Thursday, August 20, 2015

Analysis Of Latest Surge Of Violence In Ukraine, Putin Warns Hostile States Plotting 'Sabotage' In Crimea, NATO Warns Pro-Russian Rebels

If you haven't noticed, the Ukraine is once again escalating towards war. The first article below is one of the most balanced, comprehensive articles you will find on the topic. The full article is worth reading, below is the streamlined version:

The past 10 days have witnessed a significant escalation of violence all along the line of contact (LOC) between the Ukrainian armed forces (UAF) and combined Russian-separatist forces in eastern Ukraine. What follows are four initial observations about the increased fighting, and then my take on what accounts for it.

The ceasefire has broken down over the past several days, and several civilians were killed by separatist fire in the nearby village of Sartana, but to my knowledge neither side has reentered Shyrokyne or otherwise taken additional territory. 

Most of the fighting is still in the Donetsk/Horlivka suburbs.
While fighting has ramped up along much of the LOC (see Map 1 above), most of the violence continues to be concentrated to the west and north of Donetsk and Horlivka (see Map 2 below).

Both sides appear to be exaggerating the extent of mobilization by the other.

The UAF has argued that there are now some 9,000 Russian regular troops and 33,000 separatist irregulars in eastern Ukraine, and that these combined forces are equipped with some 400 main battle tanks, 2,000 armored personnel carriers, and a great deal of artillery and multiple launch rocket systems (MLRS). 
They also claim that there are now some 50,000 Russian regulars in Russia near the Ukrainian border, and that an open attack by Russia on Ukrainian forces is likely. Unsurprisingly, the separatists and much of Russian media claim the opposite — that the UAF is massing forces and preparing to launch a large offensive. I have not, however, seen nearly as much evidence of major troop concentrations by either side as I did before the introduction of Russian regulars last summer or before the Debaltseve battle. 
Nor have NATO or other Western intelligence sources confirmed Kyiv’s claims about the number of Russian regulars on Ukrainian territory, the number of tanks in the DPR/LPR, or the scale of Russia’s buildup near the border. 
While I am by no means sure of this, the impression is that Western intelligence services have concluded that most, if not all, Russian regular military units withdrew from Ukrainian territory after Debaltseve, and that the Russian regulars still in eastern Ukraine are fighting alongside irregulars or are serving as advisers, trainers, technicians, and perhaps intelligence officers. 
It is of course possible that one or both sides have succeeded in concealing major troop movements in the conflict zone, but I doubt that is really possible given how many local civilians have digital cameras and internet access — stuff shows up on the internet, as was the case in the lead up to the Russian surge last summer and again during the assault on Debaltseve. Accordingly, my guess is that both sides are exaggerating the extent of military mobilization by their adversaries.

So what to make of all this? It strikes me that there are at least four possibilities.

1. The separatists are deliberately ratcheting up the fighting without orders from Moscow. The separatists are of course dependent on Moscow for support, but in the absence of a unified chain of command, individual commanders operate relatively independently and doubtless sometimes against Moscow’s wishes. 
2. Moscow is deliberately ratcheting up the fighting. If so, I doubt that the result will be an offensive directed at taking significant additional territory that includes a major urban area. To put the argument I’ve made in earlier posts briefly, I assume that Moscow realizes that taking additional territory will only make Russia’s strategic problems worse, not better, particularly its NATO problem. 

3. Kiev is deliberately ratcheting up the fighting. If Kiev is responsible for the increased violence, then the most likely objective of the move would be to get the West focused once again on the conflict and thereby increase the likelihood that Ukraine will get additional Western military and economic assistance (particularly help on debt relief). 

4. The escalation is not being provoked by either party but is instead the result of local security-dilemma problems. In this case, the surge in violence would be the product of the conviction by both parties that their adversary is not genuinely interested in a ceasefire and instead is preparing to attack. 
These four possibilities are not exclusive; indeed, all four are probably at work to one degree or another.

Accordingly, Putin may well conclude at some point that Russia has been backed into a corner and that he needs to do something dramatic in response. One option would be to try to do to Ukraine what NATO did to Serbia in 1999, which is to bomb it into submission.
Or he might make some dramatic move elsewhere, like provoke a crisis with NATO in the eastern Baltic that falls short of war but scares the pants off Westerners.
And there is also a risk that, given the current atmosphere, some kind of accident — an aviation disaster or a Kursk-style submarine incident (see, for example, the article by Alexander Goltz here) — spirals out of control.
I don’t think it will come to that. But I repeat what I have been arguing since I started this blog last year: A low-probability event with catastrophic consequences is worth worrying about. Best not to sleepwalk into disaster.

 Russian President Vladimir Putin suggested Wednesday that several foreign states were recruiting and training people to carry out acts of sabotage on the Crimean peninsula seized by Moscow last year.
"It's obvious that a risk remains from outside forces to destabilise the situation on the peninsula in one way or another," Putin told a meeting on regional security in Crimea's naval port city of Sevastopol, quoted by RIA Novosti state news agency.
Putin is on his third visit to Crimea since he ordered out thousands of special forces troops to take control of the peninsula from Ukraine in March last year.
"In certain capitals, they talk openly about this, they talk about the need to carry out subversive activities," Putin warned his security council of ministers and top officials .
"Such structures are being formed, personnel are being recruited and trained to carry out subversion, acts of sabotage to conduct radical propaganda," he said, without specifying any countries.
Putin warned that foreign powers could "play the nationalist card" or manipulate public anger at "ineffective action by the authorities" into "a destructive channel".

