Can we have a Ukraine/ Russia/ Crimea thread for dummies?

[chicaguapa]

In other words, could someone explain the situation in really simple terms please. I don't understand it but feel it's important and I should know what's going on.

And because DD(12) asked me this morning and I couldn't answer.

p.s.

that would have been rude, if it hadn't been the exact words math previously used to me.

Fracking is not viable in the long term (or maybe even in the short term) because of the massive use of water, and also because of chemicals used in the process that affect groundwater -- this has the potential to become a political hot potato and a public relations disaster for American oil companies. And export of gas or oil by the US would be unpopular with voters unless there was an accompanying reduction in the cost of petrol and heating gas and electricity for American consumers.

Sanctions have not been tried against an economy that is as diverse and as well integrated with other leading economies as Russia's is. Previously, sanctions have been used against South Africa, Iran, Iraq, Burma, Cuba and North Korea (not an exhaustive list but in general, these places are insignificant in the global economy, and nothing they import or export would have any impact on swing states in an American election).

I agree that fracking will cause huge political problems with the public and it is banned in France. However, Chevron and Shell have invested money which could potentially reach billions for fracking in Ukraine.

Poland seems to be a country that has lots of shale but no one yet knows for sure.

"Poland's shale drive will transform Europe, if it does not drop the ball

The US Energy Department thinks Poland has enough shale gas to power the country for 300 years."

www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10257988/Polands-shale-drive-will-transform-Europe-if-it-does-not-drop-the-ball.html

Gazprom is not keen on fracking as it will hit their profits and Poland may use its potential for fracking to reduce prices of gas from Gazprom.

I think that US politicians will vote for relaxation of fracked gas exports based on this political crisis in Ukraine that could heat up even further than it has done so far.

I think this is a long term game to weaken Russia economically and to eventually force through regime change.

McCain is talking about wanting to send weapons to Ukraine.

Ah, the man who picked Sarah Palin as his VP running mate .

The US election season opens at the end of next year. A quick vote to start exporting gas and/or oil would have very little short term effect unless European ports have the capacity to process those exports and unless American merchant shipping can handle it. Another dampener is the capacity of the US to convert gas into LNG for transportation. So all of those exports would presumably only be coming online and starting to cause a pinch in the pocket of the American consumer, American airlines, and making a dent in American transport prices (with ripple effects in the price of food) just as the election season gets under way.

Meanwhile Russia, with large foreign exchange reserves and an economy that is not very exposed to European or American political whims, can lower the price of oil and gas and undercut American suppliers while at the same time selling to China and India and South Korea.

You are right that the US gas exports and fracking are long term and will not have impact in the short term. But I think the revolution was planned for the long term and that isolating and excluding Russia from Europe was part of the objective.

You are right that Russia does have some cards up its sleeve too. But how many, I don't know?

When Crimea votes to secede from Ukraine and align with Russia the UN will likely threaten sanctions. If they're applied Russia will likely switch off gas supplies to Ukraine and Europe. Not only that, they'll stop using the dollar to trade, instead using the ruble, or maybe even the yuan. Russia views Europe as corrupt, and it is, so they hold us here in contempt. If they stop trading in the dollar it sets a precedent, meaning it will no longer be the default, and will provide China with a tap in to push the yuan as the currency of choice. China already has enough gold to back their currency, the US does not.

Surely, the biggest factor is whether the interim government will be able to gain support in Eastern Ukrainian and conduct free and fair elections, which will be internationally recognized, or whether the country will descend in civil war and military rule.

What do you think?

Eastern Ukraine

I think it looks bad. I don't think Russia will accept this government which came into power illegitimately as it sees it.

" free and fair elections, which will be internationally recognized"

it would certainly make a nice change from the Russian arranged vote in occupied Crimea

On the ballot paper, voters were asked whether they would like Crimea to rejoin Russia.

A second question asked whether Ukraine should return to its status under the 1992 constitution, which would give the region much greater autonomy.

There was no option for those who wanted the constitutional situation to remain unchanged.

It would also be a refreshing change from mob action in the streets of Kiev but heyho.

.................
China has enormous foreign reserves (US$4trillion) and so does Russia, though nowhere near China's. Same goes for gold (though the US has more, and gold represents only a tiny percentage of China's foreign reserve at the moment -- under 5%). It has long been a policy of Russia to dislodge the dollar. Private Chinese investors have over the past few years sunk money into foreign property, farmland, chunks of Africa, Rolex watches, bitcoin and gold and the government is busy increasing gold stocks too. This is most likely a reflection of dwindling faith in all the US debt China holds. All of which means sanctions against Russia would be very complicated.

The Fed is creating approximately 1,000 billion new US dollars annually in order to support the prices of debt related derivatives on the books of the few banks that have been declared to be “to big to fail” and in order to finance the large federal budget deficit that is now too large to be financed by the recycling of Chinese and OPEC trade surpluses into US Treasury debt. The problem with Quantitative Easing is that the annual creation of an enormous supply of new dollars is raising questions among American and foreign holders of vast amounts of US dollar-denominated financial instruments. They see their dollar holdings being diluted by the creation of new dollars that are not the result of an increase in wealth or GDP and for which there is no demand...

