Sending Kamila Harris to the Munich Security Conference on February 20th where she publicly announced that Ukraine should join NATO was a violation of the neutrality of Ukraine as agreed to in the Budapest Agreement signed December 1994.
The Budapest Agreement required Ukraine to eliminate the strategic missiles, missile silos, and bombers on its territory and transfer the 1,900 nuclear warheads to Russia for disassembly. Ukraine was the third-largest nuclear power in the world. They had more nuclear weapons than China. In return, Ukrainians gained guarantees that the United States and Russia, joined by Britain, would provide security assurances. The Budapest Agreement committed Washington, Moscow, and London, among other things, to “respect the independence and sovereignty and existing borders of Ukraine” and to “refrain from the threat or use of force” against that country.
On Weaponizing SWIFT and Targeting Reserve Holdings
This was the first time the global reserve currency was weaponized against a G20 economy, setting a clear precedent for how the west would and could respond to any other nation that followed in Russia's footsteps (something which China is clearly contemplating vis-a-vis Taiwan, and is carefully studying just how the west responds to Moscow).
As a result, and following this week's dramatic freeze of the Russian central bank overseas assets, has prompted some to question just why countries build foreign currency reserves at all and, more broadly, whether the unprecedented western response to Russia hasn't jeopardized the dollar's reserve status.
While a huge blow for Russia's economy, Reuters' Mike Dolan wrote that the move quickly prompted questions about whether targeting reserve holdings as an act of "economic warfare" may prompt a rethink by reserve managers across the globe - not least in countries that may be at loggerheads or face a potential conflict with U.S. or EU governments - over where to bank their national stash.
It's a potentially huge issue for world markets given that central bank foreign currency reserves totaled a record $12.83 trillion late last year - a rise of $11 trillion over the past 20 years. This money is held mostly in U.S. and European government bills and bonds - with the U.S. dollar still accounting for almost 60% of that and the euro about 20%.
Berkeley professor and expert on world reserve management Barry Eichengreen reckons that of the two imperatives behind reserve stockpiling - to intervene or stabilize domestic markets or as a war chest against shocks, disasters or balance of payments crises - the latter may now be in question. "The main effect may be declining demand for reserves," he said.
"If countries see reserves and foreign exchange management as less useful and available, then they will have to accept the inevitability of that their exchange rates are likely to move by more," Eichengreen added. "In which case they need harden their financial systems and economies against exchange rate related disruptions, for example by discouraging corporates from borrowing in foreign currency."
That in itself could have a profound impact on world markets and on the model for emerging markets and developing economies.
Link: https://plus2.credit-suisse.com/shorturlpdf.html?v=4ZL1-WTBd-V (Credit Suisse Global Money Dispatch 4 March 2022)
The most stunning move by the US and its allies was cutting off the Russian central bank’s access to most of its $630 billion of foreign reserves. Without access, one wonders if these funds are really “its” reserves at all? What is ownership without access? No matter how justified that move might seem today, there’s no escaping that this action will reverberate for years to come. In a blunt opinion piece in the Wall Street Journal titled “If Russian Currency Reserves Aren’t Really Money, the World Is in for a Shock,” reporter Jon Sindreu had this to say about how central banks everywhere must now view their reserves:
“Many economists have long equated this money to savings in a piggy bank, which in turn correspond to investments made abroad in the real economy. Recent events highlight the error in this thinking: Barring gold, these assets are someone else’s liability—someone who can just decide they are worth nothing. Last year, the IMF suspended Taliban-controlled Afghanistan’s access to funds and SDR. Sanctions on Iran have confirmed that holding reserves offshore doesn’t stop the U.S. Treasury from taking action. As New England Law Professor Christine Abely points out, the 2017 settlement with Singapore’s CSE TransTel shows that the mere use of the dollar abroad can violate sanctions on the premise that some payment clearing ultimately happens on U.S. soil.”
Even if a ceasefire is announced moments after we publish this piece, shocking damage to the global economic system has undoubtedly already been done and certain genies won’t easily be put back into their bottles.
