iftttwall

Now that we have the full history of foreign Treasury purchases in 2013, we know the following: in December 2012 total US paper held by foreigners was $5,573.8 billion; one year later it rose to $5.794.9 billion or a $221 billion increase. So how does this look in the context of QE? In the past year, courtesy of the Fed’s $1 trillion in TSY and MBS purchases, Ben Bernanke purchases some $552 billion in Treasurys, or about 150% more than all foreigners combined! Suddenly the need for MyRA is becoming all too clear…

And as a bonus chart, here are the top holders of US paper as of December 31, 2013.

Thank you Fed (and Belgium) for continuing to monetize US deficit spending.

Source: TIC

via Zero Hedge http://ift.tt/1bLUnia Tyler Durden

Just as we warned earlier, the stealing of the weapons cache and labeling of the break-away region as having undertaken "terrorist acts" has led to the military getting involved:

• *UKRAINE ARMY GIVEN POWER TO CHECK CIVILIAN VEHICLES
• *UKRAINE ARMY GIVEN POWER TO USE WEAPONS ON UKRAINIANS: MINISTRY

Under the "anti-terrorist" operation, Ukraine is a close to civil war as it has been so far. As Martin Armstrong concludes: "there is no peaceful resolution" no matter how many sanctions and condemnations the West makes.

Live Feed:

Below is the Google-translated Government Statement which was posted on the Ministry of Defense website moments ago:

In connection with the decision to commence in Ukraine antiterrorist operation Ministry of Defense of Ukraine official statement:

 

According to Article 5 of the Law of Ukraine "On combating terrorism" Ministry of Defense of Ukraine, bodies of military management, formations and units of the Armed Forces of Ukraine to protect against terrorist attacks facilities of the Armed Forces of Ukraine, firearms, ammunition, explosives and poisonous substances that are in the army or stored in designated areas.

 

Under section 15 of the Act, in the area of ??counter-terrorist operations of the Armed Forces of Ukraine have the right to:

 

– use in accordance with the laws of Ukraine weapons and special means;

– apprehend and deliver to the internal affairs of persons who commit or committing an offense or other action;

– check of the citizens and officials of documents , identification, and in the absence of documents – to detain them for identification;

– to carry out in the area of counter-terrorism operation personal care nationals review things that are in them, vehicles and things that they carried;

– Provisionally restrict or prohibit the movement of vehicles and pedestrians on streets and roads.

 

Measures provided for in this Article shall comply with the applicable law and terminate immediately after the anti-terrorist operation.

 

Coordination of activities of entities involved in the fight against terrorism has antiterrorist center of the Security Service of Ukraine.Those involved in the fight against terrorism, are under state protection.

 

Disobedience or resistance to lawful demands of military officials who take part in anti-terrorist operations, incur liability as provided by law.

 

The main purpose of the anti-terrorist operation – stop extremism and illegal actions of radical groups that threaten the lives of millions of Ukrainian, to protect civilians, prevent civil war in Ukraine.

And as a reminder from Martin Armstrong – There Is No Peaceful Resolution

Russia wants to portray this as a coup organized by the USA, Europe wants to portray this as Ukraine wanted them, and the USA media spins this as US against RUSSIA.

This began as a movement against CORRUPTION and not a Europe v Russia confrontation. The more it has played out, then this has also developed into a fight for freedom. The Russian side of Ukraine is the East and south and they speak Russian. The West speak Ukrainian so there are even two languages spoken.

The Russian side has very strong RIGHT WING elements and they are anti-gay and want 7 years in prison for a girl who gets an abortion. So there is now a religious fever being thrown into the fire.

BY ABSOLUTELY NO MEANS did this begin merely over the refusal to join Europe. The corruption in Ukraine is massive. Much of the bureaucracy is buried still in communism with no rational explanation. Under communism, the state-owned everything. Therefore, your “papers” were a form of domestic passport not good for international travel. Inside that passport you had to have your PERMANENT address assigned to you by government since you were not allowed to move. To this day, although communism collapsed and you can move, your passport must still have your “official” address. If you want to move, it will take months to get a new passport and you have to pay a bribe to get it expedited that may still be 2 months. The law forced you to return to change any document. You cannot do anything on-line.

