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A record-breaking surge in monthly credit creation and a trillion Yuan of QE-lite was enough to provide a glimmer of hope into the tumbling Chinese economy for one or maybe two months but with the real estate market continuing to free-fall, it should be no surprise that China’s PMIs finally catch down to the erstwhile reality simmering under the surface in the ultimate centrally-planned economy. China’s official government PMI dropped from 30-month highs, missed expectations and the early month flash print, to less exuberant 51.1 reading (with Steel industry new orders totally collapsing) with both medium- and small-companies printing contractionary sub-50 levels. Then (after Japan’s PMI beat – of course it did as hard data crashes worst on record), HSBC China PMI also missed, printing a slightly expansionary 50.2 Showing, as BofA warns “the two PMIs both show that the current recovery is relatively weak and choppy…” and RBS adds “we expect the government to interpret such an outlook as challenging its growth target and to take more, and more significant, measures to support growth.”
As Goldman writes,
August official PMI tends to be biased on the upside. Since the data started in 2005, this is the second time it fell in August (first time was August 2012). The degree of seasonality probably has been reduced in recent years but may still exist. This suggests underlying slowdown might be more meaningful, which is consistent with the weak reading of the HSBC PMI.
Almost all components showed signs of cyclical slowdown, which indicates the evidence of an incremental slowdown is conclusive. Among them the new orders and production sub-indexes are particularly important because unlike the headline readings they do not lag mom IP and have a closer fit with mom IP readings. Both fell meaningfully in August. In terms of drivers of weaker orders, export orders fell less than overall orders but the difference was not large.
We believe this weakening reflects less supportive policy stance since July and possibly less supportive underlying exports growth. Gradual deceleration from strong sequential growth in June is consistent with our forecasts, though there is risk of a steeper deceleration if policy and monetary/credit conditions don’t ease meaningfully from the July stance. We are still on track to reach the 7.3% GDP forecast for 3Q and the whole year though the risks are largely balanced instead of clearly tilted towards the upside.
Small- and Medium-Sized companies are both in contraction…
* * *
This catastrophic miss by 0.1 points immediately saw Markit’s economist proclaim more stimulus was needed and BofA’s China-watchers calling for a fresh round of stimulus… or else…
China’s NBS manufacturing PMI slowed to 51.1 in August from 51.7 in July. The reading is slightly below the consensus forecast at 51.2, and is in line with the drop of the HSBC flash PMI to 50.3 in August from 51.7 in July. The main drags leading to the decline were output and new orders which fell to 53.2 and 52.5 in August from 54.2 and 52.5 in July respectively. Today’s reading confirmed the weakness of the economy and the softening momentum. But since the new leadership is determined to deliver stable growth during their period of power consolidation, especially in the run up to the 4th Plenum in October, we believe Beijing will step up its mini-stimulus in coming weeks. We maintain our 7.4% growth forecast for both 3Q and 4Q.
Why did growth slow down again?
As we explained in our 2H preview, there are three types of headwinds in 2H: the high base effect, the anti-corruption campaign and the downturn in the property sector. The anti-corruption campaign, though definitely positive for growth in the long-term, has hit the economy in the short term. The campaign also made the central government’s stimulus effort less effective as local government officials are not incentivized to speed up fiscal spending and investment projects.
A fresh round of stimulus
The Chinese government last week announced a fresh round of mini-stimulus to counter the downward pressure on growth. These measures include an RMB20bn PBoC relending with preferential rate to the agriculture sector, a push for ramping up investment in clean energy and public facilities such as hospitals, nursing homes and fitness centers, and a promise for delivering the target on social housing and more spending on environmental protection.
China’s third-quarter growth tends to be slower, and the level of lending in August will be “very critical” for the economy, Liu said.
“We expect the government to interpret such an outlook as challenging its growth target and to take more, and more significant, measures to support growth,” Louis Kuijs, Royal Bank of Scotland Group Plc’s chief Greater China economist in Hong Kong, said in a note today.
