Friday, April 4, 2014

Might a False Flag Op being in the operational stages at this time ? Don't you get the sense that something big and nasty is coming our way very soon folks ? If not , maybe you should ......... Let's start with missing Malaysian Flight 370 - does anyone think there is a new Bermuda triangle ? And keep in mind timing coincidental to other major events . Flight 370's ongoing situation covers the time period of March 8 , 2014 through the present time ) So , let's take a closer look at the ongoing Malaysia mystery ..... Malaysia MH370: Who has means & motive to take a plane full of people ? Then consider the events in Ukraine - in particular Crimea ( focusing on the pre-referendum period and through the end of March ) .... during this same time period while the plane is missing and Crimea is playing itself out , note the efforts by both Russia and China to break the dollar ...... US and EU threats ignored , sanctions rebutted Russian sanctions and their own threats to make life tough for the US , EU - there isn't a sanction regime that can curtail Russia + the BRICS in tandem ......Conventional War is a non starter - might the desperate West risk a nuclear gambit to put the fear of God in the BRICS and Putin ?

Whatever you may believe , at least consider the possibility that Malaysia is lying through their teeth about what they know about the plane's disappearance  ....... here is one compelling argument from former Finance Minister Anwar Ibrahim on the subject of whether Malaysian Authorities are telling the whole unvarnished truth about what they know .....

Friday, 04 April 2014 16:35

IT'S A COVER UP: M'sian govt deliberately CONCEALING INFO on MH370 - Anwar Ibrahim

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IT'S A COVER UP: M'sian govt deliberately CONCEALING INFO on MH370 - Anwar Ibrahim
Malaysia’s government is deliberately concealing information that would help to explain what happened to missing Flight MH370, the country’sopposition leader has claimed.
In a wide-ranging interview that cast doubt on the official investigation into the disappearance of the plane, Anwar Ibrahim said the country’s “sophisticated” radar system would have identified it after it changed course and crossed back over Malaysia.
Mr Anwar, who personally knew the pilot of the Malaysia Airlines Boeing 777 that went missing in the early hours of March 8 during a flight from Kuala Lumpur to Beijing, called for an international committee to take over the Malaysian-led operation because “the integrity of the whole nation is at stake”.
He indicated that it was even possible that there was complicity by authorities on the ground in what happened to the plane and the 239 people on board.
RAAF Warrant Officer Wright looks from a RAAF AP-3C Orion aircraft during the search for flight MH370 (Australian Defence Force)
In an interview with The Telegraph, he said that he had personally authorised the installation of “one of the most sophisticated radar” systems in the world, based near the South China Sea and covering Malaysia’s mainland and east and west coastlines, when he was the country’s finance minister in 1994.
It was “not only unacceptable but not possible, not feasible” that the plane had not been sighted by the Marconi radar system immediately after it changed course. The radar, he said, would have instantly detected the Boeing 777 as it travelled east to west across “at least four” Malaysian provinces.
Mr Anwar said it was “baffling” that the country’s air force had “remained silent”, and claimed that it “should take three minutes under SOP (standard operating procedure) for the air force planes to go. And there was no response.”
He added: “We don’t have the sophistication of the United States or Britain but still we have the capacity to protect our borders.”
It was “clearly baffling”, he said, to suggest that radar operators had been unable to observe the plane’s progress.
A Malaysian soldier at Kuala Lumpur International Airport reads messages about the missing Malaysia Airlines plane (AP)
He said the families of the 153 Chinese victims on board were right to demand information from the Malaysian government, which had permitted a multi-national search operation to spend a week searching in what it must have known was the wrong place.
“Why didn’t we alert the Chinese, the Vietnamese that the operation should cease in the South China Sea and let them spend millions on search and rescue in a place that they know fairly well cannot be the site of the plane?”
As hope fades of recovering the plane’s black box before its batteries start to fail – which could be as early as Monday - Mr Anwar said it was “at the least, incompetence” on the part of the Malaysian government that it is still not known what happened to the plane, but there was also a deliberate “intention to suppress key information”.
“Unfortunately the manner in which this was handled after the first few days was clearly suspect,” he said. “One fact remains. Clearly information critical to our understanding is deemed missing.
“I believe the government knows more than us. They have the authority to instruct the air force … or Malaysia Airlines. They are privy to most of these missing bits of information critical to our understanding of this mysterious disappearance of MH370.”
Mr Anwar indicated that it was a possibility that officials on the ground were complicit in what happened on the plane.
However, he later added that “the realm of possibilities is so vague, I mean, anything can have happened”, adding: “Whether they (the authorities) are complicit in a terrorist act, I’m not in a position to comment.”
A source close to the government claimed that Mr Anwar was attempting to exploit the tragedy for political gain.
“The international media response, completely condemning Malaysia, is unfair. It’s been partly orchestrated by Malaysia’s opposition,” the source said.
“The government has a duty to the families not to release uncorroborated information that leads to false hope or wild goose chases which hamper the investigation. At every step, international investigation protocols have been followed.
“The situation is unprecedented. And the search has actually been handled well. The government is coordinating an enormous operation, and both the commanders on the ground and all the international investigators involved have been complimentary about Malaysia’s efforts.”
Relatives of Chinese passengers onboard the Malaysia Airlines MH370 stand near messages of well wishes (AP)
“Far from avoiding questions or withholding information, since day one the Malaysian authorities, including ministers, military chiefs, the department for civil aviation and Malaysia Airlines have made themselves available to the media daily. As soon as information has been corroborated, it has been released.”
Malaysian authorities did not respond officially to requests for comment on Mr Anwar’s accusations, but have previously accused him of politicising the crisis.
Efforts to recover the plane in the southern Indian Ocean, more than 1,000 miles off the coast of Perth, continued on Thursday night over a search area roughly the size of Poland. A British Trafalgar-class nuclear submarine is helping to hunt for wreckage, including the black box – before it stops emitting pings.
A member of the Australian team continues the search in the Indian Ocean (EPA)
Mr Anwar, 66, was once deputy prime minister in Malaysia’s ruling coalition, which has governed the country since independence from Britain in 1957.
However, after falling out with the country’s leaders, he was charged with sodomy, imprisoned twice and beaten in custody. He now leads a pro-democracy coalition of parties that lost last year’s election despite winning over 50 per cent of the popular vote amid allegations of widespread corruption by the government.
Mr Anwar was convicted for sodomy, an offence under Malaysian law, for the third time just hours before the flight went missing and is currently on bail pending appeal. He claimed that the government moved his court date to stop him standing in provincial elections.
Investigators and media have focused on the plane’s pilot, Capt Zaharie Ahmad Shah, a passionate supporter of Mr Anwar’s pro-democracy opposition coalition, despite there being no evidence against him.
Reports have claimed that Capt Zaharie was a “fanatic” who could have hijacked the plane in despair at the latest setback to the opposition leader.
A graphic showing the north-westerly view of the search area (Geoscience Australia, Dr Beaman, James Cook University)
However, both Mr Anwar and Capt Zaharie’s family have strongly denied any such possibility.
“After personally having been subjected to such unjust accusations, I strongly feel that you should not cast aspersions against people until you have evidence to support it,” he said.
“If you say or suggest that the pilot may have been involved, what about the concealing (of information)? He could not have concealed the radar readings. He could not have instructed the air force to remain completely silent. Or the prime minister to remain completely silent. The investigations have got to be far-reaching and open.”
Describing him as an “ardent supporter”, Mr Anwar said he had had several exchanges with Capt Zaharie and that he “was nice, smart, articulate – but there was clearly a strong passion for justice. He is known to be very attached to the family, a family man.
Mr Anwar (AFP)
“To condemn a person because he is a supporter of democracy is totally unjustified. Having said that, there’s nothing stopping the police or the authorities from conducting an open and fair investigation into anybody – including the radar operators, the defence minister – why are they concealing this information?”
The disappearance of MH370 has placed the Malaysian government under unprecedented international scrutiny, with persistent criticism that the release of official information has been both inaccurate and inconsistent.
Hishammuddin Hussein, Malaysia’s defence and transport minister was criticised on Thursday for claiming that MH370’s disappearance was a “blessing in disguise” because its loss meant he now “understood the beauty of unity, the sweetness of having each other”.
Mr Anwar said that “to save the image of the country and to save the country”, an international committee should be established consisting of representatives of countries whose nationals were among the passengers, who included Chinese, Vietnamese, Malaysians and Australians.

Malaysia MH370: Who has means & motive to take a plane full of people?

Beginning his working life in the aviation industry and trained by the BBC, Tony Gosling is a British land rights activist, historian & investigative radio journalist.
Published time: April 04, 2014 11:18
A crew member from the Royal Malaysian Air Force uses binoculars onboard a Malaysian Air Force CN235 aircraft during a Search and Rescue (SAR) operation to find the missing Malaysia Airlines flight MH370, in the Straits of Malacca March 13, 2014. (Reuters)
A crew member from the Royal Malaysian Air Force uses binoculars onboard a Malaysian Air Force CN235 aircraft during a Search and Rescue (SAR) operation to find the missing Malaysia Airlines flight MH370, in the Straits of Malacca March 13, 2014. (Reuters)
Enough in the way of misstatements, contradictions and other evidence has emerged from the developing story of ‘lost’ Malaysian Airlines flight 370 to form a case for its disappearance being orchestrated by the West's Military Industrial Complex.
The initial possibility that the airliner ‘crashed into the sea and disappeared’ is fading away. The'Bermuda Triangle' scenario of bewildering disappearances will not wash in the modern world.
With the benefit of hindsight, that Caribbean 'mystery' popularized in the 1970s now looks to have been rolled out to a credulous press and public as a convenient cover story for skullduggery in CIA and related drug-running operations by sea and air between Florida markets and South American cocaine producers.

