438 Ukrainian Troops Seek Asylum In Russia; Government Passes "War Tax"

Tyler Durden's picture


Submitted by Simon Black via Sovereign Man blog,

There’s nothing more permanent than a temporary government measure, as the old saying goes.

I was reminded of it when I came back to Kiev over the weekend and that the Ukrainian government imposed a series of “temporary” taxes to help the war effort.

And boy does this government need money.

According to both Ukrainian and Russian news sources, several hundred solders were left without weapons or ammunition and crossed the border into Russia.

The Ukrainian news suggests that this was a forced withdrawal after being routed by rebel forces. The Russian news suggests that the troops were seeking asylum, no doubt tired of war.

So the Ukrainian government is in a hurry, trying to raise at least $1 billion (a lot of money here).


They’ve jacked up wage taxes, natural resource taxes, and even taxes on farming exports.

But even if they collect the money they’re aiming for, Ukraine and its government are in a serious pinch.

For the last few months, even before the turmoil began, Ukraine has been in an inflationary cycle. Both retail and asset prices were spiraling higher.

Now they’ve entered a stagflationary period. The currency has gone into freefall. Unemployment is rising. The economy is contracting (6% by phony government estimates). And inflation is a whopping 19%… and rising.

These people are getting abused. And the worst is yet to come.

The banking system is borderline insolvent. The head of the local Citigroup branch here said that the non-performing loan ratio in Ukraine is as high as 40%.

And potentially up to 4% of all bank assets are now locked down in Crimea, which may or may not even be part of Ukraine any longer.

If the banking system collapses (and many here suspect it will), this place will become unglued. Asset prices will collapse, yet retail prices will surge even higher.

I can already see it on the street; so many businesses have closed. Hopeless unemployed youths are now roaming the city or joining the war effort.

And the entire populace has been mobilized to support the fight.

Of course, it’s pretty damn easy to cheer on the bloodshed when it’s not your blood. War can seem glorious when you only have to read about it in the newspapers.

There’s so much more I need to tell you about—the only way for me to capture this was in another podcast, probably the most emotional I’ve ever done.

Come listen for yourself: (click image for link to podcast)

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Tue, 08/05/2014 - 13:14 | 5049610 junction
junction's picture

Citizens here in the good ole' USA have been paying a war tax for 50 years, since the Vietnam War.  A whole lot of good it has done, except to make rich insiders even richer.

Tue, 08/05/2014 - 13:14 | 5049625 gh0atrider
gh0atrider's picture

The bosses of Kiev are too busy gambling with derivatives and HFT wash-trades to bother buying bullets and MREs.

Tue, 08/05/2014 - 13:30 | 5049711 Manthong
Manthong's picture

It’s sad to see what 5 billion Nulandbucks can do to a country.

And it is cold comfort to believe that Nuland, Poroshenko and Tymoshenko will ultimately meet the same fate as their respective role models; Himmler, Mussolini and Hitler.

Tue, 08/05/2014 - 13:36 | 5049750 ZerOhead
ZerOhead's picture

Himmler, Mussolini and Hitler never retired in comfort to England Israel or the United States...


Tue, 08/05/2014 - 13:41 | 5049796 666
666's picture

"Citizens here in the good ole' USA have been paying a war tax for 50 years, since the Vietnam War."

I thought we're stil paying interest on the war of independence from Britain.

Did they ever repeal the telephone utility tax on the Spanish-American War?

Tue, 08/05/2014 - 13:51 | 5049865 Latina Lover
Latina Lover's picture

Dulce et Decorum est Pro Patria Moi:


The greatest lie ever told!

The banksters who rule the USSA are trying to incite a war against Russia, joyfully sacrificing the flower of our youth for their enrichment and amusement.

Tue, 08/05/2014 - 14:08 | 5050032 espirit
espirit's picture

My sympathy to the Ukrainian civilians, and those enduring the tragedy of war.

It's a sick world after all (sung to Disneys "It's a Small World"). 

Tue, 08/05/2014 - 14:43 | 5050273 zaphod
zaphod's picture

Why doesn't Russia and Ukraine just print more money to pay for their war efforts?!?

It's how the US has paid for every war since WWII and it's worked great for us.

Tue, 08/05/2014 - 15:15 | 5050513 SWRichmond
SWRichmond's picture

hmmmm...I wonder how those IMF loans are looking now, huh?

Someone knew what would happen to the Ukraine economy when the "independence" started, but loaned them money anyhow, no doubt secured by national assets.  How will they repay now?  Have we seen this playbook before?  Cui bono?


Don't forget to read the first comment on the link.

Wed, 08/06/2014 - 03:24 | 5052917 Haus-Targaryen
Haus-Targaryen's picture

Does no one see Putin's long game at this point? 

