16/9/2014: Ukraine Passes Far-Reaching Law on Eastern Regions Decentralisation

After ten days of ceasefire, the Ukrainian Parliament (Rada) ratified a very significant new bill, introduced by President Poroshenko, that
guarantees a “special status” based on a degree of self-rule for the self-proclaimed separatist territories, the Donetsk and Luhansk “People’s Republics”, for a period of 3 years allows for policing by local militias in specially designated areas of self-rule provides protection (yet to be defined) for Russian language permits local governments’ autonomy in establishing and strengthening of “good neighbourly relations” with Russia promises Kiev funding to rebuild the regions (not specified amount and/or conditions) sets the date for local elections: December 7

This post was published at True Economics on September 16, 2014.

CHINESE STATE MEDIA: THIRD WORLD WAR COULD BREAK OUT OVER US/RUSSIA CLASH

Beijing must prepare for new global conflict, warns PLA professor In an editorial for the state-run People’s Daily, Chinese PLA Professor Han Xudong warns that Beijing should prepare itself for a third world war which could arise out of the conflict between the United States and Russia over Ukraine.
‘As the Ukrainian crisis deepens, international observers have become more and more concerned about a direct military clash between the US and Russia. Once an armed rivalry erupts, it is likely to extend to the globe. And it is not impossible that a world war could break out,’ writes Xudong, noting that ‘the world has entered an era of new forms of global war’ based around the Internet and the concept of sea power.
The professor goes on to predict, ‘It’s likely that there will be a third world war to fight for sea rights,’ and that in order for China to be ready for this new conflict, Beijing needs to, ‘develop its military power based on a global war’ so as to guard against becoming a passive victim of events.

This post was published at Info Wars by PAUL JOSEPH WATSON | SEPTEMBER 16, 2014.

World War Redux: The Fourth Turning Fourth Time Around

One hundred years ago, on July 28, 1914, Austria-Hungary declared war on Serbia, which began what became World War I. France, Russia, and Britain fought Germany and Austria-Hungary – the Allies against the Central Powers. Three years later, with millions dead and the war in a stalemate, the United States sent 2 million men to the Western Front backing the Allies. This compelled Germany to cease fighting and sign the Treaty of Versailles, which set the stage for an even more catastrophic Second World War.
Following World War II, the U. S. government assumed the role as the world’s policeman and has pursued an aggressive foreign policy, particularly with regard to Russia. Could there be another Great War? A World War III?
William Strauss and Neil Howe predict that this may well happen in their book The Fourth Turning: An American Prophecy: What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny, published in 1997. Rather than progress in a linear fashion, as commonly thought, these authors posit that human history has a seasonal, cyclical nature. Each Cycle (or Saeculum) throughout human history has averaged about 80 years (aSaeculum is the length of time roughly equal to the lifetime of a person and is equivalent to the overall renewal of a human population.) America is in its Fourth Cycle, beginning with the Revolutionary Cycle (1704-1794), then a Civil War Cycle (1794-1865), followed by a Great Power Cycle (1865-1946), and now its Millennial Cycle (1946-2026?).
Strauss and Howe term the seasons in each cycle ‘Turnings.’ The First Turning is a High, an upbeat era when institutions are strong, and individualism weak, and society is confident about where it wants to go; the Second, an Awakening, a passionate time of spiritual upheaval when institutions come under attack; and the Third, an Unraveling, a downcast era where individualism is strong and flourishing and institutions weak and distrusted (i.e., ‘periods of cynicism and bad manners’), like Prohibition in the Great Power cycle and the Culture Wars in the current Millennial cycle. The Fourth Turning is one of Crisis spanning usually a couple of decades, where the country’s institutional life is torn down and rebuilt from the ground up in response to a perceived threat to the nation’s survival.

This post was published at Lew Rockwell on September 16, 2014.

Crude Oil Collapses – Plot Against Russia or Economics?

