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Testosterone Pit – Home – The “Sanction Spiral” Elegantly Spirals Out of Control
Testosterone Pit – Home – The “Sanction Spiral” Elegantly Spirals Out of Control.
The “Sanction Spiral” Elegantly Spirals Out Of Control
Attorneys with the SEC’s Investment Management Division are exhorting managers of registered investment funds, such as your mutual fund, to disclose their holdings in Russia and warn of the risks associated with them, now that the Crimean debacle has turned into a magnificent sanction spiral. “Several people familiar with the matter” had been talking toReuters. The SEC is apparently fretting that the funds aren’t truthful with investors and aren’t even thinking about how to respond to the possible outcomes of the crisis.
Investment Management Division Director Norm Champ, when contacted by Reuters, didn’t even deny it. “We want to be proactive,” he said.
The Division contacted asset managers on other occasions when civil unrest erupted or when things threatened to blow up; it wanted to make sure managers weren’t omitting or misrepresenting material information – for example, during the uprising in Egypt in 2011, when the Cairo stock market simply shut down. But this time it’s different: the lawyers at the Investment Management Division were joined by another group of SEC lawyers who focus on risk examinations.
Would the White House be trying behind the scenes to give investors second thoughts about plowing money into Russia? Would it be trying to demolish Russian stocks, bonds, and the ruble? Naw.
The efforts by the SEC, which started “over a week ago,” were accompanied by a White House announcement that 5 million barrels would be released from the Strategic Petroleum Reserve. WTI tanked. Russia, a huge energy exporter, depends on its oil and gas revenues, and knocking down the price of oil could wreak havoc on the Russian economy. It was a declaration that commodities would be used as a weapon against the Putin Regime.
Then on Tuesday, White House spokesman Jay Carney launched another attack on the Russian markets at a press briefing. In light of the sanctions the US and the EU were slapping on Russia, its economy would pay the price, he said. “I wouldn’t, if I were you, invest in Russian equities right now, unless you’re going short.”
Shaken to its roots by these threats, Russia annexed the Crimea and picked a new target: Estonia. A Russian diplomat told the UN Human Rights Council in Geneva on Wednesday that Russia was “concerned” by the treatment of the ethnic Russian minority “in Estonia as well as in Ukraine” … even while Vice President Joe Biden was in Lithuania to calm tattered nerves in the Baltics and the EU.
On Thursday, German Chancellor Merkel announced in Parliament, shortly before the EU summit in Brussels, that the EU would come up with new sanctions, such as expanding the list of Russians subject to travel limitations and freezing assets. And if the situation escalates, there would be “without doubt” economic sanctions, she said. Russia was “largely isolated in all international organizations.” And the G-8, which includes Russia, and whose upcoming shindig has already been cancelled, “no longer exists.”
She was immediately attacked by the parliamentary leader of the opposition Left Party, Gregor Gysi, who accused the government of double standards; the separation of Kosovo too had been a breach of international law, he said, but it had been supported by the German government at the time. The transitional Ukrainian government wasn’t legitimate, he said. “Fascists are part of this government, and we want to give them money?!” Under pressure from the US, Merkel was imposing sanctions on Russia to the detriment of Europe, he said. That’s “moral cowardice.”
The “Putin Doctrine” was what SPD parliamentary leader Thomas Oppermann, who is part of Germany’s governing Grand Coalition, was fretting about. Under that doctrine, Russia could intervene if ethnic Russians were perceived to be in danger outside Russia. It would give Russia an automatic right to intervene anywhere, he said. “Such a right does not exist, and such a right cannot exist.”
Hours later, President Obama announced he’d slapped new sanctions on a “number” of oligarchs, additional Russian government officials, and a bank that provides services to them. The White House was working “closely” with the EU “to develop more severe actions that could be taken if Russia continues to escalate the situation.” Then he urged US Lawmakers to approve the aid package for Ukraine and urged the IMF to put its aid package together pronto. Alas, read…. Aid for the Ukraine “Will Be Stolen” – Former Ukrainian Minister of Economy
As Obama’s words were still echoing around the world, the Russian Foreign Ministry shot back: nine US officials, including Speaker of the House John Boehner and Senate Majority Leader Harry Reid, would be barred from entering Russia. And it published the list on its website.
