Ukraine & Russia & NATO (Oh My!)

Ukraine & Russia continue their dance of the dying. Biden & NATO act like they really want it to grow into W.W.III. In theory, we have already given enough legal justification for Russia to declare us combatents. From providing lethal offensive weapons to “advisors” training special forces to mercenaries approved for combat to propaganda wars and treating Russian private citizens as enemies: we are acting as a legal enemy force.

Then there is the economic attack on Russia. Most annoying to me is that we then lie about it. So first the West (i.e. USA & EU… i.e. NATO…) impound and functionally steal $300 Billion of Russian Bank Reserves, mostly money earned from selling oil & gas to NATO members over the years. Then when Russia says “We will keep selling you gas, but payment must go to a safe bank in Russia in the safe currency of Rubles.”, NATO leaders paint this as some kind of evil Russian plot to punish NATO countries.

When Poland and Bulgaria refuse to pay for the gas, and Russia shuts it off, this is painted as some kind of attack on Poland & Bulgaria. Since when is failure to deliver free fuel an atrack? You want gas, then pay for it. Don’t expect it to be in money that will be confiscated, sent to enemy combatant banks that already stole $300 Billion either…

Just Amazing.

DDGo searches only turn up the “Russia hurting Poland & Bulgaria” angle. Only very tightly directed search returns anything about the theft of Russian assets. I’ve not bothered testing other even more biased search propaganda enginges like Google. Oddly, some RT connections have started working again. Their writers look honest and thorough compared to ours. That’s a bit creepy / annoying to have to say.

Here’s a non-war bit I picked up there: Russia is leaving the ISS. Will the Russian module be un-docking? Is the USA picking up the cost? Will SpaceX be the provider for resident “return to Earth” emergency descent craft?

Russia has set space station exit timetable

Russia will use its remaining time on the ISS to demonstrate it’s ready to proceed with its own orbital station, the Roscosmos chief says

Russia has decided when it will pull out of the International Space Station (ISS), and will give a year’s notice to its partners, Roscosmos chief Dmitry Rogozin said on Saturday.

In an interview with the Rossiya-24 TV channel, the head of the space agency said that although a timeframe has been set, the authorities “are not obliged to speak about it publicly.”

Rogozin earlier said Western sanctions imposed over Russia’s military offensive on Ukraine are preventing Roscosmos from proceeding with “business as usual” when it comes to joint work with the US and other Western countries on the ISS. He also said that if he could he would already have cased cooperation.

In the interview he noted that the terms of Russia’s activity on the ISS are determined by the government and the president, and that the agency is currently allowed to continue operations on the ISS through 2024.

“I can only say one thing: in accordance with our obligations, we will warn our partners a year in advance about the end of work on the ISS,” he said.

Rogozin also explained that during its remaining time on the ISS, Russia “will demonstrate its readiness to deploy the Russian Orbital Service Station (ROSS).” He said the ROSS will be multifunctional and that development plans are already underway.

“When it is presented… we will begin to create this ‘smart hardware’ and prepare its launch into space, the deployment of the station,” Rogozin said.

Earlier the Roscosmos chief predicted that the ISS, where NASA planned to operate until 2030, would “fall apart” by that time unless “huge amounts of money” are invested in its repair, but that in the current geopolitical environment, work on the ISS is no longer effective for Russia.

In mid-March Rogozin said the “hostile” geopolitical situation could force Russia to make ROSS “militarily applicable.” It will mean, according to Rogozin, that “there will be no one” on ROSS besides the Russian cosmonauts, who will “service the target equipment installed at this station.”

Since Russia launched its military offensive in Ukraine in late February, many countries have imposed sweeping sanctions on Moscow, targeting its banks, finances, and the import of sensitive technology, among other things.

So now we know Russia will have their own space station, will not be assisting in any repairs of the ISS, and their space assets may assist in targeting work. Not exactly making me feel more safe, LGB…

Don’t know who these folks are, but they read a bit like a front. Still, quotes Russian sources about their POV, so lets you see into their thinking:

What happened to Russia’s gold and foreign currency reserves? Will there be a default?
25274 ViewsMarch 16, 2022 84 Comments

translated by the Saker Translation community

Part of our gold and currency reserves was frozen in other countries, mainly the US and EU member states, due to sanctions imposed against Russia’s Central Bank (RCB).

Therefore, Russians are naturally asking why are our strategic reserves NOT stored on Russia’s territory but on the territory of our economic adversaries?

We’ll try to explain how much was stored where, how much is left, can it be returned, how the freeze will affect the economy and ordinary Russians, and also who’s to blame.

What do the RCB reserves consist of:

RCB publishes an annual report on its assets and a weekly one on its volume. It stopped publishing on March 4. As of that date reserves consisted of $643 billion, but the data on the structure go back to June 30, 2021, when it was as follows:

$311 billion: financial instruments by foreign issuers.

$152 billion: cash in foreign deposits.

$132 billion: gold in Russia.

$30 billion: International Monetary Fund.

