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Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China | Zero Hedge

Petrodollar Alert: Putin Prepares To Announce “Holy Grail” Gas Deal With China | Zero Hedge.

If it was the intent of the West to bring Russia and China together – one a natural resource (if “somewhat” corrupt) superpower and the other a fixed capital / labor output (if “somewhat” capital misallocating and credit bubbleicious) powerhouse – in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely “going according to plan.”

For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead… and quite a few steps east.

While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the “Holy Grail” energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.

Here is what will likely happen next, as explained by Reuters:

Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow’s seizure of the Black Sea peninsula from Ukraine would be counter-productive.

 

The underlying message from the head of Russia’s biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. 

 

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

More details on the revelation of said “Holy Grail”:

State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world’s largest producer of conventional gas to the largest consumer.

 

“May is in our plans,” a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: “It would be logical to expect the deal during Putin’s visit to China.”

Summarizing what should be and is painfully obvious to all, but apparently to the White House, which keeps prodding at Russia, is the following:

The worse Russia’s relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you’re isolated,” said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Bingo. And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China’s largest foreign source of crude, whose crown prince alsohappened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.

As reported previoisly, China has already implicitly backed Putin without risking it relations with the West. “Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia. Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow. The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world’s second biggest economy and it opposes the spread of Western-style democracy.”

This culminated yesterday, when as we reported last night, Putin thanked China for its “understanding over Ukraine.” China hasn’t exactly kept its feelings about closer relations with Russia under wraps either:

Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China’s leader last year and attending the opening of the Winter Olympics in Sochi last month.

 

Many Western leaders did not go to the Games after criticism of Russia’s record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were “close”.

The punchline: “A strong alliance would suit both countries as a counterbalance to the United States.” An alliance that would merely be an extension of current trends in close bilateral relations, including not only infrastructure investment but also military supplies:

However, China overtook Germany as Russia’s biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

 

If Russia is isolated by a new round of Western sanctions – those so far affect only a few officials’ assets abroad and have not been aimed at companies – Russia and China could also step up cooperation in areas apart from energy. CAST’s Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

 

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries. “With Western sanctions, the atmosphere could change quickly in favor of China,” said Brian Zimbler Managing Partner of Morgan Lewis international law firm’s Moscow office. 

 

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China’s seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia’s biggest trade partner, accounting for almost half of all its trade turnover.

And as if pushing Russia into the warm embrace of the world’s most populous nation was not enough, there is also the second most populated country in the world, India.

Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea – saying India had shown “restraint and objectivity”.

 

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia’s ties with traditionally non-aligned India to flourish.

 

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

 

Putin’s moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. “Russia has legitimate interests,” he added.

To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the “Asian axis”, the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.

Petrodollar Alert: Putin Prepares To Announce “Holy Grail” Gas Deal With China | Zero Hedge

Petrodollar Alert: Putin Prepares To Announce “Holy Grail” Gas Deal With China | Zero Hedge.

If it was the intent of the West to bring Russia and China together – one a natural resource (if “somewhat” corrupt) superpower and the other a fixed capital / labor output (if “somewhat” capital misallocating and credit bubbleicious) powerhouse – in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely “going according to plan.”

For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead… and quite a few steps east.

While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the “Holy Grail” energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.

Here is what will likely happen next, as explained by Reuters:

Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow’s seizure of the Black Sea peninsula from Ukraine would be counter-productive.

 

The underlying message from the head of Russia’s biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. 

 

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

More details on the revelation of said “Holy Grail”:

State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world’s largest producer of conventional gas to the largest consumer.

 

“May is in our plans,” a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: “It would be logical to expect the deal during Putin’s visit to China.”

Summarizing what should be and is painfully obvious to all, but apparently to the White House, which keeps prodding at Russia, is the following:

The worse Russia’s relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you’re isolated,” said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Bingo. And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China’s largest foreign source of crude, whose crown prince alsohappened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.

As reported previoisly, China has already implicitly backed Putin without risking it relations with the West. “Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia. Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow. The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world’s second biggest economy and it opposes the spread of Western-style democracy.”

