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.

but do you think the price of gold is relevant to
a) The US dollar status as a reserve currency
and/or
b) The Ukraine crisis?

If so, why?

I was watching BBC live updates coverage on Crimean referendum.

There was this girl saying that she watched the actions of the new Ukrainian government and of the people and the Ukrainians were telling her that if she didn't like the way things were in Ukraine, she should pack her things and move away, and, she said, the Crimean did just that, but took the land with them...

I know one could argue about the referendum until blue in face, but ultimately the legitimacy of any government relies on its acceptance by the people.

Judging by the news coverage, it is clear that Yats government failed to capture the hearts and minds of a significant fraction of Crimean people.

'This [possibility of a run on gold] 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.'

Sanctions as a next step in the train of events that started with US-led regime change in Ukraine will result in European economic chaos, which in turn will have a negative effect on American recovery. A time when the dollar is pretty much worthless would probably be a good time to try to move the world away from the dollar as reserve currency. Whether gold ends up filling that role or the Yuan takes over is anybody/s guess. China may have decided gold has a role.

Hopeful, if we believe news coverage, it looks similar in regions such as Donetsk too, where we are told that pro-Russian demonstrations far outweigh pro-Ukrainian ones.

Yats has said they will get all of the traitors who agreed to the referendum in Crimea. But I wonder if Yats will be in power for teh years that it will take.

but if china or russia sell off their T-bonds cheap, what will they gain?

how will the price of gold affect the status of the US dollar as a reserve currency? (notice I am not asking about the reverse)

how will the price of gold affect the latest or future Russian expansions?

goat, when you say "ultimately the legitimacy of any government relies on its acceptance by the people." is that relevant to the loss of power by the now-discredited Ukrainian President?

The new world reserve currency is likely to be a gold-backed currency. Gordon sold off lots of our gold and vertain buyers have been accumulating gold.

'China's Official Press Agency Calls For New Reserve Currency, And New World Order'

'We assume it is a coincidence that on the day in which we demonstrate China's relentless appetite for gold, driven by what we and many others believe is the country's desire to have a call option on a gold-backed reserve currency when the time comes , just posted in China's official press agency, Xinhua, is an op-ed by writer Liu Chang in which he decries the "US fiscal failure which warrants a de-Americanized world " and flatly states that the world should consider a new reserve currency "that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States."

www.zerohedge.com/news/2013-10-13/chinas-official-press-agency-calls-new-reserve-currency

I don't think that the US will accept a de-Americanized world
That is why we may face a very grave situation.

'is that relevant to the loss of power by the now-discredited Ukrainian President?'

Do you mean Yats, the former banker?
He hasn't been elected. They didn't ask the people in Crimea or Donetsk of anywhere else. But the EU rushed over and said Yats was the cat's whiskers.

Some people asked what the EU had to do with it and they were told to shut up.

the status of the US dollar affects the value of gold, but why do you think the value of gold affects the US dollar? The dollar is not convertible.

' the price of gold tends to move in opposite directions to the value of the US dollar.'

www.kitco.com/ind/Fraser/2013-11-11-How-the-Price-of-Gold-Reflects-the-Value-of-the-US-Dollar.html

As gold increases in value, the dollar decreases in value.
There are theories which say that the price of gold is being deliberately and artificially held low in order to maintain the dollar's value.

you are talking about changes in value.

But what makes you think that the US dollar's status as a reserve currency is affected by the price of gold?

' now-discredited Ukrainian President'

Sorry when you said "discredited", I thought that you meant Yats, but on re-reading , I see that you meant the elected President, Yanukovych

and what do you think that to free up gold for delivery means?

'But what makes you think that the US dollar's status as a reserve currency is affected by the price of gold?'

Because a reserve currency can only last as long as people have faith in it and accept it. If the gold price rises and the dollar collapses, then people holding dollar-based assets will lose much of their wealth.

''China's Official Press Agency Calls For New Reserve Currency, And New World Order''

China wants to hang on to its wealth and not be caught out by a collapse in the dollar. It wants a new stable reserve currency.

But I don't think that is in the interests of the US.

How can the circle be squared?

