Wednesday, December 24, 2014

Today's Links

"The integration of Ukraine into NATO would bring NATO forces nearly as far east as Hitler’s armies reached in the days leading up to the battle of Stalingrad, 72 years ago...
Hitler conquered virtually the entire territory of present-day Ukraine, a feat which German Chancellor Angela Merkel and the US President Barack Obama seek to duplicate, not through open invasion, but by the use of cash, political subversion and neo-Nazi gangs."


From zero hedge comments (Ironmace): "Did the US and the Saudis conspire to drop oil prices and destroy the Russian economy?
Gee, ya' think?"




1--The Fed is heading for another catastrophe, Peter Roach


Central banking has lost its way. Trapped in a post-crisis quagmire of zero interest rates and swollen balance sheets, the world’s major central banks do not have an effective strategy for regaining control over financial markets or the real economies that they are supposed to manage. Policy levers — both benchmark interest rates and central banks’ balance sheets — remain at their emergency settings, even though the emergency ended long ago


2--How Putin Stopped the Ruble's Collapse, Bloomberg


The current rate of less than 55 per U.S. dollar seems miraculous after last week's "Black Tuesday," which saw the ruble almost reach 80 per U.S. dollar. That decline followed a surprise decision by the Russian Central Bank to increase its key lending rate 6.5 percentage points to 17 percent, and it appeared the monetary authorities could do nothing short of introducing currency controls to halt the rout....


Short-sellers have become hesitant to bet against the ruble, knowing that some big foreign currency sales are coming. Here's how the number of short ruble contracts on CME, the world's biggest derivatives marketplace, has dropped lately:
CME
Bloomberg
That gives the Russian monetary authorities some breathing space, but that's all


3---A Timeline of CIA Atrocities, Steve Kangas


Operation PAPERCLIP – While other American agencies are hunting down Nazi war criminals for arrest, the U.S. intelligence community is smuggling them into America, unpunished, for their use against the Soviets. The most important of these is Reinhard Gehlen, Hitler’s master spy who had built up an intelligence network in the Soviet Union. With full U.S. blessing, he creates the "Gehlen Organization," a band of refugee Nazi spies who reactivate their networks in Russia. These include SS intelligence officers Alfred Six and Emil Augsburg (who massacred Jews in the Holocaust), Klaus Barbie (the "Butcher of Lyon"), Otto von Bolschwing (the Holocaust mastermind who worked with Eichmann) and SS Colonel Otto Skorzeny (a personal friend of Hitler’s). The Gehlen Organization supplies the U.S. with its only intelligence on the Soviet Union for the next ten years, serving as a bridge between the abolishment of the OSS and the creation of the CIA. However, much of the "intelligence" the former Nazis provide is bogus. Gehlen inflates Soviet military capabilities at a time when Russia is still rebuilding its devastated society, in order to inflate his own importance to the Americans (who might otherwise punish him). In 1948, Gehlen almost convinces the Americans that war is imminent, and the West should make a preemptive strike. In the 50s he produces a fictitious "missile gap." To make matters worse, the Russians have thoroughly penetrated the Gehlen Organization with double agents, undermining the very American security that Gehlen was supposed to protect.


4---A case can be made that the geopolitical shift towards Russia-China integration is arguably the greatest strategic maneuver of the last 100 years. Xi's ultimate master plan is unambiguous: a Russia-China-Germany trade/commerce alliance, Pepe Escobar


Only three days before the run on the rouble, I asked Rosneft's Mikhail Leontyev (Press-Secretary - Director of the Information and Advertisement Department) about the growing rumors of the Russian government getting ready to apply currency controls. At the time, no one knew an attack on rouble would be so swift, and conceived as a checkmate to destroy the Russian economy. After sublime espressos at the Tazza d'Oro, right by the Pantheon, Leontyev told me that currency controls were indeed a possibility. But not yet.

What he did emphasize was this was outright financial war, helped by a fifth column in the Russian establishment. The only equal component in this asymmetrical war was nuclear forces. And yet Russia would not surrender. Leontyev characterized Europe not as a historical subject but as an object: "The European project is an American project." And "democracy" had become fiction.   ...


