AuthorTopic: ...and so it BEGINS  (Read 30764 times)

Offline Surly1

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Re: ...and so it BEGINS/IMF version
« Reply #30 on: March 03, 2014, 02:06:58 AM »
The 2012 IMF/Ukraine Negotiations
2014 MARCH 2
by Ian Welsh
These are the reforms the IMF wanted for a 4 billion dollar loan:

the IMF demanded that Ukraine double prices for gas and electricity to industry and homes, that they lift a ban on private sale of Ukraine’s rich agriculture lands, make a major overhaul of their economic holdings, devalue the currency, slash state funds for school children and the elderly to “balance the budget.”

This is what the IMF does to your country. Note that 4 billion doesn’t even come close to covering Ukraine’s debts.  Moscow offered 15 billion and a one-third reduction in natural gas prices.

Highlight mine.

This is the operative problem as far as Ukraine Pols are concerned.

The only reason the IMF offers even this much is just to keep the banking system from imploding, not to help the Ukrainians.  The Ukrainians never even see this money, it passes straight through to the Secured Bondholders to pay up on outstanding debt.

What Ukrainian Pols WANT regardless of which side they are on is a big enough package where they can skim off money and deposit it to Cayman Island bank accounts.  They have to have control over the disbursement of the money too, and the IMF doesn't want to give them that.

$4B is Chump Change, even for Ukraine issues.  They need more like $35-50B, and not as more Loans they can't service, but as a GIFT!  LOL.

Putin won't GIVE them money either, he doesn't have it to give.  $15B from him is more like Energy Credits, he'll feed Gazprom fuel to them as a Credit, not hard currency.  So while this keeps the lights on in Ukraine and keeps the hovels warm the rest of the winter, it doesn't pay anybody's Pension or give them enough Scratch to buy food with either.  On the Ruskie Books, this further indebts Ukraine to Russia, making them Debt Slaves.

Basically ALL countries these days are run by a corrupt Political Class used to being able to skim a healthy portion of Debt money off into their own bank accounts, but the credit has dried up to a Trickle now, so there is nothing left to skim.  The IMF is just trying to keep the system from imploding.

Far as CHS theories on a Global Shadow Goobermint, that definitely exists here.  It's the folks who are really in charge of Credit Creation in the City of London and on Wall Street.  Theirs is still the only (semi)functional Global system,so they call the shots on who gets issued more credit and who gets triaged off of it.

If the Chinese and Ruskies and Brazilians and Indians could jump start their own Credit Creation system, they sure would but they can't do that.  None of these countries has the Banking Infrastructure to do it.  Their banks, such as they exist are just corrupt subsidiaries of the Anglo-American system.  They didn;t get in early enough on the Ponzi, which took centuries to set up.  They don't have credibility, and there isn't even the Veneer of a Legal System to protect "Investors".

Bottom line though is that even being in charge of Credit Creation doesn't put more resources in the ground to buy with that credit.  It does prevent the credit creators though from falling off the cliff first.  It's basically the same as you being the last Unemployed Person in your Subdivision left with a Credit Card that works.  You are the last person left who can still go to the Mall and charge up some Oil there.  The problem for the Mall Operator is that just you showing up at the Mall to buy some Oil does not pay HIS fixed costs of operation, including all the debt he has to service.  So he then tries to sell off his assets to another greater fool, but there aren't greater fools with enough scratch to buy those assets, putting them in a Liquidity Trap/Asset Class Sinkhole.  Sears and JC Penny are the commercial versions of this, they have a HUGE amount of Real Estate they "own" in Malls everywhere, but they can't unload the space to anyone else.  WTF wants to buy 1M sq ft in a Mall with close to ZERO foot traffic?  WTF wants to buy an Oil Field with $115/barrel production costs when no car traffic can afford to buy at that price?  Everybody who holds these White Elephants would like to get rid of them, but finding Bigger Fools gets harder all the time here.

So eventually here, the Credit Creators are the Bag Holders on a lot of Worthless Assets, Malls with no Foot Traffic, Convenience Store Gas Stations with no Car Traffic and McMansions nobody can pay the Mortgage on.  AKA, all the Malinvestment made in the Age of Oil.

Putin by rolling over Ukraine demonstrates that he doesn't understand the dynamics going on here any better than Obama-sama does.  Military force can't put more resources in the ground any more than Credit Creation can.  He is just burning up Capital faster by trying to hold onto the model also.

