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The Photo That Reveals Why US and EU Bankers Despise Russia’s Putin So Much | Zero Hedge

The Photo That Reveals Why US and EU Bankers Despise Russia’s Putin So Much | Zero Hedge.

Below is the photo that reveals why US and EU bankers despise Russian President Putin so much. As a quick experiment, type “Obama, gold” and “Cameron, gold” into Google images and conduct a search. You will discover that theses searches come up empty. Any similar photos to the one below by US President Obama or UK Prime Minister Cameron would be a massive betrayal of their puppet masters – the BIS, the IMF, the World Bank, the ECB, the BOE and the Federal Reserve.

Simply put, physical gold and physical silver are real money. The US dollar and the euro are not.

Russian President Vladimir Putin displays his fondness for gold

Russian President Vladimir Putin displays his fondness for gold

And in case you’ve missed them, our most recent SmartKnowledge videos are listed below:

What Bankers Want With Ukraine

The History of Gold and Silver Clearly Tell Us Where it is Heading in the Future

Another JP Morgan Banker Dead: It’s DefCon1 for the Criminal Banking Industry

Connect the Dots: The Power of the Lone Dissenter to Bring About Change

What the Chinese Yuan is Telling Us is Coming

 

Subscribe to the SmartKnowledgeU YouTube channel here and follow us on Twitter here.

The Photo That Reveals Why US and EU Bankers Despise Russia's Putin So Much | Zero Hedge

The Photo That Reveals Why US and EU Bankers Despise Russia’s Putin So Much | Zero Hedge.

Below is the photo that reveals why US and EU bankers despise Russian President Putin so much. As a quick experiment, type “Obama, gold” and “Cameron, gold” into Google images and conduct a search. You will discover that theses searches come up empty. Any similar photos to the one below by US President Obama or UK Prime Minister Cameron would be a massive betrayal of their puppet masters – the BIS, the IMF, the World Bank, the ECB, the BOE and the Federal Reserve.

Simply put, physical gold and physical silver are real money. The US dollar and the euro are not.

Russian President Vladimir Putin displays his fondness for gold

Russian President Vladimir Putin displays his fondness for gold

And in case you’ve missed them, our most recent SmartKnowledge videos are listed below:

What Bankers Want With Ukraine

The History of Gold and Silver Clearly Tell Us Where it is Heading in the Future

Another JP Morgan Banker Dead: It’s DefCon1 for the Criminal Banking Industry

Connect the Dots: The Power of the Lone Dissenter to Bring About Change

What the Chinese Yuan is Telling Us is Coming

 

Subscribe to the SmartKnowledgeU YouTube channel here and follow us on Twitter here.

Ukraine crisis is about Great Power oil, gas pipeline rivalry | Nafeez Ahmed | Environment | theguardian.com

Ukraine crisis is about Great Power oil, gas pipeline rivalry | Nafeez Ahmed | Environment | theguardian.com.

Ukraine crisis is about Great Power oil, gas pipeline rivalry

Resource scarcity, competition to dominate Eurasian energy corridors, are behind Russian militarism and US interference
Troops under Russian command at the Belbek airbase in Crimea, Ukraine

Troops under Russian command order Ukrainian soldiers to turn back before firing weapons into the air at Belbek airbase in Crimea. Photograph: Sean Gallup/Getty Images

Russia‘s armed intervention in the Crimea undoubtedly illustrates President Putin’s ruthless determination to get his way in Ukraine. But less attention has been paid to the role of the United States in interfering in Ukrainian politics and civil society. Both powers are motivated by the desire to ensure that a geostrategically pivotal country with respect to control of critical energy pipeline routes remains in their own sphere of influence.

Much has been made of the reported leak of the recording of an alleged private telephone conversation between US assistant secretary of state Victoria Nuland and US ambassador to Kiev Geoffrey Pyatt. While the focus has been on Nuland’s rude language, which has already elicited US apologies, the more important context of this language concerns the US role in liaising with Ukrainian opposition parties with a view, it seems, to manipulate the orientation of the Ukrainian government in accordance with US interests.

Rather than leaving the future of Ukrainian politics “up to the Ukrainian people” as claimed in official announcements, the conversation suggests active US government interference to favour certain opposition leaders:

Nuland: Good. I don’t think [opposition leader] Klitsch should go into the government. I don’t think it’s necessary, I don’t think it’s a good idea.

Pyatt: Yeah. I guess… in terms of him not going into the government, just let him stay out and do his political homework and stuff. I’m just thinking in terms of sort of the process moving ahead we want to keep the moderate democrats together. The problem is going to be Tyahnybok [Oleh Tyahnybok, the other opposition leader] and his guys and I’m sure that’s part of what [President Viktor] Yanukovych is calculating on all this.

Nuland: [Breaks in] I think Yats is the guy who’s got the economic experience, the governing experience. He’s the… what he needs is Klitsch and Tyahnybok on the outside. He needs to be talking to them four times a week, you know. I just think Klitsch going in… he’s going to be at that level working for Yatseniuk, it’s just not going to work.

[…]

Nuland: OK. He’s [Jeff Feltman, United Nations Under-Secretary-General for Political Affairs] now gotten both [UN official Robert] Serry and [UN Secretary General] Ban Ki-moon to agree that Serry could come in Monday or Tuesday. So that would be great, I think, to help glue this thing and to have the UN help glue it and, you know, Fuck the EU.

Pyatt: No, exactly. And I think we’ve got to do something to make it stick together because you can be pretty sure that if it does start to gain altitude, that the Russians will be working behind the scenes to try to torpedo it.

As BBC diplomatic correspondent Jonathan Marcus rightly observes, the alleged conversation:

“… suggests that the US has very clear ideas about what the outcome should be and is striving to achieve these goals… Washington clearly has its own game-plan…. [with] various officials attempting to marshal the Ukrainian opposition [and] efforts to get the UN to play an active role in bolstering a deal.”

But US efforts to turn the political tide in Ukraine away from Russian influence began much earlier. In 2004, the Bush administration had given $65 million to provide ‘democracy training’ to opposition leaders and political activists aligned with them, including paying to bring opposition leader Viktor Yushchenko to meet US leaders and help underwrite exit polls indicating he won disputed elections.

This programme has accelerated under Obama. In a speech at the National Press Club in Washington DC last December as Ukraine’s Maidan Square clashes escalated, Nuland confirmed that the US had invested in total “over $5 billion” to “ensure a secure and prosperous and democratic Ukraine” – she specifically congratulated the “Euromaidan” movement.