Russia could always deploy an economic "nuclear" option, declaring a moratorium on its foreign debt. Then, if Western banks seized Russian assets, Moscow could seize every Western investment in Russia. In any event, the Pentagon and NATO's aim of a shooting war in the European theater would not happen; unless Washington was foolish enough to start it.

Still, that remains a serious possibility, with the Empire of Chaos accusing Russia of violating the Intermediate-Range Nuclear Forces Treaty (INF) even as it prepares to force Europe in 2015 to accept the deployment of US nuclear cruise missiles.

Russia could outmaneuver Western financial markets by cutting them off from its wealth of oil and natural gas. The markets would inevitably collapse - uncontrolled chaos for the Empire of Chaos (or "controlled chaos", in Putin's own words). Imagine the crumbling of the quadrillion-plus of derivatives. It would take years for the "West" to replace Russian oil and natural gas, but the EU's economy would be instantly devastated. 
Just this lightning-bolt Western attack on the rouble - and oil prices - using the crushing power of Wall Street firms had already shaken European banks exposed to Russia to the core; their credit default swaps soared. Imagine those banks collapsing in a Lehman Brothers-style house of cards if Russia decided to default - thus unleashing a chain reaction. Think about a non-nuclear MAD (Mutually Assured Destruction) - in fact warless. Still, Russia is self-sufficient in all kinds of energy, mineral wealth and agriculture. Europe isn't. This could become the lethal result of war by sanctions.....


At the APEC meeting in November, he doubled down, promoting an "Asia-Pacific dream".

Meanwhile, frenzy is the norm. Apart from the two monster, US$725 billion gas deals - Power of Siberia and Altai pipeline - and a recent New Silk Road-related offensive in Eastern Europe, [4] virtually no one in the West remembers that in September Chinese Prime Minister Li Keiqiang signed no fewer than 38 trade deals with the Russians, including a swap deal and a fiscal deal, which imply total economic interplay.

A case can be made that the geopolitical shift towards Russia-China integration is arguably the greatest strategic maneuver of the last 100 years. Xi's ultimate master plan is unambiguous: a Russia-China-Germany trade/commerce alliance. German business/industry wants it badly, although German politicians still haven't got the message. Xi - and Putin - are building a new economic reality on the Eurasian ground, crammed with crucial political, economic and strategic ramifications.


5--George Thorogood and the Destroyers
So move it on over
Rock it on over
Move over little dog
A mean old dog is movin' in
6--Another MH17 Cover-Up: Hiding a Key Autopsy, eric zuesse


Decisive evidence as to how the July 17th shooting-down of the MH17 Malaysian airliner occurred is being hidden by the four-nation team that’s doing the official ‘investigation’ into the plane-downing incident.
This decisive evidence is the coroner’s report on the corpse of the airliner’s pilot. If the pilot was killed by bullets, then the standard ‘explanation’ of the downing (that the plane was downed by a ground-fired missile) isn’t just false, it’s an outright hoax. So: where’s the pilot’s autopsy?...


According to London’s Daily Mail on December 5th, a video documentary from a Russian journalist “suggested” that, “pieces of 30mm rounds were found in the bodies of the pilots.” 30mm bullets are the same size of bullets that come from the types of fighter-jet planes that are in the Ukrainian Air Force, including the following jets: Su-25, Su-27, and Mig-29. 30mm bullets are very different from missile-shrapnel, which the U.S. and Ukraine allege had brought down this airliner.


A retired Lufthansa pilot, Peter Haisenko, examined a remarkably clear photo of the key piece of evidence on the downing, which is the side-panel of the fuselage right next to the pilot; this panel was riddled with what he said were 30mm bullet holes, shot right into the spot where the pilot’s belly would be. Apparently (if Haisenko is correct), the airliner’s pilot was machine-gunned to death, his belly was ripped into by a hail of bullets, after which the attacking jet or jets fired a missile into the airliner’s body, and the airliner then promptly plummeted to earth. No ground-fired missile was involved. (The ground-fired “Buk” would have been 33,000 feet below, much too far away for precise targeting at the plane’s pilot; and shrapnel-holes are not round; they’re very different from bullet-holes.)


