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Tuesday, November 11, 2014

Former Goldman Banker Reveals The Path To The Next Depression And Stock Market Collapse



A funny thing happened on the way to the ‘end’ of the multi-trillion dollar bond buying program known as QE - the Fed chronicles. Aside from the shift to a globalization of QE via the European Central Bank (ECB) and Bank of Japan (BOJ) as I wrote about earlier, what lingers in the air of “post-taper” time is an absence of absence. For QE is not over. Instead, in the United States, the process has simply morphed from being predominantly executed by the Federal Reserve (Fed) to being executed by its major private bank members. Fed Chair, Janet Yellen, has failed to point this out in any of her speeches about the labor force, inflation, or inequality. 
The financial system has failed and remains a threat to us all. Only cheap money and the artificial inflation of asset values can make it appear temporarily healthy. Yet, the Fed (and the Obama Administration) continue to perpetuate the illusion that making the cost of (printed) money zero by any means has had a positive effect on the population at large, when in fact, all that has occurred is a pass-the-debt-ponzi-scheme co-engineered by the Fed and big US bank beneficiaries. That debt, caught in the crossfires of this central-private bank arrangement, is still doing nothing for American citizens or the broader national or global economy. 
The Fed is already the largest hedge fund in the world, with a book of $4.5 trillion of assets. These will plummet in value if rates rise.  Cue the banks that are gearing up their own (still small in comparison, but give them time) role in this big bamboozle. By doing so, they too are amassing additional risk with respect to interest rates rising, on top of all their other risk that counts on leveraging cheap money.
Only the super na├»ve could possibly believe that the Fed and its key banks haven’t been in regular communication about this US Treasury security shell game.  Yet, aside from a few politicians, such as former Congressman Ron Paul, Congressman Sherrod Brown and Senators Bernie Sanders and Elizabeth Warren, the notion that Fed policy has helped bankers, rather than other people, remains largely divorced from bi-partisan political discussion. 
Adding more fuel to the central-private bank collusion fire, is the fact that the Fed is a paying client of the JPM Chase. The banking behemoth is bagging fees for holding and executing transactions on the $1.7 trillion New York Fed’s QE mortgage portfolio, as brilliantly exposed by Pam Martens and Russ Martens.
Wouldn’t it be convenient if JPM Chase was also trading this massive mortgage book for its own profits? Or rather - why wouldn’t they be?  Who’s going to stop them – the Fed? Besides, they hold more trading assets than any other US bank, so why not trade the Fed’s securities ostensibly purchased to help the public - recover?
According to call report data compiled by the extremely thorough website www.BankRegData.com, nearly 97% of all bank trading assets (including US Treasuries) are held by just 10 banks, led by JPM Chase with 43.80% and followed by Citigroup at 24.51% of all bank trading assets.
Last quarter, US Treasuries were the fastest growing form of security bought by banks, increasing by 26.3% or $72 billion over the prior quarter. As the Fed tapered, banks stepped in to do their part in the coordinated Fed-private bank QE game. In the past year, banks have added $185.8 billion of US Treasuries to their books, more than doubling their share of government debt.
Just seven banks comprised nearly all ($70.5 billion) of this quarterly increase: State Street Bank, Capital One, JPM Chase, Wells Fargo, Bank of America, Bank of NY Mellon and Citigroup. By the end of the third quarter of 2014, Citigroup, with $95 billion, was the largest holder of US Treasuries, followed by Bank of America at $54.8 billion and Wells Fargo at $37.8 billion from nearly zero at the start of 2014. Bank of NY Mellon holds $25.3 billion and JPM Chase holds $15 billion US Treasuries.
This increase in US Treasury holdings reflects another easy money element of our federally subsidized banking system. Banks take deposits from individuals for which they pay close to zero in interest, in fact, charge customers fees for keeping their money  (courtesy of the Fed’s Zero-Interest-Rate policy.) They can turn that around to make a cool risk-free 2.3% by parking the money in 10-year US Treasuries. Why lend to Joe the Plumber, when the US government is providing such a great deal?
But, the recent timing here is key. Banks only started buying US Treasuries in earnest when the Fed announced its tapering plans. Thus, not only are they participants in the ZIRP game as recipients of cheap money, they are complicit in effecting monetary policy. As the data analyzed so expertly by Bill Moreland at www.BankRegData.com makes clear, there has been no taper.  Thus, the publicized reason for tapering – better job and economic growth – is also bogus.
During the third quarter, Wells Fargo and Bank of America matched Fed purchases of US Treasuries, keeping the total amount of US Treasuries in QE land neutral. With such orchestration to keep rates down and the prices of US Treasury securities up, all the talk about whether the labor force is strengthening or inflation exists or not is mere show. Banks haven’t even propped up the labor market in their own industry. They chopped 11,400 jobs last quarter. In the past two years, they cut 57,236 jobs.  
No one in either political party mentioned any of this during the mid-term elections. Yet, our political-financial system has gone from the dysfunctional to the failed to the surreal. Speculation, once left to individuals and investors, is now federally sponsored, subsidized and institutionalized.  When this sham finally buckles and the next shoe falls and rates do eventually rise, the stock market will tank, liquidity will die, and the broader economy will plunge into a worse Depression than before. We are not there yet because of these coordinated moves and the political force behind them. But we are on a precarious path to that inevitability. 
Credit to Zero Hedge