So it would be naive to assume that this magnitude of US support to organisations politically aligned with the Ukrainian opposition played no role in fostering the pro-Euro-Atlantic movement that has ultimately culminated in Russian-backed President Yanukovych’s departure.

Indeed, at her 2013 speech, Nuland added:

“Today, there are senior officials in the Ukrainian government, in the business community, as well as in the opposition, civil society, and religious community, who believe in this democratic and European future for their country. And they’ve been working hard to move their country and their president in the right direction.”

What direction might that be? A glimpse of an answer was provided over a decade ago by Professor R. Craig Nation, Director of Russian and Eurasian Studies at the US Army War College’s Strategic Studies Institute, in a NATO publication:

“Ukraine is increasingly perceived to be critically situated in the emerging battle to dominate energy transport corridors linking the oil and natural gas reserves of the Caspian basin to European markets… Considerable competition has already emerged over the construction of pipelines. Whether Ukraine will provide alternative routes helping to diversify access, as the West would prefer, or ‘find itself forced to play the role of a Russian subsidiary,’ remains to be seen.”

A more recent US State Department-sponsored report notes that “Ukraine’s strategic location between the main energy producers (Russia and the Caspian Sea area) and consumers in the Eurasian region, its large transit network, and its available underground gas storage capacities”, make the country “a potentially crucial player in European energy transit” – a position that will “grow as Western European demands for Russian and Caspian gas and oil continue to increase.”

Ukraine’s overwhelming dependence on Russian energy imports, however, has had “negative implications for US strategy in the region,” in particular the strategy of:

“… supporting multiple pipeline routes on the East–West axis as a way of helping promote a more pluralistic system in the region as an alternative to continued Russian hegemony.”

But Russia’s Gazprom, controlling almost a fifth of the world’s gas reserves, supplies more than half of Ukraine’s, and about 30% of Europe’s gas annually. Just one month before Nuland’s speech at the National Press Club, Ukraine signed a $10 billion shale gas deal with US energy giant Chevron “that the ex-Soviet nation hopes could end its energy dependence on Russia by 2020.” The agreement would allow “Chevron to explore the Olesky deposit in western Ukraine that Kiev estimates can hold 2.98 trillion cubic meters of gas.” Similar deals had been struck already with Shell and ExxonMobil.

The move coincided with Ukraine’s efforts to “cement closer relations with the European Union at Russia’s expense”, through a prospective trade deal that would be a step closer to Ukraine’s ambitions to achieve EU integration. But Yanukovych’s decision to abandon the EU agreement in favour of Putin’s sudden offer of a 30% cheaper gas bill and a $15 billion aid package provoked the protests.

To be sure, the violent rioting was triggered by frustration with Yanukovych’s rejection of the EU deal, along with rocketing energy, food and other consumer bills, linked to Ukraine’s domestic gas woes and abject dependence on Russia. Police brutality to suppress what began as peaceful demonstrations was the last straw.

But while Russia’s imperial aggression is clearly a central factor, the US effort to rollback Russia’s sphere of influence in Ukraine by other means in pursuit of its own geopolitical and strategic interests raises awkward questions. As the pipeline map demonstrates, US oil and gas majors like Chevron and Exxon are increasingly encroaching on Gazprom’s regional monopoly, undermining Russia’s energy hegemony over Europe.

Ukraine is caught hapless in the midst of this accelerating struggle to dominate Eurasia’s energy corridors in the last decades of the age offossil fuels.

For those who are pondering whether we face the prospect of a New Cold War, a better question might be – did the Cold War ever really end?

Dr Nafeez Ahmed is executive director of the Institute for Policy Research & Development and author of A User’s Guide to the Crisis of Civilisation: And How to Save It among other books. Follow him on Twitter @nafeezahmed

Ukraine crisis is about Great Power oil, gas pipeline rivalry | Nafeez Ahmed | Environment | theguardian.com

Ukraine crisis is about Great Power oil, gas pipeline rivalry | Nafeez Ahmed | Environment | theguardian.com.

Ukraine crisis is about Great Power oil, gas pipeline rivalry

Resource scarcity, competition to dominate Eurasian energy corridors, are behind Russian militarism and US interference
Troops under Russian command at the Belbek airbase in Crimea, Ukraine

Troops under Russian command order Ukrainian soldiers to turn back before firing weapons into the air at Belbek airbase in Crimea. Photograph: Sean Gallup/Getty Images

Russia‘s armed intervention in the Crimea undoubtedly illustrates President Putin’s ruthless determination to get his way in Ukraine. But less attention has been paid to the role of the United States in interfering in Ukrainian politics and civil society. Both powers are motivated by the desire to ensure that a geostrategically pivotal country with respect to control of critical energy pipeline routes remains in their own sphere of influence.

Much has been made of the reported leak of the recording of an alleged private telephone conversation between US assistant secretary of state Victoria Nuland and US ambassador to Kiev Geoffrey Pyatt. While the focus has been on Nuland’s rude language, which has already elicited US apologies, the more important context of this language concerns the US role in liaising with Ukrainian opposition parties with a view, it seems, to manipulate the orientation of the Ukrainian government in accordance with US interests.

Rather than leaving the future of Ukrainian politics “up to the Ukrainian people” as claimed in official announcements, the conversation suggests active US government interference to favour certain opposition leaders:

Nuland: Good. I don’t think [opposition leader] Klitsch should go into the government. I don’t think it’s necessary, I don’t think it’s a good idea.

Pyatt: Yeah. I guess… in terms of him not going into the government, just let him stay out and do his political homework and stuff. I’m just thinking in terms of sort of the process moving ahead we want to keep the moderate democrats together. The problem is going to be Tyahnybok [Oleh Tyahnybok, the other opposition leader] and his guys and I’m sure that’s part of what [President Viktor] Yanukovych is calculating on all this.

Nuland: [Breaks in] I think Yats is the guy who’s got the economic experience, the governing experience. He’s the… what he needs is Klitsch and Tyahnybok on the outside. He needs to be talking to them four times a week, you know. I just think Klitsch going in… he’s going to be at that level working for Yatseniuk, it’s just not going to work.

[…]

Nuland: OK. He’s [Jeff Feltman, United Nations Under-Secretary-General for Political Affairs] now gotten both [UN official Robert] Serry and [UN Secretary General] Ban Ki-moon to agree that Serry could come in Monday or Tuesday. So that would be great, I think, to help glue this thing and to have the UN help glue it and, you know, Fuck the EU.