The global demand for oil is declining as the United States moves toward self-sufficiency and is the only nation still in a positive economic trend. Everywhere else we see the global economy turning down since 2007 including China and Russia no less Europe. But the level of pessimism in the USA does not imply a bull market for commodities no less oil.
The oil price has fallen in the past week for the first time since one and a half years under the $ 100 mark dropping to test the $90 level. On our models, the critical support lies at $92 and $82 going into 2015. A year-end closing below $92 will shift oil into a neutral position whereas a 2014 closing below $82 will warn of a sharp decline cannot be ruled out.
The global oil demand rose by only 500,000 barrels of crude oil per day, according to the International Energy Agency (IEA) in the second quarter. This increase in oil demand is the lowest in almost 3 years. The only place where demand has risen is in North America, whereas in Europe and Asia demand has been noted generally less. The recent slowdown in demand growth is exceptional in fact but the rising levels of taxation and the rise in draconian policies in Europe to bail out banks and municipal governments has seriously impacted expectation no less the fact that youth unemployment remains over 60%. This has impacted everything and is even sending marriage trends back to the 19th century where the age differentials are widening drastically. Girls are marrying increasingly older men to be able to start families since those near their own age in Europe are the equivalent of marrying someone virtually homeless living with their parents.

This post was published at Armstrong Economics on September 16, 2014.

Russia completes dry run of nuclear bombing attack on America

The Cold War ended with the collapse of the Soviet Union in December 1991, but under the stewardship of President Vladimir Putin, a former KGB agent, a new cold war between Russia and the United States appears to be forming. At least, it’s cold for now. Over the past 30 months, Russian strategic (read nuclear) forces have begun testing U. S. defenses on a much more regular basis. The most recent attempt occurred just days ago when a pair of Russian strategic bombers practiced cruise missile attacks on the U. S. during a training mission — a mission that U. S. officials said was timed to coincide with a NATO summit in Wales aimed at developing a plan to blunt Russia’s aggression toward Ukraine. American and Canadian systems picked up and tracked the aged Tu-95 “Bear-H” bombers flying a line across the northern Atlantic Ocean “near Iceland, Greenland, and Canada’s northeast,” the Free Beacon news site reported, adding:Analysis of the flight indicated the aircraft were conducting practice runs to a pre-determined “launch box”–an optimum point for firing nuclear-armed cruise missiles at U. S. targets, said defense officials familiar with intelligence reports.

This post was published at Natural News on Tuesday, September 16, 2014.

E.U., Kiev, Moscow gas talks suspended

A spokesperson for the Russian Energy Ministry said Monday it was postponing trilateral talks with the European Union and Ukraine.
Talks were scheduled for Saturday. A ministry spokesperson told state news agency RIA Novosti an alternate date depended on Energy Minister Alexander Novak's schedule.
"We told the European Commission that the proposed date is not suitable for us," the spokesperson said. "Another date is being discussed."
The European Union last week enforced new sanctions on the Russian energy sector in response to ongoing crises in eastern Ukraine.

This post was published at UPI

Slovak Prime Minister Warns Ukraine of ‘Ultimate Disintegration’

Slovakia's Prime Minister Robert Fico on Saturday warned Ukraine about the perils associated with the European and possibly NATO integration, saying the east European nation was tittering on the brink of an ultimate collapse.
"I think that Ukraine will find it hard to stand against all the challenges associated with the EU integration, because it is now facing an absolute disintegration… I also disagree with the assumption that Ukraine could one day become a NATO member since this would undermine security in the region," Fico said in an interview with the Bratislava-based newspaper Novy Cas.
"Only diplomatic steps can put an end to what is now happening in Ukraine. Look, there's already been a third wave of senseless sanctions, and what has changed? Nothing. We can only expect more firm response measures from Russia," the Slovak official noted.
Robert Fico also told the country's daily that he would sooner step down than see a NATO military base built in Slovakia.

This post was published at RAI Novosti

Over 1000 US, NATO Troops Begin Military Exercises In Ukraine

Russia could care less whether Ukraine signs meaningless accession agreements with Europe (as it just did) because at the end of the day, Ukraine needs Russia’s gas (if only for the next 4-6 years until Hunter Biden develops Ukraine’s shale deposits and the Qatar gas pipeline finally crosses Syria). Russia, however, is very angry when NATO gets ever closer to its borders, which it just did when earlier today, more than 1,000 troops from 15 NATO and non-NATO countries, including the US of course, are taking part in a military exercise in Ukraine.
The good news: The ‘Rapid Trident’ exercise is happening near Lviv on the Polish-Ukrainian border, around 1,000 miles from the conflict in east Ukraine.
The bad news: 1,000 miles will hardly be considered enough by the Kremlin which will see this latest incursion by NATO ever closer to its border as another direct threat and a hint of what will happen if Ukraine is allowed to progress on its path of demanding entry into the military alliance.

This post was published at Zero Hedge on 09/16/2014.

