Magog Leader Making His Moves

Putin Readies For A Further Ukrainian Invasion

What you don’t hear about is the violence taking place – the murder and persecution going down. It doesn’t make for good headlines, so the press doesn’t bother. But the Conservative blogosphere will. One of the very best out there is Weasel Zippers who shows us this: Pro-Ukraine Group Surrounded And Attacked By Pro-Russians In Donetsk; Three Reportedly Killed:

Conform or die – it’s the Communist way. Donetsk is not in the Crimea, it is in East Ukraine, where Putin is getting ready to dance. It’s all foreplay for the invasion to come:

This video was shot after competing demonstrations from the opposing sides. A small group of pro-Ukranians was surrounded by the “pro-Russians” and attacked. The police had to come to their rescue to protect them. But the pro-Russians continued to pelt the pro-Ukrainians as well the police with everything from bats to chairs as they chanted “Russia!”.

At around 17:00. the “pro-Russians” break the police barricade and manage to stab and kill at least one man. There are reports of two others dead during the attack, but these reports have not as yet been confirmed.

Sovereignty, human rights, freedom… these are just words to Putin and mean nothing to him. He views the Ukraine as part of the Soviet Union. His storm troopers are still occupying the Crimean Peninsula. Now, an illegitimate referendum will be held Sunday, falsely touting the free choice of the people of Crimea to vote for joining the Russian Federation. No doubt, the vote will be rigged by Putin. It’s no choice at all really. Crimea has been annexed. It doesn’t matter that over 90% of the Ukraine voted for independence in 1991. It doesn’t matter that the invasion and the forced vote are illegal. What matters is Russian expansionism.

With the referendum vote this Sunday, Russia has amassed thousands and thousands of troops and heavy artillery along the Ukraine’s eastern border in at least three regions as of yesterday. Things are really heating up, while the world seems to be powerless, more or less, and is just watching the Russian bear getting ready to forcefully bring East Ukraine back into the Soviet fold.

 Russia has little to fear in regards to real retribution for their actions. No one did much when they took Georgia and no one will do much now. Russia has assessed that most countries and especially the US are weak – not only militarily, but economically. They just don’t have the means or the stomach to stop Russia from doing whatever the hell she wants right now.

Estonia has issued a warning that Russia is getting ready to invade East Ukraine. Russia warned that Ukraine’s government has lost control of the country, fueling concern the Kremlin may extend a military intervention. The Cold War is heating up.

Which brings us to banking. According to Zero Hedge, for the week ended March 12, Treasurys held in custody by the Fed dropped to $2.855 trillion: a drop of $104.5 billion. This was the biggest drop of Treasurys held by the Fed on record, i.e., foreigners were really busy selling. It is thought that China and/or Russia are dumping US Treasuries and the markets are very, very jittery. I wonder if this is the beginning of the big US currency dump? The next few weeks should be a wild ride. In Crimea, there has been a run on the banks. A bad situation there, is about to get a whole lot worse. It would also seem that Putin is cleansing his borders of troublesome foreigners, under the flimsiest of pretenses. He’s spring cleaning, before he expands.

August, 1914? Or The Rhineland, 1937?

The real problem with what Vladimir Putin is doing in Ukraine is that he may miscalculate and start a chain of events that no one can foresee the outcome. Russia is not only conducting artillery drills on the Ukraine border, it is massing troops and issuing warnings about "protecting" the Russian speaking population of eastern Ukraine.

Russia said on Friday it reserved the right to protect compatriots in eastern Ukraine after clashes in the city of Donetsk in which one person was killed.

The Foreign Ministry said Thursday's violence in the industrial city, where many people speak Russian, showed the Ukrainian authorities had lost control.

There it is in black and white - a ready made excuse for Putin to start carving up the rest of Ukraine after he annexes the Crimea. US Secretary of State John Kerry is in London meeting with Russiam FM Lavrov to try to head off Putin.

Would Ukraine fight to keep Russians from "protecting" people in their eastern provinces? Would there be civil war in Ukraine - another ready made excuse for Putin to move militarily. I don't see how, no matter what the odds against them militarily, that the Ukraine government can sit idly by while Putin carves out a chunk of their homeland. They would lose whatever legitimacy they possess if they allowed the dismemberment of their country. As for the possibility of civil war, the Kiev government has demonstrated a lot of forebearance in trying to keep order in some eastern cities. They may have to push back more aggressively so that civil order can be maintained, thus risking the kind of conflict that would start the Russian tanks rolling over the border.

It's all up to Putin. How cautious does he want to be? Whatever happens in London between Kerry and Lavrov won't matter at all, as the Russian president ponders the near future.