Thus, 80% of Russia’s reserves are outside of Russia. We’ll explain why later, but first here’s the list of countries as of June 30, 2021:

../1200%20copy.png Geography of Russian Central Bank (RCB) Reserves storage as of 30.06.2021

A reminder – this represents the allocation as of the end of June, 2021. After the publication of that report, the RCB reported it was moving part of the reserves from western countries to eastern ones, therefore the geographic distribution might not be accurate, but is a guide, since there have been no radical changes.

Thus, Russia is home to only 1/5 of the reserves, 13% are in China, 5% in IMF, and the rest are in Europe and United States. China is apparently friendly, some of the ‘other’ countries are as well, IMF is not about to block the reserves, but Western countries have decided to recall their “raider” past, therefore only half of the reserves proved resilient to arrest or potential arrest, and the rest we have no access to. The Minister of Finance, Anton Siluanov, named the figure of $300 million which is approximately the same as my calculations.

According to one explanation I’ve seen earlier, RCB transferred some of the reserves from the West to Eastern countries, in secrecy from the IMF, giving IMF a false report and therefore Western powers expected they’d be able to freeze a far larger sum than it turned out. But I have not seen any official confirmation (or refutation) of that explanation. One can only guess whether they thought this through or it came out the way it did by accident.

Nevertheless, some of our money was blocked, and that’s a fact. It’s remains our money, only RCB account transactions are blocked (it’s possible it’s our money for now, but one wants to believe they will release the funds).

If $300 billion were arrested, about $340 billion remain free, out of which $132 billion is monetary gold in the form of bullion. It is not known how much of the remaining money is cash, and how much is invested in securities.

But, I want to make a disclaimer right away — I’m not accusing anyone and I’m not defending anyone, however, the RCB and the Ministry of Finance did everything correctly, reducing the share of the dollar and the euro in favor of the currencies of eastern countries. However, our retaliatory move against blocking our reserves may be harder for the US and the EU, but more on that later.

The Central Bank began withdrawing money from dollar assets after 2017, when the United States froze about 40% of Kazakhstan’s reserves on far-fetched pretexts. Yes, regardless whatever pretexts there may be, no one has the right to prohibit the use of reserves accumulated by a sovereign country. This created a dangerous precedent, and our financial authorities reacted correctly to it, not just hoping that somehow, we would not be affected.

So, why are our reserves stored abroad?

Let’s see which ones – specifically cash currency and securities of foreign countries. The answer depends on it.

Securities. When you buy stock in a foreign company like Apple or Bank of America, you don’t receive these shares and nobody brings them to Russia as if it was cash. They are all stored in the country where they are issued. You don’t buy the stock but get a receipt that says you have ownership. And vice versa—when foreigners buy our stock, these obligations don’t leave Russia.

It’s the same with central bank reserves. Our RCB buys US government bonds and, in accordance with the rules, they are kept in the US. They cannot physically leave US territory, or the territory of other countries where RCB buys government bonds.

Cash. Storing money as money is the best way for it to lose its value – you know this yourself. Keeping money under the pillow means losing its purchasing power commensurate with annual inflation. You place your liquidity in a savings account so that you can earn some sort of interest and your losses are less than inflation.

The RCB (and other central banks) do the same. It places dollars, euros, yuan, yen, and franks and so forth in foreign banks at interest.

It could hardly be otherwise, and if it could be, then one could blame the RCB and the Finance Ministry for improper distribution of assets, because the value of the reserves ought to be sustained and not lost year to year by merely being kept in a huge safe.

Why can’t these assets be deposited with interest in Russian banks? Because Russia does not print another currency and banks do not earn money on it, respectively, banks cannot guarantee RCB income in foreign currency. There is enough money for the population, but not enough to ensure a profit on hundreds of billions of dollars at interest. Moreover, commercial banks also deposit foreign currency in foreign banks when you make such deposits, earning interest and sharing it with you.

RCB has cash reserves in order to react quickly, to intervene in order to support the ruble exchange rate and to pay debts, but cash is only a small portion of the assets.

Why is the RCB storing money in dollars, euro, pounds, and yen? Because, as of right now, these are the most stable currencies in the world, with minimal inflation. Therefore, their purchasing power does not decline as much as the Kazakh tenge, the Belorussian ruble, the Turkish lira, or other world currencies.

How to retrieve these assets?

As I already mentioned, right now only transactions are frozen. The Reserves have not been confiscated. Moreover, the government has a symmetrical response that will hurt the US and EU, much more than it will hurt us, if those restrictions are not lifted.

What has been done thus far:

A ban on dividend payments to non-residents (foreigners). Russia has forbidden paying any form of profit such as dividends to foreign owners, including private investors, international organizations, and governmental organizations which have invested in Russia. They will not be able to realize a profit.

A ban on transferring or transporting foreign currency out of Russia in large sums. Just as currency belongs in part to foreign citizens and organizations, its de-facto arrest on Russia’s territory “hurts” those who earned money in Russia while being abroad. The vast majority of these are foreign investors. Moreover, they will not be able to earn a profit from Russian financial instruments, which means that foreign countries could declare Russia in technical default since Russia is not fulfilling its obligations.

