Crimea Votes Overwhelmingly to Rejoin Russia; Truce Until March 21; Goodbye Hryvnia, Hello Ruble; McCain Wants Military Aid for Ukraine

Crimea returns to Russia It’s a done deal. Nothing can be done about it. An Exit poll shows Crimeans Choose to Join Russia in Vote

A majority of Crimeans chose to join Russia in a disputed referendum, exit polls showed, deepening the worst crisis between Russia and the West since the end of the Cold War.

A total of 93 percent voted today in favor of leaving Ukraine to become part of Russia, the Republican Institute of Social and Political Studies said, citing exit polls from the vote in the Black Sea peninsula. The Ukrainian government, the European Union and the U.S. all consider the referendum illegal. About 1.5 million Crimean voters were eligible to take part, according to the region’s prime minister.

Goodbye Hryvnia, Hello Ruble

Crimea will switch to the Russian ruble and abandon Ukraine’s hryvnia on April 1, RIA Novosti cited Crimean Deputy Prime Minister Rustam Temirgaliev as saying today.

McCain Wants Military Aid for Ukraine

The US senate’s head-warmonger, John McCain said Obama is giving “serious consideration” to sending military aid to Ukraine. Connecticut Senator Chris Murphy, in an ABC interview, said the U.S. should pass “crippling sanctions” on Russia and help Ukraine rebuild its armed forces.

Biden Promote US as World’s Policeman

U.S. Vice President Joe Biden will travel to NATO members Poland and Lithuania tomorrow for talks on Ukraine, according to a White House statement. The Pentagon said last week it would send 12 F-16 aircraft to Poland as a sign of U.S. commitment to defend allies in the region; the U.S. previously sent six fighter jets to Lithuania.

Do US citizens support wasting tax dollars sending Aircraft to Poland? Of course not. Does McCain or the Republicans care about balancing the budget? Of course not?

Did Obama take down Guantanamo Bay, get all US troops out of Afghanistan or Iraq? Of course not.

In case you missed it, please see President Obama is the Biggest Fraud Ever Perpetrated on US Citizens (Fantastic Carey Wedler Video)

Support for war, spying, and for the US to waste money being the world’s policeman is rampant in Congress, deficits be damned. But hey, don’t worry Ukraine and Russia Agree to a 5-Day Truce.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Crimea Votes Overwhelmingly to Rejoin Russia; Truce Until March 21; Goodbye Hryvnia, Hello Ruble; McCain Wants Military Aid for Ukraine

Ukraine Hryvnia Down 17% in Two Weeks as Run on Banks Intensifies; 7% of Bank Deposits Withdrawn in 3 Days

Ukraine’s currency, the Hryvnia, has fallen nearly every day for two weeks straight.

US$ vs. Hryvnia

On February 13 the Hryvnia went for 8.41 to the US dollar. Today it sells for 10.15 to the US dollar. That is a decline of 17.14% in two weeks.

Ukraine Seeks Help From IMF

Reuters reports Ukraine Asks IMF for Help on New Financial Aid Program

Ukraine has asked the International Monetary Fund to help prepare a new financial aid program, its central bank chairman said on Wednesday, adding that the new government would soon have its own anti-crisis program ready.

Stepan Kubiv [Ukraine"s new central bank head] told reporters the bank was taking measures to stop capital flight from Ukraine, which has spiraled since protesters took to the streets in November against President Viktor Yanukovich’s rejection of an EU trade deal.

7% of Bank Deposits Withdrawn in 3 Days

CNBC reports Risk of a Bank Run Heightens in Ukraine

Fears of a bank run in Ukraine are rising, as central bank reserves sink and some 7 percent of bank deposits were lost in just 3 days.

Yuriy Dyachyshyn AFP Getty Images

Ukraine’s reserves currently sit at $ 15 billion, according to the country’s newly appointed central bank governor, Stepan Kubiv. Kubiv said 7 percent of deposits, or 30 billion hryvnias ($ 3.3 billion), were lost between February 18-20, when the violence in the country reached its zenith and snipers opened fire on protesters.

Goldman Sachs has estimated the country’s foreign currency reserves have declined to $ 12 – $ 14 billion.

The slump also hit the Russian rouble, which hit a fresh five-year low versus the dollar.

The lead sentence in the above article is a bit curious. A run on Ukrainian banks has clearly started. The fear is not that a run starts, but rather that it does not soon stop.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Ukraine Hryvnia Down 17% in Two Weeks as Run on Banks Intensifies; 7% of Bank Deposits Withdrawn in 3 Days