Pyatt: No, exactly. And I think we’ve got to do something to make it stick together because you can be pretty sure that if it does start to gain altitude, that the Russians will be working behind the scenes to try to torpedo it.

As BBC diplomatic correspondent Jonathan Marcus rightly observes, the alleged conversation:

“… suggests that the US has very clear ideas about what the outcome should be and is striving to achieve these goals… Washington clearly has its own game-plan…. [with] various officials attempting to marshal the Ukrainian opposition [and] efforts to get the UN to play an active role in bolstering a deal.”

But US efforts to turn the political tide in Ukraine away from Russian influence began much earlier. In 2004, the Bush administration had given $65 million to provide ‘democracy training’ to opposition leaders and political activists aligned with them, including paying to bring opposition leader Viktor Yushchenko to meet US leaders and help underwrite exit polls indicating he won disputed elections.

This programme has accelerated under Obama. In a speech at the National Press Club in Washington DC last December as Ukraine’s Maidan Square clashes escalated, Nuland confirmed that the US had invested in total “over $5 billion” to “ensure a secure and prosperous and democratic Ukraine” – she specifically congratulated the “Euromaidan” movement.

So it would be naive to assume that this magnitude of US support to organisations politically aligned with the Ukrainian opposition played no role in fostering the pro-Euro-Atlantic movement that has ultimately culminated in Russian-backed President Yanukovych’s departure.

Indeed, at her 2013 speech, Nuland added:

“Today, there are senior officials in the Ukrainian government, in the business community, as well as in the opposition, civil society, and religious community, who believe in this democratic and European future for their country. And they’ve been working hard to move their country and their president in the right direction.”

What direction might that be? A glimpse of an answer was provided over a decade ago by Professor R. Craig Nation, Director of Russian and Eurasian Studies at the US Army War College’s Strategic Studies Institute, in a NATO publication:

“Ukraine is increasingly perceived to be critically situated in the emerging battle to dominate energy transport corridors linking the oil and natural gas reserves of the Caspian basin to European markets… Considerable competition has already emerged over the construction of pipelines. Whether Ukraine will provide alternative routes helping to diversify access, as the West would prefer, or ‘find itself forced to play the role of a Russian subsidiary,’ remains to be seen.”

A more recent US State Department-sponsored report notes that “Ukraine’s strategic location between the main energy producers (Russia and the Caspian Sea area) and consumers in the Eurasian region, its large transit network, and its available underground gas storage capacities”, make the country “a potentially crucial player in European energy transit” – a position that will “grow as Western European demands for Russian and Caspian gas and oil continue to increase.”

Ukraine’s overwhelming dependence on Russian energy imports, however, has had “negative implications for US strategy in the region,” in particular the strategy of:

“… supporting multiple pipeline routes on the East–West axis as a way of helping promote a more pluralistic system in the region as an alternative to continued Russian hegemony.”

But Russia’s Gazprom, controlling almost a fifth of the world’s gas reserves, supplies more than half of Ukraine’s, and about 30% of Europe’s gas annually. Just one month before Nuland’s speech at the National Press Club, Ukraine signed a $10 billion shale gas deal with US energy giant Chevron “that the ex-Soviet nation hopes could end its energy dependence on Russia by 2020.” The agreement would allow “Chevron to explore the Olesky deposit in western Ukraine that Kiev estimates can hold 2.98 trillion cubic meters of gas.” Similar deals had been struck already with Shell and ExxonMobil.

The move coincided with Ukraine’s efforts to “cement closer relations with the European Union at Russia’s expense”, through a prospective trade deal that would be a step closer to Ukraine’s ambitions to achieve EU integration. But Yanukovych’s decision to abandon the EU agreement in favour of Putin’s sudden offer of a 30% cheaper gas bill and a $15 billion aid package provoked the protests.

To be sure, the violent rioting was triggered by frustration with Yanukovych’s rejection of the EU deal, along with rocketing energy, food and other consumer bills, linked to Ukraine’s domestic gas woes and abject dependence on Russia. Police brutality to suppress what began as peaceful demonstrations was the last straw.

But while Russia’s imperial aggression is clearly a central factor, the US effort to rollback Russia’s sphere of influence in Ukraine by other means in pursuit of its own geopolitical and strategic interests raises awkward questions. As the pipeline map demonstrates, US oil and gas majors like Chevron and Exxon are increasingly encroaching on Gazprom’s regional monopoly, undermining Russia’s energy hegemony over Europe.

Ukraine is caught hapless in the midst of this accelerating struggle to dominate Eurasia’s energy corridors in the last decades of the age offossil fuels.

For those who are pondering whether we face the prospect of a New Cold War, a better question might be – did the Cold War ever really end?

Dr Nafeez Ahmed is executive director of the Institute for Policy Research & Development and author of A User’s Guide to the Crisis of Civilisation: And How to Save It among other books. Follow him on Twitter @nafeezahmed

The end could be nearer than you think — Paul Craig Roberts – PaulCraigRoberts.org

The end could be nearer than you think — Paul Craig Roberts – PaulCraigRoberts.org.

March 3, 2014

The end could be nearer than you think

Readers:

We are having trouble today with the website. I do not know if it is problems caused by the typical incompetence of US business enterprises, including those who host websites and have offshored American jobs to foreign countries, or whether it is National Stasi Agency induced. Certainly, the propagandistic US government does not want any truth available to compete with Washington’s systematic lies. Washington is desperate to control the explanation of the situation in Ukraine that, as a result of Washington’s incompetence, has resulted in Ukraine falling under control of neo-nazi elements, whose rabid anti-semitic and Russophobic actions and rhetoric have caused Ukraine to split in half. If you were unable to access my column today, use this URL:http://www.paulcraigroberts.org/2014/03/03/washingtons-arrogance-hubris-evil-set-stage-war/

Eastern and southern Ukraine are Russian-speaking former Russian territories added to Ukraine in the 1950s by the Communist Party leadership of the Soviet Union. These provinces are agitating to be returned to Mother Russia where they certainly belong. They are determined not to be part of a neo-nazi regime that will be looted by Western bankers and corporations and be forced to host US missile bases that will make western Ukraine a target for nuclear annihilation, like Poland and Czech Republic.

