Is that not the height of stupidity and self-delusion?

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Listening to Obama's speech about Cuba I was stunned by the following statements:

After all, these 50 years have shown that isolation has not worked.  It’s time for a new approach.  (...) I do not believe we can keep doing the same thing for over five decades and expect a different result.  Moreover, it does not serve America’s interests, or the Cuban people, to try to push Cuba toward collapse.  Even if that worked -– and it hasn’t for 50 years –- we know from hard-earned experience that countries are more likely to enjoy lasting transformation if their people are not subjected to chaos.

Crouching sanctions, hidden revenues

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by Lev Igorevich 

Dollars for borsch

There is a lot of speculation about the economic health of Russia in the light of tougher sanctions, falling oil prices and tumbling ruble. Concerns are raised whether Russia can afford it’s existence. However, those concerns are paper thin and are presented in more of a mocking spirit, because in most prediction acrobatics, actual revenues of Russian state are not considered at all. Many sources, in their predictions for Russian economy, are repeating the same mistake over and over again. Roughly speaking - assesments are made under the assumption that Russians pay dollars for their borsch. In reality, Russia sells borsch for dollars. This is important point to consider, because Russia pays it’s public sector expenditures (education, healthcare, pensions, police, army etc) in rubles!

Putin on the defensive forced to invest a lot of his personal political capital

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Can this nightmare be averted?

Let's begin by what I personally consider bad news: either Putin really believes in liberal market economics or he has to say he does.  He began his Q&A and ended it with a categorical expression of full support for the policies of the Central Bank and its Chairwoman, Nabiulina, and a no less categorical expression of support for the Government and its Prime Minister, Medvedev.  Worse, Putin declared that he believes that market forces will by themselves correct the current disequilibria.  At most, he agreed that certain decisions should have been taken earlier or more forcefully, but that's it.  

Some will love it.  Lew Rockwell went as far as to say that he would hand Elvira Nabiulina the award of "Central Banker of the Year".  Not everybody agrees.  For example, Victor Gerashchenko, a former Chairman of the Central Bank, declared that if he had been in the position of Nabiulina today he would have "asked for a gun to shoot himself".

I have to admit that I personally am dismayed by Putin's apparent beliefs in market economics.  I say 'apparent' because there might be things going on which I am not aware of.  For example, while Putin speaks of "market forces" China seems to get heavily involved in the Russian economic crisis.  For those interested in these developments, please check the following sources:

Free Fall of the Ruble – A brilliant ploy of Russian economic Wizards? Who’s chess game?

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by Peter Koenig 

The world is still hell-bent for hydrocarbon-based energy. Russia is the world’s largest producer of energy. Russia has recently announced that in the future she will no longer trade energy in US dollars, but in rubles and currencies of the trading partners. In fact, this rule will apply to all trading. Russia and China are detaching their economies from that of the West. To confirm this decision, in July 2014 Russia’s Gazprom concluded a 400 billion gas deal with China, and in November this year they signed an additional slightly smaller contract – all to be nominated in rubles and yuan. 

18.12.2014 Ukrainian crisis news. Latest news of Ukraine, Russia, Europe, Germany, USA

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Ruble Exchange Rate Fluctuations and the Economic War

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by Aleksei Kettunen
Translation to English: Petri Krohn

Russian ruble exchange rate changes have all the ingredients of success detective story. On Monday, 15.12. 2014 ruble weakened to a record low since 1998: the dollar cost 64 rubles and 79 rubles to the euro. In recent years, the price of an euro has been hanging around 50 rubles, or 5 000 rubles withdrawn from an ATM for a night of adventures in St. Petersburg would cost around 100 euros.

Taliban raid Pakistan primary school, kill 80 children

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Islamic terror group, the Taliban, around 10 this morning launched a deadly attack on a military-run primary school in Northwestern city of Peshawar in Pakistan, killing 100 people, 80 of them children, according to the BBC. They are also reportedly holding over 100 children hostage. Over 500 students have so far been evacuated.

According to reports, the militants stormed the school's auditorium this morning where the students were learning first aid training from the military and started shooting.

The Russian Central Bank's "counterattack" lasted 30 mins!

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The result of the Russian Central Bank's hike in interest rates turned out to be worse then my worst nightmares: it reversed the downward spiral of the Ruble for only about half an hour, then the Russian currency resumed its collapse.  Rumor has it that the Central Bank might begin buying Rubles next, which I personally don't see as useful at this point.

