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.

[PigletJohn]

"The reverse is true."

I mean that loss of confidence in the dollar as a reserve currency drives down its value. Correspondingly, the value of gold (which is priced in dollars) tends to rise.

You spoke of the mechanism working the other way round, which is not correct.

[claig]

'I mean that loss of confidence in the dollar as a reserve currency drives down its value.'

The dollar is just like the pound. If there are bad export figures, bad employment figure, bad productivity figures and higher inflation then the value of the dollar falls. That fall is not caused by its reserve currency status.

[PigletJohn]

The dollars value is affected by confidence in it as a reserve currency. It most certainly is.

In that respect it has an extra complication that is unlike all the other currencies which are not reserve currencies, including the pound.

It is not the status as a reserve currency that causes the fall in value. It is the loss of confidence that causes the fall in value.

[claig]

I think lots of these things are inter-related.

But when war breaks out, gold often rises and is seen as a safe haven and currencies such as the pound, the Euro and the dollar often fall due to the uncertainty.

[mathanxiety]

How has Yanukovich been discredited ?

As far as I am aware, his election has not been overturned in any court, and his government was recognised by the international community up until Yats & his mob muscled their way into power.

In fact, the EU was negotiating financial deals and political ties with his government, as was Russia, while in the streets the mob was baying for whatever various aims the mob had.

[TheresAHedgehogInMyPocket]

Marking place

[PigletJohn]

it is denied that Putin has overseas investments

"The latest round of U.S. sanctions also targeted Bank Rossia, which serves as a bank for senior Russian officials, and its largest shareholder, Yury Kovalchuk.

"Everyone knows that it's Putin's bank. Therefore it's a sign, a move in psychological warfare, like they're telling him: 'We know everything you're doing'," an unidentified head of a leading Russian financial institution said, the Financial Times reported."

[GarlicMarchHare]

I really need to mark this thread.

[DoctorTwo]

Note they haven't applied sanctions to the oligarchs. They won't either, they can't risk them taking their money back to Russia.

[noddyholder]

this looks like Putin means business and is steaming ahead with a view to making any reliance on the west a thing of the past

[mathanxiety]

It will be interesting all right to see what happens when America can no longer settle its bills in dollars.

[mathanxiety]

Monetisation of debt and gold. To harken back to the issue of gold and the dollar's precarious position, which seems to be about to come under even more pressure (see Noddyholder's link).

[DoctorTwo]

math, that bloke is surprised the price of gold is 'so high'. He should be questioning why it's so low. It's low for a couple of reasons: every time the price goes over about $1350 per oz the Fed release a couple of tonnes of gold futures to depress the price. Also, the twice daily price fix in London. Also, any actual gold that is released is being bought by China, who are also the largest miners of gold.

As for the Petrodollar, imo it's had it. The BRICS countries will do deals based on their own currencies. When this happens Saudi Arabia will arrange deals with China based on the Yuan/Renmimbi, don't forget they're at odds with the US over Syria. China will probably back their currency with their gold and render the dollar obsolete.

Having said that, the dollar is still fucked, as is the pound. The central banks have weakened them by too much QE. Stock markets and western currencies are going to plummet, and all in the name of profit.

I was watching a chap on tv this morning who advised his clients to put half their investments in gold (in 2002, when gold was at about $350). Most of them ignored him but those who didn't are looking at massive profits. Plus, gold and Bitcoin are where the clever money is going, they know that both are finite and cannot ultimately be fixed, they will find their true level. My opinion is that they will both go up massively in the next year with shares and FIAT currencies tanking.

[mathanxiety]

Yes they definitely manipulate it. And China is stockpiling gold. I think I linked another article upthread about manipulation of gold prices.

It's an irrational game really manipulation that keeps the price low makes buying it a good idea. But ultimately

'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.'

From www.foreignpolicyjournal.com/2014/01/31/why-is-the-fed-tapering/

[mathanxiety]

Following the 1953 death of Stalin, one of the leaders jockeying for position as First Secretary of the Communist Party of the Soviet Union (which consisted of 15 socialist republics including Russia and has 15 successor states including Russia) was Nikita Khrushchev. (He had spent most of his early political career in Ukraine, though he was born in a tiny village that is now in Russia and was ethnically Russian).

His position was solid by 1956 when he gave the secret speech denouncing Stalin. By summer 1953 he and Malenkov had already removed Beria and later had him bumped off, but Khrushchev was also operating against Malenkov, his main opponent with a claim to the First Secretary job. His star was definitely rising and he was appointed First Secretary in September 1953.

