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China, Russia and Gold in the De-Dollarizing World

An asset backed currency, used by Russia and China, may be the biggest challenge to Emperor Dollar.

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Trending and gaining traction throughout the economic world is the increasingly relevant search for safe, stable and secure alternatives to the US Dollar. Some due to geopolitical reasons and pressures, others from recognizing the significantly deepening debt associated with the US Dollar and government. Many have started questioning and doubting aspects of its sustainability and inviolability over the ballooning short and long term. Recently underscored by expected “trade negotiations” with the US’s largest debt holders (Japan & China) which are now to include exploring sovereign debt restructuring, usually an indicator of financial indigestion.

Others are looking to innovative crypto ideas in the hope that extra-governmental blockchain backed mechanisms of peer-to-peer “agreed value” might be the path to securing wealth. In short, all of these approaches are looking for the security which gold together with similar recognized hard assets like silver have provided and assured since the dawn of our varied successive civilizations.

China, Russia, Turkey, Iran and quite a few others see themselves sanctioned, shackled and hindered by the overwhelming market dominance of the American currency and the quickly changing policies linked to it by successive US administrations most especially of late. Some refer to this as the  “weaponization” of the US Dollar as this millennia’s new normal, the gatekeeper of trade permission.

The tariffs introduced by the US government as a form of behavior modification for other nations are understandably unappreciated and are increasingly resisted. It is likely that worsening currency as well as trade tiff’s are in the cards across the board.

The Chinese yuan is gaining internationally among users. Russia, Turkey, and Iran are making payments in their national currencies. Iran recently announced a switch from the dollar to the euro as its reporting currency. Russia and China already have a currency swap agreement that avoids settlements in the greenback. Even Saudi Arabia will have to make a choice probably sooner than later, to stay with the petrodollar fix, or go with its biggest customer – China and therefore the yuan.

China is Russia’s largest trading partner with 15% of Russia’s international trade for 2017. This year it has grown to 17.2%. In 2014 just 2% of payments for Russia’s exports to China were paid in rubles, and 9% of China’s exports to Russia were paid in yuan. In 2017, this has increased to 9% and 15% respectively and continues to grow.

There is persistent speculation and growing talk in the financial markets that Russia and China may be discussing expanding the role gold, silver and possibly other hard assets might have in realigning the value of both the yuan and the ruble independently of the US Dollar. So far it remains in the realm of rumors, then again that too is a start. Whether this remains rumor, or emerges as something more, it is a topic well worth examining if only from a risk management point of view.

There are a number of countries, which no doubt are paying close attention to what may develop. Some to join and some to try and spoil the party. However this plays out, such shifts will not be smooth or pleasant as the effects are global and will resonate throughout all financial systems, especially within the United States.

It is no secret that the central banks in China, Russia, Turkey, India and some other nations have been steadily increasing their physical gold holdings, as well as repatriating their bullion from the United States, for example Germany, and Turkey just recently this past April.

There are persistent and growing unconfirmed rumors here in Moscow that both Russia and China have formulated or are outlining plans to launch some form of a gold-participatory currency system to replace the greenback as the world’s dominant currency. Whether it will be a Ruble or a Yuan, or something entirely different is still unclear, but something interesting is no doubt afoot within this fog of speculation. Already mechanisms have been developed as potential alternatives to SWIFT, both the the Eurasian/Asia regions, and unsurprisingly as a recent development in the Euro Zone as well.

That being said I have no idea how such a system might actually look, it’s organizational profile, how it would be regulated, standardized and traded, or whether it would be a basket of hard assets (gold, silver, energy) securing it, or only gold. The key attractor for the financial world which has traditionally parked its funds in US Dollar government bonds, is if an alternative currency system is governmentally supported, asset backed and interest bearing, then the appeal of that added value and security should make such an alternative realistically appealing. It may be the single key factor which will allow any chances for real competitive use against the Dollar, Yen, Renmimbi or Euro, all of which are like the Dollar – fiat.

Backing currencies today exclusively with gold is highly unlikely; however, there is realistic potential for a new form of currency possibly connected with a state regulated blockchain crypto-currency concept, or the partial exchange within such a currency system for gold as its referenced anchor. These do have possibilities and can occur without unduly testing credulity or imagination.