7---Russia has Evidence From Ukraine Military Defector Kiev Was Responsible For MH-17 Crash, zero hedge


Russia’s Investigative Committee says it has uncovered evidence Ukraine was involved in the crash citing a military defector from the Ukraine.
The RIC said, as summarized by Bloomberg, that it interrogated a Ukraine military defector who has evidence the Boeing jet shot down in July may have been targeted by Ukrainian military SU-25 plane, according to website statement. The witness claims to have spoken to SU-25’s pilot, according to whom the SU-25 in question was carrying R-60 air-to-air missiles.  The SU-25 returned to base after flight without its missiles.  The pilot summarized that "MH-17 was in wrong place at wrong time." Tell that to the families of over two hundred innocent casualties of war.....


The witness, who was not named, worked at an airfield in the Ukrainian city of Dnipropetrovsk where he claimed to have seen a warplane take off on July 17 with air-to-air missiles and return without them. An Investigative Committee statement said the testimony of the man "is important proof that Ukrainian military was implicated in the crash of the Boeing-777".


8---But there is no respite for the American oil patch. The price of oil has plunged 50% since June, the price of propane is down 50% since its recent high in mid-September, and natural gasoline is down 32% since recent high in mid-November. None of the fancy charts natural gas drillers have shown to investors work at these prices.


9--China helps stabilize currencies and assumes role as reserve currency, wolf street


China is taking yet another a strategic step to embed the yuan more firmly in international trade and in doing so dislodge the US dollar from its dominant position as the global transaction and reserve currency.....


While Chinese support doesn’t fix the main problems in either country, namely capital outflow unmatched by inward investment, poor access to global markets due to sanctions (Russia) or the default (Argentina), and now plunging oil prices, the intervention caused both the peso and the ruble to rebound.
In both cases, China has elected to exchange its relatively valuable currency for one that is remarkably unstable and likely to lose value. For each tranche swapped, it will have to hold the pesos or rubles for up to one year before swapping it back for yuan. And China is taking the risk that in one year possibly Argentina or Russia might not have the purchasing power to buy yuan on world markets in the event of a currency crisis. So why would China take these risks in countries where other lenders or investors have shied away?


Resources. And consumer bases.
By swapping yuan for rubles or pesos, China is putting yuan in the hands of two countries with significant consumer bases. And what are yuan used for besides propping up flailing currencies? Buying Chinese stuff!
Argentina and Russia are both resource exporters. Argentina’s economy pretty much hinges on exporting agricultural products, and also possesses oil and gas, precious and base metals, and bulk commodities. Russia’s economy is oil and gas. China can use the swapped pesos and rubles to buy these valuable and needed commodities from its trading partners


10--Oil Crash: Don’t Believe the Happy Clatter , WSOP


It might be helpful to remember that the Dow Jones Industrial Average went from 12,000 to 13,000 between March and May of 2008 before entering a plunge that would take it to the 6500 range by March of 2009. (It should be noted, however, that frothy markets can become frothier than the current one before reality sets in.)...


If this price collapse were happening in just crude oil, it could be shrugged off as a supply glut problem attributable to growing shale production in the U.S. and over production among OPEC members. But other industrial commodities are in freefall as well. Iron ore prices are down 49 percent this year while copper has declined 15 percent. The price of natural gas is down 30 percent in just the past month, including a plunge of 9 percent just yesterday....


Not everyone at the Federal Reserve is part of the happy clatter crowd. On October 13, 2014, Chicago Fed President, Charles Evans, spoke before the annual conference of the National Council on Teacher Retirement in Indianapolis. Evans expressed skepticism that an economy can be robust with the tepid growth in wages happening in the United States. Evans stated:
“…it is hard to imagine a robust labor market without solid growth in wages. With productivity growth of around 1 to 2 percent and an inflation target of around 2 percent, we should be seeing wages and benefits rising at around a 3 to 4 percent rate. But that is clearly not the case. Although some in-demand occupations may be experiencing stronger wage growth, overall compensation growth has been around 2 percent over the past six years. Taken altogether, these and other measures lead me to conclude that there remains significant underutilization of labor resources — and likely somewhat more slack than what is indicated by the unemployment rate alone.”