Military secrets are not for civilian TV news

The Malaysian government does not have the most sophisticated satellite and radar surveillance systems and it took several days for them to admit that they had indeed tracked MH370 back in a westerly direction across the Malay Peninsula.
From that last point of contact on, the Malaysian authorities have been entirely reliant on 'help' from countries with powerful military radar systems and, more importantly, the top of the technocratic food chain, satellites.
And there we are faced with a dilemma. Does the military alliance that controls these systems see Malaysia as an ally? Are they willing to reveal the peacetime capabilities of their systems to a foreign power? Ultimately do they have the technical capability to 'hack' an airliner's controls and disable avionics, even steer the plane rendering the pilot? If they can do that do they want to release that information to the world?
There seem to be two main theories emerging as to why, and by far the simplest is the demonstrated by hacker Hugo Teso who is also a commercial pilot. At the 'Hack in the Box'conference in April 2013, Teso demonstrated the ability to change speed, altitude and direction of a virtual airplane by sending radio signals to its flight-management system. He has also developed an Android app which demonstrates the vulnerability of modern computer-controlled airliners and business jets called PlaneSploit.
The US has several airbases around the Indian Ocean and South China Sea from which they operate the most advanced electronic warfare gadgetry in the world. Both from specialist warships and electronic warfare pods and installations on a variety of aircraft from the lumbering AWACS battle control planes to fighter jets.
Australian Navy ship HMAS Toowoomba is seen from the Japan Coast Guard Gulfstream V aircraft as it flies over the southern Indian Ocean as they look for debris from missing Malaysian Airlines flight MH370 April 1, 2014. (Reuters)
Australian Navy ship HMAS Toowoomba is seen from the Japan Coast Guard Gulfstream V aircraft as it flies over the southern Indian Ocean as they look for debris from missing Malaysian Airlines flight MH370 April 1, 2014. (Reuters)
Former scientific adviser to the UK Home Office Dr. Sally Leivesley was quoted by London’s Sunday Express on March 16 as saying, “hackers could change the plane’s speed, altitude and direction by sending radio signals to its flight management system. It could then be landed or made to crash by remote control.” She floated the possibility that this could be the world’s first cyber-hijack.
But Malaysia is a relatively low-tech country and not in a position to know for sure whether this happened or not. Codes of humility in the region also mitigate against the Malaysian authorities being prepared to admit they are out of their depth and lose face.
The second is that MH370’s pilot was simply called by the military on a frequency not being recorded by Air Traffic Control and told something along the lines of, “Vietnamese and other unspecified airspace is suddenly unsafe to fly in due to a military incident so please change frequency and follow instructions to a distant airstrip where we can put you down safely." The was followed by something like, "Please do not inform passengers as this may alarm them.” The pilot would then be likely to simply comply and passengers may never know that anything was wrong. So if one of these is the means, what about the motive?

The geopolitics of Malaysia & China

With a constant stream of invasions and interventions and by constantly ratcheting up the arms race ever since the Second World War the USA has marked itself out, as US writer William Blum puts it, as the ‘Rogue State’ of the modern era. As a once great superpower's economy disintegrates, US behavior in world affairs with illegal 'adventures' into Iraq, Libya etc. is becoming shameless. They believe with a bit of 'soft power' news management to their domestic populations they can get away with anything.
Europe has been almost fully co-opted under US domination over decades by multinational corporations, IMF loans and the NATO military alliance. They appear to be forming a single market under the proposed Transatlantic Trade and Investment Partnership (TTIP) too now, which will weld EU and the Euro Currency to the Dollar in what will effectively be one country.
Both China and Malaysia are independently strong and that rankles in Washington. Malaysia refuses to do what it is told by the IMF and China is staunchly independent of the US 'vision' for the world in a way that has proved impossible for nations like Britain or, most recently, Ukraine to be.
One week after MH370 disappeared, China refused to back a US resolution at the UN Security Council condemning the Russian referendum in Crimea. Post-coup NATO is already signing co-operation deals with Kiev’s junta, the new ‘allies’ of the ‘free’ West, who have placed neo-Nazis in many of the nation’s key security and policing posts.
The deaths of 80 or so police and protesters in Kiev may simply have been an extension of NATO’s 1970s and 1980s ‘Operation Gladio’. In this top secret operation, exposed in a 1992 BBC Timewatch series, NATO armed fascist ‘irregulars’ took the role of terrorists and murdered countless innocent European civilians. The atrocities were blamed on leftist groups and ultimately the Soviet Union and Gladio was exposed by parliamentary enquiries in Italy, Belgium and Switzerland. Like the February 22 coup in Kiev, similar killing of protesters and police/army before the coup attempt happened in Venezuela and, more recently, Syria.
A Taiwanese volunteer assisting relatives of passengers on board Malaysia Airlines MH370 cries as she prays for the passengers at the Lido Hotel in Beijing April 1, 2014. (Reuters)
A Taiwanese volunteer assisting relatives of passengers on board Malaysia Airlines MH370 cries as she prays for the passengers at the Lido Hotel in Beijing April 1, 2014. (Reuters)
In this context the kidnapping of 239 passengers and crew could be just another example of NATO Intelligence’s disregard for human life, seeing people as pawns in a much more important geopolitical ‘game’.
The NATO countries’ answer to economic disaster, just like in the run-up to World Wars I and II, is aggression and war. As we saw with the leaked phone call in Turkey last week they are even prepared to stage events to justify an attack on an innocent neighbor. The fact that we are now in the nuclear age seems to have passed them by, but one imagines they believe, as US Strategic Air Command General Curtis LeMay said after the Cuban missile crisis of 1962 that, " any point the Soviet Union could have been obliterated without more than expectable losses on our side."
Both China and Malaysia have been set against each other to a certain extent in a 'blame game' and severely humiliated over the loss of MH370. Some may see this as ‘payback time’ for making bad decisions at the UNSC, suiting the all-powerful IMF as well as their affiliated, if twisted, and increasingly belligerent NATO military alliance very well.

Psychological warfare – news management

First on Thursday, March 13, came Rolls Royce’s surprise announcement that the Boeing 777’s two Trent engines had been running for five or so hours after the plane was ‘lost’. Then on Tuesday, March 18, came reports from a small Maldives newspaper 'Haveeru' that half a dozen islanders had first heard and then seen a ‘jumbo jet’ flying very low. To quote the paper: “They said that it was a white aircraft, with red stripes across it – which is what the Malaysia Airlines flights typically look like, and it was heading in a southerly direction.”
Both these stories were greeted in the international press by an avalanche of denials from government, military and other ‘expert’ sources, none of whom could possibly have known whether or not the Rolls Royce or the Maldives Islanders were correct or not. This massive and instantaneous reaction is the clear signature of an Information Operations campaign to stop publication and broadcasting of those stories to the world’s public and it largely worked.
In the case of Rolls Royce, a retraction was even extracted from the engine manufacturers which the next day was forgotten, because the evidence Rolls Royce had was so robust and watertight. Far fewer individuals are killed, so the military argue, by the use of lies to win over a population than with guns, bombs and tanks. Quite right they are too.
But what happens when journalists who are better at telling the truth than they are at lying are surreptitiously assassinated, as is widely believed to be the case with Rolling Stone journalist Michael Hastings? He had told the truth about US Afghan General Stanley McChrystal and got him sacked from the top post.
Hastings was about to expose the new head of the CIA director John Brennan who is an advocate for using US Army Information Operations (I-Ops) Psychological Warfare cells against domestic US journalists and politicians. It’s widely believed, including by former White House cyber-security adviser Richard Clarke said that Michael’s Mercedes was ‘consistent with a car cyber attack’, or hacked. Accelerated to breakneck speed then steered into a tree where it exploded and he died.
An artwork conveying well-wishes for the passengers and crew of the missing Malaysia Airlines Flight MH370 is seen at a viewing gallery in Kuala Lumpur International Airport March 19, 2014. (Reuters)
An artwork conveying well-wishes for the passengers and crew of the missing Malaysia Airlines Flight MH370 is seen at a viewing gallery in Kuala Lumpur International Airport March 19, 2014. (Reuters)
With MH370 we have two clear examples of hard evidence where military style 'news management' or information warfare' appears to be the only explanation for cascades of malicious news stories spreading at the speed of light around the worlds news-wires designed to kill what may well be the truth stone dead.

Similarities to the 9/11 attacks and Britain's role

The bizarre zigzag routes followed by MH370 are exactly the sort of flight path demonstrated during the September 11 attacks. On 9/11 we saw the same mysterious switching off, whether remotely or by the pilots, of transponders which should have been reporting the planes’ speed, altitude and position to air traffic control. If anything, the 777 is even more liable to cyber hijacking than the 767s involved in the 9/11 attacks. It was the first production aircraft to have no controls by which the pilot has direct influence over any part of the aircraft. It's all via the flight management system.
Britain’s role too has not been entirely as an honest broker. Private military connected firm Inmarsat have given impressive looking maps instructing rescuers where to search, but consistently failed to reveal the raw data which, they say, led to those conclusions. The UK Air Accident Investigation Branch too has given expert advice without fleshing out the full reasons for its conclusions.
On the other hand, Rolls Royce is the star of the piece, exposing an enormous flaw in the initial‘lost plane’ theory: that MH370 flew on for over five hours. Airliners in trouble simply do not fly on for five hours and then plunge into the sea.
In the land where, as of last week, friends and family are prohibited from sending Bibles to their loved ones in prison, nothing in the way of barbarism from our real leaders across the Atlantic, now entirely contemptuous of the world and citizenry they are supposed to serve, would surprise me.

Placing Flight 370 in context , one must consider events that have directly preceded this event..... Just a few recent highlights follow.....

Petrodollar assault.....

US Threatens Russia Over Petrodollar-Busting Deal

Tyler Durden's picture

On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar
We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.
As we explained earlier in the week,
Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.


"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime,"
The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.

The existence of “petrodollars” is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.

Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the “sanctions war” between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .

The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosneft, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.

First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must should ditch the dollar. “ They must be braver in signing contracts in rubles and the currencies of partner-countries, ” he said.

Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. “ I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ”, Kostin told the attendees of the annual Russian Bank Association meeting.

Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. “ Some ‘hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines,” she said.

It seems that Moscow has decided who will be in charge of the “boomerang”. Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that " it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies ". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.

Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a “jumbo deal” with Indian companies. In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the “petroruble” and will hurt the petrodollar.

It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency.The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia?During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.
Finally, those curious what may happen next, only not to Iran but to Russia, are encouraged to read "From Petrodollar To Petrogold: The US Is Now Trying To Cut Off Iran's Access To Gold."