Delicious irony: that boring list with nine names on it, issued by a Russian ministry whose website rarely gets shared in the social media, lit up a mini-firestorm on VK.com, the second largest social network in Europe after Facebook, and one of the most popular sites in Russia. The list got, as I’m writing this, 538 VK “likes.” Not sure if Obama’s list got anyFacebook likes.
Not to be left out, Standard & Poor’s slammed Russia by lowering its outlook to Negativefrom Stable. “In our view, heightened geopolitical risk and the prospect of US and EU economic sanctions following Russia’s incorporation of Crimea could reduce the flow of potential investment, trigger rising capital outflows, and further weaken Russia’s already deteriorating economic performance.”
The Sanction Spiral works in a myriad ways and performs, as we can see every day, outright miracles. It spirals elegantly higher and higher and takes on grotesque forms. And by the looks of it, no one at the top has a clue how to back out of it. Yet stock and bond markets in the US and Europe, stuffed to the gills with central-bank liquidity and intoxicated by free money, the only thing that really matters anymore these crazy days of ours, are blissfully ignoring the entire drama, and what may eventually come of it.
The first official warning shot was fired. Not by a Putin advisor that can be brushed off, but by Alexey Ulyukaev, Russia’s Minister of Economy and former Deputy Chairman of the Central Bank. A major escalation. Read…. Kremlin: If The US Tries To Hurt Russia’s Economy, Russia Will Target The Dollar System
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Forget Russia Dumping U.S. Treasuries … Here's the REAL Economic Threat Washington's Blog
Forget Russia Dumping U.S. Treasuries … Here’s the REAL Economic Threat Washington’s Blog.
Russia Could Crush the Petrodollar
Russia threatened to dump its U.S. treasuries if America imposed sanctions regarding Russia’s action in the Crimea.
Zero Hedge argues that Russia has already done so.
But veteran investor Jim Sinclair argues that Russia has a much scarier financial attack which Russia can use against the U.S.
Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse:
Indeed, one of the main pillars for U.S. power is the petrodollar, and the U.S. is desperate for the dollar to maintain reserve status. Some wise commentators have argued that recent U.S. wars have really been about keeping the rest of the world on the petrodollar standard.
The theory is that – after Nixon took the U.S. off the gold standard, which had made the dollar the world’s reserve currency – America salvaged that role by adopting the petrodollar. Specifically, the U.S. and Saudi Arabia agreed that all oil and gas would be priced in dollars, so the rest of the world had to use dollars for most transactions.
But Reuters notes that Russia may be mere months away from signing a bilateral trade deal with China, where China would buy huge quantities of Russian oil and gas.
Zero Hedge argues:
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 also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.
As we noted last year:
The average life expectancy for a fiat currency is less than 40 years.
But what about “reserve currencies”, like the U.S. dollar?
JP Morgan noted last year that “reserve currencies” have a limited shelf-life:
As the table shows, U.S. reserve status has already lasted as long as Portugal and the Netherland’s reigns. It won’t happen tomorrow, or next week … but the end of the dollar’s rein is coming nonetheless, and China and many other countries are calling for a new reserve currency.
Remember, China is entering into more and more major deals with other countries to settle trades in Yuans, instead of dollars. This includes the European Union (the world’s largest economy) [and also Russia].
And China is quietly becoming a gold superpower…
Given that China has surpassed the U.S. as the world’s largest importer of oil, Saudi Arabia is moving away from the U.S. … and towards China. (Some even argue that the world will switch from the petrodollar to the petroYUAN. We’re not convinced that will happen.)
In any event, a switch to pricing petroleum in anything other than dollars exclusively – whether a single alternative currency, gold, or even a mix of currencies or commodities – would spell the end of the dollar as the world’s reserve currency.
For that reason, Sinclair – no fan of either Russia or Putin – urges American leaders to back away from an economic confrontation with Russia, arguing that the U.S. would be the loser.
