The Generated Crisis in Ukraine: A Hidden Hand Emerges
An Emergent Hand
Publication date: 2022-01-24
Update 2022-01-25: Added an Update section to provide evidence for my conclusions, but also temper them based on that evidence. Also included is a video reference to John Pilger being interviewed on Going Underground.
The "situation" in the Ukraine that seems to be gripping "western" media attention is entirely generated by the USA. Her European NATO allies are in a very difficult position and the USA is having much trouble "herding her cats".
To set the scene some bizarre news events have occurred which invite comment.
The Secret Russian Plot
The most humorous event has been the "release" of an unsubstantiated rumor by MI6 or some political operative division thereof to the media. The claim is that Russia is hatching a dastardly plot to install a friendly government in Ukraine headed by someone who is currently under Russian sanctions and who still has no idea about the so called "plot". He was to be supported in this to-be-installed government by a bunch of officials who currently reside in Russia and were previously members of the government actually overthrown by the real USA coup plot enacted in 2014.
This is categorically a dumb-arsed “intelligence community” media launched psy-op, an evidence free media fun-fest. Any publisher who published this deserves every look of scorn targeted at them, and a few slippers too.
USA/UK looking to Qatar as emergency gas supplier for Europe
The Financial Times, as echoed by other news agencies, reported that the USA has been asking the Qatar government if they could supply Liquid Natural Gas to Europe. Its a preparation for a mythical Russian invasion of Ukraine and poor USA/NATO being forced to take "tough economic measures” against Russia in retaliation.
As this newsletter has recently shown, there is no solution here. Europe is very unlikely to possess the pipeline capacity to switch from Natural Gas to the Liquefied variant in the months to come.
The author must admit that "one was alarmed", but calm reflection required this to be categorized as the above. Just another media stunt, for now.
USA State Department "orders family to withdraw from Ukraine embassy"
Reports have also been swirling that the USA's State Department have been ordering or encouraging non-essential diplomatic staff to leave their diplomatic mission in Ukraine because of .... Dunno? Maybe there are Ukrainian crickets that work just like the ones in Havana, in January.
Any search for this news story will provide copious articles in which one can find each outlet linking to the other but not one, none, providing any link to a statement published by the USA's State Department.
Thus, it is categorized as above, a piece of media foolery, for which the fools fell. As a summary, here is an excerpt from a Guardian article about the equivalent "withdrawal" by UK officials:
The Foreign Office said: “Some embassy staff and dependents are being withdrawn from Kyiv in response to the growing threat from Russia. The British embassy remains open and will continue to carry out essential work.”
Ok. So nothing has changed.
All of this "impending invasion" western rhetoric has actually been having an effect on Ukraine itself. President Zelensky apparently addressed the nation and asked them to stop a run on the banks and to cut it with panic buying. As the poorest nation in Europe, Ukraine is not well positioned to withstand panic in its domestic markets when it is already being charged very high rates for any loans sought.
Is the USA/NATO trying to help Ukraine or drive it to default?
Reinvigoration of the Minsk Accords
There is some diplomatic news, minor but perhaps important. TASS reports that the the political process to implement the Minsk Accords, has been revitalized and shall be meeting on January 26th 2022, in Paris.
The world's elite winter sports athletes will be competing in the Olympics in Beijing from February 4th, 2022, in just over a week and a half.
Back in 2014, when Russia held the Winter Olympics in Sochi, the USA instigated their coup in Ukraine. During a recent interview, as referenced in the previous article, Professor Sakwa informed us that the steeled control of Russian President Putin was completely broken as he "lost it" in anger at the events unfolding in Kiev. Another, though failed, coup was attempted four years later in Venezuela by the USA during the Winter Olympics held in South Korea.
Its like a 4 year birthday party for coup plotters.
Putin will be in China to provide political support for Russia’s ally. Military exercises with Belarus were planned months ahead to create a cover for the deployment of divisions there. Scott Ritter has informed us that Russia’s premier army unit, its 1st Guards Tank Army have been deployed to the field. Russia apparently has about 65 000 troops in the field in their west, possibly above residual border defence, but ammunition/supplies are pre-deployed to support another 45 000. This, of course, implies that a significant proportion of those troops are on “ready alert” type status.