Top Hacker: Chicago Nuke Attack Planned For 2015

The Russians Are Coming

Actor and noted comedian, Jonathan Winters, once made a mockery of the Cold War between the United States and the Soviet Union in the classic comedy movie The Russians Are Coming, The Russians Are Coming. It is distressing to report, that contrary to the mainstream position that Russia lost the Cold War, the Russians are indeed very healthy and ready to wage war against the United States as Americans are living on borrowed time as we have failed to prepare for a joint Russian and Chinese attack upon our country.
What team is Obama playing for?
What team is Obama playing for?
The United States has not been attacked on the home front for 200 years dating back to the War of 1812. There exists a plethora of confirming information to support the fact that America’s days may be numbered and that we are totally unprepared for what is coming. There exists credible evidence that the American people have also been betrayed from within by some key leaders, namely, Barack Hussein Obama.
Let’s commence this analysis by examining the statements of high-profile Soviet defectors and try and make sense of what they have been telling American intelligence agencies for decades, namely that the Russians have engaged in a multi-generational plot to destabilize America prior to the takeover in which both the Russians and the Chinese will unleash a ferocious assault upon our country.

Viktor Suvorov and the “Fake” Surrender of the Soviet Union

russian dia pictureViktor Suvorov, a former Russian intelligence analyst, revealed Russia’s top-secret plans to attack the United States, after he defected to England. Having worked as an intelligence analyst as well as having worked for the GRU and with elite Russian special forces, Suvorov, warned the Americans of Russia’s true intentions after the Russian high command had succeeded in getting Pentagon officials to let down their guard and engage in a high level, but mostly one-sided, technology transfer.

Yuri Bezmenov and “Ideological Subversion”

Former Soviet defector, Yuri Bezmenov, a well renowned media/propaganda expert defected to the United States. in 1970, and subsequently exposed the KGB’s subversive tactics against American society. Yuri Bezmenov has conducted a number of interviews in which he explains how Marxist ideology is deconstructing America’s values by controlling the media and which would ultimately serve to demoralize the country, destabilize the economy, and provoke crises in order to sovietize the United States.   Bezmenov is well known for revealing Russia’s doctrine of “ideological subversion”, a slow, long-term multi-decade process of media-based brainwashing in which the sole purpose is to confuse, confound, and destroy the moral base of America.
Has this plot been effective? When Bezmenov defected in 1970, abortion was not yet legal in the United States, nor was gay marriage, Americans, by and large, trusted their government, the comparative use of profanity in the media was rare and there were over 250 corporations controlling 95% of the media instead of the six corporations which own the same percentage today. This media consolidation and the presence of prominent media plants, such as CNN’s Anderson Cooper, ex -CIA operative, have gone a long way towards achieving these Russian goals. Bezmenov’s account also casts serious doubts upon the severe decline of America’s moral base as being the product of a normal societal, evolutionary process which accidentally transpired. Conversely, Bezmenov has clearly identified the Leninist propaganda techniques which have been rolled out in the United States.

Stanislav Lunev and Long-Term Russian Preparations for War Against the U.S.

Former Russian Colonel Stanislav Lunev has the distinction of being the highest ranking Russian military officer to defect from to the United States after doing so in 1992, after Boris Yeltsin came to power. Lunev’s information was considered to be so volatile, but accurate, that the CIA, DIA, FBI, NSA placed Lunev, where he remains to this day, in the FBI’s Witness Protection Program.
Lunev served as the top GRU agent in America in the 1980’s and 1990’s. While in the United States, Lunev mission involved gathering intelligence information about America’s defenses and recommending Russian war strategies against America.  Some of Lunev’s information came to light, when in the 1997, he published his bestselling book Through the Eyes of the Enemy. In the book, Lunev reports that Russia’s military, despite “losing the cold war”, continues in its war preparations which are designed to conquer the United States by stealth. Since his defection, Lunev has served as a special agent to the FBI, CIA as well as many large corporations. Lunev is best known for revealing the missing 100+ missing suitcase nuclear bombs and the threat they would pose to the United States as they would be smuggled across the Mexican border.