Inexorably, we creep closer each day to a lockup on both the credit end and the political/military end.  It still will take a while, as more weaker countries and currencies will be triaged off before a final Collapse of the system, but the writing is on the wall here already.



My point in posting this--
Quote from: Ian Welsh
(The IMF wants Ukraine to]double prices for gas and electricity to industry and homes, that they lift a ban on private sale of Ukraine’s rich agriculture lands, make a major overhaul of their economic holdings, devalue the currency, slash state funds for school children and the elderly to “balance the budget.”

--was to illustrate the harshness of the ratfucking ordinary working stiff Ukrainians will get from the IMF's terms. Hell, I'd go rushing into Vlad's arms, too.

As to this--
Quote from: RE
WTF wants to buy 1M sq ft in a Mall with close to ZERO foot traffic?  Everybody who holds these White Elephants would like to get rid of them, but finding Bigger Fools gets harder all the time here.

Contrary and I tried to go to Norfolk's urban MacArthur Mall on Saturday, to look at replacing a computer that is giving up the ghost. I drove around for 15 minutes and left, unable to find a spot to park. So your pronouncement of the death of the Mall is clearly a little early, if directionally correct. Your point about Sears and Penney's is well made, but their troubles lie more at the feet of Amazon and the intertoobz than $115 oil.

And as to this--
WTF wants to buy an Oil Field with $115/barrel production costs when no car traffic can afford to buy at that price? 
Your friend MKing, the most diligent and devoted poster here, will tell you that people will line up to do that, and jerk the last biscuit out of a child's mouth to pay for the privilege... Fracking is a sacrament, and the various toxicities and externalized pollution costs are just table stakes, citizen. Ante up or go home...
"...reprehensible lying communist..."

Offline sensetti

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Re: ...and so it BEGINS
« Reply #31 on: March 03, 2014, 06:44:48 AM »
We have no major interests in Ukraine, our best move is to stay away from the situation. Putin on the other hand has interests in Ukraine, half the country is pro Russian, and the Ruskies have pipelines running through the region. If Obama and Kerry were smart (that's like saying if frogs could fly) they would be silent and let this crisis run it's course. No one in the world gives a damn what they think and no one is concerned with their empty threats, this situation is way out of their league.

Offline WHD

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Re: ...and so it BEGINS
« Reply #32 on: March 03, 2014, 07:45:05 AM »
D) exports will cause even MORE fracking when it drives up price...assuming electrical generation doesn't soak up the surplus first.
Yep, and when ecoterrorists figure that out, and realize that LNG tankers carry the energetic equivalent of a tactical nuke, well, you can do the math....

People attacking things is always a possibility, everywhere. My guess is the usual precautions will be taken for these kinds of facilities. So far the ecoterrorist types haven't seem to really have it all together, capability wise. A 5 year year old can set fires.

Pretty tough these folks are, on defenseless Hummers and real estate and whatnot.

Attack property, and they shriek eco-terrorism! Attack people, kill people, kill innocents, and they call it American Foreign Policy. Leave it to the paid apologist for American Foreign and Domestic policy to distract from the bomb droppers, polluters, Imperialists, by dredging up isolated property damage from a decade ago.


Offline WHD

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Re: ...and so it BEGINS - The Looting
« Reply #33 on: March 03, 2014, 08:55:27 AM »
It would take a couple of sensible Midwesterners to get it. Tightest assessment I've seen yet, about what is really going on. Kleptocratic looting. Same is happening here in America, the covert-op sowing of division. It will pit the states against each other, states within. Here in Minnesota I could see the northern part seceding , to mine copper and nickel as bondservants to International Financiers. Looting on a global scale.


Ukraine: "Go West, Young Man" (or Dr. Strangelove's Revenge)

"Let them loot." That is the demand of the West when its NGO subsidiaries firebomb government buildings, murder policemen and loot the arms depots of military forts. Kiev is the equivalent of Kosovo as a Slavic city-of-origin. Are we seeing a replay?

What would Dick Cheney (or President Obama for that matter) have done if Russian NGOs sponsored separatist movements in Texas, California or New England? How would US police have reacted against armed revolutionaries seizing the armory and throwing Molotov cocktails and bombs at public buildings, killing police, painting swastikas on Jewish houses and claiming vigilante justice? While this does not characterize all of the Ukrainian protesters, it does reflect a fair number of them. If this is Obama's "reset" with Russia, he is resetting the Cold War by setting the neocons loose in the former Soviet republics. If there is one thing that the CIA has shown its competence in, it is in setting one ethnic group against the others - Sunni vs Shiite, Kurd against Arab, Persian against them all. When other countries seek to defend a multi-ethnic secular state, the US foreign office has backed the fundamentalists for nearly the past half-century in all cases. This should be the sub-text for reporting on the Ukrainian uprising that seems to have been carefully timed to coincide with Sochi.