Ukraine Offers Amnesty to Rebels, 3 Years of Limited Self-Rule; War and Peace Factions Split; More Killing is No Way to Honor Dead

War and peace factions are at odds in Ukraine.
The war factions claim Putin cannot be trusted but the peace factions have finally had enough of war. The likely loss of Mariupol within weeks was simply too much to take.
One thing is certain, more killing will only make matters worse. Ukraine Offers Amnesty to Rebels, 3 Years of Limited Self-Rule
RTE reports Eastern Ukraine Offered Three Years of Limited Self-Rule.
Ukraine’s president has offered parts of the country’s separatist east limited self-rule for three years under the terms of a peace plan reached with Russia.
Petro Poroshenko’s official website said the pro-Western leader told top lawmakers the proposal would be part of a broader deal with pro-Russian rebels signed on 5 September.
He intended to formally submit it to parliament on Tuesday.
The bill also extends the right of people in the rebel-held Luhansk and Donetsk regions to use Russian in state institutions and conduct local elections on 9 November, according to media reports.
The bill further permits the regions to “strengthen good neighbourly relations” between local authorities and their counterparts in Russia.

This post was published at Global Economic Analysis on September 15, 2014.

China Russia v USA Europe

China has aligned itself with Russia as often an ally in the international arena. China has made it known that it stands ready to use the right of ‘veto’ any decision of the UN Security Council on the situation in Ukraine directed against Russia. To a large extent, our sources have been highlighting the outrage the world has had about the NSA and its wholesale collecting of everything on a global basis right down to tapping into Merkel’s personal phone calls. The price of the NSA has been the reversal of everything administrations sought to accomplish since Richard Nixon in making the world more peaceful. The paranoia of the NSA is reminiscent of Stalin who could not sleep at night worrying about who might be thinking about his demise. The NSA has rekindled the threat of world war and its arrogance is strangely the same aspect that led to the fall of the Athenian Empire as one-by-one its allies turned against it because of its lack of respect for other countries.

This post was published at Armstrong Economics on September 15, 2014.

Russian Hot Money Dodges Sanctions, Gushes into Hong Kong, Hits Resistance

The sanctions, the last batch of which took effect on Friday, are targeting with ever increasing intensity the Russian economy and a growing number of key individuals. The defense, financial, and energy sectors have been hit the hardest. Oil and gas exports are Russia’s economic and fiscal lifeblood; Western financing is Russia’s corporate lifeblood. And that’s where the sanctions have begun to bite viciously. But not only in Russia….
They’re gnawing at the revenues and profits of German companies, and potentially at the value of stock-based compensation and bonuses of their chieftains, who have been waging a loud and relentless campaign against the sanctions, which so far has fallen on deaf ears in Berlin.
A major shift in mercantilist Germany. The prior Chancellor, Gerhard Schrder, a West German through and through, has become Putin’s best buddy over the years, and within practically moments after getting kicked out of office in 2005, started to work for him. Which has led to some delicious imbroglios [for example… Putin Parties With German Ex-Chancellor, Sanctions Be Damned].
Chancellor Angela Merkel originated in Soviet-dominated East Germany, had to learn Russian in school, and experienced Soviet power first-hand. There’s no love lost between her and Putin. Even before the Ukrainian fiasco mucked up the ‘strategic relationship,’ as every German government has insisted on calling it, meetings between them were, let’s say, awkward – though big commercial deals were always signed, and that’s what counted in mercantilist Germany. But not anymore.

This post was published at Wolf Street on September 15, 2014.

Ukraine President’s Days Numbered After Broad Accusations Of “Betraying National Interests”

As we summarized late on Friday, while Europe has been banging the populist drums over ever-escalating Russian sanctions, it quietly and without much fanfare folded in the one place where Russia could have been truly hurt, the Free Trade (DFCTA) agreement between Ukraine and the EU. But while Europe would have loved for nobody to notice, some did, and not just on these pages: far more importantly, so did the citizens of Ukraine where as the WSJ reports, Ukrainian President Petro Poroshenko faces rising criticism for his decision to delay implementation of part of a European Union deal to avoid threatened Russian retaliation.
And this is why neither side can afford to blink, because the moment one side folds, its domestic support collapses. And blinking is precisely what Ukraine just did and with that it set in motion the events that will likely terminate prematurely the brief, irrelevant presidency of Ukraine’s “Chocolate Baron” Poroshenko.
From WSJ:
A senior diplomat resigned in protest over the weekend, and pro-European politicians who are competing with Mr. Poroshenko’s party in parliamentary elections next month blasted the decision as caving to Russia, which wants Ukraine to give up the deal and remain in its orbit. The tensions highlight how difficult it will be for Mr. Poroshenko to manage the competing pressures of a Kremlin that isn’t backing down and a domestic electorate that wants closer ties to Europe and no concessions to Moscow. On Friday, Ukraine and the EU agreed to put off implementing a landmark trade deal, which is part of a broader pact aimed at strengthening their ties, after Moscow threatened trade restrictions that would have crippled Ukraine’s already limping economy.
A cease-fire in the east, where Russia-backed rebels hold several towns and cities, is still largely holding despite scattered fighting. A government spokesman said Sunday that Ukrainian troops had repelled an assault on Donetsk airport by 200 pro-Russia rebels.

