• A deputy of the Ukrainian Rada who spoke on Russian TV from Moscow said that his contacts in the Crimea had informed him that the Ukrainian side had deployed unknown number of Grad BM-21M multiple-launch rocket systems (MRLS) just 2 way from the first Crimean checkpoints (these relatively old systems – they were built in the 1960s – have a 20 miles – 30km – range).
  • Big demonstration in Kharkov were the crowd is demanding a referendum on the future autonomy of the region, the local election of a governor, keeping the money of local taxes in the region. Two Berkut officers were declared honorary citizens of the city.
  • Bid demonstration in Donestk where the crowd is demanding a referendum on the future of the Donbass region and the freeing of the locally elected “popular governor”. Crimea is preparing for the referendum next week. All voting booth will have cameras and international observers have been invited. Those not included in electoral lists will have the right to vote just by presenting a local ID. A vote to be valid will need at least a 50% participation.

Now let’s turn to some corporate media propaganda debunking:

Blackwater and other mercenaries: to the extend that any of them have really made it to the Ukraine, their mission will be the protection of certain individuals and objects, but not attacking Russian-speakers in the Ukraine, much less so the Russian military in Crimea.  Why?  Because there are plenty of very competent instructors in the Ukraine insurgents for such missions, and do so at a fraction of the costs of hiring Blackwater & Co.  Then, the political scandal of just one US mercenary caught fighting the Russians would be huge, not to mention the headache of getting him back.  But the main reason is that there is plenty of expertise available locally, so the only real advantage of using US mercenaries is that they are not Ukrainians, but that is only an advantage in a very limited set of consequences.

US/EU sanctions against Russia: this morning I watch an interesting debate on Russian TV in which the various economists and politicians invited to discuss the possible effects on Russia of EU/US sanctions against Russia were all laughing about it and listing the *advantages* which Russia would gain from any western sanctions.  These were their arguments:

1) While speculative capital could leave Russia, most US and EU companies are too heavily invested in Russia to go anywhere.
2) Western companies would probably be more hurt by sanctions than Russian ones.
3) The Kremlin could order additional retaliatory sanctions or even seize assets.
4) Paradoxically, sanctions might soften some of the most negative consequences of the Russian entry into the WTO.
5) As has been the case with Iran and South Africa, sanction might serve as a a stimulus to the growth of segments of the economy which have been neglected until now.
6) Any reduction of Russian gas/oil purchases by the EU and their replacement by US shale gas/oil obtained by fracking would inevitably trigger a rise in the cost of gas/oil which would only benefit Russia.  Besides, Russia needs to use some of this gas to provide it to underdeveloped regions of Russia.
7) The seizure of bank accounts held by Russian politicians in the West would greatly contribute to the Kremlin’s campaign to fight corruption and have the Russian money sit aboard be repatriated back to Russia.
8) A ban on visas is a joke and the cancellation of talks with the EU about an visa-free regime between the EU and Russia has been stalled for so many years that it would make no difference.
9) Economic sanctions would also help to accomplish another long term strategic goal of the Kremlin: to dis-entangle Russia from the Western economies and turn its “economic face” to Asia.
10) Most Russian money is in off-shores anyway.  So either this money is safe, and then the sanctions will not affect it, or it will be threatened by the sanctions, in which case this is help the Kremlin’s campaign of “de-offshorization”.

So, amazingly, all the economists and politicians were actually looking forward to the West’s sanctions even though most though that it was most unlikely that the West would impose any real sanctions as the western economies are all in deep debt and basically bankrupted by printing fiat money while Russia is awash with cash.

The position of China: for all the media speculation, China will always support Russia against the Ukraine for because Russia can offer China which it most needs: a) energy b) a stable border c) a reliable partner against the US.  Russia also offers a huge market, fantastic weapons for relatively cheap prices, a collaboration against US-controlled insurgencies (Islamists, Uighurs, etc.).  Finally, the Chinese now that it’s Maidan today, Tiananmen tomorrow (again!).  So forget the speculation of the western media – that is wishful thinking – China will quietly by reliable support Russia.

I will be gone all of Sunday, but I will be back on Monday.

Take care and have a wonderful week-end everybody, many thanks and kind regards,

The Saker