The trend towards de-dollarization is happening, of that there is little doubt. Equally true is the fact that today this is just an irritant to the US government and the Federal Reserve. If implemented, it will in time erode capabilities the US can bring to bear economically, militarily and politically to all corners of the world through global financing of its dollar debt. That would be much more than just an irritation for the US. After all, according to BIS 80% of all international trade is contracted in US Dollars, it will take some time to shorten such a massive lead.

No major country currently backs its currency with gold, but many have in the past, including the US. The US effectively abandoned the gold standard nationally in 1933, silver in 1968, and completely severed any linkage between the US dollar and gold internationally in 1971. The US since then has remained a fiat money system, meaning the dollar’s value is not linked to any independently redeemable asset other than trust in the stewardship of the US government, and faith in the Treasury Dep’t and Federal Reserve to do the right thing.

Looking back, the inflection point for the US to begin dollar de-linkage from gold and similar assets was to help combat the Great Depression. Faced with mounting unemployment and spiraling deflation in the early 1930s, the U.S. government found it could do little to stimulate the economy. To deter people from cashing in deposits and depleting the gold supply, the US and other governments had to keep interest rates high, but that made it too expensive for people and businesses to borrow. Therefore, in 1933, FDR cut the dollar’s ties with gold nationally, allowing the government to print (“QE”) dollars into the economy, thereby lowering interest rates.

The U.S. continued to allow only foreign governments to exchange dollars for gold until 1971, when President Nixon abruptly ended the practice. It is worth noting that that before delinking from gold, the dollar had a fixed value reference of $35 to an ounce of gold, which limited and severely constrained financial and political policies. The value of gold was not permitted to be set by an open free market. Only after the dollar delinked from gold was the metal allowed to be openly traded as a commodity, at that time notably via the London Fix, and New York COMEX.

It is unlikely that a fully gold-backed currency mechanism will emerge onto the world financial markets as it was before 1933, especially in this interconnected economic and digital information age. However, a basket of hard assets as a reference point or linkage anchor to currencies does have traction, and may very well be what is now being discussed between China and Russia. This especially as the market can and will establish relative values indexed to the assets comprising such a basket, and not be limited to a single fixed price. This also suggests that some control may shift away from the central banks and instead become market sensitized and responsive. This can be a frightening concept, as it is a distinct departure from today’s Fed practices, requiring significant political, procedural and audit realignments.

Russia and China have been in working discussions to introduce gold-backed futures and similar mechanisms to circumvent the U.S dollar. It could be that over the next few decades we may witness the demise of fiat currencies such as the US Dollar, Yen, Euro and the debt excesses the printing of non-asset backed money has encouraged.

Currently, with geopolitical pressures, sanctions and trade tariffs increasing against Russia and China, these two countries have come to be seen as the standard bearers or ‘white knights’ for de-dollarizing global free trade. Whether they want this role foisted on them or not. This view is growing within a number of countries who have been limited and constrained from development by the dominant default role of the US Dollar, and by extension the US Government in its follow-on ability to dictate policies and pressure their sovereign national affairs in the interests of the USA.

The creation and introduction of a gold-inclusive indexed currency mechanism appears to be a likely event, perhaps sooner than we think. Russia has openly said that its national interests can be best served by reducing its exposure to the vulnerabilities and volatilities of global geopolitics by reducing the role of the greenback in its economic affairs.

Moscow and Beijing have been actively reducing their dependence on the dollar in mutual and regional trade. In October 2017, China launched a PVP payment system for transactions in yuan and Russian rubles. This means that payments for Russian oil deliveries to China, which have reached 60 million metric tons per year and continue to increase, are now working without the US Dollar as intermediary. This also has the added benefit to allow confidentiality of transactions. This is not possible if the US Dollar is used as the medium for trade as currently all such transaction details have to be cleared, therefore known in New York.

China’s launch of its own oil futures on the Shanghai International Energy Exchange plays a de-dollarization role and supports the gold-asset function as well. Today, shifting the China oil trade out of dollars into yuan takes between $600 billion and $800 billion worth of transactions out of the dollar each year.

One of the several factors supporting the creation of a Russia/China gold related currency system is that just the other day the global debt has reached $237 trillion.

The IMF warned this past week that the debt burden of the global economy is deeper today than it was before the financial crisis of 2008. The latest numbers for global debt is $237 trillion, up from the $140 trillion before the 2008 financial crisis. It is also worth noting that according to the Bank for International Settlements (BIS), there is also approximately $750 trillion in additional debt outstanding in derivatives, much of which is formally still “on the books” but practically can be considered swept under the financial rug, at least for now.