In an unusually frank interview, Ali al-Naimi, the Saudi oil minister, tore up OPEC’s traditional strategy of keeping prices high by limiting oil output and replaced it with a new policy of defending the cartel’s market share at all costs. “It is not in the interest of OPEC producers to cut their production, whatever the price is,” he told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.” He said the world may never see $100 a barrel oil again.
The comments, from a man who is often described as the most influential figure in the energy industry, marked the first time that Mr Naimi has explained the strategy shift in detail. They represent a “fundamental change” in OPEC policy that is more far-reaching than any seen since the 1970s, said Jamie Webster, oil analyst at IHS Energy. “We have entered a scary time for the oil market and for the next several years we are going to be dealing with a lot of volatility,” he said. “Just about everything will be touched by this


12--Biderman on CNBC: Global Zero Interest Rates Creating Global Recession


"If there's easy money around for the very affluent, and they want to get a return, the money has to go somewhere,  so it goes into stocks and ZOOM, or commodities and it makes "growing" a reality"....What happened in energy is it got punished by too much of a good thing for the liquidity standpoint."


zero rates stifle growth by producing excess supply (cheap money generates supply) and weak demand. (stagnant wages)


13--EIA December Crude Inventories Surge To Record Highs, zero hedge


WTI Crude is down over 3.5%, dropping back towards $55 - dismissing yesterday's dead-cat-bounce deja vu - as EIA inventory builds more than expected at 7.27 million barrels (biggest build in 2 months to 6-month highs). This is the largest inventory for the time of year since records began. Of course, while energy stocks are fading broad equity indices do not care at all...

EIA Inventories rose most in over 2 months...


14---The first underappreciated fact is that the large expansion of the monetary base under QE is temporary. The Fed has always planned to eventually return its balance sheet and, by implication, the monetary base back to the trend path it was on prior to the QE programs. This point has been communicated in several ways. First, the Fed issued exit strategy plans in its June, 2011 and September, 2014 FOMC meetings that point to a reduction in the monetary base. Here is an excerpt from the latter meeting:
The Committee intends to reduce the Federal Reserve’s securities holdings in a gradual and predictable manner...The Committee intends that the Federal Reserve will, in the longer run, hold no more securities than necessary to implement monetary policy efficiently and effectively. 
By  now you have probably noticed an inherent tension between these two underappreciated facts. On the one hand, the Fed never intended the expansion of the monetary base under the QE programs to be permanent. On the other hand, the monetary base injections needed to be permanent for the QE programs to really spur aggregate demand growth. And therein lies the Fed's dirty little secret: the Fed's QE programs were muted from the beginning. They never could on their own create the amount of catch-up aggregate demand growth needed to restore full employment. So despite all the Fed has said over the past six years, it made an explicit policy choice to avoid fully restoring aggregate nominal expenditures.

The Fed, in short, never chose to unload both barrels of its gun. And the QE barrel that it did unload depended on a portfolio channel that could only promise modest benefits at best. Had it committed to a permanent expansion of the monetary base via a level target, the Fed would have unloaded both barrels of its guns and made the QE programs far more effective.  Instead, the Fed opted for bird shot when it could have used a slug. This is the dirty little secret Fed officials would rather leave unsaid


15---What 5 Percent Means'
Via Calculated Risk, from the BEA:
Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 5.0 percent in the third quarter of 2014, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.9 percent. With the third estimate for the third quarter, both personal consumption expenditures (PCE) and nonresidential fixed investment increased more than previously estimated 


16---Yeah, the Saudis pushed down oil prices, but there's more to it then you think, oil price (Must read)


Some commentators have offered a more conspiratorial theory for the Saudis wanting to get rid of Assad. They point to a 2011 agreement between Syria, Iran and Iraq that would see a pipeline running from the Iranian Port Assalouyeh to Damascus via Iraq. The $10-billion project would take three years to complete and would be fed gas from the South Pars gas field, which Iran shares with Qatar. Iranian officials have said they plan to extend the pipeline to the Mediterranean to supply gas to Europe – in competition with Qatar, the world's largest LNG exporter.....