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Submitted by Saxobank's Steen Jakobsen via TradingFloor.com,
French President François Hollande unveiled his new government under Prime Minister Manuel Valls on August 26, and there have been a few changes. While most senior ministers have retained their positions, economic minister Arnaud Montebourg was replaced by Emmanuel Macron, a former investment banker and economic adviser at the Elysée.
Hollande is already the most unpopular president in French history so he is not risking much by removing a political opponent like Montebourg (who should never have been part of a so-called reform program to begin with). Montebourg is a man of the old school and of old ideas: Among other things, he titled himself "Minister of Industrial Resurrection." His ideas included threatening to fine businesses for each job they failed to create and speaking against globalisation.
Mired in economic stagnation and barely concealed unrest, France is a nation that often seems displeased with its lot. But will things have to get worse before they get better? Photo: Getty
The problem for President Hollande and any reform efforts is that, as much as removing Montebourg was a victory for his economic strategy, it was also a loss in terms of his political ability to rule both his party and the French state. We often forget that economic policy without political backing is like skiing without snow: Policy needs political anchoring.
The supply-side economics and ideas of Prime Minister Valls are good, but they are not sufficient to stop the "rotting of France". More and more observers argue that what France needs is either an European Central Bank that goes into full Quantitative Easing mode, a France that pushes for fiscal expansion, or even both. Not only is that short-sighted, it´s also wrong: France needs a new political system, a new tax regime, a less bloated government sector, and fewer subsidies. France is not lost, it´s just disorientated and lacks purpose.
France is its own worst enemy. It believes in old virtues and ideas from a time gone by. Dirigisme, the French version of socialist capitalism, has failed. In its place there needs to appear a a robust commitment to its strong and well-educated workforce. France has the ability to innovate and its early stage small- and medium-enterprise support ranks among the best in the world. Unfortunately, its tax policy, its inability to attract capital and — more importantly — its dismal return on capital are significant impediments to new growth or any reforms.
France needs a Thatcher moment, with a new leader brave enough to get elected on a mandate for change. It needs a leader brave enough to tear down a political system that generates macro- rather than micro-scaled policies, an elitist society with too many incentives for bad behaviour and disincentives for private initiative, innovation and hard work. With or without Hollande, France just doesn’t seem ready to change yet. That is why we need a deep recession and even a depression before we see real change. Real changes can only emerge from a true crisis.
The good news is that France that has never been closer to this mandate for change than now, if only because we are quickly approaching the point where things can’t get any worse. French history is full of examples of crisis yielding quickly to dramatic change. The one that comes most quickly to mind is when King Louis XVI lost his monarchical powers during the French revolution. He inherited an enormous state debt (sound familiar?) and tried a number of policy moves, but in the end the crisis overwhelmed him, and he and his Ancién Regime subordinates lost not only their power, but their heads.
It’s time for a 21st century revolution in France. Dirigisme is dying. Vive la France.
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The enemy of your enemy is your… frenemy; and so it is across the Middle East as the WSJ notes the spread of The Islamic State has united many parties once at odds with each other to become ‘strange bedfellows‘.
Parties that display friction or outright aggression toward one another are finding themselves aligned in a desire to counter Islamic State.
Groups of colored lines between parties represent shared interests.
U.S. and Iran
The U.S. and Iran share an interest in fostering an Iraqi government strong enough to fend off Islamic State.
U.S. and Syria
The U.S. and Syria’s Bashar al-Assad share an interest in quashing Islamic State in Syria, even if the regime appears to put a higher priority on fighting other rebel groups.
Israel and Egypt
Israel and Egypt have come together to oppose Hamas, and they now have a similar long-term interest to do the same in confronting Islamic State.
Syria, Kurds, Turkey and Iraq
Turkey and Syria, long fearful of building up the region’s Kurds, have a shared interest in building up the Kurdish Peshmerga to combat a more immediate threat, Islamic State. Iraq has acquiesced.