What About The Dollar: Russia, Iran Announce $20 Billion Oil-For-Goods Deal

Tyler Durden's picture

Spot what is missing in the just blasted headline from Bloomberg:
If you said the complete absence of US Dollars anywhere in the funds flow you are correct. Which is precisely what we have been warning would happen the more the West and/or JPMorgan pushed Russia into a USD-free corner.
Once again, from our yesterday commenton the JPM Russian blockade: "what JPM may have just done is launch a preemptive strike which would have the equivalent culmination of a SWIFT blockade of Russia, the same way Iran was neutralized from the Petrodollar and was promptly forced to begin transacting in Rubles, Yuan and, of course, gold in exchange for goods and services either imported or exported. One wonders: is JPM truly that intent in preserving its "pristine" reputation of not transacting with "evil Russians", that it will gladly light the fuse that takes away Russia's choice whether or not to depart the petrodollar voluntarily, and makes it a compulsory outcome, which incidentally will merely accelerate the formalization of the Eurasian axis of China, Russia and India?"
In other words, Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.
More from Reuters:
Iran and Russia have made progress towards an oil-for-goods deal sources said would be worth up to $20 billion, which would enable Tehran to boost vital energy exports in defiance of Western sanctions, people familiar with the negotiations told Reuters.

In January Reuters reported Moscow and Tehran were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

The White House has said such a deal would raise "serious concerns" and would be inconsistent with the nuclear talks between world powers and Iran.

A Russian source said Moscow had "prepared all documents from its side", adding that completion of a deal was awaiting agreement on what oil price to lock in.

The source said the two sides were looking at a barter arrangement that would see Iranian oil being exchanged for industrial goods including metals and food, but said there was no military equipment involved. The source added that the deal was expected to reach $15 to $20 billion in total and would be done in stages with an initial $6 billion to $8 billion tranche.

The Iranian and Russian governments declined to comment.

Two separate Iranian officials also said the deal was valued at $20 billion. One of the Iranian officials said it would involve exports of around 500,000 barrels a day for two to three years.

"Iran can swap around 300,000 barrels per day via the Caspian Sea and the rest from the (Middle East) Gulf, possibly Bandar Abbas port," one of the Iranian officials said, referring to one of Iran's top oil terminals.

"The price (under negotiation) is lower than the international oil price, but not much, and there are few options. But in general, a few dollars lower than the market price."
Surely an "expert assessment" is in order:
"The deal would ease further pressure on Iran's battered energy sector and at least partially restore Iran's access to oil customers with Russian help," said Mark Dubowitz of Foundation for Defense of Democracies, a U.S. think-tank.

"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime," he added.
You don't say: another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.
Also, when did the "Foundation for Defense of Petrodollar" have the last word replaced with "Democracies"?

Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China

Tyler Durden's picture

If it was the intent of the West to bring Russia and China together - one a natural resource (if "somewhat" corrupt) superpower and the other a fixed capital / labor output (if "somewhat" capital misallocating and credit bubbleicious) powerhouse - in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely "going according to plan."
For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead... and quite a few steps east.
While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may refrain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.
Here is what will likely happen next, as explained by Reuters:
Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow's seizure of the Black Sea peninsula from Ukraine would be counter-productive.

The underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. 

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.
More details on the revelation of said "Holy Grail":
State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world's largest producer of conventional gas to the largest consumer.

"May is in our plans," a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: "It would be logical to expect the deal during Putin's visit to China."
Summarizing what should be and is painfully obvious to all, but apparently to the White House, which keeps prodding at Russia, is the following:
"The worse Russia's relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you're isolated," said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.
Bingo. And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China's largest foreign source of crude, whose crown prince also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.
As reported previously, China has already implicitly backed Putin without risking it relations with the West. "Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia. Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan,it has refused to criticize Moscow. The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world's second biggest economy and it opposes the spread of Western-style democracy."

This culminated yesterday, when as wereported last night, Putin thanked China for its "understanding over Ukraine." China hasn't exactly kept its feelings about closer relations with Russia under wraps either:
Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China's leader last year and attending the opening of the Winter Olympics in Sochi last month.

Many Western leaders did not go to the Games after criticism of Russia's record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were "close".
The punchline: "A strong alliance would suit both countries as a counterbalance to the United States." An alliance that would merely be an extension of current trends in close bilateral relations, including not only infrastructure investment but also military supplies:
However, China overtook Germany as Russia's biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

If Russia is isolated by a new round of Western sanctions - those so far affect only a few officials' assets abroad and have not been aimed at companies - Russia and China could also step up cooperation in areas apart from energy.CAST's Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries. "With Western sanctions, the atmosphere could change quickly in favor of China," said Brian Zimbler Managing Partner of Morgan Lewis international law firm's Moscow office. 

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China's seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia's biggest trade partner, accounting for almost half of all its trade turnover.
And as if pushing Russia into the warm embrace of the world's most populous nation was not enough, there is also the second most populated country in the world, India.
Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea - saying India had shown "restraint and objectivity".

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia's ties with traditionally non-aligned India to flourish.

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

Putin's moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. "Russia has legitimate interests," he added.
To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the "Asian axis", the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.

China cornering gold market - has the US and USD fallen into a carefully crafted trap by China working in conjunction with Russia ? An argument could be made in 2013 while the world was watching Syria , Iran , Ukraine and other geopolitical flash-points , China quietly stepped in and took control of the world gold market ! Last chart will not your socks off , I guarantee .......

Renewed estimates of Chinese gold demand

Geopolitical and market background

I have been revisiting estimates of the quantities of gold being absorbed by China, and yet again I have had to revise them upwards. Analysis of the detail discovered in historic information in the context of China's gold strategy has allowed me for the first time to make reasonable estimates of vaulted gold, comprised of gold accounts at commercial banks, mine output and scrap. There is also compelling evidence mine output and scrap are being accumulated by the government in its own vaults, and not being delivered to satisfy public demand.

The impact of these revelations on estimates of total identified demand and the drain on bullion stocks from outside China is likely to be dramatic, but confirms what some of us have suspected but been unable to prove. Western analysts have always lagged in their understanding of Chinese demand and there is now evidence China is deliberately concealing the scale of it from us. Instead, China is happy to let us accept the lower estimates of western analysts, which by identifying gold demand from the retail end of the supply chain give significantly lower figures.
Before 2012 the Shanghai Gold Exchange was keen to advertise its ambitions to become a major gold trading hub. This is no longer the case. The last SGE Annual Report in English was for 2010, and the last Gold Market Report was for 2011. 2013 was a watershed year. Following the Cyprus debacle, western central banks, seemingly unaware of latent Chinese demand embarked on a policy of supplying large quantities of bullion to break the bull market and suppress the price. The resulting expansion in both global and Chinese demand was so rapid that analysts in western capital markets have been caught unawares.
I started following China's gold strategy over two years ago and was more or less on my own, having been tipped off by a contact that the Chinese government had already accumulated large amounts of gold before actively promoting gold ownership for private individuals. I took the view that the Chinese government acted for good reasons and that it is a mistake to ignore their actions, particularly when gold is involved.
Since then, Koos Jansen of has taken a specialised interest in the SGE and Hong Kong's trade statistics, and his dedication to the issue has helped spread interest and knowledge in the subject. He has been particularly successful in broadcasting market statistics published in Chinese to a western audience, overcoming the lack of information available in English.
I believe that China is well on the way to having gained control of the international gold market, thanks to western central banks suppression of the gold price, which accelerated last year. The basic reasons behind China's policy are entirely logical:
• China knew at the outset that gold is the west's weak spot, with actual monetary reserves massively overstated. For all I know their intelligence services may have had an accurate assessment of how much gold there is left in western vaults, and if they had not, their allies, the Russians, probably did. Representatives of the People's Bank of China will have attended meetings at the Bank for International Settlements where these issues are presumably openly discussed by central bankers.
• China has significant currency surpluses under US control. By controlling the gold market China can flip value from US Treasuries into gold as and when it wishes. This gives China ultimate financial leverage over the west if required.
• By encouraging its population to invest in gold China reduces the need to acquire dollars to control the renminbi/dollar rate. Put another way, gold purchases by the public have helped absorb her trade surplus. Furthermore gold ownership insulates her middle classes from external currency instability which has become an increasing concern since the Lehman crisis.
For its geopolitical strategy to work China must accumulate large quantities of bullion. To this end China has encouraged mine production, making the country the largest producer in the world. It must also have control over the global market for physical gold, and by rapidly developing the SGE and its sister the Shanghai Gold Futures Exchange the groundwork has been completed. If western markets, starved of physical metal, are forced at a future date to declare force majeure when settlements fail, the SGE and SGFE will be in a position to become the world's market for gold. Interestingly, Arab holders have recently been recasting some of their old gold holdings from the LBMA's 400 ounce 995 standard into the Chinese one kilo 9999 standard, which insures them against this potential risk.
China appears in a few years to have achieved dominance of the physical gold market. Since January 2008 turnover on the SGE has increased from a quarterly average of 362 tonnes per month to 1,100 tonnes, and deliveries from 44 tonnes per month to 212 tonnes. It is noticeable how activity increased rapidly from April 2013, in the wake of the dramatic fall in the gold price. From January 2008, the SGE has delivered from its vaults into public hands a total of 6,776 tonnes. This is illustrated in the chart below.
SGE Gold monthly (kg)
This is only part of the story, the part that is in the public domain. In addition there is gold imported through Hong Kong and fabricated for the Chinese retail market bypassing the SGE, changes of stock levels within the SGE's network of vaults, the destination of domestic mine output and scrap, government purchases of gold in London and elsewhere, and purchases stored abroad by the wealthy. Furthermore the Chinese diaspora throughout South East Asia competes with China for global gold stocks, and its demand is in addition to that of China's Mainland and Hong Kong.
The Shanghai Gold Exchange (SGE)The SGE, which is the government-owned and controlled gold exchange monopoly, runs a vaulting system with which westerners will be familiar. Gold in the vaults is fungible, but when it leaves the SGE's vaults it is no longer so, and in order to re-enter them it is treated as scrap and recast. In 2011 there were 49 vaults in the SGE's system, and bars and ingots are supplied to SGE specifications by a number of foreign and Chinese refiners. Besides commercial banks, SGE members include refiners, jewellery manufacturers, mines, and investment companies. The SGE's 2010 Annual Report, the last published in English, states there were 25 commercial banks included in 163 members of the exchange, 6,751 institutional clients accounting for 81% of gold traded, and 1,778,500 clients of the commercial banks with gold accounts. The 2011 Gold Report, the most recent available, stated that the number of commercial bank members had increased to 29 with 2,353,600 clients, and given the rapid expansion of demand since, the number of gold account holders is likely to be considerably greater today.
About 75% of the SGE's gold turnover is for forward settlement and the balance is for spot delivery. Standard bars are Au99.95 3 kilos (roughly 100 ounces), Au99.99 1 kilo, Au100g and Au50g. The institutional standard has become Au99.99 1 kilo bars, most of which are sourced from Swiss refiners, with the old Au99.95 standard less than 15% of turnover today compared with 65% five years ago. The smaller 100g and 50g bars are generally for retail demand and a very small proportion of the total traded. Public demand for smaller bars is satisfied mainly through branded products provided by commercial banks and other retail entities instead of from SGE-authorised refiners.
Overall volumes on the SGE are a tiny fraction of those recorded in London, and the market is relatively illiquid, so much so that opportunities for price arbitrage are often apparent rather than real. The obvious difference between the two markets is the large amounts of gold delivered to China's public. This has fuelled the rapid growth of the Chinese market leading to a parallel increase in vaulted bullion stocks, which for 2013 is likely to have been substantial.
By way of contrast the LBMA is not a regulated market but is overseen by the Bank of England, while the SGE is both controlled and regulated by the People's Bank of China. The PBOC is also a member of both its own exchange and of the LBMA, and deals actively in non-monetary gold. While the LBMA is at arm's length from the BoE, the SGE is effectively a department of the PBOC. This allows the Chinese government to control the gold market for its own strategic objectives.

