Skip to comments.Ukraine's Economy Is Nearing Collapse
Posted on 04/18/2014 5:01:58 PM PDT by PieterCasparzen
In a desperate effort to head off inflation (which in March alone was over 3%) and protect the value of the Hryvnia, the Ukrainian central bank hiked its main interest rate from 6.5 to 9.5%.
The central bank was forced to take such desperate measures because the currency has been in free fall, losing more than 35% of its value against the dollar this year.
Ukraine also faces enormous problems re-paying its debts, a substantial portion of which are denominated in dollars and other foreign currencies. Although it attracted little attention at the time, when it bought $3 billion worth of bonds at the end of 2013 Russia inserted a clause that stipulates that the total volume of Ukrainian state-guaranteed debt cannot exceed 60% of its annual GDP. If that threshold is breached, Russia can legally demand repayments on an accelerated schedule.
Russia has always had the ability to wreck economic havoc on Ukraine, and this should have made the West a lot more cautious about the Eastern Partnership and the general effort to incorporate Ukraine into European institutions. In retrospect the entire effort to sign the association agreement appears to have been a rather reckless gamble which no one knew the stakes of. But now that the gloves are off, now that the West and Russia are in an open geopolitical fight about Ukraines future trajectory, Brussels and Washington need to step up to ensure that Ukraines economy stays out of the abyss. This will require substantially more generous (and politically risky) packages of financial assistance, but the only alternative is to allow Ukraines economy to implode.
(Excerpt) Read more at forbes.com ...
It does since 1993.
SHTF time for Ukraine. Again.
Maybe the Ukraine should adopt the Euro...
With their brilliant new leadership I can’t imagine why.
There was conversation that Soros was going to do what he could to collapse the Ukraine economy. Now my guess was that if he succeeded, he and his globalists would be to go into Ukraine and buy up everything for pennies on the dollar (or euro). The profits from Ukraine's resources would flow like the Mississippi at high flood levels. But oops, Putin intervened and the globalist visions of unending profits vanished. In short order, Kerry, Biden and Obama himself went to Ukraine. And came up empty. Soros is angry, Putin is laughing. Just conspiracy mongering though, nothing based on hard facts.
One thing for sure, Putin has seen that exact same scam played out by the US/EU before. Sometimes with a bombing campaign as part of the negotiations with the locals, sometimes not. I figure that's exactly why he went straight for the Crimea, diplomatic consequences be damned.
The Crimea is not only an aberration as part of the Ukraine rather than Russia, it's a target rich environment for people who resort to bombing expensive infrastructure as a way to encourage the locals to take the deal they're offered and shut up.
Come what may, the Crimea is off the negotiating table now and if they want to play their games the Ukrainian funded infrastructure will be destroyed to make a point, not the Russian funded infrastructure in the Crimea.
A couple months ago I posted a backgrounder on Western activity in Ukraine going back to the early 1990’s.
It’s been a public-private partnership between State Dept and private equity, lead by SigmaBleyzer. More and more investors and businesses flowed in, by 2005 they started bringing in all the usual publicly-held US companies, even the consumer brands.
The IMF, World Bank and related entities provided tons of easy money financing to government and private sector.
Think about it - why was the Ukrainian government allowed to go into debt for billions, way out in front of any real tax stream guaranteed by an underlying legitimate, robust free-market economy ?
Ukraine has been WELL KNOWN as a center of internet crime for decades, massive government corruption, massive criminal activity domestically. How can that environment have REAL underlying economic growth ? Impossible.
Yet ALL the investors, international bankers kept piling in, buying up properties, contracting with local oligarchs for manufacturing, massive economic activity.
The western organizations brag about how they influenced lawmaking to improve the business climate.
So this is totally within their power - Ukraine as it is today is THEIR BABY. The elites had it within their power to mold the Ukrainian economy and legal system to their liking - and they did. And the whole point was to get the Ukrainian government massively in debt. Why ? Because that is how financiers control a government, by giving it loans like a heroin dealer sells to an addict.