But there is a solution.

Here is the plan:

Paying debts in rubles. In the coming days, the Ministry of Finance will have to pay coupons on Eurobonds, which have to be paid in foreign currency. Anton Siluanov (the Minister of Finance) stated that all will be paid on time, but only in rubles, since we don’t have access to our “foreign currency wallet”, and in order to transfer rubles into dollars, those wallets will have to be unfrozen.

On the one hand, Russia would fulfill its obligations and pay its debts, but on the other, that might not satisfy “the other side”, since ruble payments are not in accordance with the terms of the deal. So, it’s a form of competent blackmail, and walking on ice at the same time.

In any event, Russia has money and, most importantly, levers of influence and pressure unlike Iran or Venezuela which also had their funds blocked. And there’s one more key issue:

What will happen to the economy if the reserves are not unblocked and will there be a default?

Naturally, one cannot rule out the possibility the reserves won’t be unblocked and our hundreds of billions will be used by Uncle Sam to cover his national debt, so let’s see what the consequences would be. I’ll say at once it won’t be like 1998.

For starters, let’s remember that a default is a country’s inability to fulfill its obligations, namely, debts. A default in Russia would occur if, when the time came to pay, there was no money. Government loans can be internal (must in their own currency) and external (must in foreign currency).

Russia has $119 billion in foreign debt of, including $39 billion in bonds, of which only $7 billion is by 2025. It must pay $2.1 billion by April 4. Pay with what? As we already explained, Russia has $643 billion in reserves, of which $340 billion are not frozen, or twice as much as the debt. Even if all the debt had to be paid all at once, that could be done without problems. As I already said, Russia’s debts will be paid in rubles since it does not have access to foreign currency savings. Russian companies (Gazprom, Yandex, Rosneft, and others) fulfill their obligations in hard currency.

Russia’s internal debt amounts to 16.5 trillion rubles, most of it in federal loan obligations and the payments stretch until 2044. How will that be paid? The National Welfare Fund has 13.7 trillion rubles. Seems like it is 3 trillion short, but over the course of 22 years the reserves will either increase or the needed quantity of rubles will be printed.

Incidentally, (a small digression) do you know that USA borrows only in dollars? Not because of boundless love toward its currency, but rather because one’s own currency can be created in whatever quantities needed in order to pay debts. Warren Buffett once said:

“If you are printing financial obligations in your own currency, the question arises – what will happen to the currency? The USA cleverly issues debt in its own currency. If I could issue “Buffett Coins”, had a printing press and I could borrow money – I would never stop paying my debts.”

The only thing that the West can do to Russia is place it in technical default. No need to panic, it has little to do with actual default. In order to understand technical default, imagine the following situation:

You ate at a café, asked for receipt, the waiter brought it to you but says that you can’t use your credit card here. You stick your hands into your pockets and realize you have no cash. Until you withdraw money from the nearest ATM, the café will hold you in technical default (naturally, this term is not applied to individuals, but you get the idea).

In other words, you have money and even desire to pay, but you physically cannot pay. Does it remind you of anything? Technical default does not pose serious threats to a country if money and willingness to pay exist.

How is this different from 1998? In 1998 there was no money, no ability to pay, and no particular desire either.

If Western countries seize Russian reserves, they will acquire the reputation of “plunderers”, and central banks of other countries will ask themselves the question whether it makes sense to keep one’s reserves in those countries if they can be snatched at any moment. Our country can be similarly branded if it decides to seize, as compensation, the property of foreign organizations, but at that point there will be nothing to lose.

I hope Russia will learn the necessary lessons from this situation and adopt measures aimed at better protecting its own capital. What thoughts do you have on that score?

And, as usual, if this was interesting for you, you may subscribe to my Telegram channel – there is even more useful information there, and it appears there more quickly.

Yes, I’m quoting those sources heavily. Since censorship is now rampant, links may fail in future.

I find that description of the freezing of foreign assets very clear and honest. It also illustrates just why Russia us saying to pay for gas in rubles. They don’t really have any other choice, and that is “by our hand”. Painting it as an evil atrack on the EU or a deliberate breech of contract is just propaganda lying.

It sure looks to me like Russia is now justified to treat NATO as a hostile enemy combatant. I hope they continue to show restraint in that regard.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Economics - Trading - and Money, News Related, Political Current Events. Bookmark the permalink.

35 Responses to Ukraine & Russia & NATO (Oh My!)

  1. E.M.Smith says:

    Oh, and RT news feed to the tablet still works. Can’t copy links, but here’s some informative text from an article about gas:

    Poland and Bulgaria have also rejected the ruble-based payment scheme

    Helsinki has rejected Moscow’s ruble-based payment scheme for gas, the local media reported on Wednesday. Russia imposed the payment mechanism last month on countries that have placed sanctions on Russia but continue to import its gas.