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Forget Russia Dumping U.S. Treasuries … Here’s the REAL Economic Threat Washington’s Blog
Forget Russia Dumping U.S. Treasuries … Here’s the REAL Economic Threat Washington’s Blog.
Russia Could Crush the Petrodollar
Russia threatened to dump its U.S. treasuries if America imposed sanctions regarding Russia’s action in the Crimea.
Zero Hedge argues that Russia has already done so.
But veteran investor Jim Sinclair argues that Russia has a much scarier financial attack which Russia can use against the U.S.
Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse:
Indeed, one of the main pillars for U.S. power is the petrodollar, and the U.S. is desperate for the dollar to maintain reserve status. Some wise commentators have argued that recent U.S. wars have really been about keeping the rest of the world on the petrodollar standard.
The theory is that – after Nixon took the U.S. off the gold standard, which had made the dollar the world’s reserve currency – America salvaged that role by adopting the petrodollar. Specifically, the U.S. and Saudi Arabia agreed that all oil and gas would be priced in dollars, so the rest of the world had to use dollars for most transactions.
But Reuters notes that Russia may be mere months away from signing a bilateral trade deal with China, where China would buy huge quantities of Russian oil and gas.
Zero Hedge argues:
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 also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.
As we noted last year:
The average life expectancy for a fiat currency is less than 40 years.
But what about “reserve currencies”, like the U.S. dollar?
JP Morgan noted last year that “reserve currencies” have a limited shelf-life:
As the table shows, U.S. reserve status has already lasted as long as Portugal and the Netherland’s reigns. It won’t happen tomorrow, or next week … but the end of the dollar’s rein is coming nonetheless, and China and many other countries are calling for a new reserve currency.
Remember, China is entering into more and more major deals with other countries to settle trades in Yuans, instead of dollars. This includes the European Union (the world’s largest economy) [and also Russia].
And China is quietly becoming a gold superpower…
Given that China has surpassed the U.S. as the world’s largest importer of oil, Saudi Arabia is moving away from the U.S. … and towards China. (Some even argue that the world will switch from the petrodollar to the petroYUAN. We’re not convinced that will happen.)
In any event, a switch to pricing petroleum in anything other than dollars exclusively – whether a single alternative currency, gold, or even a mix of currencies or commodities – would spell the end of the dollar as the world’s reserve currency.
For that reason, Sinclair – no fan of either Russia or Putin – urges American leaders to back away from an economic confrontation with Russia, arguing that the U.S. would be the loser.
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The Tiger Awakens: China Warns of "Retaliatory Action" and "Unforeseeable Consequences" Over U.S. Monday Deadline
 |
Yesterday Secretary of State and flip-flopper extraordinaire John Kerry advised Russia that Vladimir Putin has until Monday to pull back his forces from Ukraine. Failure to do so would lead to serious repercussions. Kerry was light on details, but we can assume he was talking about some sort of economic sanctions:
Sen. Lindsey Graham, a South Carolina Republican and a top critic of President Obama’s foreign policy, asked what the administration would do if Russian forces advance farther into the eastern area of Ukraine, and the new government in Kiev asks the U.S. for weapons to fight the Russians.
Kerry responded carefully, saying “we have contingencies – we are talking through various options that may or may not be available.”
“Our hope is not to create hysteria or excessive concern about that at this point in time,” he said. “Our hope is to avoid that, but there’s no telling that we can.”
It’s quite obvious, based on Kerry’s statement, that the Obama Administration really has no idea what to do, as they are still talking through “various options,” something that probably should have been worked out well before President Obama began slinging rhetoric over the crisis.
What the Obama administration assumes will happen is that they’ll force Russia into compliance by coming after their economy. Obama will hit the Late Night TV circuit to tout his success, we’ll all laugh about it, and then go on our merry way. Putin will be left embarrassed and laying in the fetal position sucking his thumb. At least that’s the plan.
But two can play at that game and China, which has stood by Russia’s show of force in Europe since the get-go, has now upped the ante.
It’s a brilliant move designed, once again, to show the world that President Obama and the United States are no longer running the show.
“Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences,” warns China’s envoy to Germany adding that “we don’t see any point in sanctions.” On the heels of Merkel’s warning that Russia risked “massive” political and economic damage if it did not change course, Reuters reports ambassador Shi Mingde urged patience saying “the door is still open” for diplomacy (though we suspect it is not) ahead of this weekend’s referendum. Russia’s Deputy Economy Minister Alexei Likhachev responded by promising “symmetrical” sanctions by Moscow. So now we have China joining the fray more aggressively.
China’s top envoy to Germany has warned the West against punishing Russia with sanctions for its intervention in Ukraine, saying such measures could lead to a dangerous chain reaction that would be difficult to control. In an interview with Reuters days before the European Union is threatening to impose its first sanctions on Russia since the Cold War, ambassador Shi Mingde issued the strongest warning against such measures by any top Chinese official to date.
“We don’t see any point in sanctions,” Shi said. “Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences. We don’t want this.”
…
Using her [Merkel’s] toughest rhetoric since the crisis began, she warned in a speech in parliament on Thursday that Russia risked “massive” political and economic damage if it did not change course in the coming days.
Russia’s Deputy Economy Minister Alexei Likhachev responded by promising “symmetrical” sanctions by Moscow. But Shi urged patience, saying the door for talks should remain open even after a referendum on Sunday in which Ukraine’s southern region of Crimea could vote to secede and join Russia. Merkel and other western leaders have denounced the referendum as illegal and demanded that it be canceled.
“We still see a chance to avoid an escalation. The door to talks is still open. We should use this possibility, also after the referendum,” Shi said.
The White House’s deadline for Russia to pull back is Monday.
Will Obama blink again, as he did in Syria?
Let’s remember that China holds trillions of dollars of US debt. All they have to do is hint (not even actually do it) that they will pull back on Treasury purchases and we’re toast within days.
We shouldn’t be at all surprised if, on Monday, Vladimir Putin thumbs his nose at the west again and actually sends his troops across the Crimean border into Ukraine.
One thing’s for sure. President Obama’s foreign policy has been a complete and utter disaster on every front. Either this destruction of America’s worldwide credibility is pre-planned or there is a gaggle of idiots in charge at 1600 Pennsylvania Avenue. Perhaps both.
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The Tiger Awakens: China Warns of “Retaliatory Action” and “Unforeseeable Consequences” Over U.S. Monday Deadline
| |
Yesterday Secretary of State and flip-flopper extraordinaire John Kerry advised Russia that Vladimir Putin has until Monday to pull back his forces from Ukraine. Failure to do so would lead to serious repercussions. Kerry was light on details, but we can assume he was talking about some sort of economic sanctions:
Sen. Lindsey Graham, a South Carolina Republican and a top critic of President Obama’s foreign policy, asked what the administration would do if Russian forces advance farther into the eastern area of Ukraine, and the new government in Kiev asks the U.S. for weapons to fight the Russians.
Kerry responded carefully, saying “we have contingencies – we are talking through various options that may or may not be available.”
“Our hope is not to create hysteria or excessive concern about that at this point in time,” he said. “Our hope is to avoid that, but there’s no telling that we can.”
It’s quite obvious, based on Kerry’s statement, that the Obama Administration really has no idea what to do, as they are still talking through “various options,” something that probably should have been worked out well before President Obama began slinging rhetoric over the crisis.
What the Obama administration assumes will happen is that they’ll force Russia into compliance by coming after their economy. Obama will hit the Late Night TV circuit to tout his success, we’ll all laugh about it, and then go on our merry way. Putin will be left embarrassed and laying in the fetal position sucking his thumb. At least that’s the plan.
But two can play at that game and China, which has stood by Russia’s show of force in Europe since the get-go, has now upped the ante.
It’s a brilliant move designed, once again, to show the world that President Obama and the United States are no longer running the show.
“Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences,” warns China’s envoy to Germany adding that “we don’t see any point in sanctions.” On the heels of Merkel’s warning that Russia risked “massive” political and economic damage if it did not change course, Reuters reports ambassador Shi Mingde urged patience saying “the door is still open” for diplomacy (though we suspect it is not) ahead of this weekend’s referendum. Russia’s Deputy Economy Minister Alexei Likhachev responded by promising “symmetrical” sanctions by Moscow. So now we have China joining the fray more aggressively.
China’s top envoy to Germany has warned the West against punishing Russia with sanctions for its intervention in Ukraine, saying such measures could lead to a dangerous chain reaction that would be difficult to control. In an interview with Reuters days before the European Union is threatening to impose its first sanctions on Russia since the Cold War, ambassador Shi Mingde issued the strongest warning against such measures by any top Chinese official to date.
“We don’t see any point in sanctions,” Shi said. “Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences. We don’t want this.”
…
Using her [Merkel’s] toughest rhetoric since the crisis began, she warned in a speech in parliament on Thursday that Russia risked “massive” political and economic damage if it did not change course in the coming days.
Russia’s Deputy Economy Minister Alexei Likhachev responded by promising “symmetrical” sanctions by Moscow. But Shi urged patience, saying the door for talks should remain open even after a referendum on Sunday in which Ukraine’s southern region of Crimea could vote to secede and join Russia. Merkel and other western leaders have denounced the referendum as illegal and demanded that it be canceled.
“We still see a chance to avoid an escalation. The door to talks is still open. We should use this possibility, also after the referendum,” Shi said.
The White House’s deadline for Russia to pull back is Monday.
Will Obama blink again, as he did in Syria?
Let’s remember that China holds trillions of dollars of US debt. All they have to do is hint (not even actually do it) that they will pull back on Treasury purchases and we’re toast within days.
We shouldn’t be at all surprised if, on Monday, Vladimir Putin thumbs his nose at the west again and actually sends his troops across the Crimean border into Ukraine.
One thing’s for sure. President Obama’s foreign policy has been a complete and utter disaster on every front. Either this destruction of America’s worldwide credibility is pre-planned or there is a gaggle of idiots in charge at 1600 Pennsylvania Avenue. Perhaps both.
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Which European Countries Will Suffer The Most If Russia Turns Off The Gas | Zero Hedge
Which European Countries Will Suffer The Most If Russia Turns Off The Gas | Zero Hedge.
With the Sunday Crimean referendum seemingly unstoppable now, its outcome certain, it is set to unleash a chain of events that is not entirely predictable but is at best, ominous, as it will involve the launch of trade, economic and financial sanctions against Russia (despite China’s stern disapproval), which will lead to a “symmetric” response in kind by Moscow. And in a worst case escalation scenario, should game theory completely collapse and everyone starts defecting from a cooperative equilibrium state, the first thing to go will be European gas exports from Russia, anywhere from one day to indefinitely. So which European countries are most exposed to the whims of Gazprom? The following map from the WSJ, shows just how reliant on Russian gas exports most European countries are.
One wonders just how “stern” any sanctions these countries support and enforce against Russia will truly be. Then again, as the WSJ reports, Europe somehow believes that despite its massive reliance on Ukraine for energy, it can weather a storm:
Mr. Oettinger says Europe is now in a stronger position to withstand possible disruptions in supplies, thanks in part to a mild winter, more storage capacity and pipeline infrastructure that allows more gas to flow from west to east.But he has also said that the EU should reach out to other gas exporters and build more terminals for liquefied natural gas, and that countries should also start exploratory work on shale gas.
“The Russians are now more dependent on our money than we are on their gas,” said Mr. Wieczorkiewicz, adding that around half of Russia’s revenues are derived from oil and gas sales. “The EU could also explore ties to Norway, Algeria and Qatar as alternative suppliers, increase the use of coal and import LNG.”
But in the short term, others argue that the EU is short of options if it wants to use energy as a tool against Moscow. “Russia remains the largest exporter of gas to the EU; there’s no way of [quickly] sourcing those amounts of gas elsewhere,” said Simon Pirani of the Oxford Institute for Energy Studies.
“Europe has to ask itself how important is the economic relationship with Russia, which provides that cheap energy, and how important is the political protest that it wants to make” about Crimea, he said.