The propagandistic rhetoric issuing from the mouths of the White House Fool and the excrement that the Fool placed in charge of the Department of State is designed to cover up the abject failure of the Obama regime’s plot to install its puppets as Ukraine’s new rulers. The Obama regime is too stupid to comprehend that its rhetoric is preparing the gullible and ignorant American population for war with Russia. The neoconservative ideologues, who have been lusting for war with Russia ever since the 1980s when I was a member of the Committee on the Present Danger, will take advantage of the war preparation, which the White House Fool and his State Department excrement are creating with their rhetoric, to start a war that will destroy life on earth.

The neoconservatives are insane. They believe that nuclear war can be won, and that the US has the advantage to destroy Russia in a first strike.

Americans are so ignorant and gullible that they do not realize that their very existence is on the line, and that the insane neoconservatives who control the weak Obama puppet are determined to cross the line.

If any are still so gullible as to believe that the illegal deposing of the elected government of Ukraine was a “sincere indigenous revolt against a corrupt government,” the delusional should watch this video of the neo-nazi intimidating the US stooge who is a member of what Washington pretends is the government of Ukraine. https://www.youtube.com/watch?v=BV5Wm3qXfy4

Here is a video of the same nazi thug intimidating another collection of US stooges that Washington pretends is a government: https://www.youtube.com/watch?v=1oVsgJMqHNY

God help the American people. Their ignorance and gullibility make them an enormous threat to life on earth.

Yes, I know. I have readers who have escaped The Matrix. But the majority of the American population is lost.

War will be the result of the ignorance, gullibility, and stupidity of the American population, its prostitute media, and the hegemonic ambitions of the evil neoconservatives. The corrupt rulers of Europe will sell out their peoples for American money until they are all vaporized in nuclear explosions.

The total corruption of truth, integrity, and morality that Washington has imposed on the Western world has aligned the West with the powers of Darkness and death. No greater evil exists than the government of the United States.

About Dr. Paul Craig RobertsPaul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book,The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters.

BY ALISSA DE CARBONNEL

SIMFEROPOL, Ukraine Thu Mar 6, 2014 6:16am EST

Uniformed men, believed to be Russian servicemen, walk near a Ukrainian military base in the village of Perevalnoye, outside Simferopol, March 6, 2014. REUTERS-Vasily Fedosenko

(Reuters) – Crimea’s parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.

The sudden acceleration of moves to formally bring the Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, under Moscow’s rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation.

The Crimean parliament voted unanimously “to enter into the Russian Federation with the rights of a subject of the Russian Federation”, the RIA news agency reported. Its vice premier said a referendum on the status would take place on March 16.

The announcements, which diplomats said could not have been made without Russian President Vladimir Putin’s approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

EU leaders had been set to warn but not sanction Russia over its military intervention in Ukraine after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases. It was not immediately clear what impact the Crimean moves would have.

French President Francois Hollande told reporters on arrival at the summit: “There will be the strongest possible pressure on Russia to begin lowering the tension and in the pressure there is, of course, eventual recourse to sanctions.”

Russian Foreign Minister Sergei Lavrov refused to meet his new Ukrainian counterpart or to launch a “contact group” to seek a solution to the crisis at talks in Paris on Wednesday despite arm-twisting by U.S. Secretary of State John Kerry and European colleagues. The two men will meet again in Rome on Thursday.

Tension remained high in Ukraine’s southern Crimea region, where a senior United Nations envoy was surrounded by a pro-Russian crowd, threatened and forced to get back on his plane and leave the country.

The EU summit in Brussels seemed unlikely to adopt more than symbolic measures against Russia, Europe’s biggest gas supplier, because neither industrial powerhouse Germany nor financial centre Britain is keen to start down that road.

U.S. READY TO SANCTION

The United States has said it is ready to impose sanctions such as visa bans, asset freezes on individual Russian officials and restrictions on business ties within days rather than weeks.

Russia’s ruble currency weakened further on Thursday despite central bank intervention due to what analysts at VTB Capital called the political risk premium.

The short, informal EU summit will mostly be dedicated to displaying support for Ukraine’s new pro-Western government, represented at the Brussels talks by Prime Minister Arseny Yatseniuk, who will attend the lunch although Kiev is neither an EU member nor a recognized candidate for membership.

After meeting European Parliament President Martin Schulz, Yatseniuk appealed to Russia to respond to mediation efforts to end the crisis.

The European Commission announced an aid package of up to 11 billion euros ($15 billion) for Ukraine over the next couple of years provided it reaches a deal with the International Monetary Fund, entailing painful reforms like ending gas subsidies.

Diplomats said that at most, the 28-nation EU would condemn Russia’s so far bloodless seizure of Ukraine’s Black Sea province and suspend talks with Moscow on visa liberalization and economic cooperation, while threatening further measures if President Vladimir Putin does not accept mediation efforts soon.

But they will hold back from further reaching steps both in hopes of a diplomatic breakthrough to ease tensions in Ukraine and out of fear of a tit-for-tat trade war with Russia, a major economic partner of Europe.

France has a deal to sell warships to Russia that it is so far not prepared to cancel, London’s banks have profited from facilitating Russian investment, and German companies have $22 billion invested in Russia.

Before the summit, European members of the Group of Eight major economies will meet separately, diplomats said, in an apparent effort to coordinate positions towards Russia, due to host the next G8 summit in Olympic venue Sochi in June. They have so far stopped participating in preparatory meetings and Canada has said G7 countries may meet soon without Russia.

ILLEGITIMATE

The crisis began in November when Ukrainian President Viktor Yanukovich, under strong Russian pressure, turned his back on a far reaching trade deal with the EU and accepted a $15 billion bailout from Moscow. That prompted three months of street protests leading to the overthrow of Yanukovich on February 22.

Moscow denounced the events as an illegitimate coup and refused to recognize the new Ukrainian authorities.

Russia kept the door ajar for more diplomacy on its own terms, announcing on Thursday a meeting of former Soviet states in the Commonwealth of Independent States (CIS), including Ukraine, for April 4 and saying it would be preceded by contacts between Russian and Ukrainian diplomats.

Lavrov said attempts by Western countries to take action over the Ukraine crisis via democracy watchdog OSCE and the NATO military alliance were not helpful.

“I want to very briefly say that we had a meeting with U.S. Secretary of State John Kerry on the situation in Ukraine in relation to the actions that our partners are trying to take via the OSCE, the NATO-Russia council and other international organizations – action that does not help create an atmosphere for dialogue and constructive cooperation,” he said in a statement issued by the ministry on Thursday.

In a move that may alarm some of Russia’s neighbors and the West, Russian Prime Minister Dmitry Medvedev announced steps to ease handing out passports to native Russian speakers who have lived in Russia or the former Soviet Union.