Having learnt from the recent put down of the failed coup in Kazakhstan, one would be very surprised if several thousand paratroopers are not also on high alert. If anyone is stupid enough to try to disrupt Russia’s support for its Chinese ally during the upcoming Winter Olympic Games, they will not enjoy the surgical response.
Russia is quite laconic in these matters. There’s no talking or media announcements. Its its country. It just does it. 1st Guards Tank Army, to the field! Logistics, support for an additional field army here and there. 4 Paratrooper divisions, on high alert! Intelligence, counter-intelligence and communications logistics, you are on 1.5 times 24 hour rotation. All leave is cancelled for the next 2 weeks. To stations! The feeling one gets is that Russia’s military would love this opportunity to show their stuff. Not to fight, but to show rigorous dedication and preparedness. Woe betide anyone who forces their hand.
Cold Water on the Weapons Too
As if the NATO leadership were not annoyed enough by reports of European leaders not being too happy about imposing economic sanctions on Russia, the USA has some internal miscreants too. Two “senior analysts” from the RAND Corporation (a Pentagon funded “ThinkTank”) reporting in Foreign Policy, of all places, poured cold water on even bothering to aid Ukraine with weaponry.
From their article [emphasis is mine]:
Crucially, however, Ukraine has mainly not been fighting Russia’s armed forces in the Donbass. Yes, Russia has armed, trained, and led the separatist forces. But even by Kyiv’s own estimates, the vast majority of rebel forces consist of locals—not soldiers of the regular Russian military. Indeed, the Russian armed forces engaged directly in the fighting only twice—in August-September 2014 and January-February 2015—and with limited capabilities, although both episodes ended in crushing Ukrainian defeats.
Moscow has sought to retain some veil of deniability about its involvement in the conflict, which meant the Russian military never used more than a tiny fraction of its capabilities against the Ukrainians. It applied just enough force to get the job done while avoiding protracted, overt interventions. A wide variety of signature Russian capabilities—including its air force and ballistic and cruise missiles—have not been involved in the fighting at all, even as they have been repeatedly demonstrated in combat operations in Syria.
To summarize, twice about 7 years ago, the Russians actually got involved in the civil war in Ukraine. On both occasions they use the least powerful of their weapons in the most limited of fashions and twice delivered “crushing Ukrainian defeats”. One of these analysts is a senior military analyst.
How to bring these disparate pieces into an informative analysis? The "Russian Plot" and "Embassy Withdrawals" are pure military intelligence psy-ops and can be disregarded, but they do have a purpose, and that is to establish a mindset. This is obviously to continue the mantra of an "impending Russian attack" against Ukraine.
This author has repeatedly declared this warning as completely without evidence and also a very silly idea for Russia. So, it seems like a "stage setting" game. The RAND analysts, and other well informed individuals like Scott Ritter, have informed us of what will happen to the Ukraine forces if they are stupid enough to engage Russia in a battle. They will be destroyed in hours, not weeks. Of course the Ukrainians know this too.
What’s up with the "USA queries Qatar for LNG supplies" fiddle? Well, as our previous article shows, if the Der Spiegel journalist who declared that Germany has no LNG port terminals is correct, its a non-starter for Germany. The "success" of this strategy depends upon excess capacity of the Italian, Polish and Dutch LNG pipeline infrastructure to supply Germany, and that seems very unlikely. Thus, it looks like another media play. However, there is another element being exposed here, to which we shall return.
The effect on Ukraine's national economy created by all of the Mighty Wurlitzer protestations of impending Russian invasion are dastardly. All the proclamations about territorial integrity and freedom to choose your allies (or not) are pure political puff compared to putting a nation on the brink of financial failure just to achieve some geopolitical positioning.
This cynical playbook exposes that the USA's geopolitical objectives are foremost, and be damned any ally or foe who stands in its way. Secondly, the USA has been so geopolitically outplayed and so restricted in maneuver that is has been forced to play so hardball with its client state and allies.
The question becomes, ignoring the ultra-nationalist Galician league, how long does it take for the Ukrainian populace to realize just how much they are being abused by their new NATO masters even when they are not even a NATO member?
Lastly, the resuscitation of the Minsk Accords via "Normandy Format" is further evidence of the USA's failure to establish the diplomatic unity required for the delivery of their desired written response to RusFed's draft security treaty proposals. One could also look at this as France and Germany pushing against a provocative written response, and positioning for a more diplomatic solution.