So who wins in the end: the provider of the commodity, or the buyer who pays with infinitely dilutable fiat, especially if any further escalation by the west against Russia will merely bring China and Russia together even closer. Somehow we think our money is on the KGB spy instead of the clueless and insolvent European bureaucrats.
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Which European Countries Will Suffer The Most If Russia Turns Off The Gas | Zero Hedge
Which European Countries Will Suffer The Most If Russia Turns Off The Gas | Zero Hedge.
With the Sunday Crimean referendum seemingly unstoppable now, its outcome certain, it is set to unleash a chain of events that is not entirely predictable but is at best, ominous, as it will involve the launch of trade, economic and financial sanctions against Russia (despite China’s stern disapproval), which will lead to a “symmetric” response in kind by Moscow. And in a worst case escalation scenario, should game theory completely collapse and everyone starts defecting from a cooperative equilibrium state, the first thing to go will be European gas exports from Russia, anywhere from one day to indefinitely. So which European countries are most exposed to the whims of Gazprom? The following map from the WSJ, shows just how reliant on Russian gas exports most European countries are.
One wonders just how “stern” any sanctions these countries support and enforce against Russia will truly be. Then again, as the WSJ reports, Europe somehow believes that despite its massive reliance on Ukraine for energy, it can weather a storm:
Mr. Oettinger says Europe is now in a stronger position to withstand possible disruptions in supplies, thanks in part to a mild winter, more storage capacity and pipeline infrastructure that allows more gas to flow from west to east.But he has also said that the EU should reach out to other gas exporters and build more terminals for liquefied natural gas, and that countries should also start exploratory work on shale gas.
“The Russians are now more dependent on our money than we are on their gas,” said Mr. Wieczorkiewicz, adding that around half of Russia’s revenues are derived from oil and gas sales. “The EU could also explore ties to Norway, Algeria and Qatar as alternative suppliers, increase the use of coal and import LNG.”
But in the short term, others argue that the EU is short of options if it wants to use energy as a tool against Moscow. “Russia remains the largest exporter of gas to the EU; there’s no way of [quickly] sourcing those amounts of gas elsewhere,” said Simon Pirani of the Oxford Institute for Energy Studies.
“Europe has to ask itself how important is the economic relationship with Russia, which provides that cheap energy, and how important is the political protest that it wants to make” about Crimea, he said.
So who wins in the end: the provider of the commodity, or the buyer who pays with infinitely dilutable fiat, especially if any further escalation by the west against Russia will merely bring China and Russia together even closer. Somehow we think our money is on the KGB spy instead of the clueless and insolvent European bureaucrats.
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Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge
Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge.
A week ago, when the idea of sanctions against Russia was first officially announced, we made a statement, which was obviously in jest yet which, as so often happens, was so rooted in reality:
How is this an indication of reality? Well, for one, as we reported previously, the one country that has the most to lose from Russian sanctions, Germany, and specifically its industrial superlobby has already said “Nein” to any truly crippling trade blockade of Moscow would backfire on Germany’s own economy and bottom line.
But what about London? Here, the NYT explains why, once again, it was all about the money, and why were right even when we were being humorous:
The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.
It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.
At this point, in standing with the ideological framework of the host media outlet, the author takes a detour into naive idealism – a world in which it is not money that talks, but a declining global superpower, whose hypocrisy has been exposed time and again, and where extinct words like “mission” and “moral” are used with reckless abandon:
Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh.Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.
The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.
British residency is up for sale. “Investor visas” can be purchased, starting at £1 million ($1.6 million). London lawyers in the Commercial Court now get 60 percent of their work from Russian and Eastern European clients. More than 50 Russia-based companies swell the trade at London’s Stock Exchange. The planning regulations have been scrapped, and along the Thames, up go spires of steel and glass for the hedge-funding class.
Britain’s bright young things now become consultants, art dealers, private banker and hedge funders. Or, to put it another way, the oligarchs’ valets.
Russia’s president, Vladimir V. Putin, gets it: you pay them, you own them. Mr. Putin was absolutely certain that Britain’s managers — shuttling through the revolving door between cabinet posts and financial boards — would never give up their fees and commissions from the oligarchs’ billions. He was right.