Events in Ukraine are provided enough heat to overshadow the conclusion of the Sochi Olympics. Since the USSR's collapse, the "reset" has been changed many times during our long-running Ukrainian "play," but the underlying theme remains the same as it has been in the Near East: Play the ethnic card to break the country into pieces if you want to disable government regulatory power and investment. Co-opt a client oligarchy whose opportunities for the West lie in privatizing public resources and selling shares in the rent-extracting companies on Western stock exchanges. Keep your proceeds in the West and fritter it away on trophy real estate, ownership of sports clubs and London or Swiss bank accounts.

The alternative would be for a strong government to tax away their natural resource rents and use it to subsidize industrial revival. So the path to "peace" is to promote civil warfare, break up countries and concentrate wealth in as few hands as possible so as to channel it to London, New York and other financial centers rather than leaving it to be invested at home. This is how Russia is being turned into a "hewer of wood and drawer of oil and gas for the house of my bond," to paraphrase the Bible (Joshua: 9:23). "None of you will be freed from being bondservants."

This is how American protectionists in the mid-19th century described British strategy for industrial and financial supremacy. And now the tables have been turned - not only against Britain (buckling under its own real estate bubble) but against the post-Communist economies that were utterly free of debt and privatized rent-yielding resources 20 years ago.

Rotating oligarchs shift in and out of this scenario, replacing one another in the rolling sequence of "color revolutions." While Russian and Ukrainian nationalists spar in "Spy vs. Spy" fashion, Ukraine's economy unravels and its people continue their exodus on an Old Testament scale to the Promised Land of the EU. Following Horace Greeley's advice of "Go West, young man," Ukrainians have joined the multitudes of "Polish plumbers" in the UK.

It didn't have to be this way (and it still doesn't). The stage was set in the closing stages of the Cold War. George H.W. Bush (the Elder) promised Mikhail Gorbachev that if the Soviets let the Warsaw Pact go and agreed to German reunification, Russia would not have to worry about further expansion of NATO. The United States then reneged by taking the former Warsaw Pact into NATO then moved into the former Soviet territory by absorbing the Baltic states - which, in geopolitical terms, were practically suburbs of St. Petersburg.

It is hard to blame the new entrants for wishing NATO entry, given their past Soviet occupation. This is the cross that Russia has had to bear for a generation, and it will continue to be a basis for the National Endowment for Democracy, the CIA and other "security" agencies to spur ethnic rivalry against Russians. To US neo-Cold Warriors, Stalinist oppression in the Soviet Union is what memories of the Holocaust are to Israel: In good Judeo-Christian tradition, it fans the flame of retaliation, resentment and revenge.

One can hardly blame Russians for feeling betrayed by the United States and NATO for breaking their word. More importantly, they see neocon Eurasionists in the State Department wanting even more. For neo-Cold Warriors the goal is the further breakup of Russia and its Near Abroad to create a neo-liberalized periphery, Baltic-style. Breaking up countries into small units controlled by kleptocrats who see their path to wealth being to privatize public assets and sell ownership shares to the West is the most effective way of preventing government subsidy of industry - and without industry there can be little military threat.

For Russia, this geopolitical game has an existential character. Ukraine looks like a dress rehearsal for separatist movements (much as the United States is sponsoring in China and already had achieved throughout the Near East). For Russia, NATO's moves into Georgia cut too close to the bone and were repelled. The threat of NATO taking Ukraine represented a thrust into Russia's geographic heart, the ancestral home where Russia was founded. (This should be read while turning up the volume on Prokofiev's "Alexander Nevsky.")

Timing is everything. If there were any time for an opponent of Russia to try to provoke an intemperate move, this was it. The Olympics were supposed to show a positive Russian face to the world, helping heal the old Cold War tensions. So from Mr. Putin's vantage point, the worst thing that could happen would be a distraction to remind the world of old Soviet-era repression - such as arresting Pussy Riot singers. So of course, this was precisely what the Western press played up. To read The New York Times or The Washington Post, the real sporting event was whether the police would descend on Pussy Riot's sideshow and could provoke Cossack goons into beating them up on camera.