Anatoliy Golitsyn Russia’s Secret War Plans Against the U.S.

Anatoliy Golitsyn, a high-ranking KGB defector who fled to the United States in order to warn Americans about the secret Russian plan to attack the United States.
Golitsyn is generally considered to be among the first and most revealing on the subject of the secret Russian plans to attack. Having authored the The Perestroika Deception in which Golitsyn wrote about the deceitful intent behind the Leninist strategy which the present-day Communists are actively pursuing as they fake American style democratization efforts in Russia. According to Golitsyn, the short-term strategic objective of the Russians is to achieve a technological convergence with the West solely on Russian terms and mostly through a series of one-sided disarmament agreements.
According to Golitsyn, after the United States military is eliminated as a strategic threat to Russia, the long-range strategic Russian plan is to pursue Lenin’s goal of replacing nation states with collectivist model of  regional governments as a stepping stone to global governance. In order to achieve their final goal, Golitsyn states that Russia, after lulling America to sleep, will join with China in order to attack the United States from both the outside and inside as he detailed that In each of these the scissors strategy will play its part; probably, as the final stroke, the scissors blades will close. The element of apparent duality in Soviet and Chinese policies will disappear. The hitherto concealed coordination between them will become visible and predominant. The Soviets and the Chinese will be officially reconciled. Thus the scissors strategy will develop logically into the ‘strategy of one clenched fist’ to provide the foundation and driving force of a world communist federation…before long, the communist strategists might be persuaded that the balance had swung irreversibly in their favor. In that event they might well decide on a Sino-Soviet ‘reconciliation.’ The scissors strategy would give way to the strategy of “one clenched fist.” The enemies now are gathered from within. At that point the shift in the political and military balance will be plain for all to see.  I submit that the free trade agreements and the  300 senior command military officers fired by Obama stand as proof of these strategies.

The Planned Demise of the Petrodollar Will Lead to U.S. Economic Collapse

The decades of Russian stealth planning have arrived and the forces are primed for battle. The opportune (Petrodollar) crisis has opportunistically appeared and it is only a matter of time until hostilities break out. The Russians are prepared to meet the United States at the gates of Iran along with their new found Chinese allies. Ultimately, this conflict is over which currency, the Petrodollar or gold, will prevail for the payment of Iranian oil. The economic futures of both sides hangs in the balance.
Throughout the last part of the 2oth century and the first portion of the current century, the world had to purchase the dollar in order to purchase oil from the Middle East producing nations. Previously, Iraq tried to circumvent this  Petrodollar process, by accepting the Euro from France and Germany, as payment for its oil. Saddam Hussein ultimately paid for this bold move with his life. Among his many transgressions against the central bankers, Moammar Gadhafi attempted to circumvent the Petrodollar scheme and met the same fate. Rockefeller and his cronies take the Petrodollar scheme very seriously.  
Iran is now following in Hussein and Gadhafi’s footprints by selling oil to the Russians, Chinese and even the people of India in exchange for gold!  Iran’s practice is undermining the only form of backing enjoyed by America’s Federal Reserve Notes, the Petrodollar. Without the Petrodollar system, the Federal Reserve’s paper money will degenerate to the status of a fiat currency, will subsequently hyper inflate and the Federal Reserve’s epitaph will have been written along with the economic future of all Americans.
The simple solution seems to simply repeat history, send in our proxy troops and let them carry out economic justice with extreme prejudice towards the leaders of Iran.  However, unlike Iraq and Libya, Iran has very powerful allies who are collectively willing to challenge the central bankers dominance of the oil industry. It is notable, that both the Russians and the Chinese have threatened the United States with war if Iran is attacked.
It is also no secret that in recent months, America has positioned the largest naval armada in history near the Strait of Hormuz presumably to launch military strikes upon Syria and Iran. The CIA backed ISIS is the further manifestation of this desperate plan to preserve the Petrodollar by toppling Syria and the soon-to-be destabilization of Iran.  It is also no secret that the Russians have threatened our government with war if America attacks its two aforementioned allies. This clearly casts Russia into the role of being a military enemy of the United States. When ISIS goes into Syria, we will see the beginning of WW III.