I have asked for expert opinions and I hope to get them soon.  In the meantime, here is my own take on this which, caveat emptor, is backed by ZERO personal expertise in these matters.  Still, for whatever it's worth, my own speculations:

A coup against Putin or a coup BY Putin?

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A very interesting question was recently asked by a reader of the French Saker Blog, "FD":

Should we expect a coup AGAINST Putin or a coup BY Putin? Given the power of the pro-USA forces at the top political, intellectual, financial and media circles, will Putin not have to make his own "18 Brumaire"?

This is a very interesting idea because, in a way, it might appear to be, if not a good solution, t

14-15.12.2014 Ukrainian crisis news. Latest news of Ukraine, Russia, Germany, Australia

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Hypocrisy's Prelude: House Passes New Cold War Resolution

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The U.S. House of Representatives is pretty mad at Russia these days, and this week they passed a resolution saying so. In 16 pages of pretty forceful language they explain why: Russia seeks to “establish domination,” “erase independence,” and commit “armed aggression” against “U.S. allies.”

The bill calls on President Barack Obama to “provide the government of Ukraine with lethal and non-lethal defense articles, services, and training required to effectively defend its territory and sovereignty.”

12.12.2014 Ukrainian crisis news. Latest news of Ukraine, Russia, OSCE, Latvia

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QnA: The EU and the Ukraine stand to lose the most from the current US policies against Russia.

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QUESTION:

Ukraine is becoming an American/NATO platform with no viable economy, a thoroughly corrupt junta-criminal government.  It has lost most characteristics of a state. We know its economy is no longer functioning. It is on economic life-support.

Q: What in history does this colonization most remind you and what does it present as a permanent platform for the projection of US hegemony right next to Russia?

In the context of US cruise missiles into Poland and 100 US tanks into Latvia, also right on the Russian border, how do you interpret these developments?

India strengthens its strategic partnership with Russia

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President Putin visited India on December 11th for the 15th annual Indo-Russian Bilateral Summit. Some interesting agreements were signed, and there are very interesting agreements in the works. According to The Hindu, 

The highlight of the meeting — part of an annual summit between the two countries — was the unveiling of a vision statement on atomic energy cooperation, where Russian nuclear agency ROSATOM and the Department of Atomic Energy and NPCIL have agreed to build at least 12 new reactors supplied by Russia over the next 20 years

A seminal series of lectures on the US Empire

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Dear friends,

It is really a huge joy for me to share with you something which I recently discovered and which I have come to consider the single most interesting and far-reaching series of lectures I have ever heard. Dr John Marciano's "Empire as a Way of Life" (thanks to C. for introducing me to Marciano's work!)

08-09.12.2014 Ukrainian crisis news. Latest news of Ukraine, Russia, USA

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07-08.12.2014 Ukrainian crisis news. Latest news of Ukraine, Russia, ISIS

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The Importance Of The Cancellation Of South Stream by Alexander Mercouris

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The reaction to the cancellation of the Sound Stream project has been a wonder to behold and needs to be explained very carefully.

In order to understand what has happened it is first necessary to go back to the way Russian-European relations were developing in the 1990s.

Briefly, at that period, the assumption was that Russia would become the great supplier of energy and raw materials to Europe. This was the period of Europe's great “rush for gas” as the Europeans looked forward to unlimited and unending Russian supplies. It was the increase in the role of Russian gas in the European energy mix which made it possible for Europe to run down its coal industry and cut its carbon emissions and bully and lecture everyone else to do the same.

Most interesting interview of Dmitry Orlov

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Interesting QnA Session: Mikhail Khazin Q&A with the Saker Community

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Dear friends,

It is a huge pleasure, and honor, for me to present you today with the Q&A between Mikhail Khazin and the Saker Community.  For those who might have missed it, here it is (including a biography of Mr Khazin):

http://vineyardsaker.blogspot.com/2014/10/exclusive-mikhail-khazin-q-with-saker.html

This was truly a massive effort, not only on the part of Mr. Khazin to whom I am immensely grateful for taking the time to reply in detail to so many questions, but also on the part of a lot of volunteers from our community.  In the words of the Russian Saker Team Leader, Marina,

I just wanted to say couple words about the project and our team.