Thursday, June 4, 2015

Ukraine: More War Preparations For Next Round, Global Bond Market Crash Begins

‘We Will Wage War': Ukraine's Right Sector Announces Mobilization

A leader of the Right Sector called on his fighters to prepare for war disregarding the Minsk agreements.
Right Sector fighters should cancel their vacations, and commanders should start full mobilization, one of the extremist group's leaders announced.
"I am addressing the fighters of the Ukrainian Volunteer Corps of the RS [Right Sector]. The enemy has renewed activities.
1.       Those on vacation or those who went home during the lull on the front must prepare to return to their combat units.
2.       The commanders of reserve battalions must restart full-scale mobilization and prepare people to go to their combat units or the Training Center.
3.       Those responsible for material support must intensify their work.
4.       We will wage war ignoring the truce devotees.

Everything for the war, everything for the Victory! We will defeat both the external and internal foes! Volunteers are the backbone of the Ukrainian nation, remember this. Glory to Ukraine!" — Andriy Stempitskiy's post reads.

The situation in Eastern Ukraine has significantly deteriorated in recent days, with Kiev forces intensifying the shelling of Donbass residential areas.

On Wednesday the Ukrainian General Staff admitted using heavy artillery prohibited by the Minsk agreements. The command of the self-proclaimed Donetsk People's Republic reported of 14 killed and 86 injured soldiersduring clashes with Ukrainian forces on the same day.

Petro Poroshenko's aide said earlier on Thursday that at least five Ukrainian servicemen were killed and 39 injured "during the last 24 hours".

The Right Sector is a voluntary paramilitary alliance of Ukrainian nationalists notorious for numerous atrocities such as the Odessa massacre on May 2, 2014.

Is the financial collapse that so many are expecting in the second half of 2015 already starting?  Many have believed that we would see bonds crash before the stock market crashes, and that is precisely what is happening right now.  Since mid-April, the yield on 10 year German bonds has shot up from 0.05 percent to 0.89 percent.  But much of that jump has come this week.  Just a couple of days ago, the yield on 10 year German bonds was sitting at just 0.54 percent.  And it isn’t just Germany – bond yields are going crazy all over Europe.  So far, it is being estimated that global investors have lost more than half a trillion dollars, and there is much more room for these bonds to fall.  In the end, the overall losses could be well into the trillions even before the stock market collapses.

I know that for most average Americans, talk about “bond yields” is rather boring.  But it is important to understand these things, because we could very well be looking at the beginning of the next great financial crisis.  The following is an excerpt from an article by Wolf Richter in which he details the unprecedented carnage that we have witnessed over the past few days…

What this means is that the central banks are losing control.
In particular, the European Central Bank has been trying very hard to force yields down, and now the exact opposite is happening.
This is very bad news for a global financial system that is absolutely teeming with red ink.  Since the last financial crisis, our planet has been on the greatest debt binge of all time.  If we are moving into a time of higher interest rates, that is going to cause enormous problems.  Unfortunately, CNBC says that is precisely where things are headed…

So why is this happening?
Why are bond yields going crazy?
According to the Wall Street Journal, financial regulators in Europe are blaming the ECB’s quantitative easing program…

And actually this is what should be happening.  When central banks start creating money out of thin air and pumping it into the markets, investors should rationally demand a higher return on their money.  This didn’t really happen when the Federal Reserve tried quantitative easing, so the Europeans thought that they might as well try to get away with it too.  Unfortunately for them, investors are starting to catch up with the scam.
So what happens next?
Well, European bond yields are probably going to keep heading higher over the coming weeks and months.  This will especially be true if the Greek crisis continues to escalate.  And unfortunately for Europe, that appears to be exactly what is happening
If Greece defaults and starts using another currency, the value of the euro is going to absolutely plummet and bond yields all over the continent are going to start heading into the stratosphere.
That is why it is so important to keep an eye on what is going on in Greece.
But no matter what happens in Greece, it appears that we are moving into a time when there will be higher interest rates around the world.  And since 505 trillion dollars in derivatives are directly tied to interest rate levels, that could lead to a financial unraveling unlike anything that we have ever seen before in the history of our planet.
As I have warned about so many times before, 2008 was just the warm up act.
The main event is still coming, and it is going to be extraordinarily painful.

On Friday Greece is due to pay at least a quarter of the €1.5bn due to the IMF in June. 

Most commentary still appears predicated on the idea that there will be some last-minute deal - either because the creditors will back down and give Greece some more money without requiring it to be paid back or because the Greek government will back down if it understands that not doing so would ultimately mean leaving the euro.
I, on the other hand, don’t believe either side is particularly interested in achieving a deal.

