Following China's unwillingness to vote against Russia at the UN and yesterday's news that China will sue Ukraine for $3bn loan repayment, it seems Russia is returning the favor. Speaking at the Chinese Economic Development Forum, ITAR-TASS reports, the Chief Economist of Russia's largest bank stated that "China's Yuan may become the third reserve currency in the in the future."
Investors will be fleeing Europe, they’ll be moving from Russia, getting far away from the USA as they can get and they’ll be going where the sun shines longer: Africa. Why? Simply because it’s worth it and the investment prospects there are far greater than they are anywhere else right now.
As of Friday, the Ukraine has, as we predicted a month ago, been officially divided in two. As AP reported earlier, "two almost simultaneous signatures Friday on opposite sides of Europe deepened the divide between East and West, as Russia formally annexed Crimea and the European Union pulled Ukraine closer into its orbit. In this "new post-Cold War order," as the Ukrainian prime minister called it, besieged Ukrainian troops on the Crimean Peninsula faced a critical choice: leave, join the Russian military or demobilize. Ukraine was working on evacuating its outnumbered troops in Crimea, but some said they were still awaiting orders." However, it appears it is not so much a question of figuring out how to evacuate the troops, but rather motivating them. As RIA reports, "less than 2,000 of Ukrainian troops serving in Crimea decided to leave the peninsula for Ukraine, the Russian Defense Ministry said on Saturday. "As of March 21, less than 2,000 out of 18,000 Ukrainian servicemen staying on the territory of the Republic of Crimea decided to go to Ukraine," the ministry said in a statement.
In the early hours of yesterday morning European Union politicians struck a deal on legislation to create a single agency to handle failing banks and bail-ins in the Eurozone. It is important to realise that not just the EU but also the UK, the U.S., Canada, Australia, New Zealand and most G20 nations all have plans for bail-ins. Prepare accordingly ...
Veteran Investor Jim Sinclair Says That If Russia Accepts Payment For Oil And Gas In Any Currency Other Than The Dollar – Whether It’s Gold, The Euro, The Ruble, The Rupee, Or Anything Else – Then The U.S. Petrodollar System Will Collapse
- Australia says nothing spotted in search for plane (AP)
- Putin looks to Asia as West threatens to isolate Russia (Reuters)
- China Billionaire Builds Metals With Dreyfus, Glencore Hires (BBG)
- China Beige Book Says Economy Slowing (BBG)
- Caterpillar Said to Be Focus of Senate Overseas Tax Probe (BBG)
- US Cancels Summit With Divided Group of Gulf Nations (WSJ)
- Cyprus defense minister suffers aneurysm (AP)
- Abe to zero in on economy as tax hike looms (Nikkei)
- Europe strikes deal to complete banking union (Reuters)
With the Crimea referendum passed and Russia ready to annex the region, the United States and the European Union have threatened sanctions. The full extent of these sanctions is not yet known, and announcements are pending for the end of March. If these measures are concrete, they will of course be followed inevitably by economic warfare, including a reduction of natural gas exports to the EU and the eventually full dump of the U.S. dollar by Russia and China. As I have discussed in recent articles, the result of these actions will be disastrous. For those of us in the liberty movement, it is now impossible to ignore the potential threat to our economy. No longer can people claim that “perhaps” there will be a crisis someday, that perhaps “five or 10 years” down the road we will have to face the music. No, the threat is here now, and it is very real.
Earlier today, heavily-armed masked men in military attire, stormed two Ukraine corvettes, Lutsk and Khmelnitsky, in what is now Russian territory at the port of Sevastopol. Perhaps considering Ukraine said it had pulled its troops from Crimea, they should also have pulled their ships, although it is unclear just where they would pull them to. Regardless, this is what the actual storming of the ships looked like.
S&P, still deep in the mire of a legal battle with the US government, has decided now is an opportune time to cut the ratings outlook on Russia:
- *RUSSIAN FEDERATION OUTLOOK TO NEGATIVE FROM STABLE BY S&P
- *S&P SEES EU-U.S. IMPOSING FURTHER SANCTIONS
Russia remains a BBB credit (but with the outlook shift remains open to a downgrade with 24 months). S&P has cut 2014 GDP forecast to 1.2% and 2015 to 2.2%. Of course, we are sure, this would have nothing to do with currying favors with the US government (who threatened them when they downgraded the USA). Full report below.