This culminated yesterday, when as we reported last night, Putin thanked China for its “understanding over Ukraine.” China hasn’t exactly kept its feelings about closer relations with Russia under wraps either:

Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China’s leader last year and attending the opening of the Winter Olympics in Sochi last month.

 

Many Western leaders did not go to the Games after criticism of Russia’s record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were “close”.

The punchline: “A strong alliance would suit both countries as a counterbalance to the United States.” An alliance that would merely be an extension of current trends in close bilateral relations, including not only infrastructure investment but also military supplies:

However, China overtook Germany as Russia’s biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

 

If Russia is isolated by a new round of Western sanctions – those so far affect only a few officials’ assets abroad and have not been aimed at companies – Russia and China could also step up cooperation in areas apart from energy. CAST’s Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

 

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries. “With Western sanctions, the atmosphere could change quickly in favor of China,” said Brian Zimbler Managing Partner of Morgan Lewis international law firm’s Moscow office. 

 

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China’s seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia’s biggest trade partner, accounting for almost half of all its trade turnover.

And as if pushing Russia into the warm embrace of the world’s most populous nation was not enough, there is also the second most populated country in the world, India.

Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea – saying India had shown “restraint and objectivity”.

 

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia’s ties with traditionally non-aligned India to flourish.

 

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

 

Putin’s moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. “Russia has legitimate interests,” he added.

To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the “Asian axis”, the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge.

It seems, despite all the market’s belief that Putin would go quietly into the night once more, that the situation is escalating:

  • *GUNMEN STORM UKRAINE ARMY INSTALLATIONS IN CRIMEA: UKRAINE DEFMIN SELEZNYOV
  • *GUNMEN STORMING CRIMEA BUILDINGS SHOOTING IN AIR: SELEZNYOV
  • *UKRAINIAN OFFICER WOUNDED BY LIVE AMMUNITION, HAYDUK SAYS
  • *ATTACKS ON UKRAINIAN UNITS INCREASING: NAVY CHIEF HAYDUK

Of course, the big question now is how will Ukraine respond? Because attacking (and injuring) citizens sure seems like a red-line someone should not be crossing (although, as per the referendum, that region is now Russian).

#Crimean unit under attack is the photogrammetric center of the Chief Directorate of Operational Support of the Armed Forces of #Ukraine |PR

— Euromaidan PR (@EuromaidanPR) March 18, 2014

BREAKING #Ukrainian military unit in #Simferopol under attack. #Russian snipers on the scene, one injured! -D.Tymchuk |PR News #Crimea

— Euromaidan PR (@EuromaidanPR) March 18, 2014

Of course there is no confirmation that these are “Russian” troops per se but it is on the heels of news (via Slashdot) that:

this excerpt from The Examiner: “The Security Service of Ukraine (SBU) confirmed March 16 the arrest of a group of Russians in the Zaporizhzhia (Zaporozhye) region of Ukraine. The men were armed with firearms, explosives and unspecified ‘special technical means’. This follows the March 14 arrest … of several Russians dressed black uniforms with no insignia, armed with AKS-74 assault rifles and in possession of numerous ID cards under various names. One of which was an ID card of Military Intelligence Directorate of the Russian armed forces; commonly known as ‘Spetsnaz’.

And the response by Ukraine has to be weighed based on this statement from the PM:

  • *UKRAINE WON’T RECOGNIZE CRIMEA ANNEXATION, TURCHYNOV SAYS
  • *UKRAINE SEEKS TO AVOID CRIMEA ESCALATION, HAYDUK SAYS
  • *RUSSIAN TROOPS BLOCKING 38 UKRAINE UNITS IN CRIMEA, HAYDUK SAYS

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge.

It seems, despite all the market’s belief that Putin would go quietly into the night once more, that the situation is escalating:

  • *GUNMEN STORM UKRAINE ARMY INSTALLATIONS IN CRIMEA: UKRAINE DEFMIN SELEZNYOV
  • *GUNMEN STORMING CRIMEA BUILDINGS SHOOTING IN AIR: SELEZNYOV
  • *UKRAINIAN OFFICER WOUNDED BY LIVE AMMUNITION, HAYDUK SAYS
  • *ATTACKS ON UKRAINIAN UNITS INCREASING: NAVY CHIEF HAYDUK

Of course, the big question now is how will Ukraine respond? Because attacking (and injuring) citizens sure seems like a red-line someone should not be crossing (although, as per the referendum, that region is now Russian).