NATO on Wednesday warned pro-Russian separatists against grabbing more land in eastern Ukraine and stressed Moscow has a "special responsibility" to help restore peace as fighting escalates.


It said the members of the 28-nation, US-led alliance expressed "their serious concern about the recent sharp escalation of violence" when they met in Brussels.
"Russia has a special responsibility to find a political solution," NATO acting spokeswoman Carmen Romero said in a statement.

"Any attempt by the Russian-backed separatists to take over more of Ukraine's territory would be unacceptable to the international community," she said.
"NATO stands firm in our support for Ukraine's sovereignty and territorial integrity," it said. 
It renewed its support for "an independent, sovereign and stable Ukraine" that will pursue the path of democracy as the best way to ensure security in the Euro-Atlantic area.
The Western-backed Kiev government and the insurgents on Monday reported the deaths of at lest 10 soldiers and civilians, the worst bloodshed in more than a month.
The fighting has stirred the highest tensions since the Cold War ended more than two decades ago as the West accuses Russia of not only arming the rebels but sending in troops to support them. Moscow denies the charges.

Last year, when alternative economic analysts were warning that the commodities crush and oil crash just after the taper of QE3 were blaring signals for a downshift in all other financial indicators, the general response in the mainstream was that we were overreacting and paranoid and that the commodities jolt was temporary. Perhaps the fact needs repeating that it’s not paranoia if they are really out to get you.
Only a short time later, it is truly amazing how the rhetoric from the mainstream economic yes-men is changing. The blind analysts who were cheerleading for the nonexistent global recovery are now being carefully relegated to the janitor’s closet over at The New York Times, where Paul Krugman’s office should be. Media outlets are begrudgingly admitting to global instabilities like, for instance, a U.S. interest rate hike leading to a return to recession. (Special note to the mainstream media: Take away the fruitless manipulation of indicators through Fed stimulus, and we never left the recession.) They also are now forced to acknowledge that China’s market crash and yuan devaluation have far-reaching implications for global crisis, whereas a year ago the claim was that China’s problems would stay in China. Even China’s own media are now warning of the chain of fiscally interdependent economies and what the nation’s downturn means for everyone.
The MSM are finally entertaining the obvious notion that the vast financial problems of the EU have little to do with the crisis in Greece and more to do with crushing debt obligations and employment problems in primary nations like France and Italy.
And suddenly, pundits are once again concerned with Japan’s epidemic of mini-recessions and the truth of fiscal contraction that is not just a way of life, but an exponential dynamic that is getting worse fast, rather than staying static. This concern is, of course, always followed with suggestions that the light can be seen at the end of the tunnel and that growth will inevitably return. The mainstream media may be discussing points of reality, but that does not stop them at times from mixing in fairy tales.

This alteration in rhetoric from the mainstream may not necessarily be due to an awakening in the media. Rather, it may be due to the new narratives being put forth by core banking elite institutions like the International Monetary Fund and the Bank of International Settlements, institutions that have established a mission to appear competent in the wake of an economic crisis they KNOW is about to be triggered. The IMF is consistently making statements regarding potential disaster in global markets due to central banking stimulus measures (which it originally championed), as well as potential rate hikes, sending mixed messages to devout mainstream followers. The IMF’s latest overviews of global markets have been far gloomier than mainstream media outlets until recently. Suddenly, it would seem, the media has been given direction to parrot internationalist talking points.
The BIS warns that the world is currently defenseless against the next market crisis. 

 I would point out that the BIS has a record of predicting economic crashes, including back in 2007 just before the derivatives and credit crisis began. This ability to foresee fiscal disasters is far more likely due to the fact that the BIS is the dominant force in global central banking and is the cause of crisis, rather than merely a predictor of crisis. That is to say, it is easy to predict disasters you yourself are about to initiate.

The change in the MSM narrative is a bad sign. The initial media coverage of the derivatives implosion in 2008 did not become negative until we were well within the shadow of the avalanche. If the same holds true today, then a market event is imminent. Here are some of the issues you may hear more about as the year goes forward.

In the meantime, the IMF’s SDR conference continues, with the inclusion of the yuan now widely considered a threat to the dollar’s world-reserve status.
The mainstream media are now preparing the American people (or at least those who are paying any attention) for the coming loss of world-reserve status. The propaganda aims to paint the dollar’s reserve position as a bad thing. The MSM argue that loss of reserve status could actually help the U.S. economy get back on track and that a global harmonization of sovereign currencies will be a boost to our fiscal outlook. This is clearly an attempt to inoculate the public against any concern over the eventual crash of dollar value.

Economic news is moving extremely fast this year, and it will only become more frenetic as we close in on 2016. The general consensus among alternative economic investigators seems to be that 2015 will be the year for trigger events and dead fantasies. In my six part series entitled ‘One Last Look At The Real Economy Before It Implodes’ I essentially agree with this timetable. If 2014 was the new 2007 with all its immediate warning signs, then 2015 is the new 2008 with all the chaos and broken paradigms.

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