The US Treasury Department on May 1st said the government borrowed a record $488 billion in the January-March quarter. This exceeds the old record of $483 billion set in the first quarter of 2010, when all stops were pulled to prop up the financial system. The US Treasury continues to face the growing need to finance government operations when annual deficits are heading to new record levels, and a federal budget now normal at over a trillion.

Global debt has increased by roughly $21 trillion in 2017 alone. That is roughly the equivalent of this year’s US national debt. This has led to a forward-looking undercurrent of anxiety in the world’s markets, and a growing desire by some countries to do something to pre-empt being terminally caught up in these increasingly uncertain, predominantly dollar denominated risks.

The latest sanctions against Russian oligarchs and their companies, as well as trade tariffs against China are also having unintended consequences. Rusal is a major aluminum producer. They provide an estimated 6% of the world’s supply. Companies are now scampering every which way to secure new supply sources because the Russian supply might be cut off by US sanctions. The sanctions caused both the Russian stock market and the Russian Ruble to fall sharply and sent aluminum prices soaring. This simply underscores the need to create alternatives to the US Dollar sooner rather than later.

Unintended consequences certainly do not stop with sanctions against Russian companies. The dollarized trade and tariff war between China and the U.S. is also enjoying its moments in the sun. After the US imposed tariffs on China that hit aluminum products, robotics, aircraft parts, vaccines, dishwashing machines and many other items, the Chinese retaliated in turn with tariffs that hit soybeans, cars, and chemical products among others.

China’s response negatively affected agriculture products notably from the very same agricultural states that backed Trump. Aircraft parts and engines were a top U.S. export to China, totaling some $16.3 billion. Soybeans are a top agriculture product with $12.4 billion exported to China every year. Today we are expecting to see a further $200 billion in tariffs imposed on China, with an additional $267 billion package of tariffs “waiting in the wings” if the $200 billion doesn’t win China’s hearts and minds.

As this evolves, we should be seeing inflation in the US and elsewhere rather higher than the Fed’s “2% sweet spot”, in fact it may unpleasantly surprise us all.

Keeping in mind when loans are made in dollars, the debtor is then essentially a hostage, having to agree to the issuing central banks’ policies. The central bank determines the price of those dollars through politically guided monetary policy, and its (fiat) value thanks to currency printing. If such loans were issued in gold or asset-backed instruments, such counterparty pressures would lessen, or no longer be a feature.

China for many years has made it clear that gold purchased in China is to remain in China. Russia, Turkey and recently India are of the same conviction. This allows for each of these nations to be the secure custodian and guarantor of their gold assets, reducing the risk of politically motivated seizure as can happen with currencies and debt instruments.

Decisions have been acted on already by several countries repatriating their gold from the US. This is a telling sign that US control and influence is starting to shift, along with th essential element of trust that had allowed the US to play a custodial role over foreign reserves for so long.

Russia, Turkey, Iran and China are countries that are increasingly seen as threats by the West, in one form or another, and are rocking the currency boat. Various measures have been taken against them to make international trade and negotiations onerous at best. Whether through fear mongering, sanctions or trade tariffs, countries are feeling the force and weight of the US and its allies’ powers. As a result, they are increasingly considering re-enlisting gold and perhaps a basket of similar assets to shield themselves protect their financial reserves, and their ability to function as economically viable independent sovereign nations.

The process has begun, where it may take us over the coming years is the big question and one that will redefine international trade and geopolitics for decades to come. Today, after the US unilaterally exited the Iran nuclear agreement and is reimposing sanctions. North Korea and a host of other nations understandably might wonder if any agreement with the US is workable, and European allies and neighbors of the US are no doubt wondering if marching alongside America is truly in their best national interests.Trust is being frittered away quickly, and trust is what has mostly kept the US Dollar afloat in this guns & butter world. While today this possibility is still in the realm of market hearsay, rumors, and fake news – but in this increasingly curious age what isn’t?

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Putin’s State of the Nation in review Part I – Military policy

“It seems that our partners fail to notice the depth and pace of change around the world and where it is headed.”

Seraphim Hanisch

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Russian President Vladimir Putin gave his yearly State of the Nation speech on February 20th, 2019. Last year’s speech, given March 1, was a real topic of amazement for both Russia and the West, as the president revealed the new hypersonic weaponry that the Russian Federation has been developing, as well as other extremely sophisticated means of defense for the nation. At first the West mocked these claims, but time proved Mr. Putin correct.