#Crimean unit under attack is the photogrammetric center of the Chief Directorate of Operational Support of the Armed Forces of #Ukraine |PR

— Euromaidan PR (@EuromaidanPR) March 18, 2014

BREAKING #Ukrainian military unit in #Simferopol under attack. #Russian snipers on the scene, one injured! -D.Tymchuk |PR News #Crimea

— Euromaidan PR (@EuromaidanPR) March 18, 2014

Of course there is no confirmation that these are “Russian” troops per se but it is on the heels of news (via Slashdot) that:

this excerpt from The Examiner: “The Security Service of Ukraine (SBU) confirmed March 16 the arrest of a group of Russians in the Zaporizhzhia (Zaporozhye) region of Ukraine. The men were armed with firearms, explosives and unspecified ‘special technical means’. This follows the March 14 arrest … of several Russians dressed black uniforms with no insignia, armed with AKS-74 assault rifles and in possession of numerous ID cards under various names. One of which was an ID card of Military Intelligence Directorate of the Russian armed forces; commonly known as ‘Spetsnaz’.

And the response by Ukraine has to be weighed based on this statement from the PM:

  • *UKRAINE WON’T RECOGNIZE CRIMEA ANNEXATION, TURCHYNOV SAYS
  • *UKRAINE SEEKS TO AVOID CRIMEA ESCALATION, HAYDUK SAYS
  • *RUSSIAN TROOPS BLOCKING 38 UKRAINE UNITS IN CRIMEA, HAYDUK SAYS

Putin Formally Annexes Crimea, City Of Sevastopol To Russian Federation | Zero Hedge

Putin Formally Annexes Crimea, City Of Sevastopol To Russian Federation | Zero Hedge.

And there it is:

  • PUTIN ASKS FOR CRIMEA, CITY OF SEVASTOPOL TO BE ADDED TO RUSSIA
  • PUTIN SAYS WILL SUBMIT DRAFT LAW ON BRINGING CRIMEA INTO RUSSIA TO PARLIAMENT ON TUESDAY
  • PUTIN CALLS FOR RATIFICATION OF TREATY ON CRIMEA, SEVASTOPOL

And the inevitable conclusion:

  • RUSSIA, CRIMEA, SEVASTOPOL SIGN AGREEMENT ON ENTERING ACCESSION
  • REPUBLIC OF CRIMEA CONSIDERED PART OF RUSSIA FROM DATE OF SIGNING AGREEMENT – KREMLIN

The Kremlin’s official statement, google translated:

Treaty between the Russian Federation and the Republic of Crimea on the adoption of the Russian Federation in the Republic of Crimea and the formation of the Russian Federation signed new subjects March 18, 2014 in the Kremlin.

The document bears the signature of the President of the Russian Federation Vladimir Putin , President of the State Council of the Republic of Crimea Vladimir Konstantinov , Chairman of the Council of Ministers of Crimea Sergey Aksenov and chairman of the Coordinating Council on the organization of the Sevastopol city administration for Life Sevastopol Alexey Chaly .

***

Contract based on the freely expressed will of the peoples and voluntary obschekrymskom Crimea on a referendum held in the Autonomous Republic of Crimea and Sevastopol city March 16, 2014 , during which the people of Crimea decided to reunite with Russia

Republic of Crimea is considered to be adopted in the Russian Federation from the date of signing the Agreement . Since the adoption of the Russian Federation in the Republic of Crimea, the Russian Federation formed new entities – Republic of Crimea and the federal city of Sevastopol.

The text of the Agreement includes a preamble and ten articles which set out provisions relating to the adoption of the Russian Federation in the Republic of Crimea and education in the Russian Federation new subjects , including provisions for the new territories of the Russian Federation , the citizenship of the population , public authorities of the subjects of the Russian Federation.

Under the Treaty, since the adoption of the Russian Federation and the Republic of Crimea education in the Russian Federation and new subjects to January 1, 2015 the transitional period during which resolved the issues of integration of new subjects of the Russian Federation in the economic, financial , credit and legal system of the Russian Federation , in the system of state authorities of the Russian Federation , as well as issues of military duty and military service in the territories of the Republic of Crimea and Sevastopol city of federal significance.

