I was away much of this past week and it was difficult to keep up with the news. Upon catching up I can only say that the Ukraine situation has entered the "Twilight Zone." I say this because the back and forth really doesn't make sense and it's almost as if the threats and sanctions are aimed at the shooters own feet!
First and foremost, the U.S. is trying as hard as we can to shut Russia OUT of the dollar system ...which is exactly what Russia wanted anyway. Let me refine this, Russia does not want to be isolated and shut out of trade, what they do want is for the dollar to either wane, be put in the back row or to outright collapse. Russia as you know has allied itself with China while China has been globetrotting around the world making business deals and friends. "Friends" as in business partners that are treated with respect and equitable deals.
Europe is another "twilight zoner." I don't understand what they can be thinking. Late in the week they were considering further sanctions against Russia which included "oil technology" but not gas. No, never gas...because the fall season is but two months away and in a "non- climate controlled" world is normally followed by a winter with cold weather. If Russia were to retaliate by closing their natural gas spigots, yes it would affect and be painful for Russia. But, it would affect Europe much much more as Russia is their largest natural gas supplier with no one standing in the wings to fill the void.
We also found out that the government of Ukraine collapsed on Thursday, what effect will this have? Will past "deals" or pledges be honored by a new government? Will any new government be more anti-Russian or move closer to Russia? Will they give louder or softer pleas for help from the U.S.? Or none at all?
I wrote last week and had a chance to speak to and hear many varying opinions while at the Sprott Money conference in Vancouver this week. There seemed to be many different views from both sides of the spectrum, some believing that Putin is the bad guy and others believing the U.S. was the provocateur.
So which side is correct? I go back to what I said recently, if Russia really wanted military action we would have already seen it long ago... good reason or no. With each conversation that I had, I always reserved one question for the end which I believe opened the eyes of thought for almost 99% of who I spoke to. First, the U.S. has THE best satellite system in the world. Where exactly in the world do you think that we have recently had our most vigilant attention? Do you believe that it is possible that "we missed it?" "It" being the missile launched and the plane coming down. So how is it possible that we have not shown pictures of the launch? With exact coordinates and a nice shiny bright map with pins stuck in it showing that it was "Ivan" who in fact launched the attack...
Instead, we are watching finger pointing with almost no proof at all and we're steered toward "you tubes" to whip up sentiment. Now, the black boxes which were not "tampered with" will be examined under the "impartial" eyes of Great Britain. Even this has ramifications because it has been reported that Russian oligarchs are pulling up stakes and withdrawing assets from London. Who could have possibly foreseen this action? This really does scare me because it looks as if we (and Europe) are hell bent on pushing Mr. Putin either into a corner or until he decides "no more." The odds of this morphing into a live and global conflict rise each time someone on either side opens their mouths.
I do want to point out that as was believed all along regarding Syria and now Ukraine, it all has to do with "energy." This past week it was reported that none other than Joe Biden's son has involvement in Ukraine's gas business. He is a director at Burisma which is Ukraine's largest gas producer. Any potential "conflict of interest" here? Naw, I didn't think so! In any case, this is very high stakes business where both sides have the capacity to destroy life on our planet. My hope is that a conflict is not manufactured and used as a reason that "our sound policies didn't work." Mathematically the dollar and the rest of the Western financial policies are doomed to failure. Nothing can change this, however, "perception" can be altered and this is exactly what both sides are trying to do.
Before finishing I do want to mention that current U.S. policy is 180 degrees backward from what the goal supposedly is. It is imperative that demand for the dollar remain strong, we are pushing other sovereigns around and making the decision to abandon the dollar an easy one to make. We are telling Russia "you cannot use dollars." We are sanctioning large banks with fines and making it so that their board of directors would be negligent if they continued to use dollars. One can only surmise that the illogical actions are part of a grand plan, the question is "who's" plan?