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The Big Energy = Power Battle Is Coming

Commodities / Energy Resources Jul 25, 2014 - 06:40 PM GMT

By: Raul_I_Meijer

Commodities

I don’t really want to keep talk about Ukraine, but it’s too hard to avoid. Besides, it’s not the same story anymore that it was when the week began, since the economic war vs Putin and Russia is now escalating. For reasons that have nothing to do with the plane crash, though they may seem to, a fact that completely seems to escape 999 out of 1000 people.

We still don’t know who shot that plane (we’re not even sure anyone did), and the longer is takes to get evidence for who did it, the more likely it is that such evidence will be tainted and/or fabricated.


That’s undoubtedly why the western media simply bypass the need for evidence, which is worrisome on multiple fronts. The “logic” behind it seems to go something like this: Russia is involved in the plane crash because it has been involved in east Ukraine after the Maidan coup ousted Yanukovych, by supporting – in undefined ways – the Russian speaking population and ‘rebels’.

The problem is that if you follow that logic, the west, too, is involved in the crash, since the EU and US have very actively supported the other side in the domestic Ukraine conflict. That would leave only the “but we are on the good side”, or even “God is on our side” defense (not that the west feels it needs to defend itself). But “good side” or “God’s side” are not arguments that hold up in for instance a legal environment: you’re either involved or you’re not.

So if, being the west, you want to put the blame for MH17 on the Russians, bypass the need for evidence, and accuse them on the grounds of “indirect involvement”, you’re also at the same time implicating yourself. You can’t escape the fact that your actions may have contributed to the disaster. And I don’t understand why western politicians and journalists fall into that trap, and why the population falls so easily and eagerly with them.

What’s more, as long as there is no evidence on the table, it’s at least as likely that the Ukraine army – or CIA or Blackwater – shot the plane as it is that the rebels did. It is as simple as that. The move to isolate Russia and Putin which has evolved over the past week, evidence be damned, makes clear that those operating on “our side” may well have had a lot more motive to shoot down a passenger plane than the ‘rebels’ did. And that they have a political agenda: those sanction were not all drawn up on a rainy afternoon. .

After all, as we see now, it is the perfect excuse to blame and isolate Putin. Well, it’s of course not 100% perfect, since there’s no evidence, but if you shout loud enough and often enough, and you sufficiently play to people’s fear and anger, who needs perfection or even evidence? You only need to “implant” the suspicion and let it start fermenting.

Reuters quotes Dutch PM Mark Rutte today as saying:

“There’s an easy way out for Russia: to distance themselves from the separatists, and stop arming them.”

.. and that is really beyond reason. Rutte, like everyone else involved, knows that this would mean Kiev can continue murdering its own women and children with impunity. And that’s even assuming there would be evidence that Russia arms the rebels; all we have to date is hearsay and innuendo.

What Europe and the US should be doing right now, and that would be an easy thing to do, is to tell Kiev to stop shooting its own people, and go sit around a table with with all parties, including Kiev, Russia and the people east Ukrainians choose to represent them. Until that happens, if ever, we must look at the west’s actions with huge suspicion. There’s an easy way out for the west, and they’re not taking it.

Who would represent Kiev in such negotiations is not clear, since it has no government anymore, not even the US/EU handpicked one. It would be good to see someone investigate why the government resigned yesterday. And what, if anything, the resignation has to do with the plane crash. Russian media report:

“We can say with confidence that this intention reveals a wish to avoid responsibility for the troubles and misfortunes that were brought upon the people of Ukraine with his help, for the crimes that were committed by the authorities,” Irina Yarovaya, Chair of the State Duma (lower house of the Russian parliament) Security Committee, told ITAR-TASS. In her opinion, “the crimes that were committed over this time with Yatsenyuk’s direct participation are appalling”.

As far as the – additional – sanctions are concerned that the EU is supposed to announce, Reuters says:

… restrictions on Russian access to European financial markets, defence and energy technology and equipment useful for both defence or civilian purposes. [..] Under proposals put forward by the Commission, the EU would target state-owned Russian banks vital to financing Moscow’s faltering economy. Under the proposal, European investors would be banned from buying new debt or shares of banks owned 50% or more by the state.

Of course, in an integrated global economy, it is possible for one party to hurt another financially, presumably even hard. But demanding that Russia step aside and gives ‘leaders’ in Kiev time and space to execute the burning and nuking of all Russian speaking Ukrainians which several of them have openly spoken about, is a road to nowhere.

Proposed EU Sanctions Threaten To Shut Russia Out Of The Financial System

Here is the EU sanctions document under furious debate today, courtesy of our Brussels correspondent, Bruno Waterfield. Note the heading “Non paper”. It is leaked, not authorised. This is a menu of options. It requires unanimous backing of the 28 ambassadors. Any one country can veto it. Cyprus may find it too much to swallow, and will need a lot of sugar to help it go down. The MICEX index of stocks in Moscow rallied in the mid-morning session and is level for the day. The state-owned banks VTB and Sberbank scarcely missed a beat. Investors are clearly calculating that nothing will come of this.

The measures come into force only if Russia continues to help the rebels and funnel militants across the border (which in reality no longer exists). Still, I hope these investors have good political intelligence in Brussels, London, Paris, Berlin, and Washington, because this looks a little cavalier to me – rather like those who continued to buy the dips even after the Austro-Hungarian Empire issued its ultimatum to Serbia in July 1914. The document makes clear that the aim is to force Russian banks into the arms of the state, bleeding the Russian budget and reserves. This really is “tier III” level. It hammers the whole financial system.

In short, this is a financial war based on hearsay and humbug, which the US and EU can only start and continue if they keep their people angry enough, and therefore misinformed enough. That may not turn out to be as easy as they think today. It may depend on what Russia can show and tell the western media.

It may also depend on reactions in the west to fast rising energy prices. Which, if these sanctions are voted in (not certain by any means), seem inevitable. The US and its short term shale riches may feel fine about that (something that may come to haunt them), but for Europe the consequences could be devastating, and as rapidly as the sanctions hit Russia’s economy.

My guess is Brussels’ bureaucrats have been fooled into believing that they can beat Russia and take over – much of – its energy wealth. That does not look smart at all, but then these people never were. They know how to squeeze Greece and Italy, and the success there has gone to their heads. But as soon as they would even get close to Russia’s oil and gas – which I don’t think they will -, the US would step in and take it away from them. That’s how powers are divided in today’s world. As I said earlier this week, best remember who your friends are.

The US can’t wage a physical war against Russia, it wouldn’t dare. But it can try and coax the Brussels fat old boys into a battlefield here and there. We have entered what should be regarded as a next phase not just in the Ukraine situation (and my, did that plane crash come in handy), but a next phase in geopolitics as a whole. All parties know that there will be a battle, either today or tomorrow, over – fossil – energy. And all are preparing for that battle, moving pawns across the board, planting ideas in people’s heads that will make them easy to direct when the time comes.

This I understand. But I still have trouble accepting that it must desecrate the lives and dignity of the innocent 298 people on board a crashed plane, thousands in east Ukraine, thousands more just recently in Gaza, God knows how many in Syria and Iraq. Perhaps that simply means I’m not ready for what’s to come.

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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