Legislative and other normative legal acts of the Russian Federation within the Republic of Crimea and Sevastopol city of federal importance of the adoption of the Russian Federation in the Republic of Crimea and education in the Russian Federation new subjects , unless otherwise provided by the legislation of the Russian Federation.

Normative legal acts of the Autonomous Republic of Crimea and the city of Sevastopol , Republic of Crimea and the city with special status of Sevastopol operate in the territories respectively of the Republic of Crimea and Sevastopol city of federal significance until the end of the transition period or until the adoption of the relevant normative legal act of the Russian Federation and (or) the normative legal acts of the Republic Crimea, a normative legal act of the Russian Federation and (or) a normative legal act federal city of Sevastopol.

Normative legal acts of the Autonomous Republic of Crimea and the city of Sevastopol , Republic of Crimea and the city with special status of Sevastopol, contrary to the Constitution of the Russian Federation shall not apply.

Treaty shall be ratified in accordance with Article 15 of the Federal Law “On International Treaties of the Russian Federation” and in accordance with Article 10 of the Treaty.

And futures, stocks, and risk in general is soaring, sending the Kremlin precisely the message it needs to know that there is absolutely nothing wrong with this. Perhaps if Russia had annexed all of Ukraine, or the Baltics, or maybe even Poland, the S&P would have soared over 2000 already?

Putin Formally Annexes Crimea, City Of Sevastopol To Russian Federation | Zero Hedge

Putin Formally Annexes Crimea, City Of Sevastopol To Russian Federation | Zero Hedge.

And there it is:

  • PUTIN ASKS FOR CRIMEA, CITY OF SEVASTOPOL TO BE ADDED TO RUSSIA
  • PUTIN SAYS WILL SUBMIT DRAFT LAW ON BRINGING CRIMEA INTO RUSSIA TO PARLIAMENT ON TUESDAY
  • PUTIN CALLS FOR RATIFICATION OF TREATY ON CRIMEA, SEVASTOPOL

And the inevitable conclusion:

  • RUSSIA, CRIMEA, SEVASTOPOL SIGN AGREEMENT ON ENTERING ACCESSION
  • REPUBLIC OF CRIMEA CONSIDERED PART OF RUSSIA FROM DATE OF SIGNING AGREEMENT – KREMLIN

The Kremlin’s official statement, google translated:

Treaty between the Russian Federation and the Republic of Crimea on the adoption of the Russian Federation in the Republic of Crimea and the formation of the Russian Federation signed new subjects March 18, 2014 in the Kremlin.

The document bears the signature of the President of the Russian Federation Vladimir Putin , President of the State Council of the Republic of Crimea Vladimir Konstantinov , Chairman of the Council of Ministers of Crimea Sergey Aksenov and chairman of the Coordinating Council on the organization of the Sevastopol city administration for Life Sevastopol Alexey Chaly .

***

Contract based on the freely expressed will of the peoples and voluntary obschekrymskom Crimea on a referendum held in the Autonomous Republic of Crimea and Sevastopol city March 16, 2014 , during which the people of Crimea decided to reunite with Russia

Republic of Crimea is considered to be adopted in the Russian Federation from the date of signing the Agreement . Since the adoption of the Russian Federation in the Republic of Crimea, the Russian Federation formed new entities – Republic of Crimea and the federal city of Sevastopol.

The text of the Agreement includes a preamble and ten articles which set out provisions relating to the adoption of the Russian Federation in the Republic of Crimea and education in the Russian Federation new subjects , including provisions for the new territories of the Russian Federation , the citizenship of the population , public authorities of the subjects of the Russian Federation.

Under the Treaty, since the adoption of the Russian Federation and the Republic of Crimea education in the Russian Federation and new subjects to January 1, 2015 the transitional period during which resolved the issues of integration of new subjects of the Russian Federation in the economic, financial , credit and legal system of the Russian Federation , in the system of state authorities of the Russian Federation , as well as issues of military duty and military service in the territories of the Republic of Crimea and Sevastopol city of federal significance.

