We Didn’t Leave…You Kicked Us Out!

We learned on Thursday about two very separate trips to be made on Friday.  Germany’s Angela Merkel and France’s Francois Hollande made a trek to Moscow which turned out to be a five hour meeting, while John Kerry flew into Kiev.  What were these meetings about?  Very little has been reported.

What were the goals and what was accomplished?  Presumably Mr. Kerry offered arms and assistance to Ukraine because other than “dollars”, we have nothing else to offer.  The meeting in Moscow was not so simple.  Do Germany and France see the writing on the wall?  Did they make deals with Russia regarding natural gas and the delivery logistics?  Trade?  Did they pledge to stay neutral and hope Russia did not look towards them when the real fighting begins?  Were currencies discussed?  Maybe even new ones?  Did they put distance between themselves and NATO so as to escape the Russian cross-hairs?  Lots of questions and as of yet, few answers but apparently some sort of press conference for Monday and another meeting this Wednesday.   I will add one more thought, when the heads of state meet with little to no press coverage and then followed by no statement of the results with any meat on the bone whatsoever, something REALLY big was discussed!  Make no mistake, this is not about a single country, nor countries plural.  They know this is entirely about “systems” themselves and whether they can work in harmony or not work at all.

We do know one thing for sure, Russia has mobilized her ICBM rocket launchers and will begin full scale war games.  Are these only games or are they making ready for the real thing?  I would suggest if the U.S. does in fact rearm Ukraine, these may not be “games” any more, Russia will finally retaliate.  Another possibility is that of “discovery”.  As I understand it, there are now some foreign “boots on the ground”.  Ukrainian forces are surrounded in Mariupol , it looks like they will soon to be captured or killed.  What if it turns out some of these boots are of the type “made in USA”?  We have already seen one video clip of an American combatant in Ukraine, how many more are there?  This would be very bad and would give Mr. Putin a good and verifiable reason to escalate the shoving match into a hot war.  In my opinion, Mr. Putin will not attack unless provoked directly, I believe he will just sit back and wait.  In my opinion, he would prefer to wait until “the money runs out” which I will explain further shortly.

On the financial side, last week was all about Greece.  First, they were given an ultimatum and a line in the sand drawn for the end of February to “accept financial aid” from the West, presumably the IMF and ECB.  On Friday, this ultimatum was fast forwarded and cut to only 10 days …or else!  They have a debt payment due at the beginning of March and do not have the money.  Simply put, they are broke.  More elegantly but no less to the point, Yanis Varoufakis, Greece’s new finance minister said of the Eurozone and I quote “A clueless political personnel, in denial of the systemic nature of the crisis, is pursuing policies akin to carpet bombing the economy of proud European nations in order to save them”.  Do you see exactly what he is saying?  This is not about Greece, it’s not even about the Eurozone, this is about the systemic failure of the West’s policies and financial system.  I want to move along but this aspect of “systemic failure” will be tomorrow’s topic and why the West cannot in any fashion call a spade a spade.

So Greece now has an ultimatum of 10 days, accept the terms of the Eurozone …or get out.  Greece doesn’t even need to request departure, the powers that be seem to be threatening to kick them out!  Let me point out another Western financial failure and one which will be “dis connected” in the future.  Ukraine now has two, possibly three weeks’ worth of cash left.  They also owe Russia several billion dollars for gas already delivered and used.  Mr. Putin knows this and as I said earlier, is just sitting back and waiting for the money to run out …or for them to “accept” aide from the West.  Both of these NATO countries are broke and unfortunately at the same time which obviously turns up the heat further in rather inconvenient fashion.

Just so you didn’t miss my pun above, Russia is clearly “disconnecting” Ukraine.  Russia has already begun very seriously to divert gas shipments that were going through the Ukraine.  Russia was not being paid and some of her gas to Europe was being stolen, thus, turn off the spigot.  Geo-politically, Russia has already made a pipeline deal with Turkey which will end …you guessed it, at the Greek border!  Think this one through, Russia has already offered assistance to Greece …while Greece is being pressured by Europe to go further into debt.  Don’t you think it might be in Greece’s best interest to “do a deal” with Russia?

What might any deal look like with Russia and thus out from under the Eurozone and NATO?  How about “connecting” to the Turkish pipeline for starters and running it through Greece to arrive in eastern Europe?  The Russians (Chinese) could finance the deal, Greece would then earn gas transit cash flows.  A pipeline would also create jobs and economic activity.  Greece would also be free to trade with Russia, their farmers could ship crops to Russia without being under the current ridiculous embargoes and sanctions, again good for the Greek economy!  One last benefit might be “debt relief”.  Not that the West will forgive what the Greeks owe (because they cannot, I’ll include this in tomorrow’s piece), the Greeks can simply say “we are not paying you” …

You see, this is what will surely happen, the Greeks will not pay and the debt will default.  First, they do not have the ability to pay, they are well and truly broke.  Second, what is the solution of the West?  Take on more debt “so you can pay us”?  The alternative?  Let Russia finance a pipeline deal through the country which provides jobs and badly needed revenue while helping the export sector, which one would you choose?

Before finishing I’d like to also mention another NATO country in this mix, Turkey.  They have already agreed to build a pipeline through to Europe.  They are also another financially strapped country and their currency just imploded this past week.  Their lira collapsed 30% in just one day.  They are not in as poor a state as Ukraine or Greece but they are on their way …and (for now) a member of NATO.  Do you see where this is going?  NATO, the Eurozone, “the West” is being chipped away at one by one.  The weakest sisters are all going to fall and when they do, they will land in Russia’s lap!

All of these war drums are being beaten with financial drumsticks.  It is all about “money” so to speak.  It is all about the financial system of the West remaining in power while the financial system of the East is rising.  Mr. Putin, China and the East merely have to sit back and wait, similar to a grand “Waterloo” where the weather sets in.  In this case, the “weather” is simply debt service, the inabilities to pay it and how interest crowds out real economic activity.  Both Greece and Ukraine are dying on the vine simultaneously, they are very public and visible signs of the West’s failing financial system.  Neither can fail, neither can “switch sides” and land in Russian arms ‘lest the rest of the world see the West’s fatal financial flaw.  You see, Greece and Ukraine are no different financially from the rest of the Eurozone or even the U.S. itself, they are just further along debtors curve.  Neither of these countries can fail economically because NO Western spade can EVER be called a spade …tomorrow’s topic.

To finish, I would like to give you my opinion as a lead up to my writing for tomorrow.  I believe we will soon have a regional war in Ukraine which goes global very quickly.  The obvious question is “why”.  Why, if Mr. Putin has so far absorbed each slap and not made any aggressive moves?  Why, when little over a year ago, Russia temporarily diffused the Syrian situation so skillfully?  The answer is simple and right in front of our faces, the West is broke!  The Western financial system is already broke and this fact will soon be exposed… one way or the other.  The “exposure” will include the fact that anything and everything not nailed down has already been stolen, collateralized and used to keep the game going.  The theft cannot be exposed …so what better way of hiding it than to start a war?  What better way of being able to say “our policies would have worked if it weren’t for the war”.  War will be “used”, it will be blamed for the mathematically certain financial collapse that is coming!

********

The above was written Saturday, since then we have had several news items moving this along.  France has moved toward Russia, Germany and the U.S. are in disagreement in regards to arming Ukraine, Cyprus offered Russia the use of a military base and Greece has refused further “aid” in the ultimatum form of more debt.  All very big stuff which points toward reality being uncovered.  Sunset for hegemony?