Putin has cited the threat to Russian citizens to justify military action in both Georgia in 2008 and Ukraine now.

After a day of high-stakes diplomacy in Paris on Wednesday, Lavrov refused to talk to Ukrainian Foreign Minister Andriy Deshchitsya, whose new government is not recognized by Moscow.

As he left the French Foreign Ministry, Lavrov was asked if he had met his Ukrainian counterpart. “Who is that?” the Russian minister asked.

He stuck to Putin’s line – ridiculed by the West – that Moscow does not command the troops without national insignia which have taken control of Crimea, besieging Ukrainian forces, and hence cannot order them back to bases.

Kerry said afterwards he had never expected to get Lavrov and Deshchitsya into the same room right away, but diplomats said France and Germany had tried to achieve that.

Western diplomats said there was still hope that once Lavrov had reported back to Putin, Russia would accept the idea of a “contact group” involving both Moscow and Kiev as well as the United States and European powers to seek a solution.

The European Union formally announced it had frozen the assets of ousted Ukrainian president Yanukovich and 17 other officials, including former prime minister Mykola Azarov, suspected of human rights violations and misuse of state funds.

“RUSSIA! RUSSIA!”

In an awkward coincidence, just as EU leaders were gathering in Brussels, German Economy Minister and Vice-Chancellor Sigmar Gabriel traveled to Moscow for talks with his Russian counterpart and Putin.

Reflecting concern about how the long-planned trip might be seen in the midst of the Ukraine crisis, Gabriel dropped at the last minute plans to take along German industrialists with him. Germany has been accused in some quarters of soft-pedaling on sanctions in the light of its close economic ties to Russia.

Officials close to Gabriel said he was hoping to keep a low public profile on the trip, but if he meets Putin, as scheduled, he may have to appear in front of TV cameras.

U.N. special envoy Robert Serry had to abandon a mission to Crimea after being stopped by armed men and besieged inside a cafe by a hostile crowd shouting “Russia! Russia!” The Dutch diplomat flew to Istanbul after the incident.

In eastern Ukraine, a pro-Russian crowd in Donetsk, Yanukovich’s home town, recaptured the regional administration building they had occupied before being ejected by police. But police loyal to the new authorities in Kiev raised the Ukrainian flag over the building again on Thursday.

Putin has said Russia reserves the right to intervene militarily in other areas of Ukraine if Russian interests or the lives of Russians are in danger.

Dropping diplomatic niceties on Wednesday, the U.S. State Department published a “fact sheet” entitled “President Putin’s Fiction: 10 False Claims about Ukraine.”

“As Russia spins a false narrative to justify its illegal actions in Ukraine, the world has not seen such startling Russian fiction since Dostoyevsky wrote, ‘The formula “two plus two equals five” is not without its attractions,'” the State Department said in the document.

(Additional reporting by Lidia Kelly in Moscow, Tim Heritage in Kiev, John Irish and Lesley Wroughton in Paris; Writing by Paul Taylor; editing by Anna Willard)

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters.

BY ALISSA DE CARBONNEL

SIMFEROPOL, Ukraine Thu Mar 6, 2014 6:16am EST

Uniformed men, believed to be Russian servicemen, walk near a Ukrainian military base in the village of Perevalnoye, outside Simferopol, March 6, 2014. REUTERS-Vasily Fedosenko

(Reuters) – Crimea’s parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.

The sudden acceleration of moves to formally bring the Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, under Moscow’s rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation.

The Crimean parliament voted unanimously “to enter into the Russian Federation with the rights of a subject of the Russian Federation”, the RIA news agency reported. Its vice premier said a referendum on the status would take place on March 16.

The announcements, which diplomats said could not have been made without Russian President Vladimir Putin’s approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

EU leaders had been set to warn but not sanction Russia over its military intervention in Ukraine after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases. It was not immediately clear what impact the Crimean moves would have.

French President Francois Hollande told reporters on arrival at the summit: “There will be the strongest possible pressure on Russia to begin lowering the tension and in the pressure there is, of course, eventual recourse to sanctions.”

Russian Foreign Minister Sergei Lavrov refused to meet his new Ukrainian counterpart or to launch a “contact group” to seek a solution to the crisis at talks in Paris on Wednesday despite arm-twisting by U.S. Secretary of State John Kerry and European colleagues. The two men will meet again in Rome on Thursday.

Tension remained high in Ukraine’s southern Crimea region, where a senior United Nations envoy was surrounded by a pro-Russian crowd, threatened and forced to get back on his plane and leave the country.

The EU summit in Brussels seemed unlikely to adopt more than symbolic measures against Russia, Europe’s biggest gas supplier, because neither industrial powerhouse Germany nor financial centre Britain is keen to start down that road.

U.S. READY TO SANCTION

The United States has said it is ready to impose sanctions such as visa bans, asset freezes on individual Russian officials and restrictions on business ties within days rather than weeks.

Russia’s ruble currency weakened further on Thursday despite central bank intervention due to what analysts at VTB Capital called the political risk premium.

The short, informal EU summit will mostly be dedicated to displaying support for Ukraine’s new pro-Western government, represented at the Brussels talks by Prime Minister Arseny Yatseniuk, who will attend the lunch although Kiev is neither an EU member nor a recognized candidate for membership.

After meeting European Parliament President Martin Schulz, Yatseniuk appealed to Russia to respond to mediation efforts to end the crisis.

The European Commission announced an aid package of up to 11 billion euros ($15 billion) for Ukraine over the next couple of years provided it reaches a deal with the International Monetary Fund, entailing painful reforms like ending gas subsidies.

Diplomats said that at most, the 28-nation EU would condemn Russia’s so far bloodless seizure of Ukraine’s Black Sea province and suspend talks with Moscow on visa liberalization and economic cooperation, while threatening further measures if President Vladimir Putin does not accept mediation efforts soon.

But they will hold back from further reaching steps both in hopes of a diplomatic breakthrough to ease tensions in Ukraine and out of fear of a tit-for-tat trade war with Russia, a major economic partner of Europe.

France has a deal to sell warships to Russia that it is so far not prepared to cancel, London’s banks have profited from facilitating Russian investment, and German companies have $22 billion invested in Russia.

Before the summit, European members of the Group of Eight major economies will meet separately, diplomats said, in an apparent effort to coordinate positions towards Russia, due to host the next G8 summit in Olympic venue Sochi in June. They have so far stopped participating in preparatory meetings and Canada has said G7 countries may meet soon without Russia.