Yats has said they will find the traitors and "the earth will burn beneath their feet"

Will Yats square the circle?

what makes you think that the price of gold affects the US dollar's status as a reserve currency? (note that I am not asking the reverse)

Yes, Claig, the political culture in Ukraine is so much "it's my way or highway", the legacy of authoritarian oppression of the Russian Empire and the USSR. The Pro-western Ukrainians steered the ethnic revenge feelings of West Ukrainian nationalists, and it looks like it is backfiring now.

John Simpson called Ukraine on the BBC, "a can of warms" that is "now open".

I've seen Yats's verbatim on the Guardian site:
"I want to say above all...to the Ukrainian people: Let there be no doubt, the Ukrainian state will find all those ringleaders of separatism and division who now, under the cover of Russian troops, are trying to destroy Ukrainian independence,” “We will find all of them - if it takes one year, two years - and bring them to justice and try them in Ukrainian and international courts. The ground will burn beneath their feet.”

You would expect to hear that from Putin, or even Stalin. Imagine David Cameron saying that "above all" the state should track down political opponents so the ground will burn beneath their feet...

I suppose a nation that feels itself to have been violated is going to have strong feelings Sadly this is liable to cause resentment and escalation.

I think we agreed earlier that invading and occupying a neighbour is not a good way to win friends.

'You would expect to hear that from Putin, or even Stalin. Imagine David Cameron saying that "above all" the state should track down political opponents so the ground will burn beneath their feet...'

Exactly. the only reason that Yats, the former banker, can even think of talking like this is because the US backs him. Which means that this is serious and Yats has been given the green light to play tough.

'what makes you think that the price of gold affects the US dollar's status as a reserve currency?'

The price of gold affects the price of the dollar and the price of the dollar affects the world's confidence in the dollar as a reserve currency.

"Yet rarely before has international dissatisfaction with the dollar's role as reserve currency to the world been as great as it is now. The most visible anger comes from China, with more than $3 trillion of dollar foreign exchange reserves, $1.3 trillion of them held in US Treasuries. For ordinary Chinese, it has come as a revelation to discover they own so much American debt. That they own it in a country which because of political brinkmanship may actually default has provoked understandable fury.

"It is perhaps a good time for the befuddled world to start considering building a de-Americanised world", China's official government news agency has said.

A steady erosion of trust which began with the financial crisis five years ago has reached apparent breaking point with the pantomime antics on Capitol Hill. The search for long-term alternatives to the dollar is on as never before. Regrettably, there aren't any, or not for the time being in any case. Everyone can only look on in horror as the US commits apparent economic suicide."

www.telegraph.co.uk/finance/comment/jeremy-warner/10378666/The-sun-is-setting-on-dollar-supremacy-and-with-it-American-power.html

"'what makes you think that the price of gold affects the US dollar's status as a reserve currency?'

The price of gold affects the price of the dollar and the price of the dollar affects the world's confidence in the dollar as a reserve currency."

No, Claig,
The reverse is true.

Can you explain what you mean by "the reverse is true"?

It is very hard today to see what a Ukrainian nation is. The pro-Western politicians undermined this notion by steering West Ukrainian ultra nationalism with their Nazi leanings against ethnic Russians. The country is ethnically very diverse and intertwined by history, economy and family ties with Russia. Steering ethnic tensions drives a rift across families, towns and regions.

Instead of going to foreign capitals and talking tough how he will track down opponents, Yats should be reaching out to Russian minorities.

Instead of going to foreign capitals and talking tough how he will track down opponents, Yats should be reaching out to Russian minorities.

Very good point. I think the whole strategy with the neo-nazis in teh vanguard of the revolution was to alienate Russians and create a clash rather than conciliation.

It is very hard today to see what a Ukrainian nation is.

Ukraine only became an independent nation state in 1991

Putin said to George Bush

"At the 2008 NATO summit in Bucharest, Romania, Vladimir Putin told a surprised George W. Bush, "You have to understand, George, that Ukraine is not even a country. Part of its territory is in Eastern Europe and the greater part was given to us."

www.cnn.com/2014/03/03/opinion/stent-putin-ukraine-russia-endgame/