As has been noted, Saudi Arabia's manipulation of the oil price has twice targeted Russia. This time, the effects of a low price have hit Moscow especially hard due to sanctions already in place combined with the low ruble. Last week, in an effort to defend its currency, the Bank of Russia raised interest rates to 17 percent. The measure failed, with the ruble dropping another 20 percent, leading to speculation the country could impose capital controls....


Of course, the Russian dalliance with China is a key part of Putin's great Eastern pivot that will keep stoking demand for Russian gas even as the Saudis and OPEC, perhaps with US collusion, keep pumping to hold down the price. The November agreement, that would see Gazprom supply Chinese state oil company CNPC with 30 billion cubic meters of gas per year, builds on an earlier deal to sell China 38 bcm annually in an agreement valued at $400 billion.
As Oilprice.com commented on Sunday, “ongoing projects are soldiering on and Russian oil output is projected to remain unchanged into 2015.”
“Russia will go down with the ship before ceding market share – especially in Asia, where Putin reaffirmed the pivot is real. Saudi Arabia and North America will have to keep pumping as Putin plans to uphold his end in this game of brinksmanship.”
.....
The oil price drop that has dominated the headlines in recent weeks has been framed almost exclusively in terms of oil market economics, with most media outlets blaming Saudi Arabia, through its OPEC Trojan horse, for driving down the price, thus causing serious damage to the world's major oil exporters – most notably Russia.
While the market explanation is partially true, it is simplistic, and fails to address key geopolitical pressure points in the Middle East.


Oilprice.com looked beyond the headlines for the reason behind the oil price drop, and found that the explanation, while difficult to prove, may revolve around control of oil and gas in the Middle East and the weakening of Russia, Iran and Syria by flooding the market with cheap oil


The oil weapon
We don't have to look too far back in history to see Saudi Arabia, the world's largest oil exporter and producer, using the oil price to achieve its foreign policy objectives. In 1973, Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.


It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt....


Turning to the current price drop, the Saudis and OPEC have a vested interest in taking out higher-cost competitors, such as US shale oil producers, who will certainly be hurt by the lower price. Even before the price drop, the Saudis were selling their oil to China at a discount. OPEC's refusal on Nov. 27 to cut production seemed like the baldest evidence yet that the oil price drop was really an oil price war between Saudi Arabia and the US.
However, analysis shows the reasoning is complex, and may go beyond simply taking down the price to gain back lost marketshare.
“What is the reason for the United States and some U.S. allies wanting to drive down the price of oil?” Venezuelan President Nicolas Maduro asked rhetorically in October. “To harm Russia.”
Many believe the oil price plunge is the result of deliberate and well-planned collusion on the part of the United States and Saudi Arabia to punish Russia and Iran for supporting the murderous Assad regime in Syria.


Punishing Assad and friends
Proponents of this theory point to a Sept. 11 meeting between US Secretary of State John Kerry and Saudi King Abdullah at his palace on the Red Sea. According to an article in the Wall Street Journal, it was during that meeting that a deal was hammered out between Kerry and Abdullah. In it, the Saudis would support Syrian airstrikes against Islamic State (ISIS), in exchange for Washington backing the Saudis in toppling Assad.


If in fact a deal was struck, it would make sense, considering the long-simmering rivalry between Saudi Arabia and its chief rival in the region: Iran. By opposing Syria, Abdullah grabs the opportunity to strike a blow against Iran, which he sees as a powerful regional rival due to its nuclear ambitions, its support for militant groups Hamas and Hezbollah, and its alliance with Syria, which it provides with weapons and funding. The two nations are also divided by religion, with the majority of Saudis following the Sunni version of Islam, and most Iranians considering themselves Shi’ites.
“The conflict is now a full-blown proxy war between Iran and Saudi Arabia, which is playing out across the region,” Reuters reported on Dec. 15. “Both sides increasingly see their rivalry as a winner-take-all conflict: if the Shi’ite Hezbollah gains an upper hand in Lebanon, then the Sunnis of Lebanon—and by extension, their Saudi patrons—lose a round to Iran. If a Shi’ite-led government solidifies its control of Iraq, then Iran will have won another round.”