Talks In London To Defuse Crimea Crisis Reach 'No Common Vision', End With Impasse

An eleventh-hour U.S. effort to resolve the growing confrontation with Russia over Ukraine failed Friday, and Moscow shipped more troops and armor into the flash-point Crimea region ahead of a planned vote on breaking away from Ukraine and rejoining Russia.

Secretary of State John F. Kerry warned against a “backdoor annexation” by Russia of the strategic Black Sea peninsula. But Kerry conceded that six hours of talks here with Russia’s top diplomat neither stopped Sunday’s vote nor opened a new diplomatic path for Moscow to step back from the Cold War-tinged standoff.

The most significant U.S. and European sanctions against Russia since the collapse of the Soviet Union appeared all but certain.

“We don’t have a common vision of the situation,” Russian Foreign Minister Sergei Lavrov said after the crisis talks.

No agreements were reached, Lavrov told reporters. He stressed that Russia insists on Crimea’s right to hold the referendum. He said Russia would decide after the vote on how to respond.

When pressed about whether Russia would annex Crimea after the vote, he said, “There are no what-ifs in politics.”

Voters in Crimea will decide whether to secede from Ukraine and join Russia or remain part of Ukraine with greater autonomy.

Moscow’s tightening grip on Crimea and the gathering of Russian troops along the two countries’ border have unnerved Ukrainians and left the country’s fledgling government concerned about further Russian military action. Kerry said the United States was “deeply concerned” about those deployments.

The United States and other nations have been dangling a diplomatic solution for Russia, tacitly acknowledging that the referendum would produce a pro-Russia outcome while suggesting that Russia could avert further escalation by leaving Crimea’s precise status vague.

But Kerry said Lavrov had made it clear that Russian President Vladimir Putin was not prepared to take that step. Lavrov said Russia will “respect” the results of the plebiscite, and it was clear from Kerry’s tone that the United States fears full annexation.

“We did not find common ground today on the way ahead,” said a senior U.S. official who spoke on the condition of anonymity to describe the roughly six hours of intensive discussions Friday.

In Washington, President Obama stressed the continued need for “a strong message to Russia that it should not violate the integrity and sovereignty of its neighbor.”

The European Union is expected to impose travel bans and asset freezes Monday on Russians accused of complicity in Moscow’s military incursion and the intimidation of Crimea. The E.U. on Friday identified more than 120 individuals as potential sanctions targets.

The Russians Have Already Quietly Pulled Their Money From The West

Earlier today we reported that according to weekly Fed data, a record amount - some $105 billion - in Treasurys had been sold or simply reallocated (which for political reasons is the same thing) from the Fed's custody accounts, bringing the total amount of US paper held at the Fed to a level not seen since December 2012. 

While China was one of the culprits suggested to have withdrawn the near USD-equivalent paper, a far likelier candidate was Russia, which as is well-known, has had a modest falling out with the West in general, and its financial system in particular. Turns out what Russian official institutions may have done with their Treasurys (and we won't know for sure until June), it was merely the beginning. In fact, as the FT reports, in silent and not so silent preparations for what will be near-certain financial sanctions (which would include account freezes and asset confiscations following this Sunday's Crimean referendum) the snealy Russians, read oligarchs, have already pulled billions from banks in the west thereby essentially making the biggest western gambit - that of going after the wealth of Russia's 0.0001% - moot.

Russian companies are pulling billions out of western banks, fearful that any US sanctions over the Crimean crisis could lead to an asset freeze, according to bankers in Moscow.

Sberbank and VTB, Russia’s giant partly state-owned banks, as well as industrial companies, such as energy group Lukoil, are among those repatriating cash from western lenders with operations in the US. VTB has also cancelled a planned US investor summit next month, according to bankers.

The flight comes as last-ditch diplomatic talks between Russia’s foreign minister and the US secretary of state to resolve the tensions in Ukraine ended without an agreement.

Markets were nervous before Sunday’s Crimea referendum on secession from Ukraine. Traders and businesspeople fear this could spark western sanctions against Russia as early as Monday.

 What it will also do is force Russia to engage China far more actively in bilateral trade and ultimately to transact using either Rubles or Renminbi, and bypass the dollar. Perhaps even using gold, something which the price of the yellow metal sniffed out this week, pushing itself to 6 month highs. It will also make financial ties between the two commodity-rich nations even closer, while further alienating that "imperialist devil," the US.

So the bottom line is that Russia, thinking a few steps ahead, already has withdrawn the bulk of its assets from the West, and why not. Recall that a year ago it was revealed that the same Russians who were supposed to be punished in Cyprus had mostly withdrawn their fundsin advance of the bail in: they tend to know what is coming. It was the ordinary Cypriot citizens, who had done nothing wrong, who were most impaired.

And so while the Russian response is already known, we wonder just how true is the inverse: just how prepared is the west, and especially Europe, to exist in a world in which a third of Germany's gas is suddenly cut off? We can't wait to find out early next week.