Sunday, June 1, 2014

Translation of the "must read" article of explaining why there is no Russian intervention in the Ukraine

It is with an immense and heartfelt THANK YOU! to "BM" for his translation that I have the real privilege to share with you this translation into English of the excellent article of I mentioned in my previous post.  This is, in my opinion, the most complete and well-written analysis of the apparent Russian "passivity" and we all owe "BM" a big debt of gratitude for making it available to us on such short notice.  I especially encourage you all to circulate this translation as it is by far the best explanation of the Kremlin's policy.

The Saker

PS: I was also sent a link to this article with an interesting description of the condition of the Ukrainian army.  Also a must read imho.
Why there is no Russian military intervention in the Ukraine

Posted on 30 Май 22:19 
опубликовал Сухов боец красной армии [suho]
The level of analytical discussions on the Russian Internet is perfectly described by the political scientist Simon Uralov: "To consider that the Ukrainian crisis set off only the minds of the Kievan colleagues and turned them all into bloodthirsty hysterics is fundamentally mistaken. Among the Moscow colleagues there is also an incredible number of such." The purpose of this material is to take a step back from the hysteria and coldly analyze the situation in Ukraine. 

I'll start with the necessary clarifications on several emotionally important topics: 

Why is there no Russian military intervention? 

If this text was written a few days earlier, a significant part of it would had to have been devote to explaining why sending troops to Ukraine was inappropriate and just plain stupid even after the referendum. Fortunately, the head of the resistance ibn Slaviansk, Igor Strelkov, coped with this task better than I: in his video message, he very clearly described the inertness of the local population of Lugansk and Donetsk in terms of real action to protect their interests against the junta. Anticipating the arguments about the referendum, I hasten to say that a check mark on the ballot is certainly cool, but not much different from any hipster-white-ribboned (belolentochnyh) attempts "carry mode" – the “like” on Facebook. Because a "like" handle made ​​in the bulletin doesn’t change anything. The referendum was a necessary but not sufficient action. 

How much was the Kremlin prepared for events in Ukraine and how much does it improvise even now? 

I advise you to read the telegram's Wikileaks: , in which it is shown that Kremlin clearly pointed out to the Americans in 2008 the scenarios that we see today: "Experts tell us that Russia is particularly worried that the strong divisions in Ukraine over NATO membership, with much of the ethnic-Russian community against membership, could lead to a major split, involving violence or at worst, civil war. In that eventuality, Russia would have to decide whether to intervene; a decision Russia does not want to have to face." 

It is logical to assume that such a development for the Kremlin was not a surprise and that we are now in even more unpleasant but less nuanced script that something like "Plan E". 

In order to understand what the Kremlin will do next, let’s formulate objectives: 

- Do not allow the entry of Ukraine into NATO. 

- Do not allow the establishment and stabilization in Ukraine of a Russophobic regime, which assumes denazification. 

- Do not allow the genocide of Russian South-East population. 

Ideally this requires implementation of all three objectives while, in that interval, not breaking the Russian economy during its reorientation toward Asia and, at the same time, preventing the Americans from pulling off their economic ends at the expense of the EU.

How can these goals be realized? 

Let us consider the simplest scenario and see what are the vulnerabilities and negative consequences: 

So, the Russian army enters Ukraine and a few days later comes to Kiev, then captures all of Ukraine. "Patriots" are jubilant, there are parades on the Khreschatyk, etc.

It seems that all three goals have been achieved, but the following problems emerge: 

1. In the EU, where the European business elite has slowly pressed on the feet of their politicians and stamped on the brakes with regard to sanctions, the "war party" (a/k/a "The Party of the United States", or rather "Party Pax Americana») clearly triumphs. Against the Russian Federation, the maximum of real sanctions cut in with terrifying effect principally for the European economy themselves, which immediately falls into a recession. But nothing to rejoice about. 

Against this background, the Americans easily force the signing of their version of the Transatlantic Trade and Investment Partnership, a trade pact, which turns the EU into an appendage of the U.S. economy. Negotiations about the treaty are going on right now and, for the Americans, the entry of Russian troops in Ukraine would be a huge gift. Sanctions against Russia would destroy European business and trade barriers with the U.S. would finish it. What we have at the end: EU in a state as if after a war; the United States, all in white, joyfully absorbing European markets on which they have not and will not have competitors; the Russian Federation - not in the best shape. Does it seem to anyone that someone in this situation is the fool (лох), and that that someone is clearly not the U.S.? By the way, it is not necessary to take into account the arguments to the effect that European politicians would not allow economic suicide. Euro-bureaucrats are not capable even of this, as practice shows.

2. Besides the fact that the Kremlin will render a service to Washington, we need to look at what will happen to Russia itself. 

• If the sanctions cut against Russia before the gas mega-contract for 30 years with China is signed, then China will be able to negotiate a price from a position of strength. In fact, from a position of blackmail (This shows in China’s comportment, however, but not clearly). 