So, let us get this straight? It is great when the Russian oligrachs “invest” their stolen money in luxury London real estate, the FTSE100, and various other inflating assets which are mistaken for an improvement in the broader “economy”, but when the alarm clock of realpolitick rings, it was all bad?
What we are more stunned by is that while London has at least figured out the quid pro quo, the US, and its leader, so far seem completely incapable of doing so. Perhaps someone should explain to Obama that with the Fed tapering, the only incremental buyer of high end real estate are precisely the oligarchs from Russia, whom he will soon alienate, as well as those from China, which also may decide it is too risky to park “hot money” in New York triplexes, and instead once again, like in 2011, park it all in gold and other precious metals.
But going back to the NYT article, the author does make the following accurate observation: “This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.”
His conclusion, too, is spot on:
The Shard encapsulates the new hierarchy of the city. On the top floors, “ultra high net worth individuals” entertain escorts in luxury apartments. By day, on floors below, investment bankers trade incomprehensible derivatives.
Come nightfall, the elevators are full of African cleaners, paid next to nothing and treated as nonexistent. The acres of glass windows are scrubbed by Polish laborers, who sleep four to a room in bedsit slums. And near the Shard are the immigrants from Lithuania and Romania, who broke their backs on construction sites, but are now destitute and whiling away their hours along the banks of the Thames.
The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.
Still think Putin is ready to “blink”?
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Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge
Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge.
A week ago, when the idea of sanctions against Russia was first officially announced, we made a statement, which was obviously in jest yet which, as so often happens, was so rooted in reality:
How is this an indication of reality? Well, for one, as we reported previously, the one country that has the most to lose from Russian sanctions, Germany, and specifically its industrial superlobby has already said “Nein” to any truly crippling trade blockade of Moscow would backfire on Germany’s own economy and bottom line.
But what about London? Here, the NYT explains why, once again, it was all about the money, and why were right even when we were being humorous:
The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.
It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.
At this point, in standing with the ideological framework of the host media outlet, the author takes a detour into naive idealism – a world in which it is not money that talks, but a declining global superpower, whose hypocrisy has been exposed time and again, and where extinct words like “mission” and “moral” are used with reckless abandon:
Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh.Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.
The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.
British residency is up for sale. “Investor visas” can be purchased, starting at £1 million ($1.6 million). London lawyers in the Commercial Court now get 60 percent of their work from Russian and Eastern European clients. More than 50 Russia-based companies swell the trade at London’s Stock Exchange. The planning regulations have been scrapped, and along the Thames, up go spires of steel and glass for the hedge-funding class.
Britain’s bright young things now become consultants, art dealers, private banker and hedge funders. Or, to put it another way, the oligarchs’ valets.
Russia’s president, Vladimir V. Putin, gets it: you pay them, you own them. Mr. Putin was absolutely certain that Britain’s managers — shuttling through the revolving door between cabinet posts and financial boards — would never give up their fees and commissions from the oligarchs’ billions. He was right.
So, let us get this straight? It is great when the Russian oligrachs “invest” their stolen money in luxury London real estate, the FTSE100, and various other inflating assets which are mistaken for an improvement in the broader “economy”, but when the alarm clock of realpolitick rings, it was all bad?
What we are more stunned by is that while London has at least figured out the quid pro quo, the US, and its leader, so far seem completely incapable of doing so. Perhaps someone should explain to Obama that with the Fed tapering, the only incremental buyer of high end real estate are precisely the oligarchs from Russia, whom he will soon alienate, as well as those from China, which also may decide it is too risky to park “hot money” in New York triplexes, and instead once again, like in 2011, park it all in gold and other precious metals.
But going back to the NYT article, the author does make the following accurate observation: “This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.”
His conclusion, too, is spot on:
The Shard encapsulates the new hierarchy of the city. On the top floors, “ultra high net worth individuals” entertain escorts in luxury apartments. By day, on floors below, investment bankers trade incomprehensible derivatives.
