The Mad-Max State of Ukraine and The Geopolitical Turmoil Ahead

What follows is a point-by-point review of key events to anticipate during the critical month of April:

  • An energy crisis in Ukraine: Russia has time on its side in Ukraine crisis. During a press conference Tuesday, Ukrainian Minister of Energy Yuriy Prodan said “oil reserves will last for 28 to 29 days” in Ukraine. Fuel prices are being raised 50% as well. The whole Ukrainian citizenry and military will be soon completely immobilized and turned into a “Mad Max” state. It shouldn’t be long before Russian-dominated eastern Ukraine is in full uprising.

A grave U.S. error: It now seems unlikely that the U.S. will complete or even begin legislative action on the IMF reform by the April 10 deadline set by BRICS. The impetus here is that the U.S. has had too much military-backed financial power for far too long. Developing nations are going to implement change one way or another. The odds are overwhelming for a showdown at the G-20. Finance ministers and central bank governors will be meeting in Washington, D.C. on April 10.

  • A prelude to a kiss off: Either just prior to or during the G-20 meeting, China will likely reveal — either publicly or privately — its central bank’s trump card: its massive hoard of gold. You do not want to be sitting on the sidelines without gold should this happen. Even Russia, despite its financial troubles, picked up 233,000 ounces in February. In Turkey, where the lira has been under huge pressure, it was revealed that at least some intervention has involved gold — not U.S. dollars. Turkey accumulated 299,000 ounces in February. This is a strong clue that gold — not the dollar — is a beneficiary of currency turmoil.

It should be noted that Russia alone has some $400 billion in foreign exchange reserves — mostly in U.S. dollars. If it were to diversify into gold just 5% of its reserves, estimated to be worth some $20 billion, it would be equal to nearly 500 tonnes of gold or nearly 25% of global annual production.

  • Petrodollar pressure: This G-20 threshold could also mark the announcement of a whole slew of petro-yuan deals, including one with the Saudis. Rumors abound that Russia will drop the petrodollar, perhaps in response to the lack of IMF reform and further sanctions that the West may impose as Ukraine goes into “Mad Max” mode.

  • A vote of disapproval: Unreported by the mainstream western media is a growing diplomatic revolt against the U.S. demonstrated by the lopsided March 7 vote on Venezuela at the Organization of American States (OAS). Twenty-nine of 32 countries rejected Washington’s attempt to get the OAS to intervene in Venezuela. To add insult to injury, the OAS passed a resolution expressing their solidarity with the government of Venezuelan President Nicolás Maduro.
  • An EU monetization blitz: Meanwhile, European central bank officials sent strong signals Tuesday that they are willing to put in place negative interest rates — meaning rates so low that commercial banks would essentially pay the ECB to park extra cash overnight. Worse yet, and likely in response to the George Soros offensive, Germany has opened the door to an EU monetization blitz. This type of behavior is just one more reason for developing countries to quickly and decisively move toward a new global monetary system.
  • A blood moon event: The Middle-East will be watching the sky on April 15,  with the arrival of the blood moon. Also called the moon of the sword,  this is an apocalyptic, every half-millennium, hot-button event that is highly significant to three major religions: Islam, Judaism and Christianity. It would be really surprising if blood moon came and went without geopolitical incident. It is associated with the Temple of the Mound in Jerusalem, which is now the location of an important Muslim mosque. Muslims consider any attempt to destroy structures there as grounds for war, and there have been attempts in the past. As a sheikh explained in an interview with the Christian Science Monitor : “‘If the Jews and the Israelis destroy the Noble Sanctuary, then they would have actually destroyed part of the holy Quran and destroyed part of the Muslim belief,’ says Sheikh al-Khatib. ‘If that were to happen, then Muslims all over the world would conduct jihad.’”