Legislative and other normative legal acts of the Russian Federation within the Republic of Crimea and Sevastopol city of federal importance of the adoption of the Russian Federation in the Republic of Crimea and education in the Russian Federation new subjects , unless otherwise provided by the legislation of the Russian Federation.

Normative legal acts of the Autonomous Republic of Crimea and the city of Sevastopol , Republic of Crimea and the city with special status of Sevastopol operate in the territories respectively of the Republic of Crimea and Sevastopol city of federal significance until the end of the transition period or until the adoption of the relevant normative legal act of the Russian Federation and (or) the normative legal acts of the Republic Crimea, a normative legal act of the Russian Federation and (or) a normative legal act federal city of Sevastopol.

Normative legal acts of the Autonomous Republic of Crimea and the city of Sevastopol , Republic of Crimea and the city with special status of Sevastopol, contrary to the Constitution of the Russian Federation shall not apply.

Treaty shall be ratified in accordance with Article 15 of the Federal Law “On International Treaties of the Russian Federation” and in accordance with Article 10 of the Treaty.

And futures, stocks, and risk in general is soaring, sending the Kremlin precisely the message it needs to know that there is absolutely nothing wrong with this. Perhaps if Russia had annexed all of Ukraine, or the Baltics, or maybe even Poland, the S&P would have soared over 2000 already?

With 79% Turnout, Exit Polls Confirm 93% Of Voters Back Crimea Joining Russia; White House Rejects Results | Zero Hedge

With 79% Turnout, Exit Polls Confirm 93% Of Voters Back Crimea Joining Russia; White House Rejects Results | Zero Hedge.

With a voter turnout (79.09%) that exceeded every US Presidential election since 1900, the people of Crimea have spoken:

  • *CRIMEA JOINING RUSSIA BACKED BY 93% OF VOTERS: EXIT POLL
  • *U.K. FOREIGN SECRETARY: U.K. WON’T RECOGNIZE CRIMEAN REFERENDUM

Ukraine’s leaders have called up 20,000 men for a newly-created National Guard as despite the so-called “truce” Russian APCs and Tanks are rolling. Pro-Russian supporters are burning books in Donetsk after storming anti-Russian buildings. The White House is already out rejecting the vote (before the final results are released).

Voter Turnout (by region):

As exit polls confirm overhwleming support for Crimea to join Russia…

  • Exit poll by Crimea-based Republican Institute for Political and Sociological Studies released by Kryminform news service.
  • 93% of voters back joining Russia: exit poll

Exit poll: ????? 93% ??????? ????? ????????????? ?? ????????????? ? ??

— ??? ??????? (@riabreakingnews) March 16, 2014

Despite the so-called truce, Russian APC and Tanks are moving…

Pro-Russian supporters are burning books in Donetsk

And Kharkiv is dominated by Pro-Russia supporters carry this huge Russian flag…

White House Statement:

Carney on Crimea referendum: “Russia’s actions are dangerous and destabilizing” pic.twitter.com/pfAmgxLTRG

— Zeke Miller (@ZekeJMiller) March 16, 2014

The US is rejecting the vote:

The U.S. is rejecting the vote in Crimea even before the results are released.

The White House says Sunday’s referendum on succession is contrary to Ukraine’s constitution.

The U.S. says the world won’t recognize the results of a vote held under what it says are “threats of violence and intimidation from a Russian military intervention that violates international law.”

A written statement from the White House calls Russia’s actions in Ukraine “dangerous and destabilizing.”

The U.S. is urging other nations to “take concrete steps to impose costs” against Russia.

Secession was expected to be approved overwhelmingly.

And so is the UK:

  • *U.K. FOREIGN SECRETARY: U.K. WON’T RECOGNIZE CRIMEAN REFERENDUM
  • *U.K.’S HAGUE SAYS CRIMEAN REFERENDUM UNCONSTITUTIONAL
  • *U.K.’S HAGUE SAYS THERE SHOULD BE CONSEQUENCES FOR RUSSIA
  • *HAGUE: `UNACCEPTABLE’ FOR RUSSIA TO TAKE MORE ACTION IN UKRAINE

And The EU:

  • *EU REITERATES CRIMEAN REFERENDUM IS ILLEGAL, ILLEGITIMATE
  • *EU SAYS IT WON’T RECOGNISE OUTCOME OF CRIMEAN REFERENDUM
  • *EU TO DECIDE ON ADDITIONAL MEASURES AGAINST RUSSIA TOMORROW

