-- Published: Monday, 1 September 2014 | Print | Disqus
By Peter Cooper
When ArabianMoney first pointed out back in March that the so-called separatists in the Crimea were in fact Russian soldiers out of uniform we got quite a few protests from angry readers who said we had no evidence to make this claim, apart of course from what we could see on TV with our own eyes.
Russia has kept spinning this lie for as long as possible. It has gotten the media coverage tangled up in semantic knots and confused the public. With more than a 1,000 Russian troops heading for a battle at the port of Mariupol today surely they will soon acknowledge their involvement.
Not a sideshow
The global financial markets have so far been prepared to ignore the Ukraine as some kind of sideshow in a far away place though US and EU sanctions are in place and Ukraine has signed an association agreement with the EU and just decided to apply for NATO membership.
NATO is very unlikely to admit a member under attack from a foreign power because that would obliged the military pact to declare war on Russia, which is nuclear armed as its leader reminded the press only yesterday. The EU could decide on further sanctions but may reckon this is just going to cost too much for a country that is not even yet a member of their club.
However, Russia is unlikely to get off scot free. Britain is proposing her ejection from the SWIFT banking settlement system and that would hurt. Then again Russia might ban EU car imports and that would hurt a lot too. Trade wars deepened the Great Depression in the 1930s and the EU is already on the brink of another recession.
On the other hand, is the EU really going to do nothing as Russian tanks roll across the Ukraine. Some analysts say this is just about keeping Ukraine destabilized and weak or creating a land corridor to Crimea.
But this is not really the way Russians do things. They won’t want to leave a dismembered Ukraine seething with ambition for revenge and applying for membership of every Western club that will have them.
Remember what happened in Budapest in 1956 and Prague in 1968? In both cases the governments of these Soviet satellites leaned too far to the West and Russian tanks appeared on the streets and there was a complete regime change.
Is that the final solution for Ukraine? Would the West really do anything to stop it? If that is what Mr. Putin wants to happen then it will happen. He would completely re-write the rulebook of modern geopolitics in the process.
Perhaps only when global financial markets finally get it then they will react. Brain-dead analysts have only just woken up to what we talked about in March and have almost grasped the idea that this is all a Russian plot to takeover Ukraine.
As this penny finally drops trillions of dollars will be wiped off over-inflated financial markets. You have to consider what this means for energy prices and gas supplies this winter, the serious disruption to EU trade flows and new orders, and the cost of rearmament by NATO as the inevitable reaction.
Black swan event is hardly the right word. Our monthly investment newsletter has a battle protection plan for its subscription-only readers that we won’t be giving away for free here (subscribe today).
| Digg This Article
-- Published: Monday, 1 September 2014 | E-Mail | Print | Source: GoldSeek.com