From Now On, No Compromises Are Possible For Russia

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By Valentin Mândrăşescu, Editor of The Voice of Russia’s Reality Check. Former commodity trader, economist, journalist. Nomadic lifestyle. When not in Moscow, he can be found travelling across Eastern Europe.

When, on February 21st, Washington decided to default on the agreement signed between Ukrainian President Viktor Yanukovich and the so-called “democratic opposition,” including Neo-Nazis, it finally crossed the red line.

Washington has defaulted on all of its key agreements made with USSR/Russia during the last 30 years. Gorbachev was promised that Eastern Europe would not be taken into NATO. Country by country, it became part of NATO, and Yugoslavia was dismantled despite Russia’s objections. The US acted as the winner of the Cold War and guided its policies by the famous principle of “Vae victis!” Woe to the vanquished!

The “hawks” in Washington think they can push Russia around indefinitely, that Russia, in order to become an “accepted partner” in the West, would still try to negotiate, be diplomatic and peaceful.

Washington’s defaulting on an explicit agreement regarding Ukraine’s future and the prospect of NATO troops on the ground in Ukraine finally convinced Vladimir Putin and a big part of the Russian elite that there is no point in negotiating with the US. It means that from now on, no compromises are possible.

For America, the situation in Ukraine is a geopolitical game, another opportunity to hurt Russia’s interests. For Russia, it’s not a geopolitical game. It’s a matter of national identity, it’s an ethnic matter. Almost every Russian I know has relatives in Ukraine. Roughly a third of Russian senators and members of the government were born in Ukraine.

Dmitry Yarosh, the leader of the biggest neo-Nazi group in Ukraine, issued a statement in which he called on Russia’s most wanted Chechen terrorist, Doku Umarov, to commit acts of terrorism in Russia. “Many Ukrainians with arms in the hands” had supported Chechen militants in their fight against Russians, the statement said, but “it is time to support Ukraine now.”

What would have happened to a warlord somewhere who called on Al-Qaeda to commit acts of terrorism in the US? He would have been killed by a drone strike without international warrant or court decision. If the US does this, then other countries are entitled to act in a similar manner.

The fact that the neo-Nazi leaders and their soldiers haven’t been disarmed despite the EU-brokered agreement signed on February 21st proves that they and not the “official government” are actually in control of the situation. But the US doesn’t care about the fate of the Russians who don’t want to live in a neo-Nazi-led state. The US wants to dislodge Russia from the region, and nothing else matters.

There are rumors circulating in the expert community in Moscow – and I have strong reasons to believe they’re true – that the decision to tackle the Crimean issue was taken by Putin personally. He has full support from a number of top officials, especially from the army and the secret services, who have no assets and no business abroad that can be seized by the US. Also, in 2013, the Parliament passed a law barring Russian officials from owning assets, except real estate, outside Russia. So, the officials whose assets will be frozen by the US sanctions are criminals under Russian law anyway – and Putin might even welcome the move.

The hard-liners in the Kremlin have received a tremendous boost from the US. Now, everyone who advocates for a softer stance on Ukraine and everyone who advocates for an “agreement with the US” is looked upon as too stupid to understand that Washington won’t honor its end of the bargain or as paid by Washington to lead Russia into another agreement that will once again be broken. America has lost most if not all of its ranking sympathizers or allies in Russia because they are either actively shunned or because they have to be silent.

Putin’s ratings are at two-year highs. Even his fiercest critics understand that his involvement in Ukraine has tremendous popular support. He will no longer have to cater to the needs of the pro-Western community. He is now supported not only by his usual conservative electorate, but also by the communists and nationalists who like his decisive actions and his disregard for America’s objections.

From the economic point of view, everyone should get ready for tough actions from Moscow. Sergei Glazyev, the most hardline of Putin’s advisors, sketched the retaliation strategy: Drop the dollar, sell US Treasuries, encourage Russian companies to default on their dollar-denominated debts, and create an alternative currency system (reference currency) with the BRICS and hydrocarbon producers like Venezuela and Iran.

Of course, some “anonymous sources” told RIA Novosti and Reuters that Glazyev was speaking “as an academic” and not in his official capacity, but it must be pointed out that those sources didn’t dare identify themselves. On the other hand, Glaziev’s projects more often than not become the cornerstone of Putin’s external policy, including the Customs Union and the Eurasian Union.

The Western media ignore another key supporter of hardline economic measures, Putin’s ally and trusted friend, Rosneft president Igor Sechin. At last October’s World Energy Congress in Daegu, South Korea, Sechin suggested that it was “advisable to create an international stock-exchange for the participating countries, where transactions could be registered with the use of regional currencies.”

Until February 21st, Moscow was content with the slow expansion of its economic sphere of influence. Now, the hard-liners have the possibility to go all in and pursue their radical projects and strategies.

Here, in Moscow, almost everyone is certain that we’ll see a rerun of the “Georgian war” and that Crimea will be attacked by Ukrainian army at some point before March 16th. If you’re a trader, sitting on the fence for a week or putting on some hedges may be a very good idea. By Valentin Mândrăşescu, exclusive for Testosterone Pit.

The US offered Ukraine $1 billion in aid, the EU $15 billion. The IMF is working on its aid package. All to shift losses from lenders, bondholders, hedge funds… to taxpayers in other countries. But it won’t rescue the economy. Because it’s a cesspool of corruption and plundering oligarchs. Read… Aid for the Ukraine “Will Be Stolen” – Former Ukrainian Minister of Economy

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