Turkey and Qatar
Turkey and Qatar suddenly have a shared interest in keeping the Islamist movement they separately helped foster in check before Islamic State absorbs and consolidates it.
Iran, Saudi Arabia and Iraq
Saudi Arabia supported Sunnis in Iraq while Iran supported Shiites. They now have an interest in aiding the Shiite-led Iraq government to counter a common threat.
U.S., China and Russia
Russia and China have plenty of disputes with the U.S., but they agree that, as big powers, they are threatened in similar fashion by the expansionist Islamic extremism of Islamic State.
U.S., Egypt, Qatar and Turkey
Egypt’s military ruler sees Qatar, Turkey and the U.S. as hostile to his suppression of the Muslim Brotherhood. They all now fear Islamic State will consolidate the Islamic threat.
U.S. and al Qaeda
The greatest odd bedfellow of all: Islamic State threatens al Qaeda as well as the West, meaning that, in fact, al Qaeda and the U.S. now have a shared enemy.
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Submitted by Defense & Foreign Affairs via OilPrice.com,
It had become clear by late August 2014 that Libya could no longer be seen as a unified state; at best it was in two parts, even with the communal leaderships of both sides professing a desire to resume national unity. By late August 2014, the country had two parliaments: one elected by the Libyan people, and the other given legitimacy solely by foreign support.
The situation seemed so intractable by that point that it was possible that a full military intervention by regional states, perhaps spearheaded by Egypt, could be attempted, with the goal of stabilizing the country and eliminating the foreign-funded and foreign-armed jihadis who were using Libya as a springboard for a proposed pro-Islamist war against the current Egyptian Government.
The proxy forces of the 2011 unilateral intervention by Qatar, supporting jihadis and the Muslim Brothers (Ikhwan), and by Turkey and the US, into the Cyrenaican revolt against Mu’ammar al-Qadhafi, were still dominating the Libyan political scene, much to the frustration of Libyan tribal forces.
Qatar was creating a “Free Egyptian Army” in the Cyrenaica desert, and patterned on the “Free Syrian Army” which Qatar, Turkey, and the US had built to challenge Syrian leader Bashar al-Assad.
Significantly, while the US and European Union (EU) continued in August 2014 to promote the concept of a unified Libya, they were basing their approach around what was essentially a modification of the mode of governance practiced by Mu’ammar al-Qadhafi, who seized power by a coup in 1969, and held it until 2011. Widespread Libyan calls for a return to the 1951 Constitution — drafted by the United Nations and the 140 or so Libyan tribes — have been consistently ignored by Washington and Brussels.
By August 2014, the foreign jihadist fighters — mainly linked to salafist groups and either directly or indirectly working with the Muslim Brothers (Ikhwan) — were still entrenched in Cyrenaica, in Eastern Libya (where the local moderate. anti-salafist Senussiyah sect of Islam predominates), supported by Qatar, Turkey, and the US Government. As well, they were entrenched around Tripoli.
By August 18, 2014, the situation had deteriorated to the point where United Arab Emirates (UAE) combat aircraft, operating from Egyptian bases, conducted air strikes against jihadist militia forces around Tripoli, without prior warning to the US. The operation was also coordinated with the Government of Saudi Arabia, and the UAE Air Force aircraft staged over the Kingdom, en route to Egypt, using UAE AF Airbus A330 MRTT aerial refueling aircraft to reach, it is understood, Mersa Ma- truh Air Base or another forward Egyptian Air Force base, from which the strikes were then made on the Libyan targets.
The first wave of strikes, on August 18, 2014, hit militia groups; the second wave on August 23, 2014, targeted Qatari-supplied rocket launchers and military vehicles owned by the militias. The strikes were insufficient to blunt the mainly Misrata-based militia forces of the Islamist-dominated Fajr Libya (Libya Dawn) coalition which, a day later (August 24, 2014), overran Tripoli Airport, taking it from the control of the Zintan militia. [Fajr Libya also controls some 80 percent of Benghazi, although the residents of that city and surrounds have traditionally been hostile to the salafist tenets promoted by the group.] The UAE strikes also hit at Ansar al-Sharia, another extremist Islamist group, ostensibly condemned by Washington, but benefiting from Washington’s position.