Some may look upon the reports that the USA has requested that RusFed keep their written response confidential as a sign that the USA is being sneaky. This is a gross error. It indicates entirely the opposite; that the USA wants the political room to be able to engage in a diplomatic solution to the problem which it has created and from which it needs to remove itself.
This author sees a fragmentation happening, both withing the NATO alliance, and within the USA's power establishment. The European economies will suffer if a military confrontation with Russia is engineered and the requisite economic sanctions against Russia are applied. The USA's economy will also suffer, though likely less. However, the domestic consequences in Europe will shift its political landscape, placing further uncertainty at NATO’s feet.
On the one hand, from the military intelligence community, we see these silly media games about "Russian Plots" and "Withdrawing Embassy Staff". On the political side we see a desire to at least try to engage in a diplomatic solution. During Sakwa's interview with Maté on Pushback, he called the current situation a slow burning Cuban Missile Crisis. There is much merit in looking through that lens when considering the position in which Europe finds itself.
A Gaseous Slow Burn
The price of purchasing natural gas in Europe has exploded over the last 12 months.
[Image: Source. “European Union Natural Gas Import Price is at a current level of 38.03, up from 27.62 last month and up from 5.856 one year ago. This is a change of 37.66% from last month and 549.4% from one year ago.”]
Why? Why has the price risen so quickly, and why was this done? If you don't think market prices can be manipulated, wake up. All you need is the money to do it.
The short and simplistic answer is that Brussels neo-liberal bureaucrats moved Europe’s natural gas energy supply policy from long term contracts to the Spot Market. Thus, one is exposed to sudden market changes, rather than the dampened changes built into long term contracts. But, that does not quite explain a 5.5 factor increase in costs in just one year.
Russia's Gazprom was impacted by these changes in energy supply policy, and spot market prices do not necessarily include the infrastructure costs of supply which are included in long term contracts. Russia, with its intelligent and well trained bureaucracy, needed to respond to this change. While Gazprom’s reluctance to complete the Ukraine gas supply contract was forced by the Kremlin, the company did take action against the European market. It has refused to offer gas on the Spot Market to Europe for some time, as it previously had. Why?
Naturally, that shortage of supply will drive up the price, which Gazprom could then leverage to make a greater profit after losing some income. Its choice? Nah. Fuck you, Europe. The price continued to rise. Then, we learn why.
"Asian markets are paying 'any price you want' for natural gas". China has opened its cheque book for gas at any price to suck all of the natural gas supplies out of the middle east and other markets.
Can you see it now?
Why was the USA probing Qatar to supply gas for the European market? Given the lack of German terminal facilities, it looks like a media piece. Its not. They are desperate. Their European NATO allies cannot risk their political arses without the supply, and there is nowhere to go.
The Qatari's can make a good dollar selling to China or other Asian countries, or they can refocus to Europe. But, then OPEC+, in which Russia is the “+”, may not be very nice to them.
Its a checkmate of knight and bishop, baby. Its a little difficult to achieve and requires thought. Planning done, moves made, King trapped, and the Confucian Bishop moves.
The China/Russia/BRI game is in full swing and the USA/NATO alliance are about 4 moves behind the tempo.
I may just have been grasping at too many straws in my conclusion above. Some evidence needs be provided.
From an article at oilprice.com we learn a few useful pieces of information:
The USA is now the world's leading LNG exporter, followed by Qatar and Australia
China is now the world's leading LNG importer, surpassing Japan
There has been very high volatility in the European LNG markets, including "hit a record high of 180 euros per megawatt-hour in mid-December before crashing more than 60% over a 10-day span"
This is very helpful. We now know the 3 leading exporters and the 2 leading importers of LNG, and that there has been a recent change in this positioning.
From an article at spglobal.com we learn that there have been fluctuations in the direction of delivery from west to east, and now reversing from east to west.
Several LNG cargoes heading to Europe for February delivery were heard to have been diverted recently to Asia amid an uptick in end-user demand in the Pacific and limited available slots for prompt deliveries in the Atlantic, according to market sources.
A key point there is "limited availability slots for prompt deliveries in the Atlantic". By Atlantic, one presumes they mean Europe. Thus, Europe does not have extensive capacity to receive LNG tankers and offload them and store or forward their cargo.