In for a shock, indeed. In essence, Sindreu’s piece argues that this move substantially increases the risk that the US dollar loses its privileged status as the global reserve currency and, at a minimum, likely ensures a polarization of the global economy into at least two camps – the West in one and Russia/China/Iran/Saudi Arabia plus other targeted or aligned countries in the other. If $20-30 trillion or more of global GDP spurns the preexisting reserve currency, is it still the reserve currency? If reserves can be negated overnight, are they even reserves? How many other countries must hedge against the possibility of similar sanctions? Should we add India to the list?
Link: https://doomberg.substack.com/p/on-the-cusp-of-an-economic-singularity
Next steps for Putin
Russia has now, in effect, begun the remonetization of gold for domestic purposes. By removing the VAT on gold purchases Russian citizens can now offset their currency risk with gold and stabilize the domestic monetary situation.
The first step in offsetting financial warfare from the West is allowing the domestic population to be immune to collapses in their currency from foreign actors pulling capital out of the country. Companies doing international business now have an alternative to hold time deposits which are far less volatile than the ruble without penalty. Gold becomes the coin of Russia’s international business.
This is a first step in rebuilding confidence in the Russian banking system rather than what we’re seeing in the West which is the ritualistic assault on privacy, wealth generation and the value of our labor, which is degrading rapidly thanks to inflation, which will rage from here as all energy and commodity markets are scared to death of Davos’ financial war on Russia.
As Luke Gromen pointed out on Twitter this is the big signal that the petrodollar system is headed for the ashbin of history.
https://twitter.com/LukeGromen/status/1499023420834594819
- LukeGromen
With the global oil market in a complete state of shock as no one wants to run afoul of US and/or EU sanctions on Russian energy, the price of oil here potentially goes parabolic. At that point reality hits the money masters squarely in the face.
Those that brave the waters will get their oil at a steep discount, those that don’t will pay through the nose, further accelerating the decline of those economies as inflation spirals out of control and the people put the blame, not on Putin, but on the people in charge.
Moreover, Russia has kept the gas flows going to ensure that money keeps flowing into the country to finance further expansion of its gold reserves.
Now, I want to turn your attention to the other news of which further corroborates that Davos and Europe are trapped. FOMC Chair Jerome Powell testified today telling the world that the Fed will still hike 25 basis points in March. Bullard came out and said the Fed has to withdraw accommodation to maintain its credibility.
Powell even floated the idea that the world can have more than one reserve currency (!!). Meanwhile Biden is talking about bringing back Build Back Better and sending us down the road to financial ruin.
NATO isn’t getting involved in Ukraine even if Ukraine becomes an EU member. They can have the landlocked rump of what’s left over. If Putin is smart, which he is, he will offer the Poles Lviv and Hungary Transcarpathia. The EU gets the dregs.
Link: https://tomluongo.me/2022/03/02/opening-salvos-tossed-putin-next-moves-ukraine
The propaganda continues...
A 65-year-old substitute teacher and journalist was suspended from teaching in Arlington, Virginia for not promoting the state’s approved propaganda on the Russian invasion of Ukraine. The teacher was giving his students a balanced perspective on the Russia-Ukraine conflict. This was not acceptable to the state operatives monitoring speech. The media says teacher John Stanton spread Russian propaganda.
Anne-Laure Bonnel, a french reporter, who has been filming in Eastern Ukraine since 2015, is in hot water for claiming that people of the Donbass region are being tortured by government.
French journalist Anne-Laure Bonnel has been in Donbass for several years and has been trying to tell the whole truth about how the Ukrohunta has been destroying and continues to destroy its own, but Russian-speaking citizens for 8 years. Now, when she started telling the same to her colleagues from CNews channel, they didn't believe her until the only recently. This is how selective truth and the greatest Western propaganda machine in the history of mankind works.
Bonnel: I film it every day. I record it as a testimony. I don't have any political goals. We've been talking about this conflict for a week now. But it's been going on for eight years. 13,000 dead. 13000!!! [including over 500 children killed or crippled!] People without strength. And they are all residents of Ukraine. And I have to say that they are all surprised that Europe is only now seeing the situation, while for them it is the end of the world. It's life in basements. All these bombings. I filmed them back in 2015. It's been a daily life for them since 2014.