The new Government was aware — and supportive — of the combined military actions of the UAE, Egypt, and Saudi Arabia to strike at the Islamist militias.
On August 25, 2014, the US, France, Germany, Italy and the UK governments issued a joint statement denouncing “outside interference” in Libya which it said “exacerbates current divisions and undermines Libya’s democratic transition”, failing to highlight the reality that the US has, since 2011, provided the main umbrella for outside interference in Libya affairs, and continued to support the Qatari-led efforts currently underway.
At the same time, with US encouragement, the former Islamist-dominated Parliament — which no longer had a mandate — was reconvened on August 25, 2014, and voted to disband the interim Government, even though the new Government had been voted into place by opponents of the Islamists. But the newly-elected Parliament — not the one controlled by the Islamists — continued to meet in Tobruk, in Cyrenaica, away from the militias. That Parliament on August 24, 2014, dismissed the Army Chief of Staff and, with a vote of 88 out of 124 parliamentarians, installed a new one, Col. Abdel Razzak Nadhuri, who was promoted to general when he took up his new role. He replaced Gen. Abdessalam Jadallah al-Obeidi, who was dismissed by Parliament. Gen. Nadhuri, from the town of Marj, 1,100km (600 miles) east of Tripoli, took up his post as Libya’s Foreign Minister and his regional counterparts met in Cairo to discuss the Islamist threat.
Gen. Nadhuri has been known for his support for the anti-Islamist Operation Karama (Dignity), led by retired Gen. Khalifa Haftar. In the first reactions to Nadhuri’s appointment, several military generals affiliated with the Joint Chiefs of Staff announced their rejection of the Parliament’s appointment of Nadhuri declaring that “they refuse to work under the command of an officer who supports Operation Karama, and that they will only recognize Gen. al-Obeidi as chief of staff”.
The interim Government itself was unable to return to Tripoli as a result of the fighting, and had been holding its meetings in the eastern city of Bayda.
But on August 25, 2014, the interim General National Congress (GNC), which had been officially replaced earlier in August 2014 by the new Parliament, named an Islamist figure, Omar al-Hassi, to form a rival “salvation government”, which was being given credence by, for example, the US Government over the Government elected by Libyan voters in August 2014.
The situation, then, was that Libya now had two parliaments and two governments, but only the Tripoli-based Parliament had electoral legitimacy with its Government led by Prime Minister Abdullah al-Thani.
Egyptian Foreign Minister Sameh Shukri was quoted on August 25, 2014, as saying that the situation in Libya threatened the entire region and other parts of the world, noting: “The developments in Libya have left an impact we have felt on the security of neighboring countries, with the presence and movement of extremist and terrorist groups whose activists are not only limited to the Libyan territories but also spill over to neighboring countries.” He also said that a spillover of lawlessness from Libya could prompt foreign intervention in Libya, but hoped that this could be avoided.
The combined stance by Egypt, Saudi Arabia, and the UAE has further demonstrated the division of these onetime US allies away from Washington. To emphasize the point, Egyptian Pres. Abdel Fattah al-Sisi said on August 24, 2014, to local news media that Qatar, Turkey, the United States, and the Muslim Brotherhood were funding new online media projects which “aim to undermine Egypt’s stability”. These powers, he said, “do not hesitate to spend tens of millions, or even hundreds of millions [of dollars], on these websites in order to promote ideas that aim to undermine Egypt’s stability”. Ironically, the news came out at the same time that the Obama Administration announced the development of a new government program to track “hate speech” on social media in the US.
The US is moving closer to alienating key regional allies (Egypt, Saudi Arabia, and the UAE) in order to support Turkey’s and Qatar’s objectives in Libya, without defining the strategic goals for the US and the West. Already the Egyptian bloc is at war with Turkey and Qatar.
