US/NATO War on Russia

[Paul Rigby]

[video=youtube_share;9tXYY23A_ZI]http://youtu.be/9tXYY23A_ZI[/video]

[Paul Rigby]

Foreigners Sell A Record Amount, Over $100 Billion, Of Treasurys Held By The Fed In Past Week

Submitted by Tyler Durden on 03/14/2014 10:51 -0400

http://www.zerohedge.com/news/2014-03-14...ys-held-fe

A month ago we reported that according to much delayed TIC data, China had just dumped the second-largest amount of US Treasurys in history. The problem, of course, with this data is that it is stale and very backward looking. For a much better, and up to date, indicator of what foreigners are doing with US Treasurys in near real time, the bond watchers keep track of a less known data series, called "Treasury Securities Held in Custody for Foreign Official and International Accounts" which as the name implies shows what foreigners are doing with their Treasury securities held in custody by the Fed on a weekly basis. So here it goes: in the just reported latest data, for the week ended March 12, Treasurys held in custody by the Fed dropped to $2.855 trillion: a drop of $104.5 billion. This was the biggest drop of Treasurys held by the Fed on record, i.e., foreigners were really busy selling.

This brings the total Treasury holdings in custody at the Fed to levels not seen since December 2012, a period during which the Fed alone has monetized well over $1 trillion in US paper.

So is this the proverbial beginning of foreign dumping of US paper? Could Russia simply have designated a different custodian of its holdings? No, because as of most recently it owned $139 billion in US paper, or well above the number "sold" and a custodial reallocation would mean all holdings are moved, not just a portion. For another view, here is what the bond experts at Stone McCarthy had to say:

We don't have a ready explanation for the plunge in custody account holdings. One thing that is striking about the drop is that the last several days was not a period of heavy market buzz about "central bank selling" of Treasuries, at least to the best of our knowledge. China and Japan are by far the largest holders of Treasuries, with holdings of $1.269 trillion and $1.183 trillion in holdings at the end of December, respectively. China's holdings are more skewed to central bank holdings. Selling of Treasuries would appear to be at odds with China's recent effort to depreciate its currency, although on March 5 and 6 there was a brief correction in that trend.
As for the timing:

... the Wednesday-to-Wednesday decline was much larger than the weekly average decline in Treasury holdings of $46.6 billion. That implies that the plunge in Treasuries occurred later in week rather than earlier.

Some further thoughts from SocGen:

Weekly data from the Fed for US Treasury securities held in custody on behalf of foreign institutions and central banks fell sharply over the past week and may offer a plausible explanation as to why the USD has been offered pretty much all week against its major counterparts. EUR/USD in particular has stayed strongly bid since last week's council meeting (to the bemusement of the ECB) and touched a high of 1.3967 yesterday before easing back after the exchange rate comments from president Draghi. The reduced appetite for USTs and strong demand for EUR debt and equity securities underlines the difficulties the ECB is encountering to stop the strong EUR from reducing inflation expectations in the euro area.

Foreign holdings of US government securities held at the Fed dropped by a whopping $104.5bn in the week to Wednesday 12 March according to the data published overnight (see chart below). This marks the biggest single weekly fall on record and compares with just a $13.5bn drop the previous week and a 4-week average fall of $1.5bn. The previous largest fall came in mid-2013 (26 June, a week after the FOMC meeting) when holdings fell by $32.4bn. The selling over the last week coincides with the latest US employment statistics, a run of weak data from China and the escalation of the situation in Crimea and Ukraine.

Russia has threatened to respond with sanctions of its own should economic measures be imposed by the EU and the US after the referendum in Crimea this weekend. Russia currently holds $138.6bn of USTs (based on December data) and the country has been a net seller for a combined $11.3bn of USTs over the last two months for when data is available. China sold $47.8bn alone in December. The latest Treasury International Capital (TIC) data for January are only due next week so we won't find out officially until May how much Russia's US government debt holdings dropped in March.

So either China selling TSYs and buying EURs to make European import power stronger, if not so much its exports (much to Draghi's ongoing horror). Or Russia, which may be dumping USTs to support the ruble... Or dumping just because.