While there certainly was legitimate protest against former President Viktor Yanukovych's corrupt government, there was what seems provocation to get policemen (under violent attack from protesters) to defend themselves when they were fired upon by demonstrators brought into Kiev specifically to create a public relations disturbance.

Meanwhile, the EU seems bent on reprising its earlier eastward expansion of recent decades into the former Warsaw Pact to reap a windfall in exports of consumer goods. This helped alleviate the unemployment resulting from the Maastricht Treaty's neoliberal fiscal and monetary austerity for the eurozone's currency union. Yet, Ukraine's purchasing potential is much lower than that of the countries that bordered Germany and were integrated into EU markets with heavy European subsidy. No Euro-export boom is likely to occur with any likely proposed association agreement. About the only thing the EU can achieve is to ensure a strong enough austerity program gets implemented in order to ensure the holders of Ukrainian bonds gets paid. Instead, the possible damage to Ukrainian markets from poorly executed trade liberalization and non-visa regimes may flood the EU with cheap labor by "Ukrainian plumbers." But now that Europe's real estate bubble has burst, where will they plumb?

So far, the neo-Cold War crossfire has left Ukraine indebted to Russia and the EU. Who will be liable for the 60 billion euros in Ukrainian bonds that Russians hold? Yields on ten-year bonds have just jumped above the 10 percent level (and shorter-term bonds much higher), indicating a general expectation of default. What will Russia charge for the gas it ships through Ukraine? Would a separatist NATO-Western Ukraine be able to buy gas at an equally low price as the Eastern Ukraine? Will Germans freeze in the dark?

When ethnic Ukrainians look to the EU as their savior, they have lost their sense of timing. They are seeing the last vestiges of a "Social Europe" that has been sacrificed on the altar of neoliberalism. Yanukovych had been urged to raise the VAT and tax labor all the more, but he resisted in order to prevent earlier popular unrest. Now that the Ukraine promises to move under Western neoliberal tutelage, the first policies that one can expect are higher taxes on labor and consumers - and an accelerated capital flight out of the country to the Eurozone and Switzerland.

Having suffered a generation under Stalin and his successors, Ukrainians will now be able to compare that to the hand of IMF central planners. Who needs a military thrust when a new round of shock therapy and austerity will do the trick more deftly?

Yanukovych is the kind of kleptocrat that neoliberals promised would enrich the post-Soviet states, except he committed the unforgivable sin of refusing to implement an EU/US-counseled austerity program. The aim is to transfer public wealth into the hands of private individuals who will be steered by the "Invisible Hand" (that of the sponsors of today's color revolutions) to seek their gains by selling what they have taken to Western investors. Finance is the new mode of warfare, and we are seeing a grab for what military invasions in times past aimed at: land, natural resources and infrastructure monopolies.

Prior to Yanukovych's overthrow, there was talk of a "reset" as the United States and Russia seemed to be moving toward a mutual accommodation. His departure from the scene places the United States and the EU back in a position of influence and will embolden hardline Eurasionists in the State Department, such as Victoria Nuland.

Meanwhile, the reappearance of Yulia Tymeshenko (who gained stature in jail) represents the return of ethnic Ukrainian oligarchs. They have been promised that they can get even richer by paying foreign bondholders - no doubt with an IMF or ECB destabilization program that will impose deep enough austerity to create an Irish-style Lost Generation.

There is little likelihood of national economic development. The aim is to empty out the nation's capital, not create it. There will be no more consideration of Modern Monetary Theory or Land Value Tax alternatives. The US/EU plan is the same neoliberal strategy designed to demilitarize the post-Soviet states by de-industrializing them and driving their population to emigrate.

"Structural adjustment" (today's euphemism for austerity) will continue loading down Ukraine with debt, using it as a lever to control its economic policy. Meanwhile, Russia offers debt relief (or at least more loans) without development, because it itself still partially remains under the thrall of neoliberalism.

Russia and Ukraine would benefit from an alternative economic policy based on regional capital investment in economic development. Russia and Ukraine need to halt the capital flight of their oligarchs to offshore banking sites in places such as London and Riga, and instead mobilize their natural resources, real estate and monopoly rents for domestic investment. Such moves would be denounced by the epicenters of "tax dumping" (London and New York). Currently, the IMF/European Central Bank wants supersede post-Soviet governments as their new central planners whose results can only accelerate kleptocratic looting!