Amid the growing Crimea crisis, Estonia, Latvia and Lithuania - which like Ukraine were all parts of the old Soviet Union and have very significant concentrations of ethnic Russian-speaking citizens - have expressed growing apprehension over Moscow's intentions. As Reuters reports, Russia signaled concern on Wednesday at Estonia's treatment of its large ethnic Russian minority, comparing language policy in the Baltic state with what it said was a call in Ukraine to prevent the use of Russian. "Language should not be used to segregate and isolate groups," the envoy noted, referencing the same 'linguistic tensions' that supported its annexation of Crimea.
- Possible debris off Australia a 'credible lead' for missing Malaysia jet (Reuters)
- Maldives and Afghanistan: Theories Blossom for Airliner (BBG)
- Ukraine Military Concedes on Crimea as Russia Takes Hold (BBG)
- Asia Stocks Drop on Fed; H-Share Index Enters Bear Market (BBG)
- Scientists say destructive solar blasts narrowly missed Earth in 2012 (Reuters)
- GM’s Ignition Victims Need Help From Bankruptcy Judge (BBG)
- U.S. Alleges Inside Traders Used Spycraft, Ate Evidence (WSJ)
- God Meets Profit in Obama Contraceptive Rule Court Case (BBG)
Ukraine Announces Joint US Military Exercises As Obama Rules Out "Military Incursion" - Recap Of The Day's EventsSubmitted by Tyler Durden on 03/19/2014 17:12 -0500
With the story of the day undoubtedly Yellen's first (bungled) press conference, it was easy to forget that the second coming of the Cold War is raging in the Ukraine. For those curious what they may have missed, here is a summary of the major events that took place in the troubled country this afternoon. Highlights from AP, AFP, Reuters, WSJ, Bloomberg, RIA and Interfax.
- Lost Jet’s Path Seen as Altered via Computer (NYT)
- Fed Links Low Rates to “Persistent Headwinds” in Economy (Hilsenrath)
- Top German Court Clears Euro-Zone Bailout Fund (WSJ)
- U.S., EU set sanctions as Putin recognizes Crimea "sovereignty" (Reuters)
- Indian wealth effect: Sensex, Nifty hit life highs as domestic-focused firms rally (Reuters)
- China bond default has positive effect on local government groups (FT) - unless it's negative
- Russia tensions risk higher gas prices (FT)
- China Home-Price Growth Slows in Big Cities on Tight Credit (BBG)
- ECB's Weidmann says German surpluses "here to stay" (Reuters)
- Microsoft Office for iPad (AAPL) to be introduced this month (The Verge)
Just a few short hours after Obama issued an executive order declaring sanctions against a select group of Russians and Ukrainians, here comes the EU, whose unelected leaders have just slammed not only those Crimeans and pro-Russian Ukrainians who dared to organize and execute the Crimean referendum vote in which the population overwhelmingly voted to support becoming part of Russia, but in keeping with the US, also launched a salvo making it quite clear that neither Russian politicians nor various Russian military commanders are welcome to park their assets, or buy houses in the EU as of this moment. Needless to say, one person, Germany's chancellor Angela Merkel, is already dreading what the Russian response to this latest escalation will be, and grudgingly stated that "RUSSIA FORCED EU'S HAND WITH CRIMEA BALLOT." Perhaps, and perhaps Russia will be "forced" to if not freeze German gas exports as a result of this diplomatic move, then just happen to pull an Amazon Prime, and hike prices by a few dozen percent. We will find out shortly.
Those of you too caught up in Lady Gaga’s latest cutting edge art project - she arranged for another woman to vomit on her while seated at the keyboard to show, well, I guess to demonstrate that not even vomit cannot stop the power of pop music - may have missed the latest moves in our nation’s foreign policy quest to remain Hall Monitor of the World. State Department chess players are gloating at the moment that the Russian ruble has lost ten percent of its value this year. No doubt a few functionaries in the Kremlin are going boo-hoo over this. But remember: they are a nation who lost about 8.6 million soldiers to overcome Hitler. Do you think a little austerity will persuade them to cede Ukraine to the Walt Disney Company? Have the Lady Gaga fans forgotten that our country set this whole fiasco in motion by promoting a tug-o-war between a proposed Russian free trade zone (the Customs Union) and the European Union (another trade zone) with Ukraine as the rope?