Financial Warfare Against Russia Escalates Drive for General War

December 17, 2014

Open statements of economic warfare against Russia by top British and American officials have confirmed once again the recent charges by Russian Foreign Minister Sergey Lavrov that the sanctions against Russia and other measures of financial and economic warfare are part of a regime-change agenda coming from the West. Some Russian oligarchs are clearly playing into the British scenario by engaging in hyper-speculation against the ruble and flight capital.

Lavrov had an interview yesterday with France 24 TV and was direct and explicit about how his government is viewing the sanctions:

Q: So you're not afraid that we could see an economic meltdown in Russia?

Sergey Lavrov: Never. Economic meltdown could happen to a small country. It can happen even to a big country like Ukraine, and it's basically almost there. Russia is doing whatever we can to help resolve the crisis in Ukraine--not to please the West, not to ask for sanctions relief, but because we are seriously concerned. Contrary to what the Europeans feel, we are seriously concerned about the future of Ukraine and Ukrainian economy. Actually, speaking of sanctions and, you know, that this is a sign of irritation, not an instrument of serious policies.

The latest portion of sanctions which was voted in the European Union last September was introduced the next day after the Minsk protocol was signed. This is a very interesting logic, you know, to stimulate the political process. So the next morning after the huge achievement was reached, which was praised by everyone, the gentleman, what was his name, Van Rompuy, declared that there was a new portion of sanctions being introduced in Russia. If this is the European choice, if this is what Europe has as a reaction to something positive, then I once again can only say that we hugely overestimated European independence in foreign policy.

Q: Are sanctions, as some people are thinking, a way of trying to create a regime change in Russia?

Sergey Lavrov: I have very serious reasons to believe that this is the case.

Q: Really?

Sergey Lavrov: Yes. Some politicians don't even hide it.

Lavrov could have been referring to recent statements by President Obama, who was quoted today by the Daily Telegraph's Ambrose Evans Pritchard in an article gloating over the Russian ruble crisis, which, he claims, will result in $130 billion in flight capital out of Russia this year. Pritchard noted, before quoting Obama, that
"Credit default swaps (CDS) measuring bond risk in Russia soared 67 points to 556 on Monday, pricing in a 28pc chance of a sovereign default within five years," further noting that Ukraine is facing an imminent debt restructuring that will further harm Russian banks.

After noting that US Congressional Republicans are pushing for new and harsher sanctions, Pritchard quoted Obama:

"The notion that we can simply ratchet up sanctions further and further, and then, ultimately Putin changes his mind I think is a miscalculation. What will ultimately lead to Russia making a strategic decision is if they recognize that Europe is standing with us and will be in it for the long haul and we are patient. And if they see there aren't any cracks in the coalition, then over time, you could see them saying that the costs to their economy outweigh whatever strategic benefits that they get."

"Putin does not have good cards, and he has not played them as well as the Western press seems to give him credit for. Putin will succeed if he creates a rift in the Trans-Atlantic relationship, if we see Europe divided from the United States. That would be a strategic victory for him and I intend on preventing that."

In addition to Obama's open threats, the British Chancellor of the Exchequer, George Osborne, was in New York City this week, addressing the Economic Club of New York along similar lines. Osborne told the audience that the collapse in world oil prices is good for American and British consumers--and bad for Putin.

"This puts a lot more pressure on Vladimir Putin. People had been asking whether sanctions are working, [and] can Putin ride this out with strong oil prices. I don't think that looks so clear now. The Russian budget is heavily dependent on high oil prices. He might be exposed by this."

Washington sources confirm that the Saudis are not relenting in their "war" to drive down oil prices to wreck havoc in many targeted countries--including Russia. On Tuesday, crude oil was being sold on the European spot market for $48 a barrel. The Saudis continue to over-produce, creating an estimated 1.5- to 2- million-barrel-a-day glut, relative to global requirements. The source emphasized that the Saudis are prepared to keep prices low for a prolonged period of time, until many rivals in the oil and natural gas market are bankrupted.

The source elaborated:

"They can sustain the losses longer than any of their rivals. So far, the Obama Administration has made no effort to pressure the Saudis to end the warfare...If the Saudis cut production by as little as 100,000 barrels a day, it would immediately drive oil prices back up to $65 a barrel or higher, just on the perception that they have reversed course."