17---Oil prices slump after surprise inventory jump. marketwatch


Crude-oil futures slumped Wednesday, wiping out earlier gains as U.S. data confirmed an unexpected jump in crude inventories.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February CLG5, -2.89%  fell $1.64, or 2.8%, to $55.48 a barrel. February Brent crude on London’s ICE Futures exchange LCOG5, -2.98%  lost $1.74, or 2.8%, to $59.95 a barrel.


On Wednesday, the U.S. Energy Information Administration said commercial crude inventories rose 7.3 million barrels from the previous week to 387.2 million barrels. On average, analysts were looking for a decrease of 1.8 million barrels.
Late Tuesday, the American Petroleum Institute said its data showed a 5.4-million-barrel gain in U.S. crude stockpiles for the week ended Dec. 19. Rising U.S. oil production due to the shale boom has been largely responsible for the glut in oil markets, and a large build-up in U.S. supply typically weighs on oil prices


18---Christmas for Wall Street: Dow hits record 18,000 points, wsws
 
A cheer rang up from traders on the floor of the New York Stock Exchange Tuesday morning as the Dow Jones Industrial Average hit 18,000 points for the first time ever. The index, which stood at 16,264 a year ago, closed at 18,024 Tuesday afternoon, having risen 1,000 points in the last week alone.
The media referred to the last several days of trading—which also saw the S&P 500 index reach record high—as a “Santa Claus rally.” This spike in share values was attributed to rising consumer spending, falling gas prices and a supposedly “roaring” US economy...


In reality, Wall Street is celebrating the sharp reduction of workers’ wages and living standards that have sparked record corporate profits and the Fed’s policy of unlimited free money, which has fueled a new speculative bubble. Behind this, however, are intractable contradictions in the US and world economy, which will inevitably lead to a new market “correction.”
...
While


This financial parasitism, which has accelerated since the 2008 crash, has coincided with a historic transfer of wealth from the working class into the hands of the richest one percent and one-tenth of one percent of the population.
With US corporations flush with an estimated $1.5 trillion in cash, last year saw a sharp increase in mergers and acquisitions. According to Forbes, global M&A activity was up 22 percent year-over-year to $3.58 trillion, the third highest figure on record and the highest reading since the global financial crisis. Analysts predict this frenzied pace will continue in 2015, with depressed oil prices likely to spark a wave of mergers and consolidations in the energy industry.
While this socially-destructive activity massacres jobs and leads to further demands for greater output and sacrifice from workers, it has and will continue to produce a windfall for the financial aristocracy.


19--Ukrainian government prepares extreme austerity measures, wsws


20--Washington transforms Ukraine into capitalist Valhalla, wsws


National patriotic education” classes will become a mandatory component of school educational programs.... These include constitutional amendments reducing free, compulsory school education from 11 to nine years, abolishing constitutional guarantees of the rights to free education and health care, and reducing the number of members of parliament from 450 to 150..


Social benefits to be abolished include free meals for school children and hospital patients, free health resort treatment for children, free participation in youth sports centers, most state-funded scholarships, and reduced fees on public transport for students and teachers. Inflation indexing for the salaries of public sector workers is to be suspended. Price controls on medicines are to be abolished....


Pensions for working pensioners are to be reduced by up to 90 percent. A moratorium on indexing pension benefits to inflation will be prolonged indefinitely....Military servicemen are no longer to receive benefits for the rental and purchase of living quarters and uniforms, and the state will no longer pay employers for holding jobs for workers who have been drafted....


In the recently unveiled program, “de-bureaucratization, decentralization, deregulation, and accountability” are declared as the guiding principles of state policy. Its goals include the doubling of export volumes by 2019, “large-scale privatization of state property under the appropriate economic conditions,” “de-monopolization of the economy,” “capitalization of state banks,” financial restructuring of the state-owned oil and gas company Naftogaz, restructuring of the judicial system, reform of law enforcement, and efforts to establish “energy independence.”...


