investorpolitico

Russian President Putin is closing in a Red October Moment (when the Communist started the Red Revolution).

hehas been taking flak from all side US sanctions, EU sanctions, Ukrainian victories in Eastern Ukrainian without any victory to claim (apart the initial Crimean win). A series of pretty full on defeats that need to be reversed or he will be on the line next himself as normally happens in Russia…probably substituted with someone even more nationalist than him (I can assure you that no pro Western guy will be elected – if something we will get someone even more evil).

So  for August, we must expect Putin to do something.

– Invade Ukraine

– Cut/raise the gas price to Europe

– a financial attack of some kind (Treasury yields are on the limit, inflation is on the limit….it does not need much to crash the market for someone with Putin’s power).

He will have to do something to survive and he will do it. What, we do not know.

The American are pushing hard to create “military lobby opportunities” and hit back after the Snowden case, Syria humiliations. 

I would just say, pay attention what you wish for – you just may get it 

Continuing on media and democracy (supposed).

From the Guardian (UK): wikileak published a court suppression order from a  Victorian (Australian) court that forbids to report on the bribery scandal involving the Reserve Bank of Australia.

Since we cannot talk about it, google it yourself

I am always trying to steer clear of moral issues, so I make a case of the absurdity of calling where we live a democracy.

I think that there is no doubt what happen in Gaza is at least as bad as what happens in East Ukraine. In reality is much worse and the “attacker” is easily identified

As of now there is actually no proof that Russia has a direct hand (for indirect hand that than goes wrong there are plenty of cases…..it is easy to create a rogue force …much harder to control it – the current Taliban where the US backed muhjeddain of late 1990s).

But you see clearly from the media and the Western Government how the treatment is completely different….Russia always in the front page with plenty of sanctions (and ignoring when Ukraine shells Russia killing 1 (what would have happened if Mexico did it on the US) or when Ukraine uses short range ballistic missiles on the rebels (both news on CNN, but at the end of the article) – while Israel it is not good, but OK to massacre Palestinians and even bomb UN compound and killing UN personnel.

Leaving accusations aside, you can see we do not live in a democracy. This is an oligarchy where the masses are subjugated via wealth. Until the wealth last – specially in Europe the masses could start moving soon specially if Russia goes back to USSR style terrorism financing.

Both Russia and Israel will do what they want.

Israel understands perfectly that the US does not want to be any more the world policeman and needs to fix is issues before the enemy becomes too powerful.

Russia will never be a US vassal state. And if Putin falls (unlikely), someone even more diabolic will come – and if you know Russia you know it is true.

The US needs to restart the cold war as army lobby lost 50% (I do not know the exact amount) of its contracts and so the creation of the old enemy is the best to create sales opportunities.

But the USSR was strong enough to ” not be bother” while Russia needs to strike soon if it does not want to be crushed by the sanctions for real.

And at the start of the 1 World War, the major powers ware thinking that it would have been a short settlement war between Austria and Serbia.

What went wrong

37 million casualties 

4 major empires collapsed (Russia, Austro-Hungarian empire, Turkey and Germany)

It allowed the US to rise as a primary power and seeded the start of Fascism, Nazism and Communism.

On the good side – it gave some major technological advancement from air planes, to cars, ships etc

1983, the world as we know it almost ended.

From previously secret documents (this is all real)

In March 1983, President Reagan dubbed Soviet Union as the Empire of Evil and proposed the Strategic Defence Initiative (an anti missile like the one President Obama is planning to do in Poland) and he sent the Pershing nuclear missile to Europe.

7 September 1983 USSR fighter jets downed the civilian plane of Korean Airlines KAL007 with over 250 people on board as it crossed USSR border near Korea. The US called this a barbarity.

In November, NATO started a simulated military operation called  “Able Archer 1983” that simulated a response to a Warsaw Pact attack.

The Soviet Union went into full panic mode as it believed it was a preparation of a real attack like it happened in 1941 with Hitler’s Germany and activated the strategic nuclear missiles on full alert.