Michael Hudson and Jeffrey Sommers

Michael Hudson's book summarizing his economic theories, The Bubble and Beyond, is available at Amazon. His latest book is Finance Capitalism and Its Discontents. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He can be reached via his web site,

Jeffrey Sommers is an associate professor of political economy at the University of Wisconsin-Milwaukee and is visiting faculty at the Stockholm School of Economics in Riga. He is co-editor of the forthcoming book The Contradictions of Austerity. Additionally, he also publishes in The Financial Times, The Guardian, Truthout and CounterPunch and routinely appears as an expert on global television. He can be reached at:
« Last Edit: March 03, 2014, 09:02:35 AM by WHD »

Offline Petty Tyrant

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weird science
« Reply #34 on: March 03, 2014, 03:29:12 PM »
You never answered which type of end of world nutbag you are, just asked if I was paying attention to something Jimmy Carter said about coal, sorry I wasnt paying attention between watching sesame street and weening off breast milk. The question remains which doomer you are since you said you were one since way back.

Maybe ugo doesnt know what hes talking about, but its not scientific to say only that. If you deconstructed his work by building an argument of your own it would be a scientific appraoch.

"A classic!! Can't stand the more modern machines myself, turning a motorcycle into a car on two wheels complete with cup holders and seat warmers and whatnot just isn't the motorcycling I grew up with, or motorcyclist I became".

I notice a lot of guys taking a good look at the 77 Suzi, but I have to say the old bike does not add or subtract velocity quickly enough and is a guzzler so I wont be keeping it. Cupholders? to encourage wearing fool helmets instead of full helmets and fool acts like taking your hands off to pour fluid over your face. Ive seen people smoking and texting on scooters so dont expect cfs to prevail.

"When the boy reaches the proper age I am wondering if hitting the road father/son style on dual sports and camping our way to Prudhoe Bay might be a worthy bonding experience".

I was just making coffee and saw through the window an eagle glide around left to right and stop on a dead branch then another do same onto the same branch, then they continued gliding around in the same direction left to right, big birds over a metre or 4-5 feet wing to wing. Then I read that, how bizarre.


Offline WHD

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Re: ...and so it BEGINS
« Reply #35 on: March 03, 2014, 08:45:04 PM »

Attack property, and they shriek eco-terrorism! Attack people, kill people, kill innocents, and they call it American Foreign Policy. Leave it to the paid apologist for American Foreign and Domestic policy to distract from the bomb droppers, polluters, Imperialists, by dredging up isolated property damage from a decade ago.


I didn't say the eco-terrorist types had any staying power, only that in the name of CO2 emissions or whatever the current bandwagon is, they display a rather nasty tendency to want to burn things. As far as American bomb dropping, we've already discussed that, the countries bombed, the peoples freed and given a chance to try and do better for themselves (even if they didn't take advantage of said opportunity), the difference between murdering for a purpose (you might call that foreign policy) versus just murdering for the fun of it as some are wont to do. Recognizing that murder is murder, it does beg the question exactly what someone, or group, is supposed to do when faced with the murder for fun types?

Why should the collective reaction to bad folks be any different than the individual reaction? Certainly societies that require "turn the other cheek" don't work out so well in the long run..unless they happen to be close buddies with the "screw turn the cheek how about I put a cap in yo az.." types.

Burn things?

Bomb them to make them free? Does that apply equally, Pakistan, Yemen, Afghanistan, Iraq, Somalia, Libya? Etc? The eco types I know are mostly about growing things and loving, and otherwise getting along, compared to American Foreign Policy.

Which race card which one of us played what? As for turning the other cheek, Jesus wasn't successful? Ghandi? MLKing? In what long run? There is also non-aggression, btw. Among others - there is your nuke bombing contingent, among which you seem to be most active. Fracker.



Offline RE

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...and so it BEGINS: Crossposted on GEI
« Reply #36 on: March 04, 2014, 11:12:55 PM »
With FABULOUS FRONT PAGE Exposure with the new Graphic Dead Center of the page!!!  You can't MISS it!  :o

This should get us a nice BUMP in hits tomorrow!  :icon_sunny:

Also, I got requests from a couple of Bloggers to cross post the Doom All Around You rant as well in email.  :icon_mrgreen:

RE, King of Doom SUPERSTAR!

Don't worry, I won't let it go to my head.  I will be the same humble RE you have always known.  I won't forget the Little Doomers out there on the Diner when I do the Halftime Show at next year's Super Bowl.  ::)

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