And the French:

  • *FABIUS SAYS CRIMEA REFERENDUM ILLEGAL, AGAINST UKRAINE CONST.
  • *FABIUS SAYS RUSSIA HAS RESPONBILITIES AS UN SEC. COUNCIL MEMBER
  • *FABIUS SAYS RUSSIA MUST RESPECT UKRAINE TERRITORIAL INTEGRITY

Now it’s up to Putin… to weigh these potential “costs” against his gains…

With 79% Turnout, Exit Polls Confirm 93% Of Voters Back Crimea Joining Russia; White House Rejects Results | Zero Hedge

With 79% Turnout, Exit Polls Confirm 93% Of Voters Back Crimea Joining Russia; White House Rejects Results | Zero Hedge.

With a voter turnout (79.09%) that exceeded every US Presidential election since 1900, the people of Crimea have spoken:

  • *CRIMEA JOINING RUSSIA BACKED BY 93% OF VOTERS: EXIT POLL
  • *U.K. FOREIGN SECRETARY: U.K. WON’T RECOGNIZE CRIMEAN REFERENDUM

Ukraine’s leaders have called up 20,000 men for a newly-created National Guard as despite the so-called “truce” Russian APCs and Tanks are rolling. Pro-Russian supporters are burning books in Donetsk after storming anti-Russian buildings. The White House is already out rejecting the vote (before the final results are released).

Voter Turnout (by region):

As exit polls confirm overhwleming support for Crimea to join Russia…

  • Exit poll by Crimea-based Republican Institute for Political and Sociological Studies released by Kryminform news service.
  • 93% of voters back joining Russia: exit poll

Exit poll: ????? 93% ??????? ????? ????????????? ?? ????????????? ? ??

— ??? ??????? (@riabreakingnews) March 16, 2014

Despite the so-called truce, Russian APC and Tanks are moving…

Pro-Russian supporters are burning books in Donetsk

And Kharkiv is dominated by Pro-Russia supporters carry this huge Russian flag…

White House Statement:

Carney on Crimea referendum: “Russia’s actions are dangerous and destabilizing” pic.twitter.com/pfAmgxLTRG

— Zeke Miller (@ZekeJMiller) March 16, 2014

The US is rejecting the vote:

The U.S. is rejecting the vote in Crimea even before the results are released.

The White House says Sunday’s referendum on succession is contrary to Ukraine’s constitution.

The U.S. says the world won’t recognize the results of a vote held under what it says are “threats of violence and intimidation from a Russian military intervention that violates international law.”

A written statement from the White House calls Russia’s actions in Ukraine “dangerous and destabilizing.”

The U.S. is urging other nations to “take concrete steps to impose costs” against Russia.

Secession was expected to be approved overwhelmingly.

And so is the UK:

  • *U.K. FOREIGN SECRETARY: U.K. WON’T RECOGNIZE CRIMEAN REFERENDUM
  • *U.K.’S HAGUE SAYS CRIMEAN REFERENDUM UNCONSTITUTIONAL
  • *U.K.’S HAGUE SAYS THERE SHOULD BE CONSEQUENCES FOR RUSSIA
  • *HAGUE: `UNACCEPTABLE’ FOR RUSSIA TO TAKE MORE ACTION IN UKRAINE

And The EU:

  • *EU REITERATES CRIMEAN REFERENDUM IS ILLEGAL, ILLEGITIMATE
  • *EU SAYS IT WON’T RECOGNISE OUTCOME OF CRIMEAN REFERENDUM
  • *EU TO DECIDE ON ADDITIONAL MEASURES AGAINST RUSSIA TOMORROW

And the French:

  • *FABIUS SAYS CRIMEA REFERENDUM ILLEGAL, AGAINST UKRAINE CONST.
  • *FABIUS SAYS RUSSIA HAS RESPONBILITIES AS UN SEC. COUNCIL MEMBER
  • *FABIUS SAYS RUSSIA MUST RESPECT UKRAINE TERRITORIAL INTEGRITY

Now it’s up to Putin… to weigh these potential “costs” against his gains…

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