Luckily “Able Archer 83” finished and we have a history to tell.

Back to now….it looks really similar. Now a full UK Battle Group is joining Polish exercise in October 2014.

A bit similar. 

It is funny as quite a few news…do not make the …news

– Ukraine. US is still pushing hard now accusing the Russian of shelling Ukraine. This pretty much made the news (even if without much clamour as everything is unverified).

What did not make the new s is that financial war is started in earnest.

The US Department seized a Cyprus Bank used by Russian oligarchs and Russia sued Mcdonald on the basis that their food does not meet Russian food requirement standards.

How does effect you? Well probably Mcdonald in  the next corporate earning presentation will not meet the forecasts (as it just happened to VISA on Friday , as it as been boycotted by Russians. As more companies will be affected there will be more market issues.

There is also some increase of cyberwarfare against US Public institutions (Russians are some of the best in the game).

Putin said that the new sanctions will compromise intelligence sharing on terrorists (this could be nothing or a lot, depending what he does mean. During the cold war, the USSR was  the major sponsor of terror organization that killed thousands in Europe).

Russia is prepping a new private army in Blackwater style (now Academi, the infamous private mercenaries that were contracting in Iraq and Afghanistan) in order to have its unofficial deniable army.

Israel is a mess with no solution in sight. But, as of now, with not much spill over as Lebanon and Hezbollah are engaged elsewhere against Islamic State (conveniently, I suppose).

Islamic State keep advancing on Baghdad and, worryingly-as there are the oil refineries, is starting to pick up activities in the South Iraq.

Qatar, Saudi, Jordan and Israel just received some massive weapon sales from the US (Iraq the same, from Russia). Saudis (Saudi Prince Mohammed) and Qatar (ex Qatar Ambassador in the US, Sheikh Nasser bin Hamad alKhalifa),  gave string warning to the US and UK not to intervene in Iraq as they treat what is happening a settling of scores between Sunni and Shia…not to be meddle with.

Lybia is again in the throws of militia wars – hampering the resumption of oil sales

China is again flexing its muscles with live fire drill in the Gulf of Tonkin (near Vietnam, exactly where the US/Vietnam war escalated 40 years ago).

On the financial side of thinks there is a constant chatter of European banks in semi crisis, specially on Italy (Italian Banking Association warned that the bad loans where USD390 billion ($87 billion in 2008) and the top 40 Italian Banks had the third consecutive   negative profit (translated: loss) and the banks could be pushed to sell their non performing loans.

By the way today is 100 years from the start of first war world.

So the latest the development.

The Ukrainian Government fell…back to election.

The Ukrainian Army accuses Russia to have downed at least one of their airplanes (Russia not the rebels, with a Russian jet fighter air to air missile). 

The US State Department accuses (without any evidence) of Russian artillery firing against Ukrainian troops.

No evidence, but since Putin said he would consider pinpoint strikes as Ukrainian Army is supported by US Advisors and European mercenaries (confirmed in an interview in an Italian newspaper Il Giornale, interviewing a group of Italian, Swedish, Baltic State, Finland and France free mercenaries).

NATO General Breedlove is considering a NATO outpost in Poland (Szczecin) as “forwaring base” for protective strikes against Russia.

Russia kindly reminded NATO that in case of a conventional attack on Russia, its military doctrine allows it to use all tactical weapon systems – including tactical nuclear bombs.

Someone must have confused Russia with Iraq or Afghanistan!

On other Cold War Developments….Iraq is falling under Russian influence and Israel has been “carte blanche” to kill on sight (even UN protected school)….with civilian victims double the one in Ukraine.

Finally a Reuters interview to a rebel commander shed what probably is the truth.

The rebel shot down the plane.

But the Ukrainian new about the missile launcher BUK  and launched an attack on the BUK system exactly at the same moment of the civilian aircraft ( re routed from his usual path 24 km…you can check it on airwaves)  flying using its “corridor” for protection.