It is surmised that he gave away Crimea (which had been in the modern period the Crimean Khanate and then since 1783 an imperial Russian territory and then part of the USSR) in the context of the power struggle that still lingered as long as Malenkov retained vestiges of power (until late 1954 and early 1955), to smoke out individuals still hostile to him and to gauge loyalty by sticking his nose out over Crimea. Or he may have needed support from his Ukrainian allies while engaged in the power struggle and it may have been a payback. Crimea was very much a plum spot to have control over -- nice weather and resorts available for patronage style politics.

Khrushchev had always had a plan to replace the Tatar population removed during WW2 with Slavs (this ethnic change was already under way in the 1930s but removal of the Tatars inspired bigger plans). He had a gleam in his eye about expanding Ukraine and it didn't hurt him politically to appear to be distributing largesse or to appear to be distancing himself from Stalin's policy of keeping a tight grip on every single part of the USSR or other aspects of Stalin's days in power that Khrushchev had been involved in up to his elbows (purges). So when his chance came, he used the 300th anniversary of the merger of Ukraine with imperial Russia as the occasion to make the gesture of giving Crimea to Ukraine. Nobody really knows for certain what was going on in Khrushchev's mind however; there are allegations that the whole business was debated and voted upon in about 15 minutes of a meeting in 1954 and that Khrushchev had given the impression that it was pretty much a whim of his.

Officially the proclamation of January 1954 stated it was a "Decree of the Presidium of the USSR Supreme Soviet transferring Crimea Province from the Russian Republic to the Ukraine Republic, taking into account the integral character of the economy, the territorial proximity and the close economic ties between Crimea Province and the Ukraine Republic, and approving the joint presentation of the Presidium of the Russian Republic Supreme Soviet and the Presidium of the Ukraine Republic Supreme Soviet on the transfer of Crimea Province from the Russian Republic to the Ukraine Republic."

[Hopefulgoat]

A welcome news that the Ukrainian government has finally decided to withdraw the military and their families from Crimea.

The Officials in Kiev have been postured for the media, "we will never surrender", while the soldiers and their families in Crimea have been lingering in limbo awaiting instructions from Kiev. The conscript soldiers could simply go home with the money given by the Russians, but the officers who wanted to continue to serve in Ukrainian military had families in Crimea and in Ukraine. They couldn't be seen abandoning their posts, while clearly were unwilling to put the lives of their soldiers at risk. They needed a political signal from Kiev as to what they were expected to do.

I think it is disgraceful that the government left them in limbo for so long in the hope the conflict would create casualties they could talk to media about.

They talk about "European values", but treat their people as disposable.

[mathanxiety]

Edward Snowden is the gift that keeps on giving.

[mathanxiety]

Curiouser and curiouser. Maybe both Ukraine and Russia had a hand in this? Bumping off far right figures who were up to a few weeks ago welcome to rub shoulders with 'democrats' in public squares unmolested by anyone is not a recipe for stability. Pinning this on Russia makes Ukraine look both inept and ultimately supportive of the far right ('we don't like them but they're ours'). Claiming they did this on their own would make a bitter enemy of the right. Claiming it was a joint exercise makes Obama look foolish as he keeps on trying to underscore the vast differences he believes exist between Ukraine and Russia, and makes his claim that Ukraine's leaders have democratic values look a bit silly.

Also interesting in that article is the detail that 'a senior Ukrainian armed forces officer, Oleksandr Rozmaznin, was quoted as saying nearly half of the Ukrainian military staff based in Crimea had opted to stay there and some of them were joining the Russian military.'

[Hopefulgoat]

Ukraine's leaders have democratic values

RT is broadcasting a Youtube tape of Timoshenko phone conversation (she admitted the call) where she wows to burn all the 8 million Russians in Eastern Ukraine in a nuclear fire...

This would be funny if she wasn't actually an ex-prime minister and a lead presidential candidate. Yats is from the same party...

[PigletJohn]

I wonder which country will be next to experience a Russian military invasion.

[DoctorTwo]

Maybe Iraq, Afghanistan, or any other country deemed to be unAmerican undemocratic. Russia hasn't invaded anyone. They have a deal to have troops stationed in Crimea.

RT have broadcast a video of Muzychko predicting his own death. He thought he'd be arrested and turned over to Russian special forces who would then kill him. How serendipitous it is that he was killed by Ukrainian police.

[mathanxiety]

Chicken coming home to roost.

The impact on the American consumer with an election season about a year away will factor into any decision too. There is potential for serious political fallout in the US if prices of electricity, gas and petrol rise, on top of the exposure of American allies in Europe to issues in gas and oil supply and prices as a result of this huge mistake of America's.

[PigletJohn]

Come now, DoctorTwo, you know that isn't true.