Miles Report No. 38 - Ukraine

Allow me to start with a media lie, or perhaps in the jargon of parliament it was a ‘mis-statement’ or perhaps the speaker ‘misspoke’ or evaded the truth. However, in common language, in plebeian street language, it was a lie.

Rosemary Barton, while hosting Power and Politics (Monday, March 17, 2014) introduced the Crimea referendum by announcing the statistical results and then adding as commentary that there was “no other choice on the ballot.” The impression, especially for anyone who is largely ignorant of Crimean-Ukrainian-Russian history, would spin it such that the bad guy Russians only allowed one item to vote on.

Unfortunately for Ms Barton, who probably knew better, and decided to display wilful ignorance, the other question asked if the voter wished to remain with the status quo. That status, as determined by a 1992 agreement was that Crimea would be an autonomous region within the Ukraine, the Russians could keep their historical port of Sevastopol (founded by Empress Catherine II in 1783, and in and of itself a further autonomous region within Crimea), and could keep the military establishment there.

As I indicated in a previous report, in 1994 Crimea declared independence, the Ukraine denied it (Russia at the time was much too weakened to respond in any fashion) but the vote went ahead anyway, with about an 80 per cent agreement for independence. All this would indicate that perhaps, while the truth evades Ms Barton and many other western political pundits ( I include standard politicians among that group) the reality is that, yes, a fair and overwhelming vote for independence was given by the people of Crimea - as had occurred twenty years earlier. Even earlier, it was Krushchev who gave the eastern portion and the Crimea to the Ukraine, hoping to water down the still latent naziism that survived World War 2 in western Ukraine.

Following the scroll on Power and Politics it was obvious that today’s pundits were not within the general consensus of comments. Easily half the comments supported the vote - as a rough estimate I would put it at three out of five supporting the vote. The three pundits representing the three main political parties all gave the same message and all appeared to be wilfully ignorant of the background issues and the history of the region.

Canada’s parliamentary perspective

From the verbiage coming from the Canadian parliament, Canada may as well be the fifty-first state of the union. The main message concerned the illegality of the vote, which the considerations listed above do not support, followed by the “sanctions” that will be imposed by Canada.

Let’s see, perhaps we can sanction oil and gas? No, hmmm, they already have more than enough of that. Okay, how about wheat…? Well, no, they grow most of their own. Got it!! We’ll sanction the elite and their money holdings! Presto!

And then we’ll support the EU and the US as they do the same. So maybe thirty or forty people within the power circles of the Kremlin will face travel restrictions and some bank accounts possibly being frozen along with perhaps some property placed under lien somewhere. Brilliant - I can hear the Russians quaking in their boots!

Of course all of this is a knee jerk reaction based on neither the reality of Crimean/Russian history, nor on the current state of global economics. It was interesting to go to CNN and FOX news on the internet where Canada is not even mentioned - face it, we are a third rate power with megalomaniac impulses to strut our ‘chicken hawk’ power on the international stage, where we are generally ignored. I must hand it to the pundits that they generally recognized that sanctions are essentially a slap on the wrist, pretty much the stroke of a feather. Canada has no sway in this section of the world and I would argue that the pundits are mainly looking out for the Ukrainian vote in Canada.

Other actions could include expulsion from the G7(8), support of the EU sanctions, and as addressed hopefully by the pundits - negotiation. First of all rest assured that Russia is not too terribly concerned about the G7, a small group of western countries that do their best to monopolize global monetary and corporate policy. Fortunately they have been over-stepped by the G20 - and with China, India, Brazil, and South Africa as members (four of the five BRICS) takes a much different alignment than the G7. As for the hoped for negotiation, that was non-starter from the beginning of U.S. covert actions designed to topple the legitimately elected government.

Sure it was a corrupt government, but so are many other governments that support the U.S. line, including the U.S. government itself. There were to be elections held next year - the ensuing year would be the time for negotiations. Canada’s main role with perceived trouble spots under the Harper government has been to recall embassy staff - a great way to negotiate.

In sum, Canada has no weight, oversized pretensions, and a compliant media and parliament within the outlines of U.S. foreign policy. If Rob Anders wishes to use military force, perhaps he should put his chicken feathers away, grab some Canada Tire duck hunter camouflage and join the Ukrainian skinhead forces.

The “rest of the world”

During the early days of the Ukrainian coup the CBC referred to Russia in isolation and then “the rest of the world.” This was quite hilarious coming from Peter Mansbridge who obviously was using his well prepared wilful ignorance to make the assumption that the rest of the world was against Russia. Today the comments were more guarded referring to the “western nations”, the EU, NATO and other organizations that are already within U.S. hegemony anyway. One of the pundits argued that we need to keep pressure up and hopefully bring China onside. Really? Sure China has border and regional issues, but they are not going to stop acting in their own best interests just because Canada and other U.S. puppets want their support.