This year’s speech appears to be quite different in its focus, though of course the President had to discuss the matters of the defense of his nation and its response to pressure from the Western powers, most notably the United States and Great Britain. While the main focus of his speech, and indeed, this last presidential term, is on domestic issues within Russia, he had to still discuss military matters, which is what the Western media reacted to. Here is that section of the speech. We have reprinted it in full, but the emphases and comments that break the segment of the speech are ours:

Colleagues, Russia has been and always will be a sovereign and independent state. This is a given. It will either be that, or will simply cease to exist. We must clearly understand this. Without sovereignty, Russia cannot be a state. Some countries can do this, but not Russia.

Sound familiar, America?

Building relations with Russia means working together to find solutions to the most complex matters instead of trying to impose solutions. We make no secret of our foreign policy priorities. These include strengthening trust, countering global threats, promoting cooperation in the economy and trade, education, culture, science and technology, as well as facilitating people-to-people contact. These tenets underpin our work within the UN, the Commonwealth of Independent States, as well as within the Group of 20, BRICS and the Shanghai Cooperation Organisation.

We believe in the importance of promoting closer cooperation within the Union State of Russia and Belarus, including close foreign policy and economic coordination. Together with our integration partners within the Eurasian Economic Union, we will continue creating common markets and outreach efforts. This includes implementing the decisions to coordinate the activities of the EAEU with China’s Belt and Road initiative on the way to a greater Eurasian partnership.

Russia’s equal and mutually beneficial relations with China currently serve as an important factor of stability in international affairs and in terms of Eurasian security, offering a model of productive economic cooperation. Russia attaches importance to realising the potential of the special privileged strategic partnership with India. We will continue to promote political dialogue and economic cooperation with Japan. Russia stands ready to work with Japan on finding mutually acceptable terms for signing a peace treaty. We intend to promote deeper ties with the Association of Southeast Asian Nations.

(Russia and Japan never concluded a treaty to end World War II, and negotiations continue to this day, even as commerce has redeveloped between the two countries.)

We also hope that the European Union and the major European countries will finally take actual steps to put political and economic relations with Russia back on track. People in these countries are looking forward to cooperation with Russia, which includes corporations, as well as small and medium-sized enterprises, and European businesses in general. It goes without saying that this would serve our common interests.

This is significant and underreported in the United States news media, if not ignored outright. Americans usually get a strange “half” of the news, talking about the US trying to sell LNG to European allies at a high price when Russia, a huge producer of natural gas, is right next door (we will discuss this more in a companion piece).

And now we come to the heart of the matter, at least insofar as this issue makes the news in both countries.

The unilateral withdrawal of the USA from the INF Treaty is the most urgent and most discussed issue in Russian-American relations. This is why I am compelled to talk about it in more detail. Indeed, serious changes have taken place in the world since the Treaty was signed in 1987. Many countries have developed and continue to develop these weapons, but not Russia or the USA – we have limited ourselves in this respect, of our own free will. Understandably, this state of affairs raises questions. Our American partners should have just said so honestly rather than make far-fetched accusations against Russia to justify their unilateral withdrawal from the Treaty.

It would have been better if they had done what they did in 2002 when they walked away from the ABM Treaty and did so openly and honestly. Whether that was good or bad is another matter. I think it was bad, but they did it and that is that. They should have done the same thing this time, too. What are they doing in reality? First, they violate everything, then they look for excuses and appoint a guilty party. But they are also mobilising their satellites that are cautious but still make noises in support of the USA. At first, the Americans began developing and using medium-range missiles, calling them discretionary “target missiles” for missile defence. Then they began deploying Mk-41 universal launch systems that can make offensive combat use of Tomahawk medium-range cruise missiles possible.

I am talking about this and using my time and yours because we have to respond to the accusations that are leveled at us. But having done everything I have just described, the Americans openly and blatantly ignored the provisions envisaged by articles 4 and 6 of the INF Treaty. According to Item 1, Article VI (I am quoting): “Each Party shall eliminate all intermediate-range missiles and the launchers of such missiles… so that… no such missiles, launchers… shall be possessed by either party.” Paragraph 1 of Article VI provides that (and I quote) “upon entry into force of the Treaty and thereafter, neither Party may produce or flight-test any intermediate-range missile, or produce any stages or launchers of such missiles.” End of quote.

