “because it feels threatened by what’s going on in Ukraine.”

 

Asked if France would intervene militarily in Ukraine, Mr. Fabius responded: “Today, this is not the hypothesis. I’m telling you we want a de-escalation.”

..

“France’s position is to call for the suspension of preparation ahead of the G-8 meeting in Sochi as long as the Russian partners have not returned to principles in agreement with the G-8 and G-7,” Mr. Fabius said.

Apparently unlike Mali and the Central African Republic, Russian can fight back.

And then there’s this:

  • Kerry Says U.S. Considering Sanctions on Russia for Ukraine Move

Well if nothing else stopped Putin, this surely will.

WW III…Ukraine Orders Full Military Mobilization, Acting PM Says Russian Actions “Declaration Of War” | Zero Hedge

Ukraine Orders Full Military Mobilization, Acting PM Says Russian Actions “Declaration Of War” | Zero Hedge.

With less than 6 hours left until FX trading opens, no resolution to the Ukraine crisis is in sight. Instead the situation has devolved even more and overnight Ukraine has ordered a full military mobilization in response to Russia’s build-up of its forces in Crimea. Prime Minster Arseniy Yatsenyuk said the country was “on the brink of disaster.” Several other measures were announced on Sunday by national security officials:

  • The armed forces would be put on “full combat readiness”.
  • Reserves to be mobilised and trained
  • Ukraine’s foreign minister will seek the help of US and UK leaders in guaranteeing its security
  • Emergency headquarters to be set up
  • Increased security at key sites, including nuclear plants.
  • Airspace closed to all non-civilian aircraft.

WSJ has more:

Ukrainian Prime Minister Arseniy Yatsenyuk said Sunday that his country was “on the brink of disaster” and personally blamed Russian President Vladimir Putin for bringing the two nations to the verge of war. Speaking to reporters at the Ukrainian parliament, Mr. Yatsenyuk called on the international community to rein in Mr. Putin and pressure him to remove troops from the Crimean peninsula, where a majority of residents are ethnic Russians but have Ukrainian passports.

 

“If President Putin wants to be the president who starts the war between two friendly and neighboring countries, he has [almost] reached this target,” Mr. Yatsenyuk said. “We are on the brink of disaster. There was no reason for the Russian Federation to invade Ukraine.”

 

 

Western diplomats doubt that the Ukrainian armed forces would be able to match up to the Russian forces already in control of the critical infrastructure and border points in the Crimea.

 

Ukrainian leaders say that Russia has already sent an additional 6,000 troops to Crimea since tensions arose in the peninsula last week. The two countries have a military agreement that allows Moscow to base forces in the region, but Ukrainian officials accuse Moscow of violating that treaty by not informing Kiev of additional troops, and by moving forces without prior notice. Moscow says that it is in compliance of the accord.

 

Earlier Sunday, Ukraine’s interior minister said Russian officials had approached Ukrainian officers remaining in Crimea and offered them immediate Russian citizenship.

 

“Across the entire territory of Crimea, Russian emissaries and military officers have invited the remaining Ukrainian interior ministry troops to take Russian citizenship and immediately receive Russian passports,” Arsen Avakov wrote on his Facebook page. “This appeal has been aimed at upper and middle officer corps troops.”

 

Mr. Avakov denied that Ukrainian forces had threatened the Russian-speaking population on the largely pro-Russian peninsula, and blamed Russian forces for the sharp militarization of the region.

 

“In Crimea, there are no forces from the interior ministry or the regular army threatening citizens of the Russian Federation or the Russian-speaking population,” he said. “And also no self-defense units from Maidan have arrived from Kiev. All destabilization in the Crimea has come from and been masterminded in Russia.”

The BBC adds that it has seen what appear to be Russian troops digging trenches on the Crimean border.  Furthermore, a standoff between Ukrainian troops who have fortified a base in the crimean city of Privolnoye, borth place of the late USSR president Mikhail Gorbachev, and Russians who have surrounded them, may be the match that set it all off. Fox reports that hundreds of unidentified gunmen surrounded a Ukraine’s infantry base in Privolnoye in its Crimea region Sunday. The convoy included at least 13 troop vehicles each containing 30 soldiers and four armored vehicles with mounted machine guns. The vehicles — which have Russian license plates — have surrounded the base and are blocking Ukrainian soldiers from entering or leaving it.

This is the current state of the standoff:

Extraordinary standoff. #Ukraine soldiers defiant behind gates of Perevalne base. Won’t surrender. #Crimea pic.twitter.com/uLfphYAXGB

— James Mates (@jamesmatesitv) March 2, 2014

#Privolnoye: 100s of #Russian guns surround #Ukraine #Crimean base, blocking these soldiers http://t.co/9nFII4FWhF pic.twitter.com/wl9Esxiat9

— Ottawa Stare™ (@OttawaStare) March 2, 2014

In response, acting Prime Minister Arseniy Yatsenyuk said the move by Russian forces to surround military bases in Crimea was “a declaration of war.”

 His comments were echoed by acting president Oleksandr Turchynov, who said Ukraine had closed its airspace to non-civilian aircraft. Among the other statements by Yatsenyuk, as reported by the WSJ:

  • Ukrainian PM: ‘If President Putin Wants to Be the President Who Starts the War Between Two Friendly and Neighboring Countries, He Has [Almost] Reached This Target’
  • Ukrainian PM: ‘We are on the brink of disaster’
  • Ukrainian PM: ‘There Was No Reason for the Russian Federation to Invade Ukraine
  • Ukrainian PM: We Believe Western Partners and Entire Western Community Will Support Entire Territorial Integrity of Ukraine
  • Ukrainian PM: We Believe They Will Do Everything They Can to Stop Russian Military Aggression in Ukraine
  • Ukrainian Defense Ministry: All Ukraine’s Border Patrol Ships Moved Out of Crimean Ports to Odessa
  • Ukraine PM: Every Half Hour There Are Provocations in Crimea and Ukraine Refuses to Respond to These Provocations
  • Ukraine PM: Ukraine Hasn’t Given Permission to Russia to Deploy an Additional 6,000 troops to Crimea

All told, some 6,000 extra Russian troops and 30 additional armoured vehicles are now in Crimea, Ukrainian Defence Minister Ihor Tenyukh said on Saturday.

An interactive map of the key Ukraine battlefields is shown below:

Finallly, there was the traditional escalation in Western diplomacy with both France and Britain announcing they are putting on hold their plans for participation in the G-8 conference to be held in Sochi.

It gets better. From the WSJ:

France is not considering any military action in response to Russia’s decision to deploy troops inside Ukraine, French Foreign Minister Laurent Fabius said Sunday, as Western countries instead sought to renew diplomatic pressure on Moscow.

 

In an interview with French TV, Mr. Fabius said Poland had requested a meeting of the North Atlantic Treaty Organization, or NATO, military alliance “because it feels threatened by what’s going on in Ukraine.”

 

Asked if France would intervene militarily in Ukraine, Mr. Fabius responded: “Today, this is not the hypothesis. I’m telling you we want a de-escalation.”

..

“France’s position is to call for the suspension of preparation ahead of the G-8 meeting in Sochi as long as the Russian partners have not returned to principles in agreement with the G-8 and G-7,” Mr. Fabius said.

Apparently unlike Mali and the Central African Republic, Russian can fight back.

And then there’s this:

  • Kerry Says U.S. Considering Sanctions on Russia for Ukraine Move

Well if nothing else stopped Putin, this surely will.

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