[Paul Rigby]

During the Cold War, US, West German,and British intelligence utilized various OUN wings in ideological warfareand covert actions against the Soviet Union (Breitman and Goda, 2010: 7398; Breitman, Goda, Naftali and Wolfe, 2005). Funded by the CIA, whichsponsored Lebed's immigration to the United States and protected him from prosecution for war crimes, OUN(z) activists formed the core of the ProlohResearch and Publishing Association, a pro-nationalist semi-academic publisher.

http://www.academia.edu/2481420/_The_Ret...13_228-255

[Paul Rigby]

http://www.volhyniamassacre.eu/__data/as...mation.pdf

[Paul Rigby]

http://www.foia.cia.gov/sites/default/fi...)_0039.pdf

[Paul Rigby]

Who Was Stepan Bandera?

By Norman J.W. Goda
History News Network, 02-08-10

http://www.hnn.us/article/122778

Norman J.W. Goda is Braman Professor of Holocaust Studies at the University of Florida. His most recent book is Tales from Spandau: Nazi Criminals and the Cold War (2007), and is co-author of US Intelligence and the Nazis (2005).

On January 22, 2010 Ukrainian President Viktor Yushchenko honored Stepan Bandera by posthumously bestowing on him the state honor, "Hero of Ukraine." The Soviet KGB assassinated Bandera, a Ukrainian nationalist-in-exile, in 1959. Many Ukrainians, including Ukrainian émigré groups in Canada, pressed Yushchenko to grant the honor, which, according to one statement, "would restore justice and truth about the Bandera and the…struggle for liberation that he headed." To this day, many Ukrainians view Bandera as a martyred freedom fighter.

As an uncompromising leader of the militant, terrorist branch of the Organization of Ukrainian Nationalists (OUN), Bandera became a Nazi collaborator who lived with his deputies under German protection after World War II began. In preparation for the attack on the USSR, the Nazis recruited Bandera's followers to act as Ukrainian-speaking policemen and to serve in two Ukrainian volunteer army battalions. By working with the Nazis, Bandera hoped to free Ukraine from Soviet rule and establish his own government there. An independent Ukraine, Bandera promised, would remain friendly to Germany.

Historian Karel Berkhoff, among others, has shown that Bandera, his deputies, and the Nazis shared a key obsession, namely the notion that the Jews in Ukraine were behind Communism and Stalinist imperialism and must be destroyed. "The Jews of the Soviet Union," read a Banderist statement, "are the most loyal supporters of the Bolshevik Regime and the vanguard of Muscovite imperialism in the Ukraine." When the Germans invaded the USSR in June 1941 and captured the East Galician capital of Lvov, Bandera's lieutenants issued a declaration of independence in his name. They further promised to work closely with Hitler, then helped to launch a pogrom that killed four thousand Lvov Jews in a few days, using weapons ranging from guns to metal poles. "We will lay your heads at Hitler's feet," a Banderist pamphlet proclaimed to Ukrainian Jews.

The Germans intended to keep Ukraine for themselves. They arrested Bandera for his intransigence on the issue of independence, but released him in 1944 when it appeared that his popularity with Ukrainians might help stem the Soviet advance. But whatever their disappointment with the Germans, the Banderists never disagreed with their Jewish policy in Ukraine, which eventually killed over 1 million Ukrainian Jews.

This is a truth that many in Ukraine, particularly in its western parts, deny. In his book Erased (2007), Omer Bartov discusses the large bronze statue of Bandera that stands in a park in the east Galician town of Drohobych, most of whose 15,000 Jews were murdered. The park stands on the site of the town's former Jewish ghetto, but there is not so much as a plaque in the park to memorialize the Jewish dead. This and other examples like it make a condemnation of Yushchenko's step necessary.

But the rest of the story, much of which is revealed in CIA records released in 2007, reveals irony in Yushchenko's award. After the war Bandera lived in Munich. British intelligence used him to help run agents into Ukraine to gather intelligence and to help the Ukrainian underground against the Soviets. The CIA used some of Bandera's former cronies for similar reasons, but never used Bandera himself, owing to Bandera's infatuation with his own legend. "Bandera," said one CIA report from 1948, "is by nature a political intransigent of great personal ambition [who] has…opposed all political organizations in the emigration which favor a representative form of government in the Ukraine, as opposed to a mono-party, OUN/Bandera regime."