This post was published at Zero Hedge on 09/15/2014.

Russian Hot Money Dodges Sanctions, Gushes into Hong Kong

The sanctions, the last batch of which took effect on Friday, are targeting with ever increasing intensity the Russian economy and a growing number of key individuals. The defense, financial, and energy sectors have been hit the hardest. Oil and gas exports are Russia’s economic and fiscal lifeblood; Western financing is Russia’s corporate lifeblood. And that’s where the sanctions have begun to bite viciously. But not only in Russia….
They’re gnawing at the revenues and profits of German companies, and potentially at the value of stock-based compensation and bonuses of their chieftains, who have been waging a loud and relentless campaign against the sanctions, which so far has fallen on deaf ears in Berlin.
A major shift in mercantilist Germany. The prior Chancellor, Gerhard Schrder, a West German through and through, has become Putin’s best buddy over the years, and within practically moments after getting kicked out of office in 2005, started to work for him. Which has led to some delicious imbroglios [for example… Putin Parties With German Ex-Chancellor, Sanctions Be Damned].
Chancellor Angela Merkel originated in Soviet-dominated East Germany, had to learn Russian in school, and experienced Soviet power first-hand. There’s no love lost between her and Putin. Even before the Ukrainian fiasco mucked up the ‘strategic relationship,’ as every German government has insisted on calling it, meetings between them were, let’s say, awkward – though big commercial deals were always signed, and that’s what counted in mercantilist Germany. But not anymore.
Over the weekend, it was Eckhard Cordes, chairman of the Committee on Eastern European Economic Relations, who attacked the new sanctions, warning that they would not contribute to a de-escalation of the crisis. He added the word ‘dangerous’ to the already common ‘sanction spiral.’

This post was published at Wolf Street by Wolf Richter ‘ September 15, 2014.

US Equity Futures Unable To Rally Despite Avalanche Of Bad Global News

Any other Monday and futures would be scorching higher. After all it was a nearly perfect storm of bad news: from China’s disastrous economic news, the worst since Lehman, to the Scottish vote where the latest poll tally had the Yes between 46% and 54%, to the dispatch of a second Russian humanitarian convoy into Ukraine, an event which a month ago sent the S&P 500 crashing, to ISIS openly defying the US by signing a non-agression pact with the “moderate” Syrian rebels to launching a new splinter group in Algeria and threatening to take over the Suez Canal, to the BIS once again warning about bubbles and complacency, and culminating with the Pope himself warning that World War III may have started, surely the S&P would be well over 2000 on any new normal day if not at new record highs.
Yet something appears to have changed not only because the USDJPY is not some 100 pips higher overnight on, well, nothing but because the S&P, which is treading water, has yet to spike on no volume reasons unknown. That something may be algos which are too confused to buy ahead of this week’s Fed announcement which may or may not have some notable changes in language or the Scottish referendum on the 18th. Or it could simply be that algos are no longer allowed to openly manipulate and rig the market on the CME as of today now that “disruptive market practices” are banned (why weren’t they before)?

This post was published at Zero Hedge on 09/15/2014.

Former BP CEO Warns “Sanctions Will Bite West” As US Gives Majors 14 Days To Wind Down Russian Activities

For the past six months, even as Obama and the EU were laying harsher sanctions on the Kremlin, one group of companies had managed to sneak by unscathed and largely avoided being impacted by Russia’s isolation by the West: the world’s biggest E&P companies, as explained in detail over a month ago in “Exxon Drilling Russian Arctic Shows Sanction Lack Bite.”
All that is about to change, because while sanctions until this moment had been largely intended tospecifically allow energy companies to continue their status quo in Russia, as of this Friday, it is precisely the E&Ps that are being targeted, as we noted on Friday, and as Reuters follows up today, reporting that some of the world’s largest companies, namely Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI, will have to be put their Russian projects on hold: to wit, the companies will have 14 days to wind-down activities.
From Reuters:
Projects now in jeopardy include a landmark drilling program by U. S. giant Exxon Mobil in the Russian Arctic that started in August as part of a joint venture with the Kremlin’s oil champion Rosneft. Now this and dozens of other projects that Rosneft and Gazprom Neft agreed with Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI will have to be put on hold.
“Cutting off U. S. and E. U. sources of technology and services and goods for those projects makes it impossible, or at least extraordinarily difficult for these projects to continue…There are not ready substitutes elsewhere,” a senior U. S. administration official told a briefing on Friday.
The companies will have 14 days to wind-down activities.