• If the sanctions are imposed against Russia before the oil mega-contract with Iran is initialled, through which Rosneft will be able to control an additional 500,000 barrels of oil per day, Iran will be able to negotiate a price froma position of strength. 

• All subsequent attempts to build something up even to the delivery of imports we need now, will be very, very expensive.

• If sanctions cut in before the signing of the agreement on the establishment of the Eurasian Economic Community, imagine what trumps Lukashenko and Nazarbayev will have to twist Putin’s arms at negotiations. A little more of this, and Moscow, in order to create the EurAsEC, will have to pay for its oil. 
3. The Russian Federation would have to assume the responsibility for the restoration of the Ukrainian economy and denazification: where to get the needed number of “denazifiers” in “dusty helmets” (if anyone has forgotten, according to Okudzhava, it was the commissars in dusty helmets that bent over the dead hero of the Civil War) to fight compact groups of Ukrainian Nazis, which will enjoy support and supply from abroad. On aggregate, it is clear that this scenario greatly benefits the United States and China. Russia remains a deep sense of moral satisfaction, economic issues and future curses of the “generous” (щирых) Ukrainians who are unhappy with "life under occupation." 

How are the key points in time our vulnerabilities laid out? 

1. Gas contract with China - May-June (May 21 signed!) 

2. Oil contract with Iran in summer (That's why the U.S. lifted the embargo, as Rosneft is very tightly seated under BP and not very under Exxon Mobil. Where does the oil flows? To China). 

3. Important! Elections to the European Parliament, which will get a lot of votes Eurosceptic allies of Russia. After the election, will be assembled Evrokommissii different composition which will be much easier to work with - May 25. Even more important! Gas contract signed with China, newly elected deputies will be more amenable to South Stream. 

4. Collection of all relevant documents/permits/etc., for construction of South Stream - May. 

This is what is visible to the naked eye, but there are other aspects that are very important, but which are difficult to place clearly on a timetable: 

1. Transition to settlements in rubles for energy. Oil and gas are not potatoes: they (are provided under) long-term contracts that cannot be altered unilaterally but require lengthy work to replace them with new ones, plus the change in current ones. 

2. Transition to quoting prices in rubles for energy (for trading in rubles) on the Russian markets - it is absolutely hellish work though, if only because up until now no one has ever done anything like it. 

3. Own payment system 

4. Preparation of import substitution or improvement of our work with Asian suppliers (not in emergency mode).

The list can and should continue, that's what I see, and the Kremlin is much broader horizons. 

Now add interesting initiatives of the Russian Foreign Ministry, which is not sitting idly by with its hands folded. For example, Vice Minister Karasin was in Doha on May 6 and met with all the Qatari elite. The results, in my opinion, turned out to be shocking. According to the Foreign Ministry, the Qatari emir said that he appreciates the "convincing and coherent regional policy of the Russian Federation", which is very unexpected for a country that is not just a U.S. ally and the political branch of Exxon Mobil in the Middle East and a 100% opponent of the Russian Federation in Syria. But the casket (ларчик) has simply opened: the fact is that American dreams of filling the whole world with cheap gas are a death sentence for Qatar and its elite. Without ultra-high gas prices, Qatar does not just lose any hope for regional greatness, but becomes a corpse. Doha focuses quickly and begins to offer something of interest: "At the same time, emphasis was placed on accelerating the coordination of the Forum of Gas Exporting Countries (GECF)", the next summit of which (that's a coincidence!) will be held in Qatar. The Forum of Gas Exporting Countries is an organization which includes countries such as Russia, Iran, Qatar, Venezuela, Bolivia and other exporters, and which the Kremlin, for a long time but without success, the Kremlin tried to turn into the gas analogue of OPEC. It is possible that now is the right hour for a potential gas cartel. First, the three major gas exporter: Russia, Qatar and Iran have very similar interests and should be able to work on the same side in order to share and "take over the gills" of the LNG market and pipeline gas market. Such a gas cartel, even in a reduced format (only the Russian Federation, Qatar, Iran) will control at least 55% of the world's gas reserves and have significant opportunities to strongly influence the energy markets of the EU and Asia. Of course, such a project would involve a lot of problems and it will meet opposition, no one gives a guarantee that everything will work, but it is important to see that Moscow is actively seeking opportunities for more strategic advantages in the fight against the United States.

Hopefully it is now clear on what the Kremlin is spending time, which it is trying to win out of the Ukrainian situation, and why it matters. 

Let’s return to problems directly related to Ukraine and note that even the implementation of all the important foreign policy projects will not help in carrying out the denazification of Kiev and make it so that Russian troops or rebel army of Novorossia would by greeted with bread and salt even in the central region. If the army of Novorossia has problems with mobilization in Lugansk and Donetsk, then work within the zombified regions will be very, very difficult. However, it seems that on the side of the Russian Federation on the field of battle will soon appear Colonel Hunger and the Special Forces Giperok ("Hyperinflation"), which will dramatically change the balance of power. 