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September is the hottest month of the year for gold prices, rising on average 3% over the past 20 years. As the yellow metal tests hovers off 2-month-lows, Bloomberg notes that "Indian jewelers and dealers will be stocking up in the coming weeks," ahead of the festival period, which runs from late August to October (andis followed by the wedding season) when bullion is bought for part of the bridal trousseau or in jewelry form as gifts from relatives. As GoldCore's Mark O'Byrne notes, "a lot of traders are aware of this trend towards seasonal strength… They tend to buy and that creates momentum."
Some color on the week's Precious Metals Trading from Alasdair Macleod of GoldMoney,
The pattern of trading in precious metals changed for the better this week. After London's bank holiday on Monday, for the first time in a long time the market opened in London's pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York.
It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based.
Measured by deliveries on the Shanghai Gold Exchange, Chinese demand is increasing, with last week's figure rising to 46 tonnes, having increased every week in August. So far this year over 1,200 tonnes have been delivered, and the extension of trading and therefore potential demand into the Free Trade Zone is due to kick off in September.
The chart of the gold price and open interest on Comex is shown below.
August is a notoriously poor trading month, with traders in the northern hemisphere on holiday, or at least not thinking about markets. September is wake-up time, and statistically the best month for gold. Will this be the pattern this year?
Trading in silver continues to be healthier, even if the price performance has been disappointing, with the gold/silver ratio rising to 66 from 63 earlier in the month. Open interest had its first significant fall on Wednesday, when the price rose marginally. This suggests that on balance there is some bear closing in futures. The action is shown in our next chart.
Could this be a harbinger of better times? Quite likely: being mostly an industrial metal, there is some evidence that commercial users are locking in low prices by holding futures positions. Bear in mind that two years ago, users probably estimated silver prices at $35+ in their business plans, so current prices for them are too good to miss.
Quick side-note: palladium continues to power ahead, having made all-time highs consistently in recent months to challenge $900 this week.
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Submitted by Adam Taggart via Peak Prosperity,
For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather’s did.
But something changed after inflation spiked yet again during World War 2. With the permanent mobilization of the military industrial complex and the start of the decades-long Cold War, combined with a related acceleration in government deficit spending, inflation did not come back down. It remained elevated, and in fact, rose further.
That is, until the “Nixon shock” in 1971, when the dollar’s remaining ties to gold were severed. Then inflation EXPLODED. And the inflationary moon-shot has continued since, up to present day.
So, we’ve become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it’s pretty much all we’ve ever known.
But it doesn’t have to be this way. Indeed, our country did fine for centuries without systemic continual chronic inflation.
So why do we accept it today?
For the best viewing experience, watch the above video in hi-definition (HD) and in expanded screen mode
Coming next Friday: Chapter 12: How Much Is A Trillion?
For those who simply don’t want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available — now– to our enrolled users.
The full suite of chapters in this new Crash Course series can be found at http://ift.tt/VLldvm
And for those who have yet to view it, be sure to watch the ‘Accelerated’ Crash Course — the under-1-hour condensation of the new 4.5-hour series. It’s a great vehicle for introducing new eyes to this material.
Click here to read the full transcript
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Curious what the political positions are of the various, and all too numerous some would say, religions and churches in America? This new graph, courtesy of Tobin Grant, maps the ideologies of 44 different religious groups using data comes from Pew’s Religious Landscape survey. This survey included 32,000 respondents. It asked very specific questions on religion that allow us to find out the precise denomination, church, or religion of each person.
Here are the key observations:
- Churches that are similar religiously are also similar ideologically.
- Evangelicals are classic conservatives (small role in economy, protect morality). Pentecostals want a larger role for government on economic issues.
- Presbyterian Church in America, Lutheran Church Missouri Synod, and smaller Methodist churches have historical ties to both evangelicalism and mainline denominations. On the question of government and morality, they are between other evangelical churches and mainline denominations.
