After back-to-back weeks of historic announcements that rocked the global markets, today a 41-year market veteran sent King World News an incredibly powerful piece that warns Russian President Vladimir Putin has drawn a line in the sand, as the West's major oil companies are pushing for war.
January 26 (King World News) – Almost unreported in the United States is talk of shutting Russia out of the SWIFT banking payment system. This would be the harshest sanction for Russia's support of the separatist rebels in Ukraine. SWIFT is the means by which banks move money around the world….
Shutting Iran out of SWIFT was a devastating blow to the Iranian economy, and denying Russia access to SWIFT could deliver a deadly blow to the already reeling Russian economy, suffering from the double whammy of US-led sanctions and oil prices cut in half over the last six months.
On The Verge Of War
The chief executive of Russia's second largest bank, speaking at the World Economic Conference in Davos, Switzerland, said, "If there is no SWIFT, there is no banking . . . relationship. It means that the countries are on the verge of war, or they are definitely in a cold war. The next day, the Russian and American ambassadors would have to leave the capitals."
If this seems like hyperbole, consider that one of the reasons Japan attacked Pearl Harbor was because the U.S., which was the world's largest oil producer at the time, had cut off oil sales to Japan — a move that clearly signaled which side of World War II the U.S. supported.
Put Draws Line In The Sand
Meanwhile, the New York Times (January 24, 2015) reports that "War Is Exploding Anew in Ukraine; Rebels Vow More." This is in the face of the US ginning up support for still more sanctions against Russia, such as shutting Russia out of SWIFT. That fighting was renewed in the dead of winter and it reveals the commitment that Russian President Vladimir Putin has made to the rebels in Ukraine.
The separatists are clearly backed by Russia, most likely with tanks and heavy guns manned by Russian troops (or mercenaries) in green uniforms without insignia. Prior to the Crimea breakaway from Ukraine in early 2014, soldiers in green uniforms were seen participating in the action.
Exactly what Russia wants from its Ukrainian gambit is not a guess. Twice Russia has been invaded on its eastern front, first by Napoleon and later by Hitler. Putin wants Ukraine to be a buffer against another invasion.
U.S. And NATO Break Historic Agreement
Supporting this position is the fact that when the Soviet Union dissolved in late 1991, Soviet President Mikhail Gorbachev had a verbal agreement with the United States and NATO that there would be no encroachment. The U.S. reneged on that promise by building military bases in several former Soviet states, some of which have become members of the European Union and NATO.
Then there is Sevastopol, where the Russian navy ports its Black Sea Fleet. Sevastopol is as important to the Russian navy as the Norfolk and the San Diego naval bases are to the U.S. Navy.
A year ago, Russia engineered the uniting of the city of Sevastopol and Crimea, and immediately annexed them, in a historic referendum. Russia claims Crimea and Sevastopol as parts of the Russian Federation, while Ukraine, the United States and most of the international community consider Crimea still a part of Ukraine.
U.S. Oil Companies Pushing For War
Making the situation even worse is the fact that oil is involved. Here is the key: On May 17, 2014 the New York Times ran a lengthy piece about the offshore drilling rights that came with the annexation of Crimea. This includes an oil field that could rival the prolific oil-producing North Sea! An Exxon Mobil-led consortium, which included other major oil companies, had already explored the Black Sea under an agreement with Ukraine. This is why Ukraine is so strategically important.
Redividing the Black Sea
Russia’s annexation of Crimea also gives Russia control of a large swath of the Black Sea, including deep oil reserves.
Russia is actively supporting the separatist movement not with just equipment but most likely with troops. The U.S. and NATO assert that Crimea is not a part of the Russian Federation. The bottom line here is that big oil wants its oil fields back. This is why the Ukrainian situation is so explosive. And the Russians, important enough to have been invited to the recent World Economic Conference in Davos, are now say that shutting Russia out of SWIFT would be an act of war.
Incredibly Dangerous Situation For The World
Is it any wonder that gold has recently traded up $120? This is an incredibly dangerous situation for the world because we now have superpowers battling over the rights to a massive oil discovery as well as international banking supremacy. Let's hope this doesn't lead to World War III.
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