Ukrainian sources confirmed that "fighting people in the homeland … [were] not prepared to accept [Bandera] as a dictator," and that Bandera's program "was unacceptable to the resistance movement inside [Ukraine]." In 1952 Bandera temporarily resigned as head of the OUN, pressured "by the growing opposition to his leadership among … top-ranking nationalist leaders who opposed him on the grounds of his totalitarian tactics…." Bandera's subsequent petulance and his insistence on directing all facets of the Ukrainian underground at home and abroad led the British to drop him in 1953. With no high level contacts to listen to him, Bandera was now on the outside looking in.

Owing to his self-promotion in print and on West German radio, Bandera remained popular with thousands of Ukrainian émigrés in West Germany. His superficial effectiveness prompted West German intelligence (the BND) to establish contact in 1956. By 1959 the BND was helping Bandera to run a new generation of Ukrainian agents from West Germany into the USSR. General Reinhard Gehlen, the head of the BND, had lead German Army intelligence in the USSR during the war. He and his subordinates were surely familiar with Bandera's wartime record. They were less familiar with the fact that the BND was by now thoroughly penetrated with Soviet agents. On October 14, 1959, Bandera had lunch with senior BND officials to discuss the expansion of operations in Ukraine. The next day the KGB assassinated Bandera in his apartment building.

Because Bandera effectively promoted his own legend, and because the Soviets were behind his death, émigrés who did not know any better labeled him as the martyred leader of Ukrainians abroad. Fifteen hundred attended his funeral in Munich. US officials, on the other hand, noted that Bandera's "strong arm tactics" and "competition with other émigré groups" meant that "many émigré figures clearly do not personally lament his passing." His death meant nothing for CIA operations against Soviet rule in Ukraine, which depended on the very same émigré leaders who, though followers of Bandera during the war, had dumped their former chief as a self-promoting caricature. They continued their work under CIA tutelage until the USSR collapsed. Such is another story.

It is a sad comment on Ukrainian memory that the man declared a Hero of Ukraine in January headed a movement that was deeply involved in the Holocaust. It is more gratifying to know that by the time of Stepan Bandera's death, most Ukrainian leaders had long rejected him as a dangerous charlatan who harmed his own cause. By the time of his death, Bandera was reduced to dancing with the Cold War's most compromised intelligence agency, where the Soviets could watch his every move. Those who label him a hero today, in other words, are as foolish as they are offensive.

[Paul Rigby]

http://iwpchi.files.wordpress.com/2014/0...y_ussr.pdf

[Paul Rigby]

Foreigners Sell A Record Amount, Over $100 Billion, Of Treasurys Held By The Fed In Past Week

Submitted by Tyler Durden on 03/14/2014 10:51 -0400

http://www.zerohedge.com/news/2014-03-14...ys-held-fe

A month ago we reported that according to much delayed TIC data, China had just dumped the second-largest amount of US Treasurys in history. The problem, of course, with this data is that it is stale and very backward looking. For a much better, and up to date, indicator of what foreigners are doing with US Treasurys in near real time, the bond watchers keep track of a less known data series, called "Treasury Securities Held in Custody for Foreign Official and International Accounts" which as the name implies shows what foreigners are doing with their Treasury securities held in custody by the Fed on a weekly basis. So here it goes: in the just reported latest data, for the week ended March 12, Treasurys held in custody by the Fed dropped to $2.855 trillion: a drop of $104.5 billion. This was the biggest drop of Treasurys held by the Fed on record, i.e., foreigners were really busy selling.

Was that Russia transferring dollar holdings offshore?

By: Patti Domm | CNBC Executive News Editor

Published: Friday, 14 Mar 2014 | 3:05 PM ET

http://www.cnbc.com/id/101495837

The Fed's custody holdings report is usually a sleeper, but this week there was a whopping withdrawal by some central bank. And while there's no evidence, speculation is that it was Russia.

