Tuesday, May 13, 2014


The situation in Ukraine is about natural gas.   That is the deal.  Nothing else, except
that natural gas is about money.  So, natural gas and money.  Simple, right?  But,
whose money are we talking about?

Now, we know that the gas is Russian gas, but the money – who pays for the Russian
natural gas?   Up until now, the Russians have subsidized the cost of gas to Ukraine, but
that is coming to an end.  Putin wants to be paid market price for his gas, and if Ukraine
does not pay this price, Putin will not deliver the Russian gas to Ukraine.  He will simply
sell it somewhere else at full price.  If that happened, economic meltdown in Ukraine.

Ukraine is a nation of extensive, heavy industrial production.  Until 1991, this industrial
production was for the benefit of the USSR.   After 1991, Ukraine became independent
and continued to produce industrial goods and consume great amounts of natural gas.

As long as the government in Kiev was pro Russian, this all worked itself out.  Ukraine got
cheap natural gas, and Russia got its industrial production, including weapons.

Now, with Ukraine not so friendly to Russia, Putin is calling in his chips and wants to cash-out
and be paid.  Ukraine does not have the money to pay the natural gas it has used or is going
to use in the future.  So, Ukraine is throwing the mortgage to Crimea on the table and hoping
this satisfies Putin for a while.  He is not satisfied.

Putin wants the EU and the USA to come to Ukraine’s rescue by putting up the money that
is owed for the “gas bill”.  It is being reported as the EU and USA coming to the rescue of
Ukraine to help with its “deficit”.   All the money is going to Russia.  All of it.  Deficit = Russia.

So, back to the original question, “whose money are we talking about”.     Mine and yours.

This is just the continuation of the never ending world conflict over energy supply.  Only we
don’t really call it that.   We call it things like “deficit” and “land grab” and “Putin trying to put
the Soviet empire back together”.

One more time  -  it will be our money that pays for this.