Come nightfall, the elevators are full of African cleaners, paid next to nothing and treated as nonexistent. The acres of glass windows are scrubbed by Polish laborers, who sleep four to a room in bedsit slums. And near the Shard are the immigrants from Lithuania and Romania, who broke their backs on construction sites, but are now destitute and whiling away their hours along the banks of the Thames.
The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.
Still think Putin is ready to “blink”?
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Putin Targets America's Achilles Heel: "He's Going to Destroy the Stock Markets"
Putin Targets America’s Achilles Heel: “He’s Going to Destroy the Stock Markets”.
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In 2012 an elite insider claimed that on or around March 4, 2014 the doomsday clock would ring, the effect of which would be a complete collapse of the U.S. economy. How former Vice Presidential adviser Grady Means came to this conclusion with a specific target date may forever remain clouded in secrecy. But given the state of current affairs around the world today, one can’t help but consider that maybe Grady Means was on to something. With the fight over political and resource control in the Ukraine heating up, is it possible the Means was referring to this very set of circumstances?
We know the U.S. economy is literally on the brink of a collapse. All we need now is a triggering mechanism.
Contrarian investor and commentator Greg Mannarino thinks it could be happening right now, and he explains his highly viable theory in the broadcast below.
In essence, Mannarino warns that Russia’s Vladimir Putin may be using the current geo-political climate to position his pieces on the grand chessboard with the end game being a total wipe out of domestic equity markets and the U.S. dollar itself .
Given the horrid economic fundamentals in the U.S., mounting and un-serviceable debt levels, and the fact that China is now moving lock-step with their Russian counterparts, could we be seeing the final stages of a coordinated strike on U.S. economic and financial interests?
A few more moves and it could be Checkmate:
Putin understands the Achilles heel is this hyperinflated stock market… this man is brilliant.
Since we realize all warfare is based on deception, this backing off of troops here is a part of the play.
When he re-introduces those troops and makes his move here it’s going to crush the U.S. equity markets and take trillions of dollars out of this market and a lot of peoples’ pockets.
Vladimir Putin is not in any way going to back down to Barack Obama or any of the Western powers. He has no reason to do that. He understands where this going and what he needs to do to make this work here.
(Video via Steve Quayle / Watch at Youtube)
So this is the set up in my opinion.
He’s allowing cash to flow back into the world markets, more specifically into the U.S. equity market. He’s going to re-introduce his troops almost in a Blitzkrieg type fashion and he’s going to destroy the stock markets.
We also know this… Vladimir Putin has been betting against the U.S. dollar for years by acquiring gold, just like you should be doing.
… The debt of the United States is in the biggest bubble in the history of the world. He knows all this.
This relief rally here… I can’t imagine that it’s going to last because he’s going to re-introduce troops here. It’s going to destroy this relief rally and then some.
We’re going to get panic selling… I think it can happen pretty soon.
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Vladimir Putin is pulling a huge bluff on everyone right now allowing equities on a global scale to rise, only to reverse this move and crush equity markets which will destroy the United States economy.
The wealth effect that the Fed has created… Vladimir Putin knows that it is nothing more than smoke and mirrors. And he’s going to take advantage of that.
Make no mistake. Vladimir Putin strives to make Russia a global super power. China wants the same. In order for that to happen the United States of America must be crushed, and that starts with destroying our economy. And if that means a temporary destruction of global equity markets then that’s what Russia and China will do. Unlike President Obama, who bases his decisions on political surveys and half baked short-term platitudes, these nations operate with stratagems spanning decades.
For all we know, it was Putin himself who orchestrated the Ukranian coup. He’s a former KGB operative, a brilliant strategist and he comes from the ‘old school’ of Russian thought. Every move is carefully calculated and executed. While President Obama plays checkers, Putin is executing a Réti Maneuver designed to confuse and frustrate his opponent while leaving multiple pathways for the fait accompli.
The majority of informed readers understand that the collapse of America as we know it today is inevitable. It has always only been a question of “when.”
Perhaps Vladimir Putin will soon give us an answer.
Olduvaiblog: Musings on the coming collapse 