The bureaucracy has never been reformed. There is no law saying you need an address anymore, yet nobody can change anything because it is as if there is nobody really in charge. It is a chaotic mess. The police were extorting people like the Mafia, so this began as all other protests – against corruption. Simple as that. The mainstream media is playing to the propaganda on both sides.

It appears that civil war will erupt for the younger generation want their freedom. Russia will not allow that to happen for this is a strategic former possession that was once part of Russia and Kiev was the former capital of Russia  before Moscow. This is likely to fester and grow. There is no peaceful resolution.

via Zero Hedge http://ift.tt/1hvuqpt Tyler Durden

Authored by Jan Winiecki, originally posted at Project Syndicate,

With the Winter Olympics underway in Sochi, Russia is again in the global spotlight – and President Vladimir Putin is taking the opportunity to present his country as a resurgent power. But, beneath the swagger and fanfare lie serious doubts about Russia’s future. In fact, long-term price trends for the mineral resources upon which the economy depends, together with Russia’s history (especially the last two decades of Soviet rule), suggest that Putin’s luck may well be about to run out.

Mineral-resource price cycles generally begin with a rise lasting 8-10 years, followed by a longer period of stable, relatively low prices. Given that prices have been on an upswing since the middle of the last decade, they should begin declining within two years, if they have not done so already. Moreover, the last price trough lasted more than 20 years, implying that Russia cannot expect simply to wait it out.

But, beyond acknowledging the need to cut spending – an obvious imperative, after the estimated $50 billion cost of the Sochi Olympics – Putin has not signaled any concrete plans to tackle Russia’s economic weaknesses.

Russia faced a similar challenge in the 1970’s and 1980’s – and, like Putin today, its leaders failed to do what was needed. According to former Prime Minister Yegor Gaidar, who led Russia’s only post-Soviet government that was oriented toward systemic change, the socialist command economy exhausted its growth potential by 1970.

Under non-totalitarian circumstances, the threat of stagnation would have generated strong pressure for systemic reform. But the Soviet Union’s aging communist leadership, encouraged by the OPEC-generated oil-price explosion and the discovery of massive hydrocarbon reserves in western Siberia, took a different tack, using natural-resource revenues to finance continued military expansion.

In an effort to appease the public, the Soviet leadership increased food imports – both directly (meat imports, for example, quintupled from 1970 to 1980) and indirectly (by increasing feedstock imports). While this strategy worked in the short term, it caused food consumption to increase far beyond what the economy could sustain.

As a result, the Soviet economy became even more dependent on resource revenues, making it extremely vulnerable to price fluctuations in international commodity markets. When mineral prices began to decline in the early 1980’s – reaching their lowest point in 1999 – the economy, which had already been stagnating for about five years, went into a free-fall.

Today, the Russian economy is no more resilient than it was in the late Soviet era, with commodities, especially oil and natural gas, accounting for around 90% of total exports and manufacturing for only about 6%. If anything, the economy’s dependence on exports of fuels and industrial minerals has increased, meaning that smaller price fluctuations have a greater impact on Russia’s fiscal and external position. Indeed, some observers – including the Central Bank of Russia (CBR) – have predicted that the country’s current account could slip into deficit as early as next year.

A lasting deficit would eliminate the major economic difference between Putin’s Russia and its Soviet counterpart during the 1980’s – namely, the financial buffer that has been accumulated over the last decade. It is this buffer – which amounted to $785 billion in the 2000-2011 period – that protected the economy from a larger shock when the global financial crisis erupted in 2009, and that has financed Russia’s foreign-policy initiatives, including its recent cooperation with Ukraine.

The CBR’s warning of twin fiscal and current-account deficits assumed that oil prices would remain steady, at $104 per barrel in 2015. But my expectation that oil prices will decline over the next 3-7 years suggests that Russia’s medium-term prospects are actually considerably worse.

In short, Russia will soon have to confront diminished macroeconomic health, with few options for restoring it. Russia’s uncompetitive manufacturing sector certainly cannot pick up the slack, and this is unlikely to change, given Putin’s unwillingness to pursue the needed shift to a more knowledge-intensive economy.

This new reality will not only affect Russia’s foreign-policy and imperial ambitions; it will also undermine the relative social and political stability that has characterized the last decade. Without resource revenues, the government will struggle to finance the policies and programs that are needed to placate ordinary Russians. In this context, the Sochi Olympics, intended to herald Russia’s triumphant return as a global power, may soon come to be regarded as a swansong.