Using medium-range target missiles and deploying launchers in Romania and Poland that are fit for launching Tomahawk cruise missiles, the US has openly violated these clauses of the Treaty. They did this some time ago. These launchers are already stationed in Romania and nothing happens. It seems that nothing is happening. This is even strange. This is not at all strange for us, but people should be able to see and understand it.

And then comes the part that the Western media seized upon in their continuing campaign to malign and demonize both the Russian Federation and its president:

How are we evaluating the situation in this context? I have already said this and I want to repeat: Russia does not intend – this is very important, I am repeating this on purpose – Russia does not intend to deploy such missiles in Europe first. If they really are built and delivered to the European continent, and the United States has plans for this, at least we have not heard otherwise, it will dramatically exacerbate the international security situation, and create a serious threat to Russia, because some of these missiles can reach Moscow in just 10–12 minutes. This is a very serious threat to us. In this case, we will be forced, I would like to emphasise this, we will be forced to respond with mirror or asymmetric actions. What does this mean?

I am saying this directly and openly now, so that no one can blame us later, so that it will be clear to everyone in advance what is being said here. Russia will be forced to create and deploy weapons that can be used not only in the areas we are directly threatened from, but also in areas that contain decision-making centres for the missile systems threatening us.

What is important in this regard? There is some new information. These weapons will fully correspond to the threats directed against Russia in their technical specifications, including flight times to these decision-making centres.

This was the source of “media-induced” outrage in the West, which is honestly, likely not that much outrage. However, the addition of context in this speech is invaluable, and while the counter from the Americans may or may not be able to stipulate chapter and verse the violations of the INF treaty from the Russian side (though there appear to be no such violations), the Americans’ actions are clearly set in context, though conveniently ignored by the propagandists of the Western media. President Putin continues, making the most important points of his speech in regard to this topic:

We know how to do this and will implement these plans immediately, as soon as the threats to us become real. I do not think we need any further, irresponsible exacerbation of the current international situation. We do not want this.

What would I like to add? Our American colleagues have already tried to gain absolute military superiority with their global missile defence project. They need to stop deluding themselves. Our response will always be efficient and effective.

The work on promising prototypes and weapon systems that I spoke about in my Address last year continues as scheduled and without disruptions. We have launched serial production of the Avangard system, which I have already mentioned today. As planned, this year, the first regiment of the Strategic Missile Troops will be equipped with Avangard. The Sarmat super-heavy intercontinental missile of unprecedented power is undergoing a series of tests. The Peresvet laser weapon and the aviation systems equipped with Kinzhal hypersonic ballistic missiles proved their unique characteristics during test and combat alert missions while the personnel learned how to operate them. Next December, all the Peresvet missiles supplied to the Armed Forces will be put on standby alert. We will continue expanding the infrastructure for the MiG-31 interceptors carrying Kinzhal missiles. The Burevestnik nuclear-powered cruise missile of unlimited range and the Poseidon nuclear-powered unmanned underwater vehicle of unlimited range are successfully undergoing tests.

In this context, I would like to make an important statement. We did not announce it before, but today we can say that as soon as this spring the first nuclear-powered submarine carrying this unmanned vehicle will be launched. The work is going as planned.

Today I also think I can officially inform you about another promising innovation. As you may remember, last time I said we had more to show but it was a little early for that. So I will reveal little by little what else we have up our sleeves. Another promising innovation, which is successfully being developed according to plan, is Tsirkon, a hypersonic missile that can reach speeds of approximately Mach 9 and strike a target more than 1,000 km away both under water and on the ground. It can be launched from water, from surface vessels and from submarines, including those that were developed and built for carrying Kalibr high-precision missiles, which means it comes at no additional cost for us.

On a related note, I want to highlight that for the defence of Russia’s national interests, two or three years ahead of the schedule set by the state arms programme, the Russian Navy will receive seven new multipurpose submarines, and construction will begin on five surface vessels designed for the open ocean. Sixteen more vessels of this class will enter service in the Russian Navy by 2027.