At the same time, a number of taxes, as well as a number of agencies that regulate business activity, will be abolished. Income taxes and taxes on small and medium businesses are to be reduced...


21--Putin appeals to the Russian oligarchs, wsws


Even if Putin stressed the “very warm atmosphere” of his meeting with the oligarchs, his government can no longer be sure of their support. Despite his constant offers to imperialism, Western governments and media, as well as significant sections of the Russian finance and business elite criticise his policies as demonstrating too little willingness to compromise.


The Russian edition of Forbes magazine commented on Thursday’s press conference saying, “The attempts by the Kremlin to present the situation as a ‘usual crisis’, which also affects large and strong economies, is a sign of ineptitude. ... The situation is extraordinary. ... In these days, many Russian businessmen and even the state bureaucracy confront the question—should we remain within this system, which many think means suicide.”


The Russian oligarchy and state bureaucracy fear that without unconditional capitulation to imperialism, their entire fortune and power in Russia itself is at risk. At the same time, social tensions are rising enormously as a result of the economic war being conducted by the US and EU and the open protection of the oligarchs by the Kremlin.


22--Ukraine parliament approves move towards NATO, wsws


The integration of Ukraine into NATO would be another matter entirely, bringing NATO forces nearly as far east as Hitler’s armies reached in the days leading up to the battle of Stalingrad, 72 years ago, the turning point in the fighting on the Eastern front in World War II.
Hitler conquered virtually the entire territory of present-day Ukraine, a feat which German Chancellor Angela Merkel and the US President Barack Obama seek to duplicate, not through open invasion, but by the use of cash, political subversion and neo-Nazi gangs.
.....
Actual NATO membership would mean that the United States and its European allies would be legally obligated under Article IV of the NATO treaty to go to war in defense of Ukraine, an obligation that would extend to Ukraine’s claim to Crimea, annexed by Russia earlier this year, and to the eastern territories now controlled by pro-Russian separatists.
Since this would threaten war between nuclear-armed powers, the major European countries, including Germany and France, have discouraged talk of NATO membership for Ukraine. But the Obama administration has had no such reservations.


At Wednesday’s State Department press briefing, spokeswoman Marie Harf merely paraphrased the official NATO statement, saying, “[T]he door is open … countries that are willing to contribute to security in the Euro-Atlantic space are welcome to apply for membership. Each application will be considered on the merits.”


She concluded, “[A]ny decision on potential NATO membership is one for Ukraine and NATO to make.” In other words, Russia has no say on whether NATO tanks and warplanes should be stationed on its doorstep.
Ukraine only formally adopted non-aligned status in 2010, when Russian-backed Viktor Yanukovych was president and his party controlled parliament. But the principle that Ukraine would not join NATO, founded as an anti-Soviet, anti-Russian military bloc, was accepted by both Stalinist and imperialist officials at the time of the breakup of the Soviet Union,,,


The Washington Post hailed the program of budget-cutting and privatization in an editorial Wednesday that called the Yatsenyuk cabinet “a technocrat’s dream,” and noted the presence of “Natalia Jaresko, a US citizen and highly respected investment banker who has taken over the finance ministry.”


23---Ukraine ascension to NATO would end Russia-NATO ties – Moscow, RT


24--Witness account of Ukraine MH17 takedown confirmed by lie detector – investigators, RT


According to his account, he personally saw the plane piloted by [Ukrainian military pilot] Voloshin armed with R-60 air-to-air missiles,” Markin said. “He added there was no need for such weapons during regular air missions of the Ukrainian Air Forces because the rebel forces had no military aircraft.”

Markin said that the Investigative Committee will continue gathering and analyzing evidence perpetrating to the downing of MH17 and will share the information with the Netherlands-led international probe into the incident, “if they really interested in establishing the truth and send an inquiry.”
The witness is likely to be taken into protective custody in Russia because his life may be threatened, Markin said.
The Ukrainian Security Service confirmed on Wednesday that a Captain Voloshin does serve as a military pilot in the country’s armed services. But it said he didn’t fly any missions on the day the Malaysian Airlines flight was shot down.