    “We have made the decision in the government’s economic policy committee that Finland will not agree to ruble payments. The decision was already made at the beginning of April,” Finland’s Minister for European Affairs and Ownership Steering Tytti Tuppurainen told the Helsingin Sanomat newspaper. She said that it could be seen as blackmail and part of “Russia’s geopolitical efforts.” 

    Russia has denied using natural gas exports as a tool to “blackmail” Europe, a charge also leveled by European Commission President Ursula von der Leyen.

    “Russia has been and remains a reliable supplier, committed to its obligations” and the new terms for exporting the gas were “caused by unprecedented hostile steps against us,” Kremlin spokesman Dmitry Peskov said on Wednesday.

    Under the ruble-based mechanism, gas buyers are required to set up ruble accounts with Gazprombank. They are allowed to make payments in their currency of choice, but their payments will be converted into rubles to reach the gas provider through this account.

    Read more Ruble payment mechanism in effect – Kremlin
    Russian fuel giant Gazprom sent a letter to their Finnish state-owned counterpart, Gasum, at the beginning of April informing them of the new terms of their deal. Gasum is conducting a legal assessment of its situation and considering a response, Helsingin Sanomat reports

    Finland is working on renouncing Russian natural gas, but “companies are responsible for their own operational business decisions,” Tuppurainen said. 

    She added that if the goal of divestment was to stop indirectly “funding” Russia’s military operation, then Finland should “avoid a situation where we have to pay for breaches of contract.”

     Meanwhile, Hungary, Austria, and Germany have accepted the ruble-based payment mechanism. Austrian Chancellor Karl Nehammer announced on Wednesday that Vienna had found the new scheme to be “in line with the terms of the sanctions” leveled on Moscow.

    In total, Russia supplies pipeline gas to 23 European countries. 

  2. E.M.Smith says:

    Gee … during gas shortage, 1/2 of French nuke generators shut down. Buy a new Electric car anyone? /snark;

    From tablet RT feed:

    France shuts down 50% of nuclear reactors amid energy crunch
    Published: 30 Apr 2022 | 09:18 GMT

    French utility giant confirms 28 nuclear reactors are offline as Europe grapples with energy crisis

    France, one of Europe’s leading electricity exporters, has taken 28 of its 56 atomic reactors offline due to defects or maintenance. The step comes amid a months-long energy crunch, one of the worst in European history.

    The 1,300-megawatt Golfech-2 reactor run by Electricite de France (EDF) in the south of country was shut down on Friday for maintenance until Saturday, the company said in a filing with grid operator RTE.

    The suspension, due to extended outages after corrosion issues were found at some sites, is expected to force EDF to purchase electricity from the European grid at a time of soaring demand exacerbated by natural gas shortages.

    Checks and repairs, along with scheduled halts for refueling and regular maintenance, have reportedly sunk French nuclear output to its lowest level in more than 10 years.

    The shutdowns are expected to aggravate Europe’s supply problems, with nuclear power accounting for more than two thirds of French electricity generation. Daily prices for electricity in France in 2022 have averaged nearly 30% more than in Germany, which relies more heavily on gas and coal to run its plants. They are reportedly four times higher than in the same period of 2021.
    French imports of electricity were nearly equal to exports in the first quarter, versus net exports of roughly eight terawatt-hours to Britain, Italy, Germany and Switzerland in the same period of 2021, according to data from research institute Fraunhofer ISE.

    For more stories on economy & finance visit RT’s business section

    So how will the UK do in a wind outage, with France not net exporting for a while?

  3. E.M.Smith says:

    1/2 of Germsn nuclear generation is also shut down. Not looking like a very bright idea ATM…

    Nuclear power in Germany accounted for 13.3% of German electricity supply in 2021, generated by six power plants, of which three were switched off at the end of 2021, the other three due to cease operation at the end of 2022 according to the complete nuclear phase-out plan of 2011. However, in early 2022 this plan was called into question once more in light of the 2022 Russian invasion of Ukraine which threatens Germany’s supply of natural gas. There have been calls to either delay the shutdown of the remaining three reactors or to restart operation in those reactors that were shut down in late 2021.

    So exactly how will the EU dump both fossil fuels and nuclear while electrifying transport… and NOT go dark?

    I don’t see any path other than “cold and dark”.

  4. Canadian Friend says:

    Just something related…and strange,

    As the USA is helping Ukraine fight a war with Russia, the Biden administration suddenly created a ministry of truth ( the governance disinformation board) and put Nina Jankowicz in charge… who it turns out has studied in Russia, and has worked in Ukraine with the Ukrainian government.

    Strange coincidences don t you think?

    She did not study in Belgium or Brazil or Canada, no she studied in Russia of all places, then worked with the Ukraine government.

