Executive Summary

• Ukraine's economic free fall
• The real risk of Ukraine igniting the next world war
• Why a lasting peace is unlikely
• What you should do in preparation of escalating conflict between Russia and the West

If you have not yet read Part 1: The US' Suicidal Strategy On Ukraine, available free to all readers, please click here to read it first.

Economic Free Fall

The economy of Ukraine is in a free fall.

Here is what Roland Hinterkoerner, a thoughtful analyst at RBS Asia-Pacific, the Royal Bank of Scotland’s Hong Kong outpost, had to say about Ukraine in a recent economic report:

“The country is clinically dead…. There is nothing government or the central bank can do to stop the decline. The population is being pushed further and further into poverty. Food prices are up 25 percent and rent, electricity, gas and water by 34 percent…. This is the picture of a Ukraine that is looking an economic collapse in the eye. But its government is still attempting to channel money into the military to fend off the big bear’s aggression…. The danger for Ukraine is not Russia. It is its own demise….”

(Source)

Of course Ukraine is in economic freefall.  That's something we predicted here over a year ago because of the key industrial and productive areas of Ukraine are largely in the east where the rebels exist.  No mines and no factories and no economy.

But the real economic tragedy exists in the huge gap between the current onerous IMF loans that are rapidly "Greeking" the Ukraine economy and what Russia had offered just a month before the coup against Yanukovych which scuttled the Russia deal.

First the IMF loans which totaled some $17 billion and were to be doled out in tranches based on 'progress' as described below:

Ukraine Can’t Afford the IMF’s ‘Shock Therapy’

Sept 10, 2014

The IMF demands that Ukraine make immediate cutbacks to reduce the fiscal deficit.

To meet this requirement, Kiev has already enacted a series of laws raising excise and property taxes, reduced social income support expenditures for retirees and public employees, frozen Ukraine’s minimum wage, and cut public-sector wages.