ILLEGITIMATE

The crisis began in November when Ukrainian President Viktor Yanukovich, under strong Russian pressure, turned his back on a far reaching trade deal with the EU and accepted a $15 billion bailout from Moscow. That prompted three months of street protests leading to the overthrow of Yanukovich on February 22.

Moscow denounced the events as an illegitimate coup and refused to recognize the new Ukrainian authorities.

Russia kept the door ajar for more diplomacy on its own terms, announcing on Thursday a meeting of former Soviet states in the Commonwealth of Independent States (CIS), including Ukraine, for April 4 and saying it would be preceded by contacts between Russian and Ukrainian diplomats.

Lavrov said attempts by Western countries to take action over the Ukraine crisis via democracy watchdog OSCE and the NATO military alliance were not helpful.

“I want to very briefly say that we had a meeting with U.S. Secretary of State John Kerry on the situation in Ukraine in relation to the actions that our partners are trying to take via the OSCE, the NATO-Russia council and other international organizations – action that does not help create an atmosphere for dialogue and constructive cooperation,” he said in a statement issued by the ministry on Thursday.

In a move that may alarm some of Russia’s neighbors and the West, Russian Prime Minister Dmitry Medvedev announced steps to ease handing out passports to native Russian speakers who have lived in Russia or the former Soviet Union.

Putin has cited the threat to Russian citizens to justify military action in both Georgia in 2008 and Ukraine now.

After a day of high-stakes diplomacy in Paris on Wednesday, Lavrov refused to talk to Ukrainian Foreign Minister Andriy Deshchitsya, whose new government is not recognized by Moscow.

As he left the French Foreign Ministry, Lavrov was asked if he had met his Ukrainian counterpart. “Who is that?” the Russian minister asked.

He stuck to Putin’s line – ridiculed by the West – that Moscow does not command the troops without national insignia which have taken control of Crimea, besieging Ukrainian forces, and hence cannot order them back to bases.

Kerry said afterwards he had never expected to get Lavrov and Deshchitsya into the same room right away, but diplomats said France and Germany had tried to achieve that.

Western diplomats said there was still hope that once Lavrov had reported back to Putin, Russia would accept the idea of a “contact group” involving both Moscow and Kiev as well as the United States and European powers to seek a solution.

The European Union formally announced it had frozen the assets of ousted Ukrainian president Yanukovich and 17 other officials, including former prime minister Mykola Azarov, suspected of human rights violations and misuse of state funds.

“RUSSIA! RUSSIA!”

In an awkward coincidence, just as EU leaders were gathering in Brussels, German Economy Minister and Vice-Chancellor Sigmar Gabriel traveled to Moscow for talks with his Russian counterpart and Putin.

Reflecting concern about how the long-planned trip might be seen in the midst of the Ukraine crisis, Gabriel dropped at the last minute plans to take along German industrialists with him. Germany has been accused in some quarters of soft-pedaling on sanctions in the light of its close economic ties to Russia.

Officials close to Gabriel said he was hoping to keep a low public profile on the trip, but if he meets Putin, as scheduled, he may have to appear in front of TV cameras.

U.N. special envoy Robert Serry had to abandon a mission to Crimea after being stopped by armed men and besieged inside a cafe by a hostile crowd shouting “Russia! Russia!” The Dutch diplomat flew to Istanbul after the incident.

In eastern Ukraine, a pro-Russian crowd in Donetsk, Yanukovich’s home town, recaptured the regional administration building they had occupied before being ejected by police. But police loyal to the new authorities in Kiev raised the Ukrainian flag over the building again on Thursday.

Putin has said Russia reserves the right to intervene militarily in other areas of Ukraine if Russian interests or the lives of Russians are in danger.

Dropping diplomatic niceties on Wednesday, the U.S. State Department published a “fact sheet” entitled “President Putin’s Fiction: 10 False Claims about Ukraine.”

“As Russia spins a false narrative to justify its illegal actions in Ukraine, the world has not seen such startling Russian fiction since Dostoyevsky wrote, ‘The formula “two plus two equals five” is not without its attractions,'” the State Department said in the document.

(Additional reporting by Lidia Kelly in Moscow, Tim Heritage in Kiev, John Irish and Lesley Wroughton in Paris; Writing by Paul Taylor; editing by Anna Willard)

The West Should Butt Out of Ukrainian Politics | Jackson Doughart

The West Should Butt Out of Ukrainian Politics | Jackson Doughart.

Jackson Doughart

Posted: 03/05/2014 5:16 pm

The West, and especially the English-speaking West, has wrongly taken sides in the present conflict in Ukraine. On the one hand, our leaders have mimicked the line of the news media, which simplistically represent the revolutionary ouster of President Yanukovych as an occasion of desperate democratic action against a corrupt leader. On the other hand, various pundits have elevated Vladimir Putin’s Russia to the status of enemy, whose actions must be “contained” as an apparent foreign-policy sine qua non.

For instance, the Washington Post’s Charles Krauthammer argues that President Obama “sees Ukraine as merely a crisis to be managed rather than an opportunity to alter the increasingly autocratic trajectory of the region, allow Ukrainians to join their destiny to the West, and block Russian neo-imperialism.”

In response to the Administration’s claim that democracy “must not be imposed by outside intervention but develop on its own,” Krauthammer writes: “Ukraine is never on its own. Not with a bear next door. American neutrality doesn’t allow an authentic Ukrainian polity to emerge. It leaves Ukraine naked to Russian pressure.”

But this “authentic Ukrainian polity” is wrought with ethnic divisions, particularly concerning the Crimean peninsula, which is populated in a majority by ethnic Russians. The pro-Europe posture of the protesters is a reflection less of a considered moral preference than of a country torn in politics and identity between East and West. Krauthammer also fails to mention that the “Russian pressure” involved here is not a mere exercise in imperial Realpolitik. What’s really involved is the fear of Ukrainians that they may be unduly influenced by Russia, or worse, that they may lose territory. Meanwhile, the Ukrainian Russians fear that a more nationalist government will leave them with less clout and fewer political rights, such as the regional language recognition that the new parliament has just taken away from them.

Putin isn’t going to leave the Russian residents of the Ukraine, and especially those in Crimea, proverbially out to dry. It’s a matter of legitimate interest for Russia, whose ethnic brethren was stranded from the homeland when Ukraine declared independence, to use its geopolitical might to protect them. (One remembers that it was only in 1954 that Crimea was tacked onto the Ukrainian SSR — a fact of little importance when the entire country was run by the Kremlin, but of great importance now.) But so too it is legitimate for the new Ukrainian government to fight any specter of partition in Crimea. It will want to preserve the territorial integrity of its state and ensure that the substantial Ukrainian minority in that region remains within its sovereign borders.