    Here is her Wikipedia page,

    Jankowicz attended Bryn Mawr College, double-majoring in Russian and political science.[5] She attended a semester at Herzen State Pedagogical University in Russia in 2010,[6] and graduated in 2011.[5] In 2017, she was a Fulbright fellow in Kyiv, working with the foreign ministry of Ukraine.[1] She has also served as a disinformation fellow at the Woodrow Wilson Center and as supervisor of the Russia and Belarus programs at the National Democratic Institute.[7]

    Now before anyone dismisses this,

    Don t forget that a lot of the shady deals that bring tens of millions of dollars to the criminal Biden family are in Ukraine ( like Hunter Biden owning a company that builds biolabs in Ukraine, or better yet, Hunter who was paid $80,000 a month by a Ukrainian gas company while he was in the USA getting high on crack with a prostitute in a fancy hotel… ) …and we are supposed to believe it is a coincidence that the queen of truth – named by Biden – worked with the Ukraine government???

    and think for a moment how the left and the main stream media would have reacted if Trump had created a ministry of Truth headed by someone who studied in Russia…

    There is something behind this…not sure what…but it is too strange to be nothing.

  5. philjourdan says:

    The lies coming out of fake news and the new Ministry of Truth are why I do not believe a single word about the war. RT may be a mouthpiece of Russia, but they will at least give the lies from the west some balance.

  6. Canadian Friend says:

    E.M. Smith,

    I thought you might appreciate this one ( although you may have known about it way before I did, I just saw it minutes ago )

    Putin: “The sky is blue”

    Anyone: “The sky is blue”

    US media: “You’re repeating Putin’s talking points!”

    – Michael Tracey, investigative reporter

  7. E.M.Smith says:

    @Canadian Friend:

    Had not seen that one… it’s about right.

    Putin doesn’t thrill me, heck, I mostly just wonder how he managed his takeover of Russia. But every time I’ve seen him speak, I come away impressed. He knows his facts cold. Takes challenging audience questions. Needs no queue cards nor prompter. Speaks carefully and in depth. Yet individual points are often terse and sharp…focused. I can tell there’s a crafty person behind the face, but what he’s thinking is hidden until he speaks (emotion burried & controlled, trained to do flat affect on demand). Then he can do this “challenge stare” when he questions someone. Always watching and aware of those around him. High situational awareness. I’ve never heard him make an error of fact nor screw up. (He says nothing if unsure). But I have no doubt he could lie convincingly and smoothly if necessary.

    Which makes it all the more nutty to me when folks assert he is stupid or powermad or strongly emoting over things. Just never seen any evidence of it from him. Yes, he finds the loss of USSR Power tragic. But who could have their country go from 1 of 2 Superpowers to also-ran and not feel that way?

    Then The West is soooo busy painting anything Russian as horrible and anything Putin as Evil Beyond The Devil. Just incredibly small minded petty crap that is patently crap. “Creation of the evil other” for effect. Lies top to bottom so thick you can’t see the actual bad bits to sort them out and identify where real issues sit. Oh Well. I’m of the opinion (like the joke you gave) that if Putin praised Jesus & the church, the LSM MSM Propaganda Op would proclaim Lucifer as Saint and Putin evil…

    Then our new Ministry Of Truth hiring a Ukrainian educated in Russia to spin our lies? Either incredibly tone deaf to how it looks, or just doesn’t care since they bought Ukrainian government wholesale… and our vote is counted by China anyway….


    Why I like to read / watch opposition sources is simply because of the other POV.

    1) They do the work to point out our lies and errors, making it easier to research them.

    2) They cover stories I’d otherwise not see. Either because our MSM hides them, or just doesn’t care. Like the Space Station. Big deal to Russians, irrelevant to Hollywood fixated USA UK media.

    3) I get to see how they view things from their POV.

    4) It trains the BS-O-Meter on more styles of propaganda.

    ALL news has lies and spin, but many are better than ours and some laughably worse. RT Spins based mostly on what they do not cover or say, then some by highlighting our follies and lies – some of the best technique. Occasional, but not enough to raise awareness of it, direct statements with “soft bias”. Al Jazeera shows some posed set up shots in conflict zones. Generally spotted and outed. Also does Opinion Interviews with spin. Then there’s the lousy stuff by the Ukrainians… cars flipped over by bombs but no windows broken? Recycled photos published years before? Just amateur.

    If I had to rank them, I’d have to rank RT as less spin and lies, with more valid information and on a broader list of interesting topics, than the BBC or anything in the USA. This pains me to say. I once set up a shortwave radio for my Mum to hear the BBC. For years it, and Cronkite, were almost synonymous with truth and insight. Now lost.

    The shift happened in about the early ’80s when news shows changed from legal mandate public service to “earn a buck” infotainment (an accurate word I despise…). Then accelerated in the Click Bait Oughties. I now rarely use them, but mostly just to see our current hard spin rant du jour if something big happens.

  8. philemon says:

    A minor data point on academic ignorance, I had a seminar in philosophy on Descartes and the instructor had never heard of the Thirty Years War.