...What we are witnessing is our central bank pulling out all stops on integrity and lawfulness in order to serve a small handful of banks that financial deregulation allowed to become “too big to fail” at the expense of our economy and our currency. When the Fed runs out of gold to borrow, to rehypothecate, and to loot from ETFs, the Fed will have to abandon Quantitative Easing or the US dollar will collapse and with it Washington’s power to exercise hegemony over the world.

The dollar not so almighty and possibly not too big to fail.

From gold price manipulation article

(It is interesting to note in the context of the mention of GDP that slashing public spending and allowing native industry, banks, and farming to fail is fine for Ukraine whose elections mean nothing to Washington, but considered too much for the US electorate to swallow.)

The dollar is not convertible into gold.

Gold and the dollar --

the Federal Reserve is very much aware of the flight away from the dollar into gold, because it is this flight that causes the Fed to manipulate the gold price in order to hold it down and in order to be able to free up gold for delivery.

The Fed knows that the ability of the US to pay its bills in its own currency is the reason it can stand its large trade imbalance and is the basis for US power. If the dollar loses the reserve currency role, the US becomes just another country with balance of payments and currency problems and an inability to sell its bonds in order to finance its budget deficits.

since we know that the dollar is not convertible into gold. what do you think "free up gold for delivery" means in your C&P?

The thing is the US would not risk the end of the dollar as reserve currency, unless we believe in the conspiracy theories that say that the New World Order wants to collapse fiat currencies to cause panic in order to bring in a one world currency and a one world government.

Assuming that is not the case here, then why would the US and EU be so keen to back this government brought in by a coup, if it might risk the end of dollar reserve currency status? If we assume that they will not allow this to happen and if we assume that the Russians would really try it, then that suggests that we could be looking at a vey bad scenario.

I don't think the Russians would go that far because of what will happen then, unless the New World Order conspiracy theorists were right all along.

from your previous posts, it appears that you think that the price of gold is relevant.

Why?

They told us that Gordon Brown saved us and saved the world after the financial crash. We knew it was rubbish, but that's what they kept trying to tell us, along with "we have 50 days left to save the planet".

Surely this doesn't mean that they will roll him out again to tell us that he will save us again for the New World Order.

They showed us his speech about the New World Order. Surely we won't have to sit through more of this type of stuff? Have they never heard of the saying "once bitten, twice shy".

I don't know who "they" are and presumably they are not on this thread.

What is the relevance of the price of gold?

They is the New World Order that Gordon Bennett told us about.

The price of gold is important and there are theories that it is being kept artificially low because a rising gold price indicates a loss of faith in paper money.

Gordon Brown, who saved us and saved the world, sold off a vast amount of our gold at a low price. The people who bought our gold at that low price will be sitting on real value if one day paper money value collapses in a time of global crisis that may precipitate the aims of the New World Order.

Gordon Bennett the famous racing driver?

I haven't seen anything to suggest that the price of gold is relevant to Russia's latest adventure.

However as Galtieri, Thatcher, Hitler and Mussolini could tell you, a successful military adventure brings popularity and re-election.

Putins POV is that the legitimate government of the Ukraine was overthrown in a political coup. (Which is true as the government was elected by the people).

Therefore he is protecting the mainly Russian speaking/thinking people of the Crimea by moving Russian groups in and having a referendum on where their alliegence is in the future with the aim of reintegration with Russia.

The more western leaning Ukrainians in Kiev want closer ties with the west and the EU.

Putin is the winner in this one as

1. The Americans are out of the loop despite trying to elbow their way in. Unless there has been continental drift?

1. The Russians have the europeans by the short and curlies because of financial investment and GAS!

1. Only crazy nations will wage a war against Russia don't speak too soon about that one

'Gordon Bennett the famous racing driver?'

Sorry, I misspelt Gordon Brown. I do sometimes get them mixed up.

'A Kremlin aide was quoted on Tuesday as saying that if the United States were to impose sanctions on Russia over Ukraine, Moscow might be forced to drop the dollar as a reserve currency and refuse to pay off any loans to U.S. banks.

Sergei Glazyev, who is often used by the authorities to stake out a hardline stance but does not make policy, was cited by RIA news agency as saying Moscow could recommend that all holders of U.S. treasuries sell them if Washington freezes the U.S.. accounts of Russian businesses and individuals.'

www.reuters.com/article/2014/03/04/us-ukraine-crisis-glazyev-idUSBREA230DS20140304

This was quickly contradicted by some other Russian authorities. But if the Russians tried it. this would have huge consequences and could trigger panic.

This is the stuff that the New World Order dreams about and has written about and planned for years. This is their Holy Grail.

But for ordinary people, it would be a calamity.

do you think the price of gold is relevant? Or is it just math?

In the context of the article it refers to causing artificial (for want of a better word) selloffs of gold holdings because of belief that the price is dropping thus making possible delivery of gold to customers who want the actual bullion and will not take cash or other instruments -- increasingly China but also Germany which recently gave the Fed 7 years to repatriate 300 tonnes of German gold from the Federal Reserve back to Frankfurt.