To conclude, on the unilateral withdrawal by the USA from the Treaty on the Elimination of Intermediate-Range and Shorter-Range Missiles, here is what I would like to say. The US policy toward Russia in recent years can hardly be called friendly. Russia’s legitimate interests are being ignored, there is constant anti-Russia campaigning, and more and more sanctions, which are illegal in terms of international law, are imposed without any reason whatsoever. Let me emphasise that we did nothing to provoke these sanctions. The international security architecture that took shape over the past decades is being completely and unilaterally dismantled, all while referring to Russia as almost the main threat to the USA.

Let me say outright that this is not true. Russia wants to have sound, equal and friendly relations with the USA. Russia is not threatening anyone, and all we do in terms of security is simply a response, which means that our actions are defensive. We are not interested in confrontation and we do not want it, especially with a global power like the United States of America. However, it seems that our partners fail to notice the depth and pace of change around the world and where it is headed. They continue with their destructive and clearly misguided policy. This hardly meets the interests of the USA itself. But this is not for us to decide.

We can see that we are dealing with proactive and talented people, but within the elite, there are also many people who have excessive faith in their exceptionalism and supremacy over the rest of the world. Of course, it is their right to think what they want. But can they count? Probably they can. So let them calculate the range and speed of our future arms systems. This is all we are asking: just do the maths first and take decisions that create additional serious threats to our country afterwards. It goes without saying that these decisions will prompt Russia to respond in order to ensure its security in a reliable and unconditional manner.

I have already said this, and I will repeat that we are ready to engage in disarmament talks, but we will not knock on a locked door anymore. We will wait until our partners are ready and become aware of the need for dialogue on this matter.

This is an appropriate and very honest stance. While it sounds forceful, it is not. It is actually the only thing one really can do. The US hawkish folks have not demonstrated the slightest interest in fixing this problem. In the US, they believe the exacerbation of tensions suits their ends.

This is a potentially tragic example of “my mind is made up; do not confuse me with the facts.” And sadly, the United States of America stands completely in the wrong on this matter.

We continue developing our Armed Forces and improving the intensity and quality of combat training, in part, using the experience we gained in the anti-terrorist operation in Syria. Much experience was gained by practically all the commanders of the Ground Forces, by covert operations forces and military police, warship crews, army, tactical, and strategic and military transport aviation.

I would like to emphasise again that we need peace for sustainable long-term development. Our efforts to enhance our defence capability are for only one purpose: to ensure the security of this country and our citizens so that nobody would even consider pressuring us, or launching an aggression against us.

While the rhetoric of “Defense” is always more palatable in our times than militarily offensive strategies, the difference between the defense rhetoric of the US and that of Russia is that the US creates threats out of thin air. Russia and China have the capability of taking over the world, but neither country is actually interested in doing such a thing. As noted by Russia’s own Vladimir Zhirinovsky, to be on top is not the best place, and the second and third great powers have shown unusual wisdom in understanding this.

 

 

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Photos of swastika on Ukrainian mall stairway creates a stir [Video]

Ukrainian nationalist press in damage-control mode to explain away the Nazi sign, but they forgot the name of the street the mall is on.

Seraphim Hanisch

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One of the aspects of news about Ukraine that does not make it past the gatekeepers of the American and Western news media is how a significant contingent of Ukrainian nationalists have espoused a sense of reverence for Nazis. The idea that this could even happen anywhere in the world in an open manner makes the claim seem too absurd to be taken seriously. Gone are the days when the Nazi swastika adorned streets and buildings in Europe. Right?

Well, maybe, wrong.

This was seen in Kyiv’s Gorodok (or Horodok, if you insist) Gallery, a shopping center in that city, located on Bandera Avenue.

The pro-nationalist news service UNIAN wasted no time going to press with their explanation of this incident, which admittedly may be accurate:

Children and teenagers who participated in the All-Ukrainian break dance festival held in the Kyiv-based Gorodok Gallery shopping mall were shocked to see a swastika image projected onto an LED staircase.

The mall administration apologized to visitors, explaining saying that their computer system had apparently been hacked.

“The administration and staff have no relation to whatever was projected onto the LED-staircase, and in no way does it support such [an] act. Now we are actively searching for those involved in the attack,” it said in a statement.

According to Gorodok Gallery’s administrative office, it was not the first time a cyber breach took place.

As reported earlier, Ukraine is believed to be a testing ground for cyberattacks, many of which are launched from Russia. Hackers have earlier targeted critical energy infrastructure, state institutions, banks, and large businesses.

This time, it appears, hackers aimed to feed the Kremlin’s narrative of “Nazis in power in Ukraine” and create a relevant hype-driving viral story for Russian media to spread it worldwide.