  9. jim2 says:

    From the It-Took-You-Long-Enough Department …

    Russia’s invasion of Ukraine has triggered a profound reassessment in European capitals of their individual and collective relations with China. Senior lawmakers in Germany, jolted into the realization that fostering close ties with Russia was an historic blunder, are starting to make the same connection with China, raising alarm bells over the country’s status as Beijing’s largest European trading partner. In a related move, Italy just strengthened its veto power against foreign takeovers, a measure directed at China. Beijing is unlikely to welcome the instability and economic turmoil Vladimir Putin’s war has caused. Yet even if its ability to influence the Russian leader is limited, the EU argues China has unique channels it can use to try. Read our rolling Ukraine coverage here.

  10. philemon says:

    As much as Jerome Powell at the Fed is talking about raising interest rates in the U.S. to, maybe, 3% (or real negative 5% or so), Christine Lagarde at the ECB is maintaining negative nominal interest rates and continuing to monetize EU public sector debt, as there’s no private market bid. There’s no actual market level for this paper as an inflation and credit-risk adjusted price would bankrupt the entire European (and realistically the American) financial system.

  11. philjourdan says:

    @EM – I agree with your assessment of Putin. He is a thug! But that does not mean he is stupid, nor is he (Yeltsin was stupid – the Biden of the USSR). Putin is not a nice guy. He is a man on a mission (Very similar to Trump) and will not let anything stand in his way. He uses the system, and when the system is not usable, he changes the system.

    I respect him as an adversary. I guess that makes me a Putin parrot. But then all you have to be is a white male to get that classification. Racist College educated white females are so stupid1 And that includes AOC who is a White hispanic as much as Zimmerman was.

  12. philjourdan says:

    BTW – on AOC’s crack about frustration for not being able to date her, I am reminded of a joke.

    A man calls his mother and says he has found the woman of his dreams! His mother askes “Can she cook?” – No he replies. “Is she Pretty? – No he replies. “Is she Smart?” – No he replies. “THen why are you marrying her?” – He replies she is the best lay he has ever had! She is a tiger in bed! “So how do you make love to an ugly woman that is stupid?” – He replies that he tells her to wear a paper bag.

    So one day he is working on a house repair and bangs his thumb with the hammer! “Effing GD#&#*&#(*&” he screams. His new wife then says “paper bag. Paper bag”

    AOC is the Paper bag.

  13. E.M.Smith says:

    To quote Ron White “But you can’t fix stupid”

    If you’ve not watched that comedy bit of his, find it….

    “Pretty” is nice to have, but stupid wears badly and ends quickly… a good person grows the relationship, a mean or cranky one sours it into rot.

  14. E.M.Smith says:

    Oh, implied but…

    AOC is both stupid and mean / cranky / loud complaining. Were I sent on a blind date with her, at about finishing desert time, I’d call for the check and say I had to go rescue a client (me :-)

    Even if guaranteed that she would not open her mouth to speak all night, I could not bring myself to spend a night with her. The stupid, it burns….

  15. E.M.Smith says:


    My impression of Putin is that he is smart and well trained. But also that he has a plan to kill anyone seen as a threat in the room, and that it is best to not turn your back on him… and get your own drinks…

  16. philjourdan says:

    @EM – Yes in stupid. And Yes on Putin! I detest the Clintons but I have never called them stupid. They are American Putins. Ruthless and immoral (not amoral, immoral). Best not to turn your backs on them

    And that is their better qualities

    Just an FYI – Not sure who Ron White is, but he was my boss about 13 years ago? Top notch guy!.

  17. Richard John Hill says:

    to EM about Australia.
    At least one commentator has managed to cut through with the obvious….
    Oz as a small isolated country threatened by the CCP should develop it’s own nuclear capability to the extent of being able to take out a Chinese city.
    On another topic.
    No one ever seems to mention that NK’s nuclear strike capability is dangerous for China as well as NK’s other neighbours.

  18. E.M.Smith says:

    @Richard John Hill:

    North Korea knows it only exists due to China “flooding the zone” with Chinese regulars during the Korean War. It also knows it will instantly cease to exist as soon as China doesn’t protect it. So while a theoretical risk to China, it is more of a Chinese launch pad with denyability for China…

    Per Australia and nukes: Not sure one city would be enough, unless it were the Capitol…

    IMHO, making a working nuke is not hard. It is 1940s tech. The physics is now well known. Fornulas and designs, including neutron source triggers, are public knowledge. Fabrication methods are greatly improved now as are clean room and radiation protection methods (no need to invent HEPPA filters, you can buy them at Home Depot…). Oh, and one of my college friends made one… Not as OMG as it sounds, as he was Ph.D. Physics and went to work for Livermore Nuclear Lab… OTOH, he was not that exceptional and math needed no more than I had. One of those “If he can do it, I can” things ;-)

    THE hard bit, IMHO, is getting the SNM (Special Nuclear Material. AKA Boom Stuff). Even there, methods and techniques have multiplied and I think I know of a “back door” way to do it ( see McPhee “The Curve Of Binding Energy” and Indian nuclear tests using Th and power reactor Pu for clues). Then making it small enough to fit on a rocket is hard… but delivery via boat or cargo plane drone is easy…

    I’m quite certain Australia has a few thousand Physicists & Engineers who are able to make one in a year or two. Working out the SNM a bit longer…. Same for most technological nations today. What really prevents making one is just not wanting the political grief it brings.