The Eurozone does not want to make any compromise with the current Greek government because:

(a) they don’t believe they need to because Greek threats to leave the euro are empty both because internal polling suggests Greeks don’t want to leave and because if they did leave that doesn’t really constitute any threat to the euro;

(b) because they (particularly perhaps Angela Merkel) believe that under enough pressure the Greek government might collapse and be replaced by a more cooperative government, as has happened repeatedly before in the Eurozone crisis including in Italy and Greece itself; and

(c) because any deal with Greece that is seen to involve or be presentable as any victory for the Greek government would threaten the political positions of governments in several Eurozone states including Spain, Portugal, Italy, Finland and perhaps even the Netherlands and Germany.

Furthermore, it’s not clear to me that the Eurozone creditors at this stage would have much interest in any deal based upon promises, regardless of how much the Greek had verbally surrendered.  Things have gone too far now for mere words to work.  They would need to see the Greeks deliver actions — tangible economic reforms and tangible, credible primary surplus targets and a sustainable change in the long-term political mood within Greece that meant other Eurozone states might eventually get their money back.  That is almost certainly not doable at all with the current Greek government.  The only deal possible would be with some replacement Greek government that had come in precisely on the basis that it did want to do a deal and did want to pay the creditors back.

On the Syriza side, I see no more appetite for a deal.  They believe that austerity has been ruinous for the lives of Greeks and that decades more austerity would mean decades more Greek economic misery.  From their point of view, default or even exit from the euro, even if economically painful in the short term, would be better than continuing with austerity now.  The only kind of deal they could countenance would be one in which creditors accepted that austerity must end and much of the monies lent are never coming back.

The past 24 hours have seen an alleged “Take-it-or-leave-it” proposal from the Eurozone, which reports indicate appears to involve no debt relief at all, no material change in the demands for economic reforms, and primary surpluses of 1% in 2015, 2% in 2016, 3% in 2017, and 3.5% thereafter.  Since the Greek economy has deteriorated further through 2015 with the political turmoil, a 1% target might be difficult to meet and at this stage is no kind of “compromise”, whilst the 3.5% longer-term target continues to reflect the narrative of placing the Greeks in a position to repay their debts, which the Greek government refuses to accept.  It is hard to see how Syriza could accept that without collapsing.  If it really is “take-it-or-leave-it” then if Syriza wants to contemplate it at all that might mean a referendum – which would presumably lead to a rejection.  I suspect they will simply start the defaulting on Friday by not paying the IMF.

Okay, so let's put on our thinking caps and try real hard to concentrate for just a second or two and consider the (probably very significant) relationship between two points...

1. The NSA needs to "protect our freedom and liberty" by gathering information on the citizens of the United States on a scale and at a level that is unprecedented in all of human history and would make the KGB and Gestapo weep with envy. (See also: So the American State has to destroy our freedom in order to protect it? Oh yeah, that makes sense.)

2. The Pagan Right and Pagan Left leaders puppets atop our contrived, controlled system of political theater are both obsessed with power and, more often than not, have some rather remarkable skeletons lurking in their closets. (See also: Privacy is for masters. Transparency is for slaves. Welcome to "the land of the free" and the home of the NSA.)

So what could go wrong with this combo, right?

I mean, if the American State is now openly in the business of slurping up pretty much every bit of info that it can on every "free," "private" citizen in the land (all for their own good, of course), and in that process The State manages to acquire all of the most delicious, damaging, and incriminating info on the political puppets central to its mirage of representative government, then how much easier has NSA-style "data acquisition" made it for the Almighty American State to keep potentially anti-Statist politicians from even thinking about opposing the Statist agenda in a meaningful manner?

This is how Statism shifts into a higher gear. This is how Statism moves into a faster mode of growth and a more complete level of control. All in the name of "protecting freedom" and "liberty" for all, of course.

This is what it looks like when Americans worship and promote the American State as their god in practice.
This is the hell that builds when proud Americans refuse to bend their knees in broken repentance and submit to Christ as King in practice.
May God grace the people of this land that brokenness and repentance of past and present America idolatry so that we might shatter the shackles of American Statism while there is still time, and submit to Christ as King in practice, all by His grace, all for His glory, and all to our eternal benefit. (See also: Roaring into Post-America Christianity.)

Also see:


Mrs.C said...

Breaking News -
"US officials: Massive breach of federal personnel data"

The Associated Press has learned that the Obama administration is scrambling to assess the impact of a massive data breach involving the agency that handles security clearances and employee records.
A congressional aide familiar with the situation, who declined to be named because he was not authorized to discuss it, says the Office of Personnel Management and the Interior Department were hacked. A second U.S. official who also declined to be identified said the data breach could potentially affect every federal agency.
The White House was considering a public announcement of the breach Thursday night or Friday morning, the second official said.
The Office of Personnel Management is the human resources department for the federal government, and issues SECURITY CLEARANCES.

Scott said...

Goodness....what next.....sigh