Treason From Within

If Russia and the United States are clearly headed for conflict, why then, would the federal government mandate that enemy Russian paratroopers and commandos be trained at Fort Carson Army base in Colorado Springs, Colorado. Yet, this is an undeniable fact as Defense Department spokesperson, Commander W. L. Snyder, told the New American, that Russian troops are training in southern Colorado in which they would be allowed to provide security at local baseball games and to participate in roadside checkpoints as well as to conduct war game military raids on local terrorist base camps. The unmistakable conclusion is that our enemies are being trained to interact with the American public and to participate in policing activities on American soil. We are looking at the fact that Russian commando hit squads will be carrying out the assassinations of key American figures including members of Congress. The Russians will also likely be carrying out the sabotage of our command and control facilities as well as  attacking many of our nuclear weapons silos. Thanks to our stupidity, due to previous arms agreements, we have shown the Russians where all of defenses are located.
grid ex iiThe Russians were even allowed to be present at last year’s Grid EXII drill in which a simulated take-down of the American power grid by an EMP was rehearsed. Why in the hell would we let both the Russians and their Chinese allies be in attendance after they have threatened to nuke the United States on so many occasions?
The presence of Russian troops on American soil be considered an act of war! Why then would Russian troops be given access to one of our most important and secure military bases in the country? Why then are Russian troops being allowed to view how our military will meet a crisis not to mention the fact that we are giving the Russian military access to the inner workings of a key military installation while training on American soil for the first time! Is this is just a significant military intelligence victory for the Russians? Has the Obama administration lost its mind by revealing our military command and control capabilities in a crisis situation? Or, is this apparent abject stupidity, on the part of the Obama administration, being carried out with clear intent, precision and purpose, to a level which would make Benedict Arnold jealous? Why else would Russian troops be trained to carry out policing activities on American soil in which they will supplant our domestic forces?

Conclusion

Part one of this series purposely left out the complicity of another sympathetic Russian collaborator.  There are still more dots to connect and in Part 2 of the Russians are Coming, Obama’s complicity in the betrayal of this country will be revealed and the plan to use Obama has been in the works for a very long time as there is no doubt that his presidency is just as much a part of the destruction of this country in the same spirit as Bezmenov, Lunev, Golitsyn and Suvorov have described.
The Russians are not coming, they are here!
Credit to Common Sense

Our Last Good Summer



Ever since I began to wake up to how bad things really were, in 2011, I’ve been trying to figure out WHEN everything really falls apart. And, every year, I’ve been wondering if that year would be our last good one.

In fact, just a couple months ago, Bix Weir and Harvey Organ went out on a limb and said that everything would fall apart by the end of 2014 – a little over a month and a half from now. They still could be right, but Bix is already starting to edge back from this prediction.

Were Bix and Harvey wrong to sound the alarm over what could happen over the coming months?

No. I don’t think so.

Why?
Being Ready Early Is Good

Because something REALLY awful is coming, and if you jump too early, that’s okay. ‘Early Jumpers’ will find themselves to have been ahead of the game. And, with all that’s coming, being ahead of the game is a really, really good idea.

Now, there are some of you who want someone to give a date so that you can have as much fun as you can before an awful future hits. You might be wanting to maximize your income. You might want to get as much profit out of your investments. You might want to get in one last family vacation.

If so, you are a fool.

And, unfortunately, that’s most of us.
Better 5 Years Early Than 5 Minutes Late

When dealing with an unimaginable future, it’s better to be…

…five years early than five minutes late.

Seriously, folks. Never play chicken with God. He rules the road, and He WILL run over you.

So, get your poop in a group and prepare for really bad times.
Martin Armstrong

Having said that, it is still instructive to make our best guess about WHEN it will happen. And, if you backed me into a corner and demanded WHEN it all falls apart, I would say…

Martin Armstrong!

Okay, that’s not a date. That’s a person, and a somewhat annoying person, at that – since he has this knack for being always right about certain things. And, one of the things that he seems to be right about is cycles in economic confidence.

Years ago, he discovered that every economy in the world follows an 8.6 year cycle, from peak-to-peak or trough-to-trough. When an economy hits a top and starts down, that economy won’t hit another top until 8.6 years later.

He also noticed that these cycles weren’t numbered in years or months, but days:

3,141 days
The ECM

He developed a model to describe that observation and to help predict future turns in the economy. That model is called:

The Economic Confidence Model, or ECM.

Martin has been uncannily accurate with his ECM, which is why I am paying attention to it.

When it comes to when an economy turns direction, I listen to what Martin says. And, I’m willing to extend my favorable view of his abilities to his analysis of other cycles.

But, when he gets into other areas unrelated to cycles… not so much.

I find his analysis of the cycles of war and internal conflict to be compelling, but he is dismissive about the idea of precious metals manipulation, which I find to be strange. However, I’m not interested in his views on Gold or Silver. I just want to know when the economic system collapses.
The End Begins In 2015

Martin’s answer is:

October 1st, 2015

The longer answer will include an interim bottom by October 28th, 2016, with a small recovery that will end on November 25th 2017. And, a final bottom will arrive by January 19th, 2020.

