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Ukraine: What To Do When Economic Growth Is Gone

Politics / Ukraine Civil War Jul 24, 2014 - 07:28 PM GMT

By: Raul_I_Meijer

Politics

“The fact that the coalition has fallen apart, that laws haven’t been voted on, that soldiers can’t be paid, that there is no money to buy rifles, that there is no possibility to fill gas storages. What options do we have now?” This is, as per Bloomberg, what US handpicked handpuppet and – now former – Ukraine PM Yatsenyuk told the Kiev parliament earlier today during a speech in which he announced the resignation of his “government”. Several of his coalition partners, including right wing Svoboda, had left the government not long before.


This raises a ton of poignant questions. The first one that came to my mind was: “in whose name are the women and children of Lugansk and Donetsk going to be killed now”? It can’t be in the Kiev government’s name anymore.

But also, of course, what happens with the IMF loan tranches that were waiting to be paid out? President Poroshenko allegedly commented that “snap” elections will be held in October or thereabouts. That would suggest three months of free for all. And even then, what are the chances that the Ukrainian citizens in the eastern part of the country will – be able to – take part in that sacred exercise of democratic rights? These people don’t want Kiev to dictate their lives for them. The UN has a statute of self-determination. Seems a good fit. But instead they get shot at and bombed (why do you think they want anti-aircraft missiles?).

Still, there in no Kiev anymore now. No government. There’s a president, but the parliament used Maidan, which is still just 5 months ago, to move many of the president’s powers to itself and the government. So legally, there’s a very large grey area all of a sudden. Can a government that has already resigned, but is asked to take care of daily business, order an army to – continue to – shell civilians on its own territory? How many examples could you name?

I’m not a specialist in international law, and I’m not sure it would make much difference – who would drag Yatsenyuk before an international court? -, but these things are certainly not clear cut.

More interesting for now may be some more underlying questions. Yatsenyuk says Ukraine can’t pay its soldiers. Who’s going to pay them? He says there’s no money to buy rifles. So who’s going to arm the Ukraine army? Will the IMF make a few billion more available so the army can keep fighting their own countrymen, even if the country has no government? What does international law have to say about that? Or IMF statutes?

How about gas storages? What are the odds that Kiev will be dark and cold the coming winter?

It all comes back to Russia, and Putin, in the end, doesn’t it? Speaking of which, Holland, Australia and Malaysia are preparing a UN mandate to form a “police force” that would be tasked with securing the plan crash site. The ‘rebels’ have left it, they need to defend their families from the ongoing shelling from the now defunct Kiev government.

Holland, Australia and Malaysia, plus all other countries that think it’s a good and dignified idea to secure the site, could get what they want tomorrow morning if only they called for the shelling of east Ukraine cities to stop. But they don’t. They want that police force to come in while the attacks by a – defunct – government on its own citizens continue 20-30 miles away.

As if they had no part in those attacks, and all they want and deserve is to get their deceased people back. The problem is, they do have a part in the attacks. For the past 6 months, Yatsenyuk and his “government” has been propped up and financed by countries like Holland and Australia, through various organizations like the EU, IMF, UN, World Bank etc.

Are you, like me, beginning to grasp how absurd this whole situation is?

In order for the police force to “work”, and of course there’s a lot – certainly emotionally – to say for making it work, they will need Putin. Want to take a stab at how many times Putin has – again – been compared to Hitler recently? Remember Joe Biden saying Putin has no soul?

Here’s how they’ll play this one: if Putin doesn’t agree to push the ‘rebels’ into accepting international troops – ostensibly tasked with policing, but who knows if they smuggle in CIA or Blackwater? – on the territory they have seen thousands of their friends and family members lose their lives over protecting, Putin will be blamed for the whole thing. We live in the age of propaganda.

The same Putin faces threats of increased sanctions from the EU. Which Holland is part of. Why, I’m not entirely sure. The sanctions, that is. As far as I understand, the idea is that Putin supports the easy Ukraine rebels. Which may or may not be true, but US and EU have never provided evidence.

And why would such – purely alleged – support be so bad? Because it keeps the west, through Kiev, from conquering the entire Ukraine right up to the Russian border. A goal that can only be achieved by eradicating the east Ukraine Russian speaking population. Something multiple Kiev bigwigs, including Yulia Tymoskenko, and including newly elected president Poroshenko, have heartily supported.

So what was it again you want from Putin?

Europe, edged on by the US power politics supremacy establishment, risks painting itself into a corner it has no chance of getting out of. Brussels is loaded with career guys who dream of great powers but lack the brains to back up their ambitions. And – almost – everyone in EU national governments follows the ‘leaders’ like a bunch of, let’s give it a label, eunuch slaves. Not fit to rule.

But that same EU is now preparing major sanctions on Putin, for “offences” against ‘something’ poorly defined that they have provided no proof for – again, are you beginning to grasp how absurd this whole situation is? -, and that EU may well come to regret this whole thing.

The eurozone economy, notwithstanding the rosy rosy PMI manufacturing data today, is in a shambles. If you need proof, look at the terrible US PMI numbers, or the 20% drop in American new housing starts. The global economy is being kept alive by debt issued by central banks. Japan and China are talking over for Yellen, and Draghi gets squeezed out of the picture (which is not that bad, all the new debt is too damaging for future generations).

The battle against Putin for ‘something that he never done’ risks raising European gas prices by 100%, and world oil prices by the same percentage. Just a guess, granted, but by no means a bad one.

The US will be temporarily fine on account of shale, though for far less time than it thinks it will; I wouldn’t give shale as a viable growing industry more than 3-4 years. But the US does have that, and it’s pressing its European ‘friends’ into an energy situation it wouldn’t want to be in itself. That, along with a much stronger dollar, would give America much more say in European affairs. I don’t think Washington and Wall Street would mind that. Do you?

“Global economy starts second half on solid footing”, says a Reuters headline today. Yeah, well, I think that’s so far out there in left field it’s not funny anymore. What should we call this phase we’re in? How about ‘the age of diminishing returns’? Where empires fight not over growth, but over the scraps falling off the table.

Think about it this way: if you were someone dreaming of empire, how would you react when you find out that growth is gone, and you have to fight over what’s left, instead of look for new resources?

If growth is over, and your entire world view has always been based on more growth, then what do you do?

Apart from these larger issues, please allow me to repeat this: If countries want to secure the plane crash site, they would be allowed to do that right now if only they called for the shelling of eastern Ukraine by its own government to stop. Anything else is a waste of your time and mine.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2014 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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6 Critical Money Making Rules