- Mainline churches hold similar economic views as evangelicals but want less government involvement protecting traditional morality.
- Christians in traditionally black denominations and evangelicals are similar in their views toward morality policy, but there is a large divide on economics.
- Catholics are large and represent the center on both dimensions.
- Jews are centrist on the economy. There is a major divide between both Conservative and Orthodox Jews and other streams of Judaism. This divide falls along the morality dimension.
- The “nones” are united on their ideology toward morality (keep government out!) but there are interesting divides on government services. Atheists want more government services; agnostics favor less governmental involvement in the economy. If you consider Unitarians part of this group, then they’re the most supportive of government services.
Some guidelines on how to read the graph:
- Each circle represents a denomination, church, or religion. There are several circles for types of Americans with no religion: self-identified “atheist”, self-identified “agnostic”, and those who say that have “no religion in particular”.
- The size of the circle represents the relative size of the religion in the United States. For very small groups, I put them in groups with other similar churches. In these cases, the circle represents collections of similar churches, e.g., nondenominational evangelicals, all Baptists who aren’t in one of the larger denominations, or all Hindus. The decision for how specific to make the circle was based on the size of the group in the survey.
- The color of the circle indicates the religious tradition of the group: evangelical Protestant (historically white), Mainline Protestant (historically white), historically black Protestant, Catholic, a catch-all category for other Christian groups, all other religions, and those with no religion. (yes, there are some disagreements about whether some groups should be coded as evangelical (e.g., Seventh Day Adventist) or even Christian or not (e.g., Jehovah’s Witness). We can debate these decisions in a future post.
- The location of the circle represents where a group’s members stand on the two major ideological divides in American politics. The numbers represent the percentile location of each group (details below). The political ideologies of religious groups are placed along two dimensions.
- Government involvement in the economy (x-axis). This is the major ideological divide in the country. At one end are the “small government” folks who want a less regulation, fewer services, and more market-oriented policies. At the other are those who want a stronger safety net, tougher consumer protections, and greater checks on the economy. In the Pew survey, this is measured by a question asking whether they wanted: “a smaller government providing fewer services” or “a bigger government providing more services”?
- Government involvement in morality (y-axis). How much should government be involved in regulating morality? Some people believe that the government should protect morality and should uphold traditional values and religion. Others think government should “stay out of bedrooms” and keep up a high wall between church and state. This can be measured using a question that asked people to pick which statement comes closest to their beliefs: “The government should do more to protect morality in society” or “I worry the government is too involved in this issue”?
Some additional notes on the author’s website.
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From Raúl Ilargi Meijer of The Automatic Earth
Jack Delano Workman at Chicago & North Western repair shops, Chicago, IL Dec 1942
These Clowns Are Dragging Us Into War
In 8 weeks, on October 26, there are – supposed to be – parliamentary elections in Ukraine. What’s that going to look like? Who’s going to vote? In the presidential elections a few months ago, most of east Ukraine did not vote. How many different ways are there to define democracy and still remain credible?
In an interview today on Russian Channel 1, Vladimir Putin commented on the upcoming elections: “All the participants in the electoral race will want to show how cool they are; Everyone will want to show they are strongmen or strongwomen, and as the political struggle sharpens it is hard to expect anyone to seek a peaceful resolution and not a military one.” That would seem to be an accurate prediction.
The EU yesterday (in yet another definition of democracy) picked its new president. They chose Polish PM Donald Tusk, which may seem a bit strange since Tusk doesn’t speak a word of either English or French, and he comes from a nation that is not even in the Eurozone, yet he will now now get to chair meetings that concern the euro. But Tusk is a hawk on Russia, and therefore suspiciously convenient to the inner core of Washington and Brussels’ control apparatus. He’s said more bad and ugly things about Russia and Putin than just about anyone recently, and that’s saying something.