Here’s a picture:


ECM – 2011 to 2020

And, you can see an earlier part of the graph here:


ECM 1985-2011

I originally saw the above graph here:

http://www.nowandfutures.com/buscycle.htm

That was an article that he wrote on September 26, 1999, and the above graph uncannily predicted – ahead of time – the rise and fall of our economies. It’s more than a little shocking to see such accuracy.

In fact, I don’t want to believe that we are so predictable, but apparently we are.

Lord willing, I’ll be able to discuss the ramifications of Martin Armstrong’s Economic Confidence model over the next few days.

But, for now, just consider the Summer of 2015 to be the last good summer that any of us may ever have.

I truly hope that you’ll be ready for this
(That’s a link. There’s not much time left.)

A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished. – Proverbs 22:3

Credit to Omega Shock

Russia, China drop US dollar for mutual trade

TOP COP: MILITARIZED VEHICLES NEEDED TO DEAL WITH “ANTI-GOVERNMENT” GROUPS



In an article for popular law enforcement website PoliceOne.com, Officer Steve Rabinovich writes that the controversial use of militarized vehicles in domestic law enforcement situations is necessary to deal with the threat posed by “anti-government groups.”

Rabinovich boasts an impressive list of credentials, with his assignments including Emergency Response Team, Crisis Intervention, ERU, Mounted and dignitary details. Rabinovich also teaches other police and emergency medical responders at his state’s technical college system.

Acknowledging that law enforcement bodies have received “criticisms from their communities” for utilizing the Department of Defense’s 1033 Program to acquire militarized vehicles previously used to hunt insurgents in Iraq and Afghanistan, Rabinovich cites domestic terrorism and “a steady increase in deadly and violent assaults on cops” as good reasons for police departments acquiring MRAPs and other military gear.


Rabinovich also points to “violent anti-government groups and individuals” who are“targeting cops as scapegoats” as another factor that justifies the use of militarized vehicles.

At no point does Rabinovich cite any actual studies showing violence against cops is on the increase, nor does he provide an example of any “anti-government group” that has launched a violent attack on police officers.

“The American law enforcement officer is expected to be able to work problems ranging from a traffic stop, noise complaint, or a domestic, to a terrorist act, mass murderer, or natural disaster. While your local town may or may not respond to terrorists planting explosives during a mass gathering event, a barricaded gunman or hostage situation is quite plausible scenario, and tools such as an MRAP will prove indispensable when that time comes,” writes Rabinovich.

“Police work isn’t becoming increasingly dangerous, even with the supposed corresponding uptick in “domestic and international terrorism,” points out the MassPrivateI blog. “Rabinovich must know this assertion won’t hold up because he adds the ridiculous claim that attacks on cops are ignored by much of the media or never reported at all. The exact opposite is the truth. In addition, the number of officers killed or wounded by civilians is a stat tracked by nearly every law enforcement agency. Civilians killed or wounded by police officers are stats tracked by amateurs, despite the fact that the DoJ has ordered these numbers to be reported annually — an order that has been mostly ignored for the last thirteen years.”

As we have exhaustively documented, many see the growing militarization of domestic police departments as a clear signal that law enforcement increasingly views the American people as a threat, with Indiana Police Sergeant Dan Downing admitting earlier this year that the increasing militarization of domestic police departments is partly to deal with returning veterans who are now seen as a homegrown terror threat.

During the height of the Ferguson unrest earlier this summer, MSNBC host Ed Schultz opined that such militarized equipment and vehicles was needed to deal with “anti-government” groups, while former Marine Paul Szoldra offered a different view, warning that scenes in Ferguson illustrated the “terrifying” result of the militarization of police, with the American people now being treated like insurgents in Afghanistan and Iraq.

Former Marine Corps Colonel Peter Martino, who was stationed in Fallujah and trained Iraqi soldiers,warned last year that the Department of Homeland Security is working with law enforcement to build a “domestic army,” because the federal government is afraid of its own citizens.

Martino was speaking at a council meeting concerning a decision to purchase a BearCat armored vehicle. The purchase of the vehicle was mired in controversy after the city’s Police Chief wrote in an application filing to the DHS that the vehicle was needed to deal with the “threat” posed by libertarians, sovereign citizen adherents, and Occupy activists in the region.

Credit to Infowars

Close military encounters between Russia and the west ‘at cold war levels’




Close military encounters between Russia and the west have jumped to cold war levels, with 40 dangerous or