Quantifying demand

Identifiable demand is the sum of deliveries to the public withdrawn from SGE vaults, plus the residual gold left in Hong Kong, being the net balance between imports and exports. To this total must be added an estimate of changes in vaulted bullion stocks.
SGE gold deliveriesGold deliveries from SGE vaults to the general public are listed both weekly and monthly in Chinese. The following chart shows how they have grown on a monthly basis.
SGE Gold monthly (kg)
Growth in public demand for physical gold is a reflection of the increased wealth and savings of Chinese citizens, and also reflects advertising campaigns that have encouraged ordinary people to invest in gold. Advertising the attractions of gold investment is consistent with a deliberate government policy of absorbing as much gold as possible from western vaults, including those of central banks.
Hong KongHong Kong provides import, export and re-export figures for gold. All gold is imported, exports refer to gold that has been materially altered in form, and re-exports are of gold transited more or less unaltered. Thus, exports refer mainly to jewellery which in China's case is sold directly into the Mainland without going through the SGE, and re-exports refer to gold in bar form which we can assume is delivered to the SGE. Some imported gold remains on the island, and some is re-exported from China back to Hong Kong. This gold is either vaulted in Hong Kong or alternatively turned into jewellery and sold mostly to visitors from the Mainland buying tax-free gold.
The mainstream media has reported on the large quantities of gold flowing from Switzerland to Hong Kong, but this is only part of the story. In 2013, Hong Kong imported 916 tonnes from Switzerland, 190 tonnes from the US, 176 tonnes from Australia and 150 tonnes from South Africa as well as significant tonnages from eight other countries, including the UK. She also imported 337 tonnes from Mainland China and exported 211 tonnes of it back to China as fabricated gold.
Hong Kong is not the sole entry port for gold destined for the Mainland. The table below illustrates how Hong Kong's gold trade with China has grown, and its purpose is to identify gold additional to that supplied via Hong Kong to the SGE. Included in the bottom line, but not separately itemised, is fabricated gold trade with China (both ways), as well as the balance of all imports and exports accruing to Hong Kong.
Hong Kong plus fabricated supplies
The bottom line, "Additional supply from HK" should be added to SGE deliveries and changes in SGE vaulted gold to create known demand for China and Hong Kong.
SGE vaulted goldThe increase in SGE vaulted gold in recent years can only be estimated. However, it was reported in earlier SGE Annual Reports to amount to 519.55 tonnes in 2008, 582.6 tonnes in 2009, and 841.8 tonnes in 2010. There have been no reported vault figures since.
The closest and most logical relationship for vaulted gold is with actual deliveries. After all, public demand is likely to be split between clients maintaining gold accounts at member banks, and clients taking physical possession. The ratios of delivered to vaulted gold were remarkably stable at 1.05, 1.03, and 0.99 for 2008, 2009 and 2010 respectively. On this basis it seems reasonable to assume that vaulted gold has continued to increase at approximately the same amount as delivered gold on a one-to-one basis. The estimated annual increase in vaulted gold is shown in the table below.
Vaulted gold
The benefits of vault storage, ranging from security from theft to the ability to use it as collateral, seem certain to encourage gold account holders to continue to accumulate vaulted metal rather than take personal possession.


Supply consists of scrap, domestically mined and imported gold
ScrapScrap is almost entirely gold bars, originally delivered from the SGE's vaults into public hands, and subsequently sold and resubmitted for refining. Consequently scrap supplies tend to increase when gold can be profitably sold by individuals in a rising market, and they decrease on falling prices. There is very little old jewellery scrap and industrial recycling is not relatively significant. Official scrap figures are only available for 2009-2011: 244.5, 256.3 and 405.8 tonnes respectively. I shall therefore assume scrap supplies for 2012 at 430 tonnes and 2013 at 350 tonnes, reflecting gold price movements during those two years.
Scrap is refined entirely by Chinese refiners, and as stated in the discussion concerning mine supply below, the absence of SGE standard kilo bars in Hong Kong is strong evidence that they are withheld from circulation. It is therefore reasonable to assume that scrap should be regarded as vaulted, probably held separately on behalf of the government or its agencies.
Mine supplyChina mines more gold than any other nation and it is generally assumed mine supply is sold through the SGE. That is what one would expect, and it is worth noting that a number of mines are members of the SGE and do indeed trade on it. They act as both buyers and sellers, which suggests they frequently use the market for hedging purposes, if nothing else.
Typically, a mine will produce doré which has to be assessed and paid for before it is forwarded to a refinery. Only when it is refined and cast into standard bars can gold be delivered to the market. Broadly, one of the following procedures between doré and the sale of gold bars will occur:
• The refiner acts on commission from the mine, and the mine sells the finished product on the market. This is inefficient management of cash-flow, though footnotes in the accounts of some mine companies suggest this happens.
• The refiner buys doré from the mine, refines it and sells it through the SGE. This is inefficient for the refiner, which has to find the capital to buy the doré.
• A commercial bank, being a member of the SGE, finances the mine from doré to the sale of deliverable gold, paying the mine up-front. This is the way the global mining industry often works.
• The government, which ultimately directs the mines, refiners and the SGE, buys the mine output at pre-agreed prices and may or may not put the transaction through the market.
I believe the government acquires all mine output, because it is consistent with the geopolitical strategy outlined at the beginning of this article. Furthermore, two of my contacts, one a Swiss refiner with facilities in Hong Kong and the other a vault operator in Hong Kong, tell me they have never seen a Chinese-refined one kilo bar. Admittedly, most one kilo bars in existence bear the stamp of Swiss and other foreign refiners, but nonetheless there must be over two million Chinese-refined kilo bars in existence. Either Chinese customs are completely successful in stopping all ex-vault Chinese-refined one kilo bars leaving the Mainland, or the government takes all domestically refined production for itself, with the exception perhaps of some 100 and 50 gram bars. Logic suggests the latter is true rather than the former.
Since the SGE is effectively a department of the PBOC, it must be at the government's discretion if domestic mine production is put through the market by the PBOC. Whether or not Chinese mine supply is put through the market is impossible to establish from the available statistics, and is unimportant: no bars end up in circulation because they all remain vaulted. It is material however to the overall supply and demand picture, because global mine supply last year drops to about 2,490 tonnes assuming Chinese production is not available to the market.
Geopolitics suggests that China acquires most, if not all of its own mine and scrap production, which accumulates in the vaulting system. This throws the emphasis back on the figures for vaulted gold, which I have estimated at one-for-one with delivered gold due to gold account holder demand. To this estimate we should now add both Chinese scrap and mine supply. This would explain why vaulted gold is no longer reported, and it would underwrite my estimates of vaulted gold from 2011 onwards.
Further comments on vaulted goldFrom the above it can be seen there are three elements to vaulted gold: gold held on behalf of accountholders with the commercial banks, scrap gold and mine supply. The absence of Chinese one kilo bars in circulation leads us to suppose scrap and mine supply accumulate, inflating SGE vault figures, but a moment's reflection shows this is too simplistic. If it was included in total vaulted gold, then the quantity of gold held by accountholders with the commercial banks, as reported in 2009-11, would have fallen substantially to compensate. This cannot have been the case, as the number of accountholders increased substantially over the period, as did interest in gold investment.
Therefore, scrap and mined gold must be allocated into other vaults not included in the SGE network, and these vaults can only be under the control of the government. It will have been from these vaults that China's sudden increase in monetary gold of 444 tonnes in the first quarter of 2009 was drawn, which explains why the total recorded in SGE vaults was obviously unaffected. So for the purpose of determining the quantity of vaulted gold, scrap and mined gold must be added to the gold recorded in SGE vaults.
Though it is beyond the scope of this analysis, the existence of government vaults not in the SGE network should be noted, and given cumulative mine production over the last thirty years, scrap supply and possibly other purchases of gold from abroad, the bullion stocks in these government vaults are likely to be very substantial.