The shift in trade flows reverses the trend seen in December, when diversions were in the opposite direction amid strong demand in Europe. It offers further evidence of the volatility that has characterized the global LNG market since last fall.
Here we see further evidence for trade direction reversals, and also confirmation of the price volatility. We also learn of the period “since last fall” of the volatility and trade flow fluctuation.
These reversals in tanker direction have caused congestion in the Panama Canal:
Amid word of diversions to Asia, Panama Canal congestion has increased. The maximum wait on Jan. 24 for unreserved LNG tankers transiting the passageway was at eight days northbound toward the Gulf of Mexico and five days southbound toward the Pacific, according to the Panama Canal Authority.
"There have been some diversions away from Europe of February cargoes," said an Atlantic-based trader.
"Some cargoes are being diverted to Asia because of prompt demand from end users," said a second Atlantic-based trader.
Limited slot availability in Europe for prompt cargoes also has been a contributing factor, said the second trader.
From all of this we may conclude that there has been a bit of chaos in the LNG market with extreme price volatility, and a congestion in both the capacity to offload in Europe and to transit through the Panama Canal.
From an article at The Switzerland Times we learn:
The average LNG price for March delivery in Northeast Asia fell to around $23.00 per million metric British thermal units (mmBtu), down $9.60 or nearly 30% from the previous week, industry sources said.
Spot liquefied natural gas (LNG) prices in Asia fell this week, with major Chinese tenders signaling that supplies are well supplied amid still-tepid Asian demand.
This indicates that the high demand and prices set in Asia have cooled off. Perhaps China and/or Japan have come close to filling their reserves or have accounted for projected demand within the variances they accept.
While the first two sources give use information about the changing nature of the global LNG market, and provide some evidence to support my thesis that China was intervening in the market to assist Russia, the last piece indicates that if this was the case, it has been a fairly short term intervention.
Perhaps my language in my article conclusion above was a little too hyperbolic. Nonetheless, I do maintain that China will be providing assistance to its ally Russia in ways which are mutually beneficial. Driving up the LNG prices and creating a little chaos in the LNG supply is one area in which this could be done.
In the end, LNG producers are captive to the market. Considerations of time to deliver and offload are important in margin calculations, as well as price. Equivalently, consumers can only effectively purchase that which they can offload and store/forward. Anyone wishing to provide long term market disruption would need massive storage and offloading capacity, and these are expensive to build and maintain.
As is so often the case, things are usually more complex than they may seem at first glance. While this author still believes in the core behind the above conclusion, I will admit to having been caught in a moment of self-referenced belief.
This newsletter now has a Twitter handle @YesXorNo which will announce future articles on publication, and welcomes all discussion.
Anonymous Officials Claim There's An Evil Russian Plot Again But The Evidence Is Secret Again, Caitlin Johnstone, her newsletter, 2022-01-23
US 'in talks' with Qatar over Europe gas supply if Russia invades Ukraine, Middle East Eye, 2022-01-22
Ukrainian president responds to invasion fears, Jonny Tickle (really?), RT, 2022-01-20
Ukraine could default, economist warns, Layla Guest (c’mon RT, can’t you do better with your reporters names, please), RT, 2022-01-23
Regime Change Fails: Is A Military Coup or Invasion of Venezuela Next?, Kevin Zeese (RIP) and Margaret Flowers, Consortium News, 2018-02-14
The West’s Weapons Won’t Make Any Difference to Ukraine, Samuel Charap and Scott Boston (both RAND senior analysts), Foreign Policy (magazine), 2022-01-21
The New Superpowers In Global LNG Markets, Alex Kimani, oilprice.com, 2022-01-19
Trade flows flip again as Atlantic-bound cargoes said to be diverted to East Asia, Harry Weber Alkis Mouratis, S&P Global
Asian prices fall amid Chinese tenders for the sale of LNG cargoes, The Switzerland Times, 2022-01-23
John Pilger on Ukraine, US tensions with Russia & China: An Enemy is Essential for US & Its Vassals!, John Pilger interviewed on Afshin Rattansi's Going Underground, RT, 2022-01-22
Up to 15:33 is discussion of UK domestic politics, including various COVID type scandals, but more germane to this article is what follows:
Big Brother & The Holding Company, Janis Joplin - Ball and Chain (Live 1968-Audio), as it says, uploaded to the Janis Joplin youtube channel 2018-11-15
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