This post was published at Zero Hedge on 09/14/2014.

Washington’s War Against Russia – Paul Craig Roberts

Quarterly Call For Donations
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As this site grows in influence, its support needs to grow. Protecting this site is expensive. Those of us who tell you the truth and who provide explanations different from the propaganda are targets. Many efforts are made to smear us, discredit us, and, thereby, limit our audience. Government trolls and poorly informed ‘patriots’ who defend the government but not the Constitution, attack us in comment sections and sow confusion by misrepresenting what we write. Email attacks are mounted that so swell the inbox that it becomes impossible time wise to work through the messages to find the legitimate ones to which to respond.
It will not be long before only a masochist will be willing to speak the truth in the United States or in any country of the West.
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Washington’s War Against Russia
The new sanctions against Russia announced by Washington and Europe do not make sense as merely economic measures. I would be surprised if Russian oil and military industries were dependent on European capital markets in a meaningful way. Such a dependence would indicate a failure in Russian strategic thinking. The Russian companies should be able to secure adequate financing from Russian Banks or from the Russian government. If foreign loans are needed, Russia can borrow from China.

This post was published at Paul Craig Roberts on September 14, 2014.

Bob Shiller Warns Of “Parallels To 1937″

Authored by Robert Shiller, originally posted Op-Ed at The Guardian,
The depression that followed the stock-market crash of 1929 took a turn for the worse eight years later, and recovery came only with the enormous economic stimulus provided by the second world war, a conflict that cost more than 60 million lives. By the time recovery finally arrived, much of Europe and Asia lay in ruins.
The current world situation is not nearly so dire, but there are parallels, particularly to 1937. Now, as then, people have been disappointed for a long time, and many are despairing.
They are becoming more fearful for their long-term economic future. And such fears can have severe consequences.
For example, the impact of the 2008 financial crisis on the Ukrainian and Russian economies might ultimately be behind the recent war there.
According to the International Monetary Fund, both Ukraine and Russia experienced spectacular growth from 2002 to 2007: over those five years, real per capita GDP rose 52% in Ukraine and 46% in Russia.
That is history now: real per capita GDP growth was only 0.2% last year in Ukraine, and only 1.3% in Russia. The discontent generated by such disappointment may help to explain Ukrainian separatists’ anger, Russians’ discontent, and the Russian president Vladimir Putin’s decision to annex Crimea and to support the separatists.
There is a name for the despair that has been driving discontent – and not only in Russia and Ukraine – since the financial crisis.
That name is the “new normal,” referring to long-term diminished prospects for economic growth, a term popularized by Bill Gross, a founder of bond giant PIMCO.

This post was published at Zero Hedge on 09/14/2014.

Chaos of War – The Next Will Be no CNN TV Special

According to reliable sources, the primary reason I have been for backing off of war is because this is by no means going to be some TV CNN special where you watch things be blown up on TV as if it were a surreal movie or video game. First, Russia has intercontinental nuclear capability but it also has battle-field tactical nuclear weapons that would be used if their troops were truly going to lose. Secondly, China will support Russia and has already come out and taken their position against the arrogant posturing of the United States. Thirdly, there are sleeper cells within the United States that will take out power-grids and poison water supply. Cut the power and the USA will fall into chaos in a matter of days. In part, this is why Homeland Security has bought more than 1700 tanks for domestic use and it is also the thinking behind 1033 and the militarization of the police domestically. Either way, be it sovereign default on pensions and social programs that are inevitable or a domestic attack that takes out power-grids and poisons the water supply, troops are here to react. Homeland Security has been staging military drills taking various cities without notice to local politicians.
The stupid warlike Republicans who want to attack ISIS had better think twice before going down this road. If America puts boots on the ground, we will be drawn deeper and deeper into a war that nobody is going to win.

This post was published at Armstrong Economics on September 13, 2014.