Western gold flows to China

We are now in a position to estimate Chinese demand and supply factors in a global context. The result is summarised in the table below.
Global demand and supply
Chinese demand before 2013 had arrived at a plateau, admittedly higher than generally realised, before expanding dramatically following last April's price drop. Taking the WGC's figures for the Rest of the World gives us new global demand figures, which throw up a shortfall amounting to 9,461 tonnes since the Lehman crisis, satisfied from existing above-ground stocks.
This figure, though shocking to those unaware of these stock flows, could well be conservative, because we have only been able to address SGE deliveries, vaulted gold and Hong Kong net flows. Missing from our calculations is Chinese government purchases in London, demand from the ultra-rich not routed through the SGE, and gold held by Chinese nationals abroad. It is also likely that demand from the Chinese diaspora in SE Asia and Asian is also underestimated by western analysts.
There are assumptions in this analysis that should be clear to all. But if it only serves to expose the futility of attempts in western capital markets to manage the gold price, the exercise has been worthwhile. For much of 2013 commentators routinely stated that Asian demand was satisfied from ETF redemptions. But as can be seen, ETF sales totalling 881 tonnes covered only one quarter of the west's shortfall against China, the rest coming mostly from central bank vaults. Anecdotal evidence from Switzerland is that the four major refiners have been working round-the-clock turning LBMA 400 ounce bars into one kilo 9999 bars for China. They are even working with gold bars that are battered and dusty, which suggests the west is not only digging into deep storage to satisfy Chinese demand at current prices, but digging a hole for itself as well.

And consider China's move with Jim Willie's assessment .... Game over ?

The shocks will be many as the USDollar struggles and falls off the global financial stage in full view. The desperate maneuvers like in Syria and Ukraine should be seen as last ditch efforts to save a dying system. For two decades the USDollar has been defended by military means. Worse, for 50 years the USGovt has been a hidden nazi enclave of wicked fascists who have hidden behind their overt disdain for communism, with Kissinger the flag bearer, with Brzezinski the ideologue, with Papa Bush the executor, with narcotics and genetics and gold thefts their principal agenda. The official US support of fascist regimes includes a list of nations as long as your arm. Since 2008 when the Lehman kill was executed in order to rescue Goldman Sachs, when Fannie Mae was hidden under the USGovt roof to prevent its $trillion fraud from being exposed, and when AIG was tucked in the USFed basement closet for ample monetized rescues to patch the derivative black holes, the Anglo-American banking system has indeed been going through trials and tribulations, leading to its death throes. The climax of the banking system death process is upon us finally, the fibrillations of sudden illiquidity against the backdrop of relentless unforgiving insolvency so evident to those with eyes that function. Never before has the USGovt been so plain in its fascist ways, with abuses on domestic soil and installed nazi regimes on foreign soil. They kill economies systematically. They wage war relentlessly, using it as a business initiative. They control bank movements obsessively. They monitor human movement compulsively. In Kiev were seen the swastikas on armbands. The name Neo-Con is derived as a more palatable version of Neo-Nazi. The game is over for their captured gutted violated USDollar kingdom in a veritable killing field of nations.

The entire world must create a more workable system, an equitable system. The banking structures and trading systems require it. No longer can the Anglo-American free credit card be tolerated. No longer can the exporting nations accept vendor financed trade, the credit extended by the producers. No longer can the world be subjected to USMilitary aggression, financed by the victim nations. No longer can a deeply corrupted and immoral pack of leaders be permitted to roam in privileged channels. No longer can absent criminal prosecution be forced upon the masses. No longer can the battle among vile secular bankers and satanic bankers and bankers from the Sanhedrin tree be permitted in the open. No longer can the battle go on for tight global control with liberties tossed in the dustbin. The path to totalitarianism financed by narcotics in a magnificent undertow must be interrupted, the Orwellian world within view.

The Paradigm Shift is far along, no more an infant project. The Western leading nations have transformed into the Axis of Fascism. The Eastern leading nations have emerged as seeking viable fair solutions, essentially a return to the Gold Standard. The physical gold migration from London and Switzerland proves the shift in power underway. The swing nations of Germany, Saudi Arabia, Turkey, India, and Iran will play pivotal roles in shaping the future. The year 2014 will not end with any remote resemblance to its start.

Ukraine was clearly the Waterloo event for the USDollar, which requires the passage of time for critical changes in psychology and perception. Putin is in no hurry. Besides, when Russia does respond, it will be on the financial and economic front, where the US & British puppeteers are legless and without moral spine. The US-led Western NATO forces, joined by secretive mercenary forces and Blackstone thugs, invaded Ukraine and thereby fell into a significant trap set by Putin. The Germans had been making important moves toward a deeper alliance with Russia. The first interruption was Cyprus, where Russian banks conduct intermediary operations and where GazpromBank has offices, and where the Russians were purchasing gold in large quantities. The second interruption was Syria, where the Russians were working steadfastly to establish the Iran Shiite gas pipelines for Gazprom system integration, which would (will) supply the Western European market. The third interruption is Ukraine, the last ditch attempt to cut Russia off from Eastern Europe, using Western energy firms as the leverage device. Under the cloud of confusion, the Western fascists stole the Ukrainian central bank gold and diverted $70 billion of public funds into Swiss banks. The world is on the path to demanding a solution, as the fascists are being recognized and called out. The world demands a viable solution. It is coming. It will shake the world.

Since the Black Monday 1987 event, the big US money center banks became dependent upon narco money laundering functions. Since the 2003 wars with Iraq and Afghanistan, the big US banks would fail without the steady narco fund injections. Managing reserve efficacy requirements in overnight accounting has become a daily challenge. In the following decade, these big banks, together with the big London banks, joined in service by the big French and German banks, have lashed themselves together with derivative rope, while working in deep collusion to rig the LIBOR, the FOREX, and the GOLD markets. The bold crimes and illicit activity and blatant malfeasance are in the open nowadays, have been in the open for over two years, yet without any semblance of prosecution, remedy, or restitution. The regulators continue in their musical chair exercises, which include sitting on their hands while saluting their bank masters. The big US banks have become control centers for criminal interventions in some bizarre service to preserve a corrupted system, while crafting legislation in the USCongress that serves their purposes. Their big bank structures are as filled with toxic matter as they are crime syndicate vault stores. The world demands a viable solution. It is coming. It will shake the world.

It has become comical that supposed experts actually believe certain markets to be viable, or offer value, or present opportunity. The following financial markets are deeply corrupted and heavily controlled. USTreasury Bonds are maintained by direct unsterilized USFed monetization and bond purchases, reinforced by Interest Rate Swap derivative contracts. The USTBond market controls are furthermore blessed as the new normal, a stabilizing force, in almost full consensus. The US Stock market is maintained by the Working Group for Financial Markets, when the Wall Street banks are subject to fatigue. The USDollar is maintained by the USDept Treasury’s favorite tool, the Exchange Stabilization Fund, which employs FOREX derivatives with its army of Western banker tools. The Crude Oil market is maintained by the Wall Street trading desks, but to a lesser extent of control in recent months, as the Saudi Petro-Dollar is fast fading into the annals of history. The Gold market is maintained by Wall Street naked shorts, in concert with London bank naked shorts, aided by SPDR Gold Trust inventory raids, aided by denied COMEX deliveries, all under the sleepy eyes of the Commodity Futures Trading Commission. The US Big Bank stocks are maintained by phony accounting blessed by the Financial Accounting Standard Board, which overlooks the falsified portfolios for their asset values and hollowed out reserves. One could go on further. The world demands a viable solution. It is coming. It will shake the world.

The global banking system cannot continue to function with USTreasury Bonds as reserve capital. It is not pristine, not of high value, not of any value really. The USTBonds are toxic paper that serves as phantom foundation for the Western banking system. The fiat currencies are backed by debt which is falling apart into crumbs on the floor. The USTBonds cannot be called AAA-rated much longer, since they are from a nearly infinite USGovt debt balance sheet, when considering unfunded liabilities. The global banking system suffers from acute blood contamination. The bank welfare, the social network, the broad-based pensions, the war costs, these have bankrupted the USGovt balance sheet at a time when the USEconomy fails to recover, except when the Weimar rose colored glasses are worn for perception visual aids. The world demands a viable solution. It is coming. It will shake the world.

The backlash to the widely approved USFed hyper monetary inflation policy has finally come. The backlash actually began last September 2013 when the pathetic trial balloon from Taper Talk had its bluff called. The outcome was the stark realization that the QE to Infinity was actual policy, cheered on by the financial markets, begged by the US corporate captains of industry, who both urgently require credit faucets to flow. The global fallout has included higher food prices, higher business cost structure in every nation, shuttered businesses, and profound economic deterioration, which has resulted in widespread capital destruction. Anyone like Michael Pento (see CNBC last days of March) who calls the USFed policy destructive is wiped clean. The entire Eastern world is demanding an end to the debasement of USD-based assets and reserves, along with the harmful influence to lift cost structures everywhere. The world demands a viable solution. It is coming. It will shake the world.

The Eastern nations have had enough of the Anglo-American hegemony (called bullying or criminal force feeding). They dislike the usual weapons used such as Bank SWIFT blocks, bank center obstacles, sanctions against companies doing business with labeled rogue nations, interrupted contract bidding, and more. The Eastern nations began banding together with the G-20 Meetings, then put the G-7 and G-8 into the shadows, then built the BRICS nation consortium. Finally they are constructing the potent BRICS Development Bank and the BRICS Central Bank and the BRICS communications network. Their central bank is the sleeper cell in the mix. It will be revealed soon as the processing center to convert USTBonds to Gold bullion. Later it will convert other major nation sovereign debt to Gold bullion, like UKGilts, EuroBonds, and JapGovtBonds. The Eastern nations have acted in unison, shown solidarity, worked in coordinated channels, and seek common goals. They are a force to be reckoned with, while the G-7 diminishes into a mist of a faded empire. Out of the BRICS will come new organizations and institutions that fortify the East and display in full force the Global Paradigm Shift. The BRICS and G-20 are the agents to the shift, led by Russian & Chinese projects, pacts, accords, and initiatives. It is coming. It will shake the world.