The Gorodok Gallery also apologized on its Facebook page and said that this was a result of hacking.

But what about the street that the mall is on? From the self-same Facebook page, this is what we see:


To translate, for those who do not read Ukrainian or Russian, the address says the following:

23 Steven Bandera Prospekt, Kyiv, Ukraine 04073

This street was formerly called “Moscow Avenue.” Big change, as we shall see.

Steven Bandera got his birthday designated as a national holiday in Ukraine last December. He is known in Ukraine’s history for one thing. According to the Jerusalem Post:

The street where the shopping mall is located is named for Stepan Bandera, a Ukrainian nationalist who briefly collaborated with Nazi Germany in its fight against Russia.

His troops are believed to have killed thousands of Jews.

Several Israeli papers picked this bit of news up, and of course, the reasons are understandable. However, for the West, it appears possible that this news event will largely go unnoticed, even by that great nation that is often called “Israel’s proxy”, the United States.

This is probably because for certain people in the US, there is a sense of desperation to mask the nature of events that are happening in Ukraine.

The usual fare of mainstream news for the West probably consists of things like “Putin’s military seizes innocent Ukrainian sailors in Kerch incident” or, “Ukraine’s Orthodox Church declared fully independent by Patriarch of Constantinople” (not that too many Americans know what a Constantinople even is, anyway), but the overriding narrative for the American people about this country is “Ukraine are the good guys, and Russia are the bad guys,” and this will not be pushed aside, even to accommodate the logical grievance of Israel to this incident.

If this article gets to Western papers at all, it will be the UNIAN line they adhere to, that evil pro-Russia hackers caused this stairway to have a swastika to provoke the idea that Ukraine somehow supports Naziism.

But UNIAN neglected to mention that the street name was recently changed to Stephan Bandera (in 2016), and no one appears to have hacked this. Nor does UNIAN talk about the Azov fighters that openly espoused much of the Nazi ideology. For nationalist Ukrainians, this is all for the greater good of getting rid of all things Russia.

A further sad fact about this is the near impossibility of getting assuredly honest and neutral information about this and other similar happenings. Both Ukrainian nationalists and Russian media agencies have dogs in the race, so to speak. They are both personally connected to these events. However, the Russian media cannot be discounted here, because they do offer a witness and perspective, probably the closest to any objective look at what is going on in Ukraine. We include a video of a “torchlight march” that took place in 2017 that featured such hypernationalist activity, which is not reported in the West.

More such reports are available, but this one seemed the best one to summarize the character of what is going on in the country.

While we do not know the motive and identities of whoever programmed the swastika, it cannot really be stated that this was just a random publicity stunt in a country that has no relationship with Nazi veneration.

The street the mall is on bears witness to that.

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Putin: If mid-range missiles deployed in Europe, Russia will station arms to strike decision centers

Putin: If US deploys mid-range missiles in Europe, Russia will be forced to respond.

RT

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If the US deploys intermediate-range missiles in Europe, Moscow will respond by stationing weapons aimed not only against missiles themselves, but also at command and control centers, from which a launch order would come.

The warning came from President Vladimir Putin, who announced Russia’s planned actions after the US withdraws from the INF Treaty – a Cold War-era agreement between Washington and Moscow which banned both sides form having ground-based cruise and ballistic missiles and developing relevant technology.

The US is set to unilaterally withdraw from the treaty in six months, which opens the possibility of once again deploying these missiles in Europe. Russia would see that as a major threat and respond with its own deployments, Putin said.

Intermediate-range missiles were banned and removed from Europe because they would leave a very short window of opportunity for the other side to decide whether to fire in retaliation after detecting a launch – mere minutes. This poses the threat of an accidental nuclear exchange triggered by a false launch warning, with the officer in charge having no time to double check.

“Russia will be forced to create and deploy weapon systems, which can be used not only against the territories from which this direct threat would be projected, but also against those territories where decision centers are located, from which an order to use those weapons against us may come.” The Russian president, who was delivering a keynote address to the Russian parliament on Wednesday, did not elaborate on whether any counter-deployment would only target US command-and-control sites in Europe or would also include targets on American soil.

He did say the Russian weapon system in terms of flight times and other specifications would “correspond” to those targeting Russia.

“We know how to do it and we will implement those plans without a delay once the relevant threats against us materialize,”he said.

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