I always remember reading “Platoon”. In the introduction to the book there was a phrase that remained with me ever since

The first victim of war is innocence.

RIP to all those innocents.

full article at

http://www.reuters.com/article/2014/07/23/us-ukraine-crisis-commander-exclusive-idUSKBN0FS1V920140723

Funny enough yesterday a big news that appeared, but did not make a big splash.

2 Ukrainian jet fighters got shot down…from Russia. So the Ukrainian says and this time I think they have reason.

Why? Because Putin said so in the previous interview (a lot of things can be said about him, but not that is not clear)….he said that as a consequence of different bombings on Russian soil (even killed a civilian in a Russian town) the Russian army will make pinpoint attacks. 

And so he started..

The uncomfortable truth about Israel is that is another consequences of the American disengagement (or re engagement towards old enemies) of the US from the Middle East.

Israel, without the US or another big brother, has a limited window of opportunity before the numerically superior neighbors/ enemies regroup against it.

So it needs to take the opportunity the settle accounts for the future before is too late (plus there is gas in the Palestinian side of the sea….and Israel has a big energy issue – in 2000 British Gas found that offshore Gaza there are $4 billion of gas reserves in a search sponsored by BG and the Palestinian Investment Fund).

In a sense the surge of the Islamic State is a bit suspect as it creates an “hornets nest” that is more worrisome than Israel State to the Arab monarchies (even Hezbollah cannot participate in the war as it is strained against IS). After a bit of search I found this ….no one knows if it is real or not…but makes sense.

In one of less publicized files released from Snowden (the turncoat American spy) says that the head of IS had been trained on purpose to create the Islamic State.

According to Snowden’s file, “The only solution for the protection of the” Jewish State “is to create an enemy near its borders, BUT to draw against Islamic states who oppose his presence.”.

In reality, whatever it is, after 600 years of tension the Middle East is arriving to a major melting point. No one can prevent it (apart using nukes), you just need to watch carefully.

In this period I am more geopolitically oriented than sharemarket – until the FED supports the market and nothing happen the market will stay like this- climbing a wall of worry. But we are on thin ice….and I am trying to understand where is the break. Plus it is really interesting – better than any spy-fiction books I read -terribly the victims are real.

Yesterday apparently Putin called Washington and said this is my evidence (you can find it on Russia Today) and asked the American to show their evidence…..and they said they had NONE.

Apart the evident back-pedalling just from the day before, for me it seems strange with all the American hardware around (the media are always talking of Russian support o the rebels, but they somehow fail to mention that the US is providing full support (from surveillance to military advisors and weaponry – hence the improved performance of the Ukrainian Army since Crimea). 

It is not possible that the US was not looking at Eastern Ukraine. Probably the truth is a bit different than the media spin.

The US have to give an honourable escape route  to Putin. As Russian history goes Russian Government that loses power in Russia, does not end very well. It is not just an electoral defeat – usually you can choose between being killed, disappeared or run away (and, as happened to Trotzky, usually they will find you).

So, if they continue on this path the only logical strategy for Putin is to become more violent and aggressive.

Also because his rise was due to Yeltsin humiliation in Kosovo – where Serbia got defeated by NATO- Russia brokered a peace, but the NATO promise of using Russian peace keeper was soon forgotten. Yeltsin was dismissed in disgrace in 2000 and died in 2007 apparently of natural causes. 

The other failed President was Khrushchev (again humiliated during the Cuban missile crisis) and deposed in 1964. After depression, with a 400 rubles monthly pension, he died of supposed heart attack in 1971.

And if you think that Vladimir Putin is evil …please go an read Russian history. It might be that the era of the first Putin will be see an era of freedom and enlightenment for Russia.

The still most revered leaders in Russia are Lenin and Stalin that killed (excluding the World Wars) at least 15 millions.

And as post scriptum in case anyone forgot, Russia has still 1,500 operational nuclear warheads. OK a little bit less than the Americans at 1,650, but enough to send us all into history!

So the political developments are more interesting than the actual fight to guess the outcomes.