Host: I'm going to interrupt you because not everyone understands the situation exactly what you've been following for several years. You said and this is surprising - all people are Ukrainians? And you assure me that the bombings are Ukrainian?
Bonnel: Yes, absolutely. GRAD bombing . The people of Donbass were targeted by their own government by the Kiev authorities. I have all the evidence. I can provide them when I return to France. I have everything filmed, it's irrefutable. The day before yesterday I was in one school. Two teachers were torn in half. Literally. I posted a photo of one grandmother on Facebook because the old people couldn't leave the area. Civilians are suffering. I'm telling you responsibly that there are bombings here in Donbass in the Russian-speaking part of the country. There was a bombing in Donetsk yesterday.
Host: Are you saying that it is the Ukrainian government that is doing the bombing? Bonnel: Yes!
Biden working now with Iran and Venezuela for more oil!
Can you guess who also owns most of those assets? It seems the Biden Regime of Idiocracy has no clue that Russia is a major investor in Iranian oil and natural gas, and that the Russian government also owns massive Venezuela oil assets!
"We identify Russia as a strategic partner, and this partnership is not something that can be changed with ups and downs in the international arena," Iranian Oil Minister Bijan Zangeneh said, following a meeting with Alexander Novak, Russian Deputy Prime Minister, and Nikolai Shulginov, Russian Energy Minister, in Moscow on December 21, adding that, “we have good cooperation with Russian companies. We have planned to continue cooperation with them in the field of oil, gas and equipment manufacturing."
Russia’s Rosneft has transferred its assets in Venezuela to a company fully owned by Vladimir Putin’s government, a move apparently intended to shield Russia’s largest oil producer from U.S. sanctions while Moscow continues showing support for Venezuelan President Nicolás Maduro in the wake of a U.S. narcotics indictment.
Retired US Army Colonel Douglas Macgregor, PH.D. is one of the few people who really seems to have a grasp on what's actually going on...
Retired US Army Colonel Douglas Macgregor, PH.D., one of America’s foremost strategic military tacticians, reveals that Russia has already obliterated Ukrainian military forces to such an extent their soldiers have fled into cities wearing civilian clothing. He also reveals that the Russian military is deliberately not targeting Ukrainian cities. He says Ukrainian President Volodymyr Zelensky is NOT a hero, but little more than a dangerous Western “puppet” who should immediately stop using the Ukrainian people as human shields.
Macgregor also says "Quite frankly, most of what comes out of Ukraine is debunked as lies within 24-48 hours."
List of anti-Russia propaganda we have seen thus far
Ukrainian father crying as he hugged his daughter was actually a pro-Russian rebel in Donbas preparing to fight Nazi Azov Battalion
13 Ukrainian soldiers "killed" on Snake Island actually surrendered and are alive and well
Russian tank that ran over civilian car in Kyiv was a Strela-10 Ukrainian air defense system
Photos of Zelensky in military garb with a helmet on are from 2021 border inspection
Video of Ukrainian MiG-29 shooting down a Russian Su-35 was a Digital Combat Simulator animation
Russian cruise missile that blew up the side of a residential building was actually a Ukrainian air-defense missile fired by the Ukrainian military
Viral video of Ukrainian pilot shooting down Russian jet was a screen recording from Arma 3 video game
Russian supply convoy that Ukrainian military blew up was a Ukrainian convoy
Ukrainian military lied about blowing up 56 tanks that included General Tushayev
Russian jet bombing near residential homes appears to be a Ukrainian MiG-29 fighter targeting Russian troops
Link: https://threadreaderapp.com/thread/1497760233115947008.html
Real Racism faced by Non-White Ukrainian Refugees, also mostly unreported by the MSM
A Nigerian doctor told the New York Times, “The Ukrainian border guards were not letting us through. They were beating people up with sticks. They would slap them, beat them and push them to the end of the queue.” More and more firsthand accounts of similar experiences with racist border guards are being shared on social media and with reporters. As white refugees boarded trains to flee, African women were sent to the backs of lines and forced to wait in the cold. Nepalese, Indian, and Somalian men told Time magazine that Ukrainian border guards kicked them and beat them with batons.