When the USGovt imposed sanctions against Iran in 2012, the chest beating was in full view. The celebrations took place before the battles were waged, and then lost. The British and European Governments followed suit, like the goose stepped phalanx they represent, all done in full view. The primping in the mirror was in full view. The browbeating was in full view. The handshakes were in full view. The banker-led Western governments were very impressed with themselves. The Jackass at the time mocked them at every opportunity and every turn, for their futile efforts and self-aggrandizement. The triangle or Iran, Turkey, and India defeated the USGovt sanctions with clever gold trade settlement schemes, using intermediaries, avoiding legal obstacles, and accomplishing the task to make payments for Iranian oil & gas shipments. The US left a door open for Iranian companies to serve as mules to deliver gold bullion, gold that was provided by Turkish banks acting as intermediaries. The Indian energy customer found a way to make payment to Iran. The sanctions workaround was born. It will serve as a model in defiance to the Western clown show, which erected a veritable Maginot Line that the Persian mules jumped over. How pathetic the arrogance of the Anglo-American banker hacks! The Gold Trade settlement has a prototype, developed but in need of some refinement. The Gold Standard will return, not in bank transfer platforms or currency trading platforms, but in peer-to-peer transactions made in settlement. The world demands a new payment system, an alternative to the deeply flawed USD-centric current system. Even effective viable barter systems are to emerge. It is coming. It will shake the world.

A year ago, the Shanghai crowd began the highly disruptive practice of permitting a higher gold futures contract price, when compared to the corrupted suppressed New York and London price. Perhaps some extra optimism was involved, hoping for wide premiums in Shanghai versus NY/London. However, even 2% to 3% is sufficient to promote arbitrage and a gradual but significant drainage of gold bullion, leaving London and entering Hong Kong and Shanghai. Next comes the Shanghai crude oil futures contract, to be priced in Chinese Yuan terms. The new Shanghai Free Trade Zone is fast forming. It will feature fully convertible Chinese Yuan by June, not in two years. It will happen this summer. The component of Shanghai Yuan price for crude oil and gold together will be highly disruptive to the entire Petro-Dollar system. The endorsement must come from the Saudis, which will happen on cue. It will spawn the Petro-Yuan, to first challenge the Petro-Dollar, then displace it. The foundation for the USDollar is fracturing in full view. It is coming. It will shake the world.

Russia is the true powerhouse in the crude oil sector. The Saudis are yesterday’s news, as their excess capacity is non-existent. Their water cut is over 90% in the giant Ghawar, meaning its fields produce almost ten times as much brine water as crude oil. The Russians have the excess capacity and will begin to flex their energy muscles very soon. Price is determined at the margin, not the myth or false billboard. The focus has been on natural gas, but the oil & gas will be double barreled shot gun applied to alter the European hearts and minds. The Jackass forecasts that the Kremlin will announce that oil & gas payments by European clients must be in Rubles, Yuan, or Gold bullion. The surprise will be inclusion of Yuan for potential payments to Russia, which will demonstrate an alliance with China. Thoughts and threats of isolating Russia are as absurd as notions of gold sitting in FortKnox. A nation with twelve time zones cannot be encircled. The payments for Russian energy sales in Yuan terms will be a significant part of the Petro-Yuan system to emerge. Moreover, the Russians can use the Yuan to purchase finished products from China, and to aid the internationalization of the Yuan itself. Some serious back scratching is about to be exhibited by the Eastern Dynamic Duo. It is coming. It will shake the world.

Naturally, the world’s biggest oil importer will work to set terms for its own purchase of crude oil. They will hasten a change from any present system that requires them to pay for Saudi oil, or Iranian oil, or Indonesian oil, or Nigerian oil, the change to feature payment in USDollar terms. They have sufficient market power to dictate terms, and they will do exactly that. They will insist on purchasing oil imports with transactions completed in Chinese Yuan payments. They will strongarm the Saudis into accepting Yuan payments, and the entire cast of weakling OPEC players will follow the leader. The Petro-Yuan will be born in Saudi Arabia, with a Beijing phone call. It is coming. It will shake the world.

The Saudis are in a huge bind. They lost their USGovt protector for the last 50 years. They need a new protector in order to continue the pilferage and plunder of the desert kingdom’s natural wealth. It is hardly a royal family asset, but the West enables it to be exactly so. The Arab Spring charade and smokescreen effectively ripped the cord between the WashingtonDC and Riyadh. The turning point was Egypt, where the US engineered a Morsi regime installment, which the Saudis quickly eradicated. Now the dirty little secret is that the Saudis are more in control of the Suez Canal than the US and British gangsters, where Persian Gulf oil for the European market must make passage. But the Persian Gulf needs more unity, and needs a cohesive agent, which must be design sail some impressive ships and sport some hefty guns. The Chinese not only fit the bill, but the Saudis have already answered the call. The economic summit in late March in Beijing, led by President Xi Jinping and Prince Salman, provided all the necessary groundwork. The Saudis have a Chinese missile deal in the works, sort of a consummated marriage. The Saudis will soon announce, while standing under the Chinese umbrella, that any oil payments are acceptable in USDollars, Chinese Yuan, Euros, British Pounds, Swiss Francs, and Japanese Yen. The Saudis will transform themselves into an equal opportunity crude oil mart with many working windows. They will kneel before all fiat paper princes, including the King Dollar. It is coming. It will shake the world.

The influence of OPEC will fade with the Saudi desert sun. The OPEC cartel serves as the Petro-Dollar active platform to enforce the payment system in USDollar terms. Deviations invite USMilitary reaction. See Iraq, dateline 2003. See Iran, dateline 2012. Oil policy is dominated by the Saudis in the OPEC meetings, often held in Vienna. The Arab Royals like to get out of the office and mingle, even see the world that is not sun scorched. In order to comply with the Chinese new leadership in the oil and currency nexus, the Saudis will have to swallow hard and permit the Iranians to become a leading player within the NatGasCoop. It will supplant OPEC. It will be led by Russian Gazprom. It will not be dominated by oil transport ships, but rather by natgas pipelines. The key new ports will be in Syria, in Israel, with connector valves to Greece, Ukraine, and soon Pakistan. What OPEC is to the Petro-Dollar, the NatGasCoop will be to the Petro-Yuan. The risk to the Arab kingdoms is a return to desert tents and away from palaces. The coop cartel will include strange bedfellows like Iran, Qatar, Israel, Turkmenistan, Algeria, and Russia. It is coming. It will shake the world.

The grand prize has always been Europe. With NATO, the United States captured it. But with bond fraud, failed banks, monetary inflation, toxic patches, austerity plans, bank bail-in threats, agency eavesdropping, and narcotics trafficking, the Anglo-Americans have wrecked their alliance with Western Europe. The clincher and breaking point will be action in Ukraine. The USGovt has been in violation of NATO Treaties forged with Russia ever since 2004 when the defensive missile shield was put in place in Eastern Europe. At the same time, the US courted certain eastern nations to join NATO in a real big stretch. The stretch to impose a nazi regime in Kiev is the final straw. The European nations are splintering away from the US fold, one by one. The reasons stated appear to be financial in uniform fashion. The London bankers and the German bankers will not forego the lucrative Yuan Bond trade, just for a lousy two bits in Ukraine. Besides, they did not share in the looted Ukraine central bank gold, which went to New York Fed vaults. The United States will find itself horribly isolated again and soon, just like in Syria. The Western energy giants of Chevron, Royal Dutch Shell, and ENI of Italy will not enjoy sufficient spoils to keep the European alliance together. It is a pathetic alliance. It has no strong dogma besides thefts and sacked control. It has no deep commitment. The nazi modus operandi has been laid bare. Europe will move gradually to the future, and depart from the past. Europe will be led by Germany, whose industrialist elite are 90% pro-Russian. Europe will turn its back on the United States initiative in Ukraine, with political lip service offered in support, but with absent military commitment and support, or approval for attack under any pretense. Europe will back the Petro-Yuan that is pushed by Russia and China, thus disproving any hint of Russian isolation. Europe will be the midwife to the Petro-Yuan birth. It is coming. It will shake the world.

The death of the Petro-Dollar was written when the USFed announced Quantitative Easing and the uncontrolled spew of bond purchases. The central bank monetary policy to debase the USDollar forced Eastern nations to begin diversification plans out of the USTreasury Bonds held in banking reserves. They suddenly become toxic, falling in value, or propped in value by the Weimar press managed in New York. The death of the Petro-Dollar was confirmed when the Saudis ousted Mohamed Morsi from the US designed throne in CairoEgypt. One must wonder what early assurance China had given to Riyadh Royals in order for the Saudis to pump $6 billion into the Egyptian coffers, alongside certain other Persian Gulf participation. The death of the Petro-Dollar was given a hidden eulogy in Beijing when Xi and Salman worked out numerous supporting deals to lay the foundation for a decade of union. The death of the Petro-Dollar will cause unprecedented ripple effects across the Western world. It is coming. It will shake the world.

The shock waves will be enormous and far reaching, hitting every sector of the USEconomy. The price system will undergo shock from the unwillingness of foreign suppliers to accept old USDollars. The import prices will rise significantly. The supply network will undergo shock from shortages and pockets of inventory lapse. The USGovt will find tremendous challenges in funding its deficits, while the USFed loses its control of the USTreasury market. Expect even the derivative machinery to suffer deep strain, if not breakdown. Foreign banks will engage a grandiose dumping exercise. The new Scheiss Dollar must be born in order to finance the US debt and to assure imported supply, thus to ensure continuation of the USEconomy itself. The USGovt has no jurisdiction over foreign contracts, period! The shock waves for the Petro-Dollar death will urgently force the launch of the domestic Dollar, the decision hastened by the extreme vacuum to come. The Scheiss Dollar will feature an exchange rate that must undergo a painful sequence of devaluations. The poor currency baby will not find stability easily, since devaluations will not be large enough to bring about equilibrium, and will be too small in the hope to avoid disruptions. It is coming. It will shake the world.