    I think as soon as Iran announces their bomb, the whole Middle East goes nuclear (at least, the surviving part… /snark;) That will then spread to the “icky stans” of Asia as they are sandwiched between India/Pakistan and the Middle East. Eventually spreading to Egypt and North Africa.

    At that point, the only bits of Europe & Asia without the bomb will be minor countries, Germany for historical reasons, and both the Scandinavian arc and the southern nations. I can’t see that holding for long with all around them packing nukes. Oh, and the FSU / ex Warsaw pact minor states.

    Basically, I think Iran going nuke ends the non-proliferation movement. Exact pattern of spreading not that important… but the Sunni world will not let Shia be the only nuke power in the region.

    INHO, any country that can run a nuclear power reactor and research pool reactors can make a bomb in just a few years. Neutron reflectors and neutron trigger tech are no longer secrets, and high speed pulse circuits are trivial now (coordinated detonation for symmetrical implosion is no longer hard). That lets you use less pure SNM as long as a relatively large “device” is acceptable.

    Making one that fits in an 8 inch howitzer is still hard ;-)

  19. philjourdan says:

    @EM – Well not my boss, but a top notch guy! And yes, you can’t fix stupid.

    I define stupid as follows.

    Ignorance is the lack of knowledge.
    Stupid is the rejection of knowledge.

    You cannot fix stupid.

  20. John S Howard Jr says:

    To be sure, I have had reservations, regarding the Russo/Uk War, since the beginning. My gut tells me that the revolting Russian soldiers, who sabotaged their own equipment, but killed thousands of innocent civilians, is a false narrative one way or another.

    Additionally, the Russians are destroying the country, literally making every city uninhabitable. I’m not sure how this is a winning strategy for the Ukrainians.

    Now, we are sending billions to the Uks. Where is the accountability? It’s just up in smoke.

  21. E.M.Smith says:

    @John S. Howard jr:

    Up in smoke in H.Biden’s crack pipe…

    Note that Pillousy flew over to pick up her suitcsse of cash in person…

  22. H.R. says:

    J.S.H. jr: “Additionally, the Russians are destroying the country, literally making every city uninhabitable.”

    I’m not so sure about that. It has been noted that in a country of over 30 million, with somewhere near that number of cell phones, there is not a lot of video of that devastation. Some, but not much. And Zelinsky seems to be “free to roam about the country” while foreign dignitaries come and go as they please to visit with him.

    Some video was shown to be from a few years ago and was Western propaganda. Recent video is untrustworthy. So far, I’ve only seen a few videos, such as the mall where military vehicles were visible in the garage area, where it is assuredly Russia-caused devastation.

    I’ve also found it to be remarkable that the Russians seem only able to hit maternity hospitals, pre-schools, orphanages, and the like and can’t hit a military target to save their life. Odd that.

    Then there are the maps of the situation on the ground. A) they are hard to come by and 2) they are most likely propaganda (either side) and not to be believed.

    So I’m not saying your statement is wrong, right, accurate or inaccurate. I am just not sure of what is really happening in Ukraine, and I have only seen just a very small bit of video that has proven to be reliable.

  23. E.M.Smith says:

    I’ve been digging into this a bit more. Details in a future post… but:

    What is shaping up is a vision of Ukraine as an ethnically strained nation. Western bits were Czech-Slovack or Polish in times past. Eastern & coastal were Russia. In between Ukrainian speakers. When Maidan happened, the Western bits did a forced conversion effort on the Russian bits, that didn’t go down well. Now Russia is reclaiming and protecting the Russian bits, but willing to rubblize the non-Russian cities if given grief by them.

    You can not get the correct view if you just classify cities as “Ukrainian”. There are historically Russian, historically not Russian, and mixed ethnicity cities. It looks like each is treated differently… by both sides…

  24. H.R. says:

    @John S. Howard jr – I reread your comment and I realized that you may have been including “Additionally, the Russians are destroying the country, literally making every city uninhabitable.” as an addition to the propaganda in your first paragraph. Is that so? It was unclear to me.

    It didn’t make sense to me in light of your statement that you didn’t see how that would help the Ukrainian cause.

    Anyhow, as further discussion of the point, I’m seeing a lot of propaganda that seems to be sheer bollocks on the face of it to anyone with half a brain and I am wondering much the same; how is some of these over the top stories helping Ukraine?

    The only thing I can think of is that the US gubmint is using them as the excuse to send billions of dollars over to the Ukraine Money Laundromat.

  25. E.M.Smith says:


    You got it in one. Just an excuse to run 33 $ Billion through the laundry and pocket a few $ Billion each. Got to keep the laundry running after all. Lots of bribes to pay.