The US and EU have worked for years to see their desire to take over Ukraine come to fruition. They’ve come a long way, but they wanted Crimea and the Donbass region most of all, and those they still don’t have. Still, they’ve so far shown themselves more than willing to assist first in killing thousands of eastern Ukrainians to get what they want, and now they are prepared to start a war over it.
The well-prepared, built-up step by step, storyline in the western press is the threat of Russia’s expansionary drift. Hence this Reuters piece:
Polish President Bronislaw Komorowski said that Vladimir Putin is trying to build a new Russian empire for Moscow and that the region now had to choose whether it wanted “a Cossack Europe or a democratic one”. “Russia has carried out an invasion in Ukraine,” the Polish head of state told German public radio. Komorowski said Putin was quite open about his ambitions to “rebuild the empire”. The Polish president is an ally of Prime Minister Donald Tusk. “I hope Germans are sufficiently mindful of what a Soviet empire meant for Europe,” Komorowski told Deutschlandradio Kultur and Deutschlandfunk, warning against any reprise of the pre-World War Two “appeasement policy of yielding to Hitler”.
That’s the kind of thing where I go: Huh? Did I see that right? You try to scare the Germans by referring to a Russia that by now has been history for almost 25 years, a Russia that was instrumental in saving Europe from the Third Reich and lost 20-30 million people in the process, by reminding them of an 80-year old policy of appeasement to Hitler? The Germans?
When we look at what has actually happened over the past decade, and what we can prove when it comes to expansion drift, that is without a doubt a painfully hollow story. Since what we actually do know, what is not mere conjecture, is that it has instead been the west, through NATO, that has been in expansion mood.
Despite solid agreements not to move NATO’s borders eastward, the alliance has done nothing but move east, and is now planning to put even more troops and new army bases right on Russia’s doorstep. The narrative to justify this NATO expansion that breaches those former agreements, which we can see time and again, is that Russia is moving west, for which there is no proof, only accusations, and that NATO territory is inviolable, but Ukraine is not a NATO member.
No NATO territory is under threat of being violated, other than inside the narrative. Moreover, while voices in Europe increasingly claim that the threat to Ukraine is a threat to Europe (i.e. the EU), Ukraine is no more an EU member than it is a NATO member. Brussels seems to want it to be, but that’s where the narrative ends. So it’s simply being changed on the fly and has now become: “Ukraine is fighting a war on behalf of all Europe”, according Lithuanian leader Dalia Grybauskaite.
Which is where I think: really, Ukraine has killed over 2000 of its own citizens ‘on behalf of Europe’?
The entire conflict could be solved in a heartbeat if Kiev would simply tell the Donbass leadership that they can be autonomous. But that’s not what Poroshenko wants, or Yatsenyuk, and certainly not Washington and Brussels. Because the Donbass is by far the richest region in Ukraine. Which however happens to be home to people who don’t want to be ruled by the present Kiev leadership. Well, so you kill a bunch of them and instill fear in the rest, right?
Putin had something to say about that too, first in Agence France Presse’s version of his Channel 1 interview:
Russian President Vladimir Putin today sharply raised the stakes in the Ukraine conflict by calling for the first time for statehood to be considered for the restive east of the former Soviet state. Mr Putin’s defiant remarks came just hours after the EU gave Moscow – which the bloc accuses of direct involvement in the insurgency – a week to change course or face new sanctions. “We need to immediately begin substantive talks… on questions of the political organisation of society and statehood in southeastern Ukraine … ”
And then the way RT reported it:
The devastated infrastructure of the southeast requires full repair otherwise people might just freeze to death, he said. “It looks as if only Russia cares about that. The first most essential condition is to stop combat operations and begin reconstruction of the infrastructure, replenish inventories, do the necessary repairs and scheduled maintenance to be ready for the cold season.” [..]