The motive for Cyprus action, Syria action, and Ukraine action is to prevent, obstruct, and forestall the progression in the Eurasian Trade Zone. If truth be known, the conflict between the United States and Russia has additional roots in Georgia, dateline 2008. The skeletal system for the trade zone is to be the Gazprom energy pipelines and the scattered LNG nodes. Its headquarters will be Moscow, Beijing, and Berlin, all shown in time, with strong satellites in Delhi and Tokyo. The role played by Iran, Turkey, and Brazil will also be important. The passage of time will be crucially important in the following weeks and months, since time permits the rapid degradation. All of Eastern Europe is watching the horror show in Ukraine, and especially in Kiev. As the rape and pillage is continued in orchestration by the USGovt security agencies, the European Soros gangsters, and the Blackstone thugs, all Eastern European nations will be watching closely. They will wish to escape the scourge of the Anglo-Americans, their French tyrant poodles, the Big Oil firm plunderers, and the Attila the Hun lookalikes. The contamination of the water tables in Ukraine, Bulgaria, Romania, and Poland might turn the tide. The trap has been set, but it cannot spring shut to trap the Western pirates without the passage of time. Putin will use that passage of time to permit the public sentiment to change, and to permit the Ukraine Economy to collapse in double quick timeframe. Without its central bank gold, and without the $billions in official state funds, and without the Western investors, the nation will collapse in three months. It is coming. It will shake the world.

A tremendous opportunity has arisen. The Chinese are in a position to mediate between the United States and Russia, while in the background working vigorously to put the Petro-Yuan final touches in place, while in the background working to put the Gold-backed Yuan currency in place, while in the background working to build the components to the Eurasian Trade Zone, while in the background working to convert the BRICS Banks into a gold acquisition office. China can look like the champion for peace, while winking at Putin through the Kremlin window. Furthermore, China can take the lead in diplomatic roles in the Persian Gulf, like between the Saudis and Oman. Many are the bilateral conflicts within the Persian Gulf, all the result of the Moslem Brotherhood influx supported by the Al-Qaeda main office in Langley. Never has their Al-Q leadership and coordination been more obvious from US offices. As footnote, let it be known that Germany has an open opportunity to rise as the European diplomatic champion. The Germans can mediate between Russia and the other European nations who wish to break away from the US Nazi camp. The important swing state for the uniting of Europe with Asia is Germany, and has always been Germany. The Schaeuble foibles will be overcome in time, a bump in the road. It is coming. It will shake the world.

Consider events in Ukraine and Crimea just before Flight 370.......

Ukraine Orders Full Military Mobilization, Acting PM Says Russian Actions "Declaration Of War"

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With less than 6 hours left until FX trading opens, no resolution to the Ukraine crisis is in sight. Instead the situation has devolved even more and overnightUkraine has ordered a full military mobilization in response to Russia's build-up of its forces in Crimea. Prime Minster Arseniy Yatsenyuk said the country was "on the brink of disaster." Several other measures were announced on Sunday by national security officials:
  • The armed forces would be put on "full combat readiness".
  • Reserves to be mobilised and trained
  • Ukraine's foreign minister will seek the help of US and UK leaders in guaranteeing its security
  • Emergency headquarters to be set up
  • Increased security at key sites, including nuclear plants.
  • Airspace closed to all non-civilian aircraft.
Ukrainian Prime Minister Arseniy Yatsenyuk said Sunday that his country was "on the brink of disaster" and personally blamed Russian President Vladimir Putin for bringing the two nations to the verge of war. Speaking to reporters at the Ukrainian parliament, Mr. Yatsenyuk called on the international community to rein in Mr. Putin and pressure him to remove troops from the Crimean peninsula, where a majority of residents are ethnic Russians but have Ukrainian passports.

"If President Putin wants to be the president who starts the war between two friendly and neighboring countries, he has [almost] reached this target," Mr. Yatsenyuk said. "We are on the brink of disaster. There was no reason for the Russian Federation to invade Ukraine."


Western diplomats doubt that the Ukrainian armed forces would be able to match up to the Russian forces already in control of the critical infrastructure and border points in the Crimea.

Ukrainian leaders say that Russia has already sent an additional 6,000 troops to Crimea since tensions arose in the peninsula last week. The two countries have a military agreement that allows Moscow to base forces in the region, but Ukrainian officials accuse Moscow of violating that treaty by not informing Kiev of additional troops, and by moving forces without prior notice. Moscow says that it is in compliance of the accord.

Earlier Sunday, Ukraine's interior minister said Russian officials had approached Ukrainian officers remaining in Crimea and offered them immediate Russian citizenship.

"Across the entire territory of Crimea, Russian emissaries and military officers have invited the remaining Ukrainian interior ministry troops to take Russian citizenship and immediately receive Russian passports," Arsen Avakov wrote on his Facebook page. "This appeal has been aimed at upper and middle officer corps troops."

Mr. Avakov denied that Ukrainian forces had threatened the Russian-speaking population on the largely pro-Russian peninsula, and blamed Russian forces for the sharp militarization of the region.

"In Crimea, there are no forces from the interior ministry or the regular army threatening citizens of the Russian Federation or the Russian-speaking population," he said. "And also no self-defense units from Maidan have arrived from Kiev. All destabilization in the Crimea has come from and been masterminded in Russia."
The BBC adds that it has seen what appear to be Russian troops digging trenches on the Crimean border.  Furthermore, a standoff between Ukrainian troops who have fortified a base in the crimean city of Privolnoye, borth place of the late USSR president Mikhail Gorbachev, and Russians who have surrounded them, may be the match that set it all off. Fox reports that hundreds of unidentified gunmen surrounded a Ukraine's infantry base in Privolnoye in its Crimea region Sunday. The convoy included at least 13 troop vehicles each containing 30 soldiers and four armored vehicles with mounted machine guns. The vehicles -- which have Russian license plates -- have surrounded the base and are blocking Ukrainian soldiers from entering or leaving it.

This is the current state of the standoff:

View image on Twitter
Extraordinary standoff. soldiers defiant behind gates of Perevalne base. Won't surrender.

Crimea Parliament "Accelerates Crisis", Votes To Join Russia

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While the world is convinced that Putin's Tuesday press conference was an admission of blinking to the west, the reality is anything but that, and hours ago Crimea's parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in what Reuters said is a "a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula." To be sure, the Crimea - which has an ethnic Russian majority - affiliation to Moscow as opposed to Kiev is well-known, yet still the sudden acceleration of moves to bring Crimea formally under Moscow's rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation. And now all Putin has to do is sit back and say the people have spoken and without spilling a drop of blood has effectively split the country in two parts, with the entire east of Ukraine, where pro-Russian sentiment also runs high - sure to follow Crimea. Just as we said from the very beginning.
From Reuters:
The Crimean parliament voted unanimously "to enter into the Russian Federation with the rights of a subject of the Russian Federation". The vice premier of Crimea, home to Russia's Black Sea military base in Sevastopol, said a referendum on the status would take place on March 16. The announcement, which diplomats said could not have been made without Russian President Vladimir Putin's approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

Far from seeking a diplomatic way out, Putin appears to have chosen to create facts on the ground before the West can agree on more than token action against him.

EU leaders had been set to warn but not sanction Russia over its military intervention after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea, with a population of about 2 million, back to their bases. It was not immediately clear what impact the Crimean moves would have.

European Commission President Jose Manuel Barroso said in a Twitter message: "We stand by a united and inclusive #Ukraine."

French President Francois Hollande told reporters on arrival at the summit: "There will be the strongest possible pressure on Russia to begin lowering the tension and in the pressure there is, of course, eventual recourse to sanctions."
To be sure, the new Kiev government - which may or may not have killed its own citizens in order to rise to power while blaming the atrocities on Yanukovich as described yesterday - has responded in kind to how Putin views them, and declared the referendum illegal and opened a criminal investigation against Crimean Prime Minister Sergei Askyonov, who was appointed by the region's parliament last week. The Ukrainian government does not recognise his authority or that of the parliament. Still, it is by now far too late for Kiev to enforce its will in Crimea.
In the meantime, and confirming that Putin has all the cards, EU leaders had been set to warn but not sanction Russia over its military intervention in Ukraine after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases. According to EU sources the leaders gathered in Brussels delayed the discussion on sanctions to Russia to a new meeting in two weeks. As we stated yesterday, due to stern German industrial lobby objection, Europe will never implement full blown sanctions and at best will stick to some optical wristslap which has no real adverse impact on Russia.
But back to the Crimea, where a parliament official said voters will be asked two questions: should Crimea be part of the Russian Federation and should Crimea return to an earlier constitution (1992) that gave the region more autonomy?
"If there weren't constant threats from the current illegal Ukrainian authorities, maybe we would have taken a different path," deputy parliament speaker Sergei Tsekov told reporters outside the parliament building in Crimea's main city of Simferopol.
"I think there was an annexation of Crimea by Ukraine, if we are going to call things by their name. Because of this mood and feeling we took the decision to join Russia. I think we will feel much more comfortable there."
All the while, Europe is engaged in idiotic meetings and summits, spearheaded by John Kerry, who was quick to point out how constructive the meeting has been. Perhaps it would have been more so if Russia had participated:
Russian Foreign Minister Sergei Lavrov refused to meet his new Ukrainian counterpart or to launch a "contact group" to seek a solution to the crisis at talks in Paris on Wednesday despite arm-twisting by U.S. Secretary of State John Kerry and European colleagues. The two men will meet again in Rome on Thursday.

Tension was high in Crimea after a senior United Nations envoy was surrounded by a pro-Russian crowd, threatened and forced to get back on his plane and leave the country on Wednesday.

The EU summit in Brussels seemed unlikely to adopt more than symbolic measures against Europe's biggest gas supplier, because neither industrial powerhouse Germany nor financial centre Britain is keen to start down that road.

The short, informal EU summit will mostly be dedicated to displaying support for Ukraine's new pro-Western government, represented by Prime Minister Arseny Yatseniuk, who will attend even though Kiev is neither an EU member nor a recognised candidate for membership.

After meeting European Parliament President Martin Schulz, Yatseniuk appealed to Russia to respond to mediation efforts.

After a day of high-stakes diplomacy in Paris on Wednesday, Lavrov refused to talk to Ukrainian Foreign Minister Andriy Deshchitsya, whose new government is not recognised by Moscow.

As he left the French Foreign Ministry, Lavrov was asked if he had met his Ukrainian counterpart. "Who is that?" the Russian minister asked.

He stuck to Putin's line - ridiculed by the West - that Moscow does not command the troops without national insignia which have taken control of Crimea, besieging Ukrainian forces, and hence cannot order them back to bases.

Kerry said afterwards he had never expected to get Lavrov and Deshchitsya into the same room right away, but diplomats said France and Germany had tried to achieve that.