The Russian Investigative Committee invited the Dutch or Malaysian experts to check Voloshin using a polygraph, and Ukraine’s Security Service to provide the military log to the official investigation, Markin said.
“The fact that Ukraine’s Security Service has acknowledged Voloshin’s existence is already an accomplishment,” he said.


24---Russia-US relations 'poisoned' for decades to come – Medvedev, RT


Russian PM Dmitry Medvedev thinks the recent unfriendly moves by Presidents Poroshenko and Obama effectively turn Ukraine into Russia’s potential enemy. It will also “poison” relations with the US for decades to come.
On Facebook, Medvedev commented on the Ukraine Freedom Act 2014 signed by Barack Obama last week, and on the Ukrainian parliament’s intention to cancel a national law forbidding them to join military blocs.
As in the case with the Jackson-Vanik amendment, our relations with America will be poisoned for decades to come,” he added.
Medvedev also underlined that if Ukraine changed its out-of-bloc status, it would in essence be an application to join NATO, rendering Ukraine Russia’s potential enemy


25--Aso says wage hikes key to 'Abenomics' success, JT


26--Secret gov bust in Turkey: There is growing propaganda being made by the parallel structure. What are you planning to do to avoid this?
There are several interesting points with regard to recent developments. The first is efforts to introduce the Dec. 14 operation as a dispute or even revenge, as outlined by [main opposition Republican People’s Party, CHP, leader Kemal] Kılıçdaroğlu between the government and the parallel structure. However, this is not something between the government and the parallel structure. This is a problem between the parallel structure and a group of people who have suffered because of a plot committed by this structure. … Now that this plot has been revealed, they are hiding behind freedom of the press. They are trying to mislead [public opinion]. They are doing another thing at the same time. They are starting a smear campaign against Turkey in every corner of the world. …

What does an operation on this organization have to do with freedom of the press? The journalists brought to the courthouse are not being questioned for their articles. They are told ‘You violated the rights of a group of people for depicting them as terrorists through the campaign you carried out.’ There is clear evidence here. Weapons with certain serial numbers were found. We’ll now wait for the court ruling. I can’t judge beforehand, but these are things that were discovered. Plus, this incident has been introduced as a media raid. No one has been taken from their house in the early morning; they were invited to testify.

They didn’t behave like a normal citizen and instead of going to the court to testify, they went to the newspaper and deceived public opinion by saying that they were resisting. What are they resisting for? They testified and were released pending trial. What would happen if they had gone to the court in advance instead of making such a show?

And that shows another thing: Some circles are pressing the button [to begin an operation against Turkey]. When I was the foreign minister, I would think at least 50 times before calling a colleague on a Sunday, even if the case was an immediate one. And if the colleague is Jewish, I never called on Saturday. But about an operation that took place on a Sunday, without having an idea about its background, a statement was issued from the European Union even though it’s difficult to make such a decision, as such statements require collectivity. But [we observed] a mobilization [against Turkey], just like with the press of a button.

We have, in fact, envisaged this. We had a meeting on this issue with our friends and we have reviewed the measures to be taken in the frame of public diplomacy. We have made the necessary assignments. Public opinion should be careful against efforts to reflect this operation against human rights because it is in fact seeking to respond to the human rights of a certain group....


You were planning to announce a new package on freedom of expression in Brussels?
There is nobody in Turkey being investigated because of their expression. We are not in a defensive mode on this issue. Anyone can make any kind of publication, even under Turkey’s current conditions. Whose freedom of expression is being restricted? Whose words were silenced? We can openly discuss it everywhere in the world. But it should also be known that we are under the siege of a massive smear campaign of propaganda. We know who is behind this propaganda.


27--We’re winning over ‘parallels’ (secret government) : President Erdoğan , Hurriyet


Agents of the parallel structure within TÜBİTAK began to wiretap the president, the prime minister, the chief of General Staff and other top officials with high-tech devices it created before leaking the content of their communications to other countries’ secret services, Erdoğan said.

“It’s not only treason but also immorality. Not only treason and immorality toward their country but also toward science and scientists,” Erdoğan said.




 

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