Russian President Vladimir Putin has called on Kiev to start substantial talks on deescalating the crisis in eastern Ukraine. He added that it’s an illusion to expect that the rebels would calmly watch their homes being destroyed. “We have agreed on a plan, so its realization must be pursued,” Putin told Channel 1 TV, adding that the Ukrainian government “must immediately start substantial talks – not a technical discussion – on the political organization of society and the state in southeast Ukraine so that the interests of people who live there are protected.” The plan, according to Russia’s leader, puts negotiations at the center of the peace process.[..]
Commenting on the new batch of sanctions against Russia threatened by western countries, Putin advised his counterparts to think again about what they are advocating. “What are the so-called European values then? Support for an armed coup, suppression of opponents with armed forces – so these are ‘European values’? I believe our colleagues should be reminded of their own ideals … ”
In the meantime, the rumors and allegations don’t just continue, they get stronger. Evidence hasn’t been a factor is this game for a long time, and it is not now. Just today, I’ve seen 2 Russian ladies who say 100 Russian troops died in a battle earlier this month, Kiev claiming that Russian tanks ‘flattened’ an entire village, and Ukraine soldiers saying their comrades who were given safe passage after being trapped, were shot at.
It just never stops, or so it seems. We’ve been subject so far to a tsunami of allegations and accusations, and 99%+ of them have come with zero evidence. But now we risk being pulled into a outright war despite the lack of evidence. Really, it’s come to this: we’re asking for just one piece of evidence for all the accusations we’ve been made party to. Just the one!
Essentially, the western leadership is saying that if the ‘Donbass rebels’, and Russia, won’t let the Ukraine army do just what it wants in east Ukraine, there will be war. But it’s not our leaders who are going to be the boots on the ground. And because Obama has pledged no US military involvement in Ukraine – though CIA, Blackwater and who knows who else, are present anyway -, it will have to be European boots on the ground in Ukraine.
Perhaps prior to the official war declaration our politicians and media can tell us where the remains of the BUK rocket are that’s alleged to have downed MH17, where the contents are of the black boxes, and where the Air Traffic Control conversations with the pilots are which were allegedly confiscated by the Ukraine secret service on July 17.
It’s perhaps hard to remember due to the misinformation tsunami, but the MH17 has been a major driver of the western public’s anger vs Russia, and their acceptance of sanctions and other decisions, and now the threat of war. While it still may just as well not have been the Donbass rebels who shot that plane, but the Ukraine army, or Blackwater or the CIA. We simply don’t know.
The west says that the war in east Ukraine is caused by Russia’s support for the rebels. Just like the overriding narrative today is that the west reacts to what Russia does, while in reality it’s the other way around.
The entire Ukraine conflict could be resolved tomorrow morning if Kiev, and its western support, would pledge to stop waging war on the Donbass. And give it a separate status, either within Ukraine or in a separate state. After half a year+ of warfare, how else could you resolve this crisis? Only through more bloodshed, that’s how.
But our western leadership is simply too trigger happy for comfort. Based on only hints and allegations. There’s a NATO conference in Wales this week; Obama, Merkel, they’ll all be there. I suggest you just watch and listen what comes out of that. It won’t be pretty. Peace will not be a commonly used term there. While for all of us, and all the civilians in the Donbass, that’s all we want.
But these clowns are dragging us into war. And yes, maybe it would be a good idea for you to tell them that you don’t want them to. Before your kids, or their friends, their neighbors, start dying in some far away ugly theater they should never have been part of.
Is peace impossible in Ukraine today? No. Not at all. But it is as long as the west keeps its hopes for conquering the Donbass alive. It should have known that from the start, and perhaps it did, and started this crusade anyway, because the grand prize it’s after is Russia itself. Over our dead bodies.
via Zero Hedge http://ift.tt/Y484DB Tyler Durden
As the weekend’s celebration of ‘labor’ in America continues, the following cartoon seemed to sum it all up perfectly…
And, as we discussed here, some ‘labor’ is not as exuberant as others…
FACT: There is a record divergence between the exuberant ‘rich’ and crushed ‘middle class’
via Zero Hedge http://ift.tt/1qZMjz4 Tyler Durden