    They no longer care if you believe it or not. What you gonna do about it? Vote them out? How are you going to buy the election counting company from China, eh? So any cover story will do. IF folks get cranky about it, just DOX them and sic Antifa on them. If it’s a big group, call it an “insurrection” and toss them in Federal Prison without lawyer or trial.

    It has been proven to work, after all….

  26. another ian says:

    There is a cartoon doing the rounds centred in a large laundromat with bulk bags with owner labels full of “product” needing to be “laundried”. Not sure of the brand of washers but they have blue and yellow badges.

    Came by email with no source link

  27. H.R. says:

    @E.M. – I had two replies to J.S.H. because his comment was a bit unclear. I first took it that he was buying one line and not the other. Then it occurred to me that perhaps he was not buying either line. If so, he and I are in agreement that it’s hard to trust anything from either side.

    The only reason that I cottoned onto the purpose behind the Ukraine/U.S. propaganda is the rapid pushing of the $8 billion and $33 billion packages after already sending $4.7 billion.

    If Ukraine is kicking Ruski butt, there’s no reason to send more money. The U.S. pollies can’t have that now, can they? They have to have a slush fund somewhere.

  28. philjourdan says:

    @John S Howard Jr. (Speedway?)

    The crap from the fake news here is just that crap. Is Russia kicking butt? We do not know. Is Ukraine a noble fight? We do not know. Basically all we know is that what we know is pure BS.

  29. philjourdan says:

    @John S Howard

    BTW – Kris Kristorpherson was great in that movie! Babs sucked

  30. E.M.Smith says:

    Germany advocating for a bigger aliance against Russia and putting Russian hostile forces on the Russian border… what could possibly go wrong… /snark;

    Yes is is an RT article. Only because I ran into the story there since it mattered to them (American lame media busy obsessing over who in Hollywood is “doing” whom and The Nancy visiting with Fearless Volodymyr to pick up her vigorish.) /snark;

    Germany says it will back NATO expansion
    Russia’s attack on Ukraine was a “turning point” for security relations in Europe, the German chancellor said
    Germany says it will back NATO expansion

    Germany will support the admission of Finland and Sweden into the NATO military alliance, Chancellor Olaf Scholz said, after the two Nordic states expressed interest in joining up despite decades of neutrality.

    Speaking to reporters on Tuesday following two days of closed-door meetings with his Finnish and Swedish counterparts in a town near Berlin, Scholz vowed to back both nations’ bid to join the Western military bloc should they submit membership applications.

    “For us it is clear: If these two countries decide they should join the NATO alliance then they can count on our support,” he said, adding, “Even in the period before such NATO membership is decided, they can always rely on Germany’s support. As Europeans, we see ourselves obliged to do so anyway.”

    Scholz’s comments follow reports that Helsinki could declare its intent to join NATO as early as next week, with President Sauli Niinisto purportedly set to announce the move on May 12. It remains unclear if Stockholm will follow suit, though the country’s parliament recently said it would conduct a review of Swedish security policy before a decision is made.

    While earlier reports stated both countries would submit their applications at the same time, Finnish Foreign Minister Pekka Haavisto has said his country could ultimately go ahead without its neighbor.

    “Currently I think the mood in parliament… includes the possibility to go without Sweden,” the FM told the Irish Times in an interview last week. “It would be good to do the same things at the same time as Sweden, but that depends on Swedish decisions. It is too early to guess the date, but I think before the summer we are proceeding.”

    Addressing journalists after Scholz on Tuesday, Swedish Prime Minister Magdalena Andersson said a decision had not yet been made and that “All options are on the table,” comments echoed by Finland’s prime minister, Sanna Marin.

    “Finland and Sweden are facing important decisions regarding their own security,” Marin said, adding that “Russia’s attack on Ukraine has dramatically changed our security environment, and that cannot be undone.”

    The German chancellor similarly labeled Russia’s military operation a “turning point” for security on the continent, saying the attack prompted Berlin to scrap a long-held policy against shipping weapons into active conflict zones. “It was right and necessary” to change that policy, Scholz continued, adding, “we are now providing large-scale support [to Ukraine], which we will continue to do.”

    The invasion of Ukraine was driven by failure to adhere to the commitment of no NATO on the frontier of Russia; so now to “fix it” the proposal is MORE NATO on Russian borders.

    Failure to understand Russian motivations and history. High lack of self awareness and how Germany shipping arms to fighting at the Russian border sure looks historically familiar as a threat. Ignoring the cascade failure of interlocking military support agreements turning one political assassination into W.W.I as precedent warning. These folks are either quite stupid or are looking to start a war with Russia involving all of Europe and North America.

  31. Canadian Friend says:

    This Ukraine thing is more bizarre everyday…

    The pope was more pro Ukraine a few days ago, but now he sounds like he is more pro-Russia.

  32. philjourdan says:

    Germany is screwed and they know it. And it was not Putin that screwed them, but Biden!

    George Peppard on the A-Team said it – I love it when a plan comes together. Germany is still waiting for one of those.

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