The people in Crimea are living high on the hog compared to those in the rest of the country at this point.  While the Russian and thus, Crimean economy isn't doing great, its better than most (in terms of # of countries) of "Western" nations.  (See, Spain, Greece, Portugal, Mexico, Italy, etc., etc.,)

All Putin has to do is keep the Crimeans happy, and then after the first freeze, fail to turn back on the gas.  I fail to see the Ukranians bending over and dealing with high inflation coupled with collapsing asset prices, a defunct banking system, and freezing to death in the snow like morons, when their former country men are drinking Vodka nice and warm in their homes in Crimea. 

Wed, 08/06/2014 - 18:18 | 5056244 Idaho potato head
Idaho potato head's picture

They don' have to, US state dept pick up that tab for them.....so far.

Tue, 08/05/2014 - 13:19 | 5049646 RaiZH
RaiZH's picture

Only US citizens? Much of the world has been funding the USA's hegemony for the past 50 years... and many pay an even bigger price. 

Tue, 08/05/2014 - 13:26 | 5049690 Greenskeeper_Carl
Greenskeeper_Carl's picture

true. inlfation is pretty much our only export, along with debt

Tue, 08/05/2014 - 19:07 | 5051507 conscious being
conscious being's picture

CG You forgot Fraudulent Bonds and various other Frauds.

Tue, 08/05/2014 - 13:21 | 5049665 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

The poor are always the first to be hit.

Tue, 08/05/2014 - 13:55 | 5049929 icanhasbailout
icanhasbailout's picture

It was not long ago that we finally stopped getting phone lines taxed to pay for the Spanish-American War of 1898.


And the Federal Reserve itself is arguably a perpetual war tax as well, dating to the start of WWI (1913).

Tue, 08/05/2014 - 13:11 | 5049611 PlusTic
PlusTic's picture

Komrades, velcome home!

Tue, 08/05/2014 - 13:11 | 5049612 Gringo Viejo
Gringo Viejo's picture

We're from the IMF and we're here to bleed you dry.

Tue, 08/05/2014 - 13:16 | 5049643 junction
junction's picture

I thought it was "We're from Goldman Sachs and we're here to help you."

Tue, 08/05/2014 - 13:26 | 5049698 Realname
Realname's picture

We're here to steal your gold...man.

Tue, 08/05/2014 - 13:44 | 5049813 zhandax
zhandax's picture

"Sorry, the fed beat you to it in March"

Tue, 08/05/2014 - 13:28 | 5049705 Charles The Ham...
Charles The Hammer Martel's picture

Phone call to the Ukrainian embassy... "I'm John Kerry and I'm here to help you." "You mean like you helped the Libyans, Iraqis, Vietnamese, Afghanis, Koreans, Central Americans, Native Americans, Germans..."

Tue, 08/05/2014 - 13:45 | 5049831 Toolshed
Toolshed's picture

The IMF is sooooo misunderstood. They are real humanitarians actually. Their goal is to restore complete social equality. When no one has any assets remaining.............they have achieved their goal.

Tue, 08/05/2014 - 13:12 | 5049615 Theta_Burn
Theta_Burn's picture

Wasn't the IMF tripping over themselves with loan guarantees?

Tue, 08/05/2014 - 13:42 | 5049797 NotApplicable
NotApplicable's picture

Only upon Kiev defeating the separatists, if I recall.

I wonder what the chocolate export tax is?

Tue, 08/05/2014 - 15:11 | 5050488 tvdog
tvdog's picture

Yes, release of the bailout for Ukraine is conditioned on reconquering the eastern part of the country. It makes sense - that's where all the assets are, all the shale gas, all the industry. The rest of Ukraine is dirt poor, Moldova-poor.

Problem is, they are blowing their loan security to oblivion in the process of reclaiming it.

Tue, 08/05/2014 - 13:13 | 5049619 Seasmoke
Seasmoke's picture

U kraine seen nothing yet. 

Tue, 08/05/2014 - 14:36 | 5050235 karutzar
karutzar's picture

Yeah, it is just the beginning. This jooish-polish bastards is going to see the rage of the cossacks. What I can foresee is the end of Poland - this fabricated (jooish) country.

Wed, 08/06/2014 - 22:46 | 5057221 Capissimo
Capissimo's picture

What I see is Ruine.

Tue, 08/05/2014 - 13:14 | 5049629 Duffy
Duffy's picture
Mafia States: Israel and Ukraine’s special relationship

the term "must read" is thrown around a lot these days... 

I'll just describe it^ as very interesting, indeed.

Tue, 08/05/2014 - 13:41 | 5049798 Seek_Truth
Seek_Truth's picture

Overall a well written, fact based article, with this notable exception- the author states:
"Today about half of Israel’s Jews are of Eastern European descent, and most of those are from Russia and Ukraine"

Actually, approximately 95% of Israel's "Jews" are Ashkenazi (hence non-Semite), while only 5% are Sephardim (hence Semite).

Other than that glaring error, good article!

Tue, 08/05/2014 - 13:45 | 5049830 ZerOhead
ZerOhead's picture

Good read.