The Ukrainian economy is finished. Given the disastrous spring sowings, the crops of vegetables destroyed (frozen), lack of credit, problems with gas, the jump in fuel prices, we can safely say that the economy will come as a northern beast, which will be full and fluffy. No one will give money to the junta, not even from the IMF, which promised something around $17 billion (exactly 50% of what Ukraine needs for this year), but built into the contract an "escape clause": if Kiev does not control all the regions, then Kiev is not to receive a cent. Hunger, cold and hyperinflation (caused by the collapse of the hryvnia) will actively work to weaken the junta and correct the minds of the “generous” (shchirykh) Ukrainians: they will surely not come to love Russia, but this is hardly necessary. It is necessary that they begin to remember the Yanukovych period as sweet, unattainable dream. The inevitable chaos and total collapse of social structures, coupled with low intensity civil war guarantees that NATO will not accept Ukraine since Europe will then itself "be on the rails", and even in the U.S., more or less moderate politicians will not make a move, which obviously would not lead to U.S. victory, but to the dragging of the country into a nuclear war. 

Moreover, in the context of total economic collapse, for the miners, metal workers and other comrades who are now firmly glued to their jobs for fear of losing them and hoping to "ride it all in their huts on the edge (of the precipice)", there will no longer be such a possibility. They will have to participate in one form or another, in the political and economic problems of New Russia. And likely they will have to participate in arms.

At the same time, the-junta-named-Poroshenko, foisted (on the country) by the European Union, will have a strong incentive to negotiate with Moscow to make concessions, to offer compromises. Already, the new European Commission, which needs peace in the east and stable gas transit, will be pushing Poroshenko in this direction. Poroshenko will also be pushed in the same direction by social upheavals caused by Colonel Hunger and Hyperinflation the Saboteur.

All these factors, in sum, open up great opportunities for the Kremlin to reformat the former Ukraine into something appropriate to the interests of the Russian Federation. It is precisely this scenario that the United States is attempting to avoid, and it is because of this that the United States has serious reasons to accelerate the translation of the conflict into a hot phase with the use of troops and massive bloodshed. 

If you add up the time that is needed for the action of Hunger and the time required to resolve foreign policy problems in terms of establishing work with China, Iran, untethering from the dollar, import substitution, etc. (very roughly) can come to the conclusion that you need somewhere 5-9 months (that same December, for which Yanukovych tried to negotiate) to provide solutions to Ukrainian and other issues to the maximum advantage of Russia. During this period, you must provide at least for the preservation of Ukraine in a state of civil war (i.e., support for the DNR, LNR, but it is not necessary to take Kiev too fast in order not to create unnecessary additional problems) and ideally, combined with the civil war, prolonged and sticky negotiations within Ukraine, with the participation of international observers, something like 2 +4 format, i.e., Poroshenko + Tsarev + Russia, EU, ​​OSCE, USA. 

The final touch. In recent months, the U.S. has slowed down the work of its printing press, reducing the "pump-priming" (this especially simplifies the formulation) from 85 to 55 billion dollars a month. Very many expect (e.g., that the machine will turn off completely by the end of this year. Again, in that same December. This is due to the fact that the dollar, though it is the main international currency, cannot be printed endlessly - it is impossible. According to various estimates, the United States has almost entirely used up the "resource strength" of the dollar, which allowed them to do the naughty with the (financial) machine. Moreover, the corollary and inevitable effect of such tricks is reducing rates on U.S. bonds, which, on the one hand, helps Washington to pay less for its debts, but, on the other hand, is actually choking the entire U.S. pension and insurance system that is built on the expectation of very different returns from their portfolios bonds. Roughly speaking, by the end of the year, the U.S. will have a choice between to blowing up their social system in order to keep on printing, or greatly reducing their appetites in order to preserve any chance of stability at home. Judging by the reduction in the amount of dollars being thrown into the system, Washington has decided that preventing an explosion is more important than its foreign policy ambitions. 

Now to complete the puzzle finally, let’s make our predictions: 

- America will try by all means to aggravate the crisis in Ukraine, in order to weaken Russia and put the whole European market under its sway before it needs to shut down its printing presses. 

- The Kremlin will try to translate the crisis in Ukraine from the acute to the chronic phase - civil war plus sluggish negotiations amid the economic collapse of Ukraine. At the same time, the Kremlin will use the time to create favorable conditions for the transition to the sharp confrontation with the United States - from the work on untethering from the dollar with China, Iran, Qatar, creating the EEC etc. 

- Complete end to the crisis in December 2014, possibly earlier if U.S. desists from trying to exacerbate the hostilities. 

- And if it does not desist? - Then ... a big war ... a war for resources, because shale "boom" was an ordinary bubble. 

On this subject in detail in the article by William Engdahl "Washington shale boom - bust". Original Washington's Shale Boom Going Bust