Foreign central banks' holdings of U.S. marketable securities fell in the week that ended Wednesday by a record $106.1 billion, and that was mostly Treasurys. The holdings of U.S. securities held by the Fed for other central banks fell to $3.21 billion, the lowest level since December 2012.

While traders say they suspect it was Russia, they don't know for sure, and it has not shown up on Russia's balance sheet.

However, Marc Chandler, chief Treasury strategist at Brown Brothers Harriman, said everything points to Russia, starting with the timing of Sunday's Crimean referendum and the potential for Western sanctions. He said rather than selling the Treasurys, Russia simply transferred them out of the U.S.

"Everything (Russian President Vladimir) Putin is doing is being extra cautious about retaliation, like bringing troops right to the Ukraine border," said Chandler. "The other reason I say it's most likely Russia is you look at the countries that have the largest reserves. It doesn't feel like it's China because China has enough on its plate."

Chandler said about half of Russia's foreign currency reserves are held in dollar-denominated instruments, and this would be about 80 percent of those dollar holdings. At the end of 2013, Russia had $138 billion in Treasury securities.

"It could be somebody else, but it does seem circumstantial just on the timing alone," said Chandler.

He also said there are precedents for this type of behavior by Russia.

He pointed to the birth of the Eurodollar marketdollars outside the U.S. In 1956, when the Soviet Union invaded Hungary, it feared the U.S. would retaliate with financial muscle, and Russia-based Narodny Bank shifted dollars from the U.S. and deposited them in its London branch, he noted.

[Magda Hassan]

MQ-5B Hunter Drone from 66th US brigade captured intact by Russian forces


An American scout-attack drone was intercepted in the Crimean sky, Interfax and AP reported quoting the Rostec state corporation.
A U.S. Army Hunter (RQ-5) UAV

"Judging by side marking, the MQ-5B drone was part of the 66th US brigade of military intelligence with the main location in Bavaria," the report on the website of the corporation reads.
The 66th Military Intelligence Brigade is a United States Army brigade, subordinate to United States Army Intelligence and Security Command and based at Wiesbaden Army Airfield, Wiesbaden, Germany. After years of history as a counter intelligence/intelligence group with headquarters in Munich and geographically dispersed detachments, it became a brigade on 16 October 1986, but was inactivated in July 1995. Reformed again as an intelligence group in 2002, it became a brigade again in 2008.
The unit's mission is to provide intelligence support to U.S. Army Europe and U.S. Army Africa.
Part of the 66th Military Intelligence Brigade supports near real-time missions for deployed soldiers such as operations in Afghanistan and also Iraq.
According to the report, at the beginning of March, the American brigade was relocated to the Ukrainian Kirovohrad, from where drones commit reconnaissance raids in the direction of Crimea and Russian border areas.
Earlier, they reportedly appeared in the Kherson region, in the area of the Crimean roadblock Chongar.
"According to some data, the American reconnaissance brigade had 18 MQ-5B drones in its arsenal. This is the second time the American UAV is intercepted over Crimea," the report says, Voice of Russia reported.
"The drone was at the height of about 4 thousand meters and was practically invisible from the earth. It was possible to break the drone's link with its American operators with the help of the EW (electronic warfare) complex Avtobaza. As a result, the device made an emergency landing and passed into the possession of the self-defense forces almost unbroken," the report says.
The IAI RQ-5 Hunter unmanned aerial vehicle (UAV) was originally intended to serve as the United States Army's Short Range UAV system for division and corps commanders.
The RQ-5 is based on the Hunter UAV that was developed by Israel Aircraft Industries. A version armed with the Northrop Grumman GBU-44/B Viper Strike weapon system is known as the MQ-5A/B.
As of October 2012, the U.S. Army had 20 MQ-5B Hunters in service.
http://inserbia.info/news/2014/03/mq-5b-...an-forces/

[Lauren Johnson]

From the National Archives: ch 5 on Allied Intelligence involvement with Ukrainian nationals

http://www.archives.gov/iwg/reports/hitlers-shadow.pdf