Tue, 08/05/2014 - 15:20 | 5050555 Anarchy 99
Anarchy 99's picture

ok I'll say it,    Must Read

Tue, 08/05/2014 - 17:14 | 5051063 The_Prisoner
The_Prisoner's picture

Article provides a good overview to those who are beginning to establish that link.

Case in point:
Italy to extradite former IDF major convicted by Brazil of organ trafficking.
(Link in Portuguese)

Tue, 08/05/2014 - 19:13 | 5051524 conscious being
conscious being's picture

What sickenning bastards!!

Tue, 08/05/2014 - 13:14 | 5049632 USD Long
USD Long's picture

None of this would be happening if John Kerry was still alive!

Tue, 08/05/2014 - 13:25 | 5049692 kurt
kurt's picture

Instead of Big Chin Lurchbot?

Tue, 08/05/2014 - 13:16 | 5049640 NOTaREALmerican
NOTaREALmerican's picture

Jezzz,  who woulda thunk people would be killing each other in DaUkraine in 2014.    Oh well, as long as our economy keeps improving and the top 20% keep getting richer; it's all good.

Tue, 08/05/2014 - 13:20 | 5049661 Charles The Ham...
Charles The Hammer Martel's picture

So... at what point does Kiev just throw in the towel? They have got to know that they are on borrowed time right now and the E.U. and U.S. are truly insignificant factors at this point. Herr Merkel is practically begging Putin to take Ukraine so they can get on with it. I'm not even sure why the western Ukrainians are fighting anymore, its not like their country has been around for more than 25 years. Speaking of that, when is Belarus going to be assimilated? They are ready. The Baltic states are ready, Georgia is ready.... Lets get the ball rolling Ruskies, you are taking too long. We need a viable competitor to the U.S. so we can stop pretending the world will ever agree to just get along.

Tue, 08/05/2014 - 13:25 | 5049685 Winston Churchill
Winston Churchill's picture

The junta in Kiev thinks they are exceptional people.

Seems that delusion is not confined to the US after all.

More infecteous than ebola.

Tue, 08/05/2014 - 13:56 | 5049931 Jack Burton
Jack Burton's picture

Winston, I can see you still have the Churchill insight! Kiev's junta and it's 10% support in the population are not rational people. They have grown up over the last 20 years to believe they are a special race and they are chosen to cleanse Ukraine to a new nation. Based of their fascist dream. No, they do not know they are doomed, they think they are on the verge of a new golden age of Ukrainian fascism. To wipe out the ethnic Russian 8 million is their first goal.

Nuland knew this, she is just using them for US foreign policy goals. They are indeed doomed, but DO NOT KNOW IT.

Tue, 08/05/2014 - 14:16 | 5050084 potato
potato's picture

Yes. There wouldn't be war if the other side wasn't also sure it could win.

Tue, 08/05/2014 - 14:29 | 5050193 Charles The Ham...
Charles The Hammer Martel's picture

The Gazans know they cant win, doesnt stop them from trying to kill as many jews as they can. Kiev is no different. It will look like Gaza shortly.

Tue, 08/05/2014 - 23:11 | 5052513 StychoKiller
StychoKiller's picture

Cornered wild animals will fight with everything they've got!

Tue, 08/05/2014 - 15:23 | 5050571 Anarchy 99
Anarchy 99's picture

I just think they are preparing their next stop (israhell 2nd) for when they decide to shut down israhel the 1st, which will happen sooner or later.

Tue, 08/05/2014 - 16:58 | 5050999 The_Prisoner
The_Prisoner's picture

Indeed, time for the US to ramp the propaganda war to 11, as it's the only thing it is still competent at doing, because it is gone by private companies.

Perhaps they should try and down a civilian airliner and blame it on Russ... Oh, wait!

Gangster Kolomoisky, head of European Jewish council, who financed the Ukrainian nazi death squads is seeing he is unlikely to get a return in his investment, Silverstein-style. So he pressures Poro to institute a draft and war tax on its Citizens, because the paid thugs are not getting the job done.

To paraphrase HS Thompson: Wherever you look, there they are.

Tue, 08/05/2014 - 19:27 | 5051579 conscious being
conscious being's picture

Read The Vineyard Sakers blog. Many more Uke trops are trapped. The Uke conscripts can put down their weapons and walk acroos the Russian border to internment for the durration. The Polish and  other mercenaries cannot. They maybe would not get a warm welcome.

The Ukees are losing 25 pieces of armour and 700 to 1,000 troops a day trying to free the pocket that managed to get itself trapped against the Russian border.

Saker says in 60 days it will all be over.

Tue, 08/05/2014 - 23:49 | 5052630 StychoKiller
StychoKiller's picture

In 60 days (more or less), the snowflakes will be accumulating; next up, frozen bodies accumulating.

Tue, 08/05/2014 - 13:23 | 5049677 JRobby
JRobby's picture

Why didn't they call janet?

Tue, 08/05/2014 - 13:26 | 5049689 Sick
Sick's picture

There is a billionaire running the country.  Take his money since he want war.

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