This is a simple assimilation, which is planned for all of eastern Europe, step by step, one country at a time.
The big challenge they face is the US, getting it to give up national sovereignty, with all those guns and independence and all.
NAFTA was a step, Common Core is a step.
Both political parties in the US report up to the same financial elites. The Klintoons, the Bushes, they all work for the same people.
Cecil Rhodes is an interesting character to read about which will give you perhaps an idea of the hubris of this UK/US elites axis. Another is Jeremy Bentham.
At the top, it’s the heads of the most powerful banking families, kind of like the mob (which is really just a small subsidiary). These cartels control, through their foundations and well-placed minions, whole national governments, and their education systems (mainly through Ivy League), intellectuals, unions, capital markets, etc., etc.
Yes unions and socialism are tools of the elites. The modern UK/US socialism was initially lead by Beatrice Webb, nee Potter, of the extremely wealthy and powerful Potter family.
It’s easy to grasp in 19th century America, but people think that era has ended and somehow the power was all magically diluted, which isn’t possible, it just gets handed to proteges.
It is WELL known that the Soros-funded NGO’s have been active in Ukraine for some time.
That activity ratcheted up last year, after Putin embarrassed Obama over Syria.The ideologues in the White House, and Obama’s huge ego, still cannot let that go.
They likely saw destabilizing Ukraine, and Russia’s influence, as a way to “Get back” at Putin, for daring to challenge THE MESSIAH. You will note how US Media demonization of Putin began after Syria. That the US State Department was involved in the financing the groups in the Maidan demonstrations is undeniable.
Putin had to know it was coming, things didn’t have a vacuum. And Putin acted to boot the Soros NGO’s out of Russia last year, after Syria, if you’ll recall. Did he already know they had been “activated”?
Russian Intelligence isn’t incompetent, Ukraine is likely infested with those, like the huge mafia’s, that are willing to sell info. And Putin, as a former KGB’r, knows better than to ignore intelligence estimates.
Crimea is very strategic to Russia, and plans were likely in the works for a long time to move should Ukraine’s government fall, which it did. That the Donetsk region would likely follow was clear to all but the blind.
I’m just an unconnected schmuck in the middle of an Indiana cornfield, and I can this clearly.
Thank you both. I think your posts are insightful and more illuminating that what has been reported so far. It makes me more certain that Putin pulled the rug out from under a LOT of the globalists.
Excellent observations also. Thank you.
Amazing isn’t it, the clarity and common sense in the heartland. Now if we could send some people to Congress who wouldn’t stick their heads up their anuses,as everyone else does once they get there....
Maybe they'll kick off the collapse party worldwide.
IMHO, bear in mind that Russia has a central bank, like the Federal Reserve, that is a quasi-governmental body, that is a member bank of the Bank of International Settlements.
Russia’s government debt is very low right now, so arguably the government may feel a lot of lattitude from banking elites, enough to press the point on retaining their naval base.
All world governments have the elite financial cartel to deal with in order to borrow money.
If they completely stop borrowing from them, and print their own money, without buying “gold” (the elites’ other stock in trade) from them to “back” it, they then can give the bankers the boot.
Trouble is, the bankers always have the option of using their espionage network and control of other governments to replace the leadership of the offending nation through elections or revolutions, or by causing other nations to go to war against them.
It would take simultaneous action in the major nations to kick the bankers to the curb successfully, so the bankers did not have any significant powerbase in any major nation while they are arrested, tried, convicted, etc. The financial banks and corporations would have to be broken up. There would have to be a “de-bankification” process to enlighten people, especially intelluctuals, as to what has been going on. People would have to be faced with good old-fashioned evidence; testimony, etc.
Another hold the elites have on governments is the complete, utter, abominable corruption of a number of government leaders around the world.
For example, to touch on the problems with Europe’s elites, one can do a little digging into the utterly disgusting, completely diabolical Marc Dutroux, et.al, case.