[ZH – It seems pretty clear what Putin needs – higher oil prices… makes you wonder what his next plan is…]

via Zero Hedge http://ift.tt/1nNP7u9 Tyler Durden

Authored by Jan Winiecki, originally posted at Project Syndicate,

With the Winter Olympics underway in Sochi, Russia is again in the global spotlight – and President Vladimir Putin is taking the opportunity to present his country as a resurgent power. But, beneath the swagger and fanfare lie serious doubts about Russia’s future. In fact, long-term price trends for the mineral resources upon which the economy depends, together with Russia’s history (especially the last two decades of Soviet rule), suggest that Putin’s luck may well be about to run out.

Mineral-resource price cycles generally begin with a rise lasting 8-10 years, followed by a longer period of stable, relatively low prices. Given that prices have been on an upswing since the middle of the last decade, they should begin declining within two years, if they have not done so already. Moreover, the last price trough lasted more than 20 years, implying that Russia cannot expect simply to wait it out.

But, beyond acknowledging the need to cut spending – an obvious imperative, after the estimated $50 billion cost of the Sochi Olympics – Putin has not signaled any concrete plans to tackle Russia’s economic weaknesses.

Russia faced a similar challenge in the 1970’s and 1980’s – and, like Putin today, its leaders failed to do what was needed. According to former Prime Minister Yegor Gaidar, who led Russia’s only post-Soviet government that was oriented toward systemic change, the socialist command economy exhausted its growth potential by 1970.

Under non-totalitarian circumstances, the threat of stagnation would have generated strong pressure for systemic reform. But the Soviet Union’s aging communist leadership, encouraged by the OPEC-generated oil-price explosion and the discovery of massive hydrocarbon reserves in western Siberia, took a different tack, using natural-resource revenues to finance continued military expansion.

In an effort to appease the public, the Soviet leadership increased food imports – both directly (meat imports, for example, quintupled from 1970 to 1980) and indirectly (by increasing feedstock imports). While this strategy worked in the short term, it caused food consumption to increase far beyond what the economy could sustain.

As a result, the Soviet economy became even more dependent on resource revenues, making it extremely vulnerable to price fluctuations in international commodity markets. When mineral prices began to decline in the early 1980’s – reaching their lowest point in 1999 – the economy, which had already been stagnating for about five years, went into a free-fall.

Today, the Russian economy is no more resilient than it was in the late Soviet era, with commodities, especially oil and natural gas, accounting for around 90% of total exports and manufacturing for only about 6%. If anything, the economy’s dependence on exports of fuels and industrial minerals has increased, meaning that smaller price fluctuations have a greater impact on Russia’s fiscal and external position. Indeed, some observers – including the Central Bank of Russia (CBR) – have predicted that the country’s current account could slip into deficit as early as next year.

A lasting deficit would eliminate the major economic difference between Putin’s Russia and its Soviet counterpart during the 1980’s – namely, the financial buffer that has been accumulated over the last decade. It is this buffer – which amounted to $785 billion in the 2000-2011 period – that protected the economy from a larger shock when the global financial crisis erupted in 2009, and that has financed Russia’s foreign-policy initiatives, including its recent cooperation with Ukraine.

The CBR’s warning of twin fiscal and current-account deficits assumed that oil prices would remain steady, at $104 per barrel in 2015. But my expectation that oil prices will decline over the next 3-7 years suggests that Russia’s medium-term prospects are actually considerably worse.

In short, Russia will soon have to confront diminished macroeconomic health, with few options for restoring it. Russia’s uncompetitive manufacturing sector certainly cannot pick up the slack, and this is unlikely to change, given Putin’s unwillingness to pursue the needed shift to a more knowledge-intensive economy.

This new reality will not only affect Russia’s foreign-policy and imperial ambitions; it will also undermine the relative social and political stability that has characterized the last decade. Without resource revenues, the government will struggle to finance the policies and programs that are needed to placate ordinary Russians. In this context, the Sochi Olympics, intended to herald Russia’s triumphant return as a global power, may soon come to be regarded as a swansong.

[ZH – It seems pretty clear what Putin needs – higher oil prices… makes you wonder what his next plan is…]

via Zero Hedge http://ift.tt/1nNP7u9 Tyler Durden