All this of course is to “change the behaviour of the Kremlin.” Don’t hold your breath. I watched a video with U.S. spokesperson John Bolton (if you don’t know who he is, your knowledge of U.S. foreign affairs is lacking significantly) whom I disagree with intensely most of the time. His main argument however was quite well stated without any of the usual “indispensable” rhetoric. He said that EU and US sanctions were pinpricks and that Russia held all the cards - militarily, politically, and financially.

It stands in realistic contrast to Harper’s statement, “ Mr. Putin's reckless and unilateral actions will lead only to Russia's further economic and political isolation from the international community."

Okay let’s see how this could play out. The ultimate finale would be nuclear war which would lead to global destruction, perceived first strike knock-out or not. So that end result would be quite final for all, and would be triggered probably by U.S. first use, as is part of their policy (go back and see John Bolton). That can be ignored, although it may come to pass.

The most current and realistic scenario are the economic sanctions threatened by the west. But how real are they?

Economic sanctions and unintended consequences

Imagine that Russian assets are seized and that the EU refuses to import Russian gas and oil. First off, Angela Merkel, instead of having Russian assets frozen would have German asses frozen. If Ms Merkel is considered justifiably concerned about Russia’s intentions because she grew up in East Germany, then she also needs to consider that it was German war actions that created the occupation of Germany in the first place. Is she trying to repeat history?

Certainly, gas sanctions would have some impact on Russia, but how much? Russia and China already trade with the ruble and the yuan, with both resources and manufactured goods. They could begin trade with other countries in their own currencies which has several effects. First, less but still some money for Russia. Secondly, the other countries would have cheaper gas without having to exchange their money for US dollars. Third, the hit on the US dollar would put it at considerable risk as the world’s global reserve petrodollar fiat currency.

Let’s look at the latter more closely. Many people argue that the US wars in the Middle East and elsewhere are in order to harvest the oil wealth of the world for themselves. This is only partly true. The main truth is that the US dollar is the reserve currency essentially meaning that in order for international exchange to occur, they must use the US dollar as all items are priced in dollars (or they used to be). That is the main reason for wars in Iraq, Libya, Syria, Afghanistan et al - to support countries that will continue to use US dollars as their exchange currency, just as the wonderful democracy in Saudi Arabia does.

It is a petrodollar because oil has been the energy source for attempted US military and industrial hegemony over the world, and the world buys their oil and gas with US dollars.

Further it is also a fiat currency, adding another level of weakness to the dollar. Being a fiat currency means it is declared legal money, but it has nothing for support but the belief that a particular scrap of paper with some fancy ink on it has some intrinsic value. It doesn’t, it is not even a promise of money as there is no gold or other valued resource supporting it - other than the apparent necessity to buy oil in dollars.

If the Russians start trading in other than US dollars, if Russia sells its dollar holdings on the exchange markets, if Russia sells it billions of US Treasury bonds on the market (as China has started to do) the US dollar will take a severe downturn, supported only by more of the trillions of dollars already in circulation without basis of value. If the US dollar goes down, it essentially becomes worthless as more and more other countries either try to front-run Russia in getting rid of their dollars, or accept their losses and start trading in rubles and yuan - and gold.

The U.S. is trillions of dollars in debt to much of the rest of the world and also within its domestic economics. The economy is one large bubble, supported by the printing of trillions more dollars each year, not backed by anything but a hope and a prayer that all will be well - and the US military. The US has been selling gold for two related purposes: to keep the dollar up, and keep the price of gold down. As the dollar looks weaker and weaker, more and more people in the eastern nations are buying gold, regardless of its generally lowering price. The west continues to sell, until eventually they will no longer be able to supply physical gold - and then China and Russia win the economic battle.

China has bought thousands of tons of gold as recorded through official channels and considering the secretive nature of their polity, probably thousands more tons unofficially. Russia has gold. India has gold. Brazil has gold. South Africa obviously has gold. The BRICS could be well on their way to establishing a gold standard currency of some form, or perhaps a basket of currencies, backed by gold. The U.S., if it wishes to remain within the realm of an economic power, second rate though it be, will have to adjust to this possible reality and hope they can somehow be included.

John Bolton is correct. The US has no cards in this game: they are living within a house of cards financially (okay, some cards, but all precariously balanced) a giant ponzi scheme; they could well be politically isolated from the “rest of the world” even though their sycophantic puppets will continue to support them (at least until the dollar collapses or their own asses are frozen); and militarily - well, if worse comes to worst, they could go nuclear, but that would end it all for all of us. Even John Bolton, a US war hawk, understands the stupidity of that scenario.