Western diplomats said there was still hope that once Lavrov had reported back to Putin, Russia would accept the idea of a "contact group" involving both Moscow and Kiev as well as the United States and European powers to seek a solution.
Keep hoping. In the meantime, with each passing day, Putin consolidates his new territory even as the west dithers, Europe is unable to obtain the bailout loans it has promised Ukraine, and Kerry keeps talking.

Warning Shots Fired At OSCE Mission In Crimea; Russia Warns Of Treaty Force Majeure Over "Unfriendly NATO Threats"

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Perhaps it is time to finally admit that anyone who thought Putin's Tuesday press conference, which the market so jubilantly assumed was a case of "blinking" and de-escalating tensions with the west, was wrong. If there is still any confusion, following yesterday's news that Gazprom officially threatened Ukraine with cutting off its gas supplies, as well as the storming of a Ukraine base by Russian troops - luckily with no shots fired so far - then today's developments should any remaining doubts. Moments ago AP reported that as the latest, third in a row, group of OSCE inspectors tried to enter Ukraine, they were not only barred from doing so, but warnings shots were fired to emphasize the point by pro-Russian forces.
An Associated Press reporter says pro-Russian forces refused to let a foreign military mission enter Crimea on Saturday.

After the officers had stopped, the armed men fired warning bursts of automatic weapons fire into the air to make other unidentified vehicles halt. No injuries were reported.

The multinational group of military officers from the Organization for Security and Cooperation in Europe was attempting to enter the embattled peninsula from the north. The armed men told them they had no authorization to enter Crimea.

The OSCE mission will likely return to the Ukrainian city of Kherson where it had spent the night, the AP reporter said.

Russia and Ukraine are locked in a tense standoff over Crimea.
the OSCE tweeted:

Military assessment visitors from OSCE States returning to Kherson to plan next steps after being denied entry to Crimea at Armyans'k today

Diplomacy Fails In Ukraine: Putin Slams Kerry Plan, Kiev Issues Ultimatum, Crimea Suspends All Non-Moscow Flights

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While it may have been pushed back from the front pages to keep confidence high, things in the Crimea, and in Ukraine in general (which may or may not waved goodbye to its gold reserves) are going from bad to worse with every passing day, with the near term catalyst of course being this Sunday Crimean referendum vote, which seems like a done deal, and which will give Russia a carte blanche to annex the territory over the howls of protest from Ukraine's coup government, and the west of course.
Making this outcome one step clower, overnight the parliament of the Autonomous Republic of Crimea adopted an independence declaration from Ukraine which is necessary for holding a March 16 referendum.
“We, the members of the parliament of the Autonomous Republic of Crimea and the Sevastopol City Council, with regard to the charter of the United Nations and a whole range of other international documents and taking into consideration the confirmation of the status of Kosovo by the United Nations International Court of Justice on July, 22, 2010, which says that unilateral declaration of independence by a part of the country doesn’t violate any international norms, make this decision,”says the text of the declaration, which was published by the Crimean media.
As RT reports, the document was adopted during an extraordinary session of parliament. 78 of 100 members of the parliament voted in favor of the declaration.
The Crimean parliament’s vote to become an independent sovereign state paves the way for the March 16 referendum for the Crimean Autonomous Republic and the city of Sevastopol to join Russia. If the referendum is in favor, the Crimean authorities will request for their country to become a constituent republic of the Russian Federation. The declaration was signed by the speaker of the Supreme Council of Crimea, Vladimir Konstantinov, and the head of the Sevastopol City Council, Yury Doynikov.

“We adopted the declaration of independence to make the upcoming referendum legitimate and transparent,” Konstantinov said. “Now we declare ourselves the Republic of Crimea, we don’t add ‘autonomous."

After Tuesday’s declaration of independence, Crimea will never rejoin Ukraine, Konstantinov added. He said that Crimea will adopt the Russian ruble as its currency soon after the referendum.
Not unexpectedly, the west, and Ukraine specifically, continue to make loud noises over the referendum, with the latest development is Kiev sending an ultimatum to Crimea. Guardian reports that "Ukraine's parliament has warned the regional assembly in Crimea that it faces dissolution unless it cancels a referendum it has called to join the region to Russia."
A resolution, supported by a parliamentary vote, gave the Crimean parliament until Wednesday to call off the referendum, due to take place on Sunday. The Crimean parliament on Tuesday passed a motion stating that it would become independent in the event of a yes vote and then seek to join the Russian Federation, arguing that "the unilateral declaration of independence of part of a state does not violate any international laws".
There is the minor matter of enforcing this ultimatum in a territory largely controlled by Russian forces:
Also on Tuesday, the acting Ukrainian president, Oleksander Turchinov, announced that a new national guard would be formed in response to Russian attempts to annex Crimea.

Turchinov said mismanagement of the armed forces under former president Viktor Yanukovych meant that the Ukrainian military had to be rebuilt "effectively from scratch". The acting defence minister said the country had only 6,000 combat-ready infantry compared with more than 200,000 Russian troops on its eastern borders.
Good luck with that.
But aside from the actual area of physical confrontation, the real conflict continues behind the scenes. It is here that we find Russia president Putin has apparently rejected a U.S. proposal to resolve the dispute over Ukraine that had been put forward by Secretary of State John Kerry over the past week, according to senior Russian and U.S. officials. WSJ reportedthat "Mr. Putin's decision led Mr. Kerry to put off a Russian invitation to meet Mr. Putin in Russia, as early as the beginning of this week in Sochi, to discuss the Ukraine crisis, according to these officials."
Moscow and Washington on Monday each blamed the other for the diplomatic stumble and for failing to defuse the most serious U.S.-Russian standoff since the end of the Cold War.

Residents of the Crimean region of Ukraine are scheduled to vote Sunday on whether to secede from their country and join the Russian federation.

Despite the setback, U.S. and Russian officials stressed Monday that discussions on the former Soviet state were ongoing. The State Department didn't rule out Mr. Kerry visiting Moscow to meet Mr. Putin.

"The United States needs to see concrete evidence that Russia is prepared to engage on the diplomatic proposals we have made to facilitate direct dialogue between Ukraine and Russia," State Department spokeswoman Jennifer Psaki said.
Send in the Kerry again perhaps? Speaking of political cadavers, ousted Ukraine president Yanukovich, whose political future even Putin said is over, appeared on TV earlier today and reminded everyone he was still the legitimate leader:
Ousted Ukrainian President Viktor Yanukovych has said in a televised press conference that he is still the legitimate leader of the country. It was his second statement made from the Russian city of Rostov-on-Don where he fled to when he was removed from power by the Ukrainian Parliament.

“I want to remind you that I am not only still the legitimate president of Ukraine but also the supreme commander of the army and I haven’t stopped my duties as president early – I am still alive.”

He took no questions from the press after his speech.

Yanukovych claimed that he was still the legitimate leader of Ukraine and that he fled Ukraine because of a direct threat to his and his family’s lives.

He added he would return to Ukraine soon.

He called the upcoming May 25 presidential election “illegal” and said that any government voted in would also be unconstitutional

He said the US and West should not be backing or funding the new “bandit” government which had carried out an illegal coup d’etat.
And then there is everything else. Reading Reuters:
A pro-Russian force opened fire in seizing a Ukrainian military base in Crimea on Monday and NATO announced reconnaissance flights along its eastern frontiers as confrontation around the Black Sea peninsula showed no sign of easing. Ukrainian activists trying to cross into Crimea to show solidarity with opponents of last week's Russian military takeover there said they were halted by men in uniforms of the now outlawed riot police. One of these fired at close range, hitting a man in the chest, apparently with rubber bullets.

With diplomacy at a standstill, Russia said the United States had spurned an invitation to hold new talks on resolving the crisis, the worst East-West standoff since the Cold War - although Washington said later a meeting of foreign ministers was possible this week, if Moscow shows it is ready to "engage".

The U.S.-led NATO defense alliance said AWACS early warning aircraft, once designed to counter feared Soviet nuclear missile strikes, would start reconnaissance flights on Tuesday over Poland and Romania to monitor the situation in Ukraine, flying from bases in Germany and Britain.

The United States on Tuesday will also begin previously planned military training exercises in the region, the first since the Russian intervention in Crimea. A U.S. Navy destroyer will participate in maneuvers with Romanian and Bulgarian warships in the Black Sea, across from Crimea. In Poland, U.S. fighter jets will take part in joint exercises.

* * *

On Monday, a Ukrainian defense official said a Russian-led military force of about a dozen men fired in the air as they took control of a Ukrainian naval base near the town of Bakhchisaray, though no one was hurt.

The force was accompanied by the base's Ukrainian commander. He persuaded a number of his men to join the Russian forces while allowing others who refused to leave, the Ukrainian official, Vladislav Seleznyov wrote on Facebook. The Russian force later drove off with nine Ukrainian vehicles.

Yarik Alexandrov, one of the Ukrainian naval personnel who refused to pledge allegiance to Moscow, told Reuters near the base that he and his comrades at first refused to surrender. "Then they started shooting round our feet and we surrendered," he said. "What could we do? We had no weapons."

Similar small confrontations have taken place at other Ukrainian bases around Crimea, although shooting has been rare and there has so far been no bloodshed. Russia denies its troops are involved - a stance ridiculed in Kiev and the West.

In a sign of the peninsula's growing isolation from the Ukrainian mainland, armed men prevented a convoy of cars from a Ukrainian activist group crossing into Crimea.

The group was part of the Maidan movement behind the protests that forced Yanukovich to flee to Russia. Ukrainian television showed men in the uniform of the Berkut riot police, banned by the new authorities for its role in shooting dozens of demonstrators in Kiev last month, blocking the road south.

One was shown firing twice, hitting a man in the chest. His injuries appeared minor, suggesting the use of rubber bullets.

In other armed action, Russian forces took over a military hospital and a missile unit. Reuters correspondents also saw a big Russian convoy on the move just outside the port city of Sevastopol near a Ukrainian air defense base.

It comprised more than 100 vehicles, including around 20 armored personnel carriers, plus mobile artillery.
In conclusion, just so there is no confusion about who is in charge of Crimea...
All flights to Crimea airport suspended except from Moscow @AFP