Where does this leave Western countries and their national interests? As a rule, these kind of ethno-territorial conflicts involve deep-seated animosities that are scarcely appreciable to those unfamiliar with their histories. They also invariably involve the atrocious use of force by both sides, contrary to the tendency of news organizations and other media to portray such conflicts as one of “good guys” and “bad guys.” Evidently, not all human conflicts can be boiled down to matters of good versus evil.

A salient example is that of the Kosovo conflict of some 15 years ago. After having foolishly maintained an arms embargo that favoured the Serb forces over the Croats and Muslims during the Bosnian War, and subsequently intervening in pursuit of a peace agreement in 1995, the West came down like a ton of bricks on Serbia and Montenegro in 1999, which employed force to put down secessionist uprisings in the south. The Muslim Kosovar-Albanians formed a majority in the region and wished to break away from Serbia, either to form an independent state or to join Albania. The Christian Serbs, who formed a minority in Kosovo but a majority in the country, understandably wanted to keep Kosovo as part of their territory.

In hindsight, it remains remarkably unclear why the West was so decisively on the side of the Kosovar-Albanians. Perhaps we thought that extending a helping hand to the Kosovo Liberation Army would earn us sympathies in the Muslim world. Another idea, which is persuasive to me, is that the Western media collectively decided that Slobodon Milosevic was evil, which meant that any action his country took, however legitimate, was also evil. Today, Vladimir Putin has been deemed evil by our opinion-makers, meaning that any enemy of his is supposedly a friend of ours.

The Kosovo War had a further implication. When the United States and its allies directed NATO to perform air strikes on Serbia, it did so without the permission of the United Nations Security Council, of which Russia is a permanent and veto-wielding member. Perhaps more importantly, that case established the ability of a powerful state to choose one side in an ethnic conflict and commit military force in its support, seemingly without any overarching geopolitical reason.

Ironically, this plays directly into the hands of the loathed Mister Putin, who has called Obama’s bluff by first moving his troops to the Ukrainian border, and then into Crimea itself. Given the brazenness of our intervention in Kosovo, with its ignorance of international law as well as the wishes of other powerful states, on what remaining leg will we stand if Putin decides to forcibly remove Crimea from Ukraine? Such action, after all, would be ostensibly in support of a beleaguered minority seeking refuge from a nationalist government.

This is a very irresponsible way to even think about, and let alone conduct, foreign affairs. One doesn’t have to be an isolationist to see that some conflicts are not of paramount importance to the national interest, and hence to the calculation of sacrificing blood and treasure overseas. To the contrary, many such situations are, to use Krauthammer’s scornful words, “merely a crisis to be managed.”

Instead of making empty promises or threats, our message should be clear and decisive: “What is happening in Ukraine is a matter that its population has to sort out for itself. But, if asked, we will work with all interested parties to mediate a speedy and peaceful resolution.” No more, no less.

~
This piece also appears in the Prince Arthur Herald.

The West Should Butt Out of Ukrainian Politics | Jackson Doughart

The West Should Butt Out of Ukrainian Politics | Jackson Doughart.

Jackson Doughart

Posted: 03/05/2014 5:16 pm

The West, and especially the English-speaking West, has wrongly taken sides in the present conflict in Ukraine. On the one hand, our leaders have mimicked the line of the news media, which simplistically represent the revolutionary ouster of President Yanukovych as an occasion of desperate democratic action against a corrupt leader. On the other hand, various pundits have elevated Vladimir Putin’s Russia to the status of enemy, whose actions must be “contained” as an apparent foreign-policy sine qua non.

For instance, the Washington Post’s Charles Krauthammer argues that President Obama “sees Ukraine as merely a crisis to be managed rather than an opportunity to alter the increasingly autocratic trajectory of the region, allow Ukrainians to join their destiny to the West, and block Russian neo-imperialism.”

In response to the Administration’s claim that democracy “must not be imposed by outside intervention but develop on its own,” Krauthammer writes: “Ukraine is never on its own. Not with a bear next door. American neutrality doesn’t allow an authentic Ukrainian polity to emerge. It leaves Ukraine naked to Russian pressure.”

But this “authentic Ukrainian polity” is wrought with ethnic divisions, particularly concerning the Crimean peninsula, which is populated in a majority by ethnic Russians. The pro-Europe posture of the protesters is a reflection less of a considered moral preference than of a country torn in politics and identity between East and West. Krauthammer also fails to mention that the “Russian pressure” involved here is not a mere exercise in imperial Realpolitik. What’s really involved is the fear of Ukrainians that they may be unduly influenced by Russia, or worse, that they may lose territory. Meanwhile, the Ukrainian Russians fear that a more nationalist government will leave them with less clout and fewer political rights, such as the regional language recognition that the new parliament has just taken away from them.

Putin isn’t going to leave the Russian residents of the Ukraine, and especially those in Crimea, proverbially out to dry. It’s a matter of legitimate interest for Russia, whose ethnic brethren was stranded from the homeland when Ukraine declared independence, to use its geopolitical might to protect them. (One remembers that it was only in 1954 that Crimea was tacked onto the Ukrainian SSR — a fact of little importance when the entire country was run by the Kremlin, but of great importance now.) But so too it is legitimate for the new Ukrainian government to fight any specter of partition in Crimea. It will want to preserve the territorial integrity of its state and ensure that the substantial Ukrainian minority in that region remains within its sovereign borders.

Where does this leave Western countries and their national interests? As a rule, these kind of ethno-territorial conflicts involve deep-seated animosities that are scarcely appreciable to those unfamiliar with their histories. They also invariably involve the atrocious use of force by both sides, contrary to the tendency of news organizations and other media to portray such conflicts as one of “good guys” and “bad guys.” Evidently, not all human conflicts can be boiled down to matters of good versus evil.

A salient example is that of the Kosovo conflict of some 15 years ago. After having foolishly maintained an arms embargo that favoured the Serb forces over the Croats and Muslims during the Bosnian War, and subsequently intervening in pursuit of a peace agreement in 1995, the West came down like a ton of bricks on Serbia and Montenegro in 1999, which employed force to put down secessionist uprisings in the south. The Muslim Kosovar-Albanians formed a majority in the region and wished to break away from Serbia, either to form an independent state or to join Albania. The Christian Serbs, who formed a minority in Kosovo but a majority in the country, understandably wanted to keep Kosovo as part of their territory.

