By JC Collins
UPDATE to SDR’s and the New Bretton Woods – Part Eight
Things are moving so fast right now that its challenging to stay on top of events. In the last 24 hours the following has happened:
1. US threatens economic sanctions against Russia. (more than 24 hours)
2. Russia threatens to dump US treasuries.
3. Russia threatens to by-pass the dollar as reserve currency.
4. Russia threatens to not make payments to western banks.
5. Ukraine says it can not pay Russia for natural gas deliveries.
6. Russia says it will stop deliveries of natural gas to Ukraine.
7. US Treasury Secretary Jack Lew states that the IMF 2010 Code of Reforms must be part of any aid package to the Ukraine.
8. Top Republican Bob Corker says the Reforms are on the table for the aid package.
9. White House slips the IMF Reforms into the 2015 budget.
10. Russia threatens to confiscate all US and European assets in Russian territory.
11. Protestors waving the Russian flag storm Treasury building in Donetsk, which is located in eastern Ukraine.
12. Russia continues with pre-scheduled ICBM test launch.
13. European Union offers Ukraine $15 billion dollar aid package.
14. Russia offering Ukraine $15 billion dollar aid package.
15. IMF expecting tough austerity measures on Ukraine as a part of any SDR denominated bail out.
16. Russian tanks are in the eastern Ukrainian town of Enerhodar. the location of a hydro dam and nuclear power plants.
With the US Congress and Republicans all of sudden interested in making the IMF 2010 Reforms a part of any aid package, one can only wonder if they are sending a message to Russia. Could this message be saying, “give us Ukraine and we will pass the IMF Reforms to equal the playing field for the emerging markets”?
And lets not forget that these reforms will transition the worlds primary reserve currency from the dollar to the SDR.
Based on the level of Russian threats it can be assumed that they are not interested in handing over the Ukraine at all.
Perhaps the country will be split down in the middle, with eastern Ukraine going to Russia and western Ukraine going to Europe. Its the hinge between economic zones as we have previously stated.
Eastern Ukraine has the majority of the resources and industry. Perhaps the Russians will have to give up the natural defensive wall offered by the Carpathian mountains for the heavy industry.
Or perhaps Russia will give up nothing in the Ukraine and wait for the western economies to fold or economically fall. This is the least desired outcome as it will affect the whole world.
Survival measures have been taken by the emerging economies by way of currency swap arrangements with China using the renminbi.
Watch the problem/reaction/solution play out on the world scene.
What can’t be denied is that the IMF 2010 Code of Reforms and SDR allocation system is at the middle of it all. The shift from US dollar reserves to SDR reserves is inevitable. JC Collins
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Russia prepares bill on foreign asset freeze in reply to sanctions – senator
Published time: March 05, 2014 08:56
Edited time: March 05, 2014 12:43
The entrance to the Russian Federation Council, on Bolshaya Dmitrovka Street.(RIA Novosti / Vladimir Fedorenko)
A top Russian lawmaker has revealed he is working on a bill that would freeze the assets of European and American companies operating in Russia in reply to Western economic sanctions.
The chairman of the upper house committee for constitutional law, Andrey Klishas, is sure that Russia must have an enough leverage to deal with the threat of sanctions coming from foreign countries.A team of lawyers are currently preparing a separate federal bill that would allow the Russian president and government to confiscate foreign owned property in Russia, including assets belonging to private companies, the senator told the RIA Novosti news agency.
The bill is in response to the major political crisis in Ukraine and the threat of sanctions against Russia coming from the USA and other countries.
“All sanctions must be mutual,” Klishas stated.
The senator added that he had no doubts that such a measure was in line with European standards. “We can recall the example of Cyprus where the confiscation was, in essence, one of the conditions for getting aid from European Union.
Klishas rejects the idea that the measure adds to the tension. “We are only suggesting that instead of threatening each other with sanctions we should together with our partners calmly read the Ukrainian Constitution and understand what has happened in this sovereign country,” the Russian lawmaker said. “The main thing we are trying to achieve, whether our European and American partners want it or not, is to make others listen to our legal arguments and adequately react to them,” Klishas said.
The senator added that the Federation Council planned to officially address parliaments of Poland Germany and France (the guarantors of the February 21 agreement between the Ukrainian authorities and the opposition) with a request to give a legal assessment of the Ukrainian events. Similar requests will be made to parliaments of other European countries and the USA.
Earlier this week the White House called off trade talks and suspended all military ties with Russia and President Barak Obama said that if Russia “continued on its current trajectory” the US administration was ready for “a whole series of steps — economic, diplomatic — that will isolate Russia and will have a negative impact on Russia’s economy and its standing in the world.”
Russian officials have already condemned these threats as one-sided and selfish. “Those who try to interpret the situation as a type of aggression and threaten sanctions and boycotts, are the same who consistently have encouraged the sides to refuse dialogue and have ultimately polarised Ukrainian society,” Foreign Minister Sergey Lavrov told the UN Human Rights Council on Monday.
The Russian Foreign Ministry said in its official comment that US politicians are losing an accurateperception of real state of affairs in the 21st century. “Moscow has explained to the Americans, repeatedly and demonstrably, why their one-sided punitive measures are not matching the standards of civilized relations between nations. If this fails to take effect, we will have to retaliate, and not necessarily in a mirror way,” the ministry’s spokesman Aleksandr Lukashevich said.