In hindsight, it remains remarkably unclear why the West was so decisively on the side of the Kosovar-Albanians. Perhaps we thought that extending a helping hand to the Kosovo Liberation Army would earn us sympathies in the Muslim world. Another idea, which is persuasive to me, is that the Western media collectively decided that Slobodon Milosevic was evil, which meant that any action his country took, however legitimate, was also evil. Today, Vladimir Putin has been deemed evil by our opinion-makers, meaning that any enemy of his is supposedly a friend of ours.

The Kosovo War had a further implication. When the United States and its allies directed NATO to perform air strikes on Serbia, it did so without the permission of the United Nations Security Council, of which Russia is a permanent and veto-wielding member. Perhaps more importantly, that case established the ability of a powerful state to choose one side in an ethnic conflict and commit military force in its support, seemingly without any overarching geopolitical reason.

Ironically, this plays directly into the hands of the loathed Mister Putin, who has called Obama’s bluff by first moving his troops to the Ukrainian border, and then into Crimea itself. Given the brazenness of our intervention in Kosovo, with its ignorance of international law as well as the wishes of other powerful states, on what remaining leg will we stand if Putin decides to forcibly remove Crimea from Ukraine? Such action, after all, would be ostensibly in support of a beleaguered minority seeking refuge from a nationalist government.

This is a very irresponsible way to even think about, and let alone conduct, foreign affairs. One doesn’t have to be an isolationist to see that some conflicts are not of paramount importance to the national interest, and hence to the calculation of sacrificing blood and treasure overseas. To the contrary, many such situations are, to use Krauthammer’s scornful words, “merely a crisis to be managed.”

Instead of making empty promises or threats, our message should be clear and decisive: “What is happening in Ukraine is a matter that its population has to sort out for itself. But, if asked, we will work with all interested parties to mediate a speedy and peaceful resolution.” No more, no less.

~
This piece also appears in the Prince Arthur Herald.

Welcome to the Currency War, Part 12: Bankrupt Rome and Soaring Euro-Bonds

Welcome to the Currency War, Part 12: Bankrupt Rome and Soaring Euro-Bonds.

by John Rubino on February 28, 2014 · 14 comments

Only in a world totally corrupted by easy money could the following two things be announced on the same day. First:

 

European Bonds Surge as ECB Stimulus Confines Crisis to Memory

Yields on the euro area’s government bonds have never been lower as the potential for extended European Central Bank stimulus helps exorcise memories of the region’s sovereign debt crisis. 

The bond-market rally is broad based, encompassing both core economies such asFrance and also peripheral markets including Greece, which was pushed to the brink of exiting the currency bloc during the region’s financial woes. Another of those nations, Portugal, took a step toward exiting an international bailout program today as it bought back bonds, while Italy, supported in the turmoil by ECB bond purchases, sold five-year notes at a record-low rate.

“Investors are starting to look at the non-core European bond markets as a viable investment alternative again,” said Jussi Hiljanen, head of fixed-income research at SEB AB inStockholm. “Further ECB actions have the potential to maintain the tightening bias on those spreads,” he said, referring to the yield gap between core nations and the periphery.

The average yield to maturity on euro-area bonds fell to a record 1.6343 percent yesterday, according to Bank of America Merrill Lynch indexes. It peaked at more than 6 percent in 2011, the data show.

Italy’s 10-year yield fell seven basis points to 3.47 percent after touching 3.46 percent, a level not seen since January 2006. Portugal’s 10-year yield dropped four basis points to 4.81 percent and touched 4.78 percent, the least since June 2010, while Ireland’s two-year note yield and Spain’s five-year rates dropped to records.

Then, at about the same time:

 

Rome days away from bankruptcy

Eternal city warns it will go bust for the first time since it was destroyed by Nero 

Matteo Renzi, the Italian prime minister, came under pressure on Thursday as the city of Rome was on the brink of bankruptcy after parliament threw out a bill that would have injected fresh funding.

Ignazio Marino, Rome mayor, said city services like public transport would come to a halt and that he would not be a “Nero” – the Roman emperor who, legend has it, strummed his lyre as the city burnt to the ground.

Marino said that Renzi, a centre-left leader and former mayor of Florence who was only confirmed by parliament this week, had promised to adopt urgent measures to help the Italian capital at a cabinet meeting on Friday.

The newly-elected mayor faces a budget deficit of 816 million euros ($1.1 billion) and the city could be placed under administration if he does not manage to close the gap with measures such as cutting public services.

“Rome has wasted money for decades. I don’t want to spend another euro that is not budgeted,” Marino said, following criticism from the Northern League opposition party which helped shoot down the bill for Rome in parliament.

The draft law would have included funding for Rome from the central government budget as a compensation for the extra costs it faces because of its role as the capital including tourism traffic and national demonstrations.

Other cash-strapped cities complained it was unfair. But Marino warned there could be dire consequences. “We’re not going to block the city but the city will come to a standstill. It will block itself if I do not have the tools for making budget decisions and right now I cannot allocate any money,” he told the SkyTG24 news channel.

Marino said that buses may have to stop running as soon as Sunday because he only had 10 percent of the money required to pay for fuel in March.

He added: “With the money that we have in the budget right now, I can do repairs on each road in Rome every 52 years. That’s not really maintenance.”

How is it that Italy is able to borrow money at low and falling rates – which indicates that borrowers are confident of its ability to pay its bills – while its major city, far more important to that country than New York or Los Angeles is to the US, slides into bankruptcy?

The answer is that Rome is irrelevant in comparison with two other facts. First, Europe is slipping into deflation, which generally leads to lower bond yields. Second, the European Central Bank is virtually guaranteed to respond to fact number one with quantitative easing on a vast scale.

So the bond markets, far from rallying on the expectation of a eurozone recovery, are rising in anticipation of the opposite: a new round of recession/deflation/instability that forces the abandonment of even the pretense of austerity and the adoption of aggressively easy money.

In this scenario, a Roman bankruptcy is actually a good thing because it pushes the ECB, Bundesbank, Bank of Italy and the other relevant monetary entities to stop dithering and start monetizing debt in earnest. Once it gets going, the goal of the program will be to refinance everyone’s debt at extremely low rates, push down the euro’s exchange rate versus the dollar, yen and yuan, and shift the currency war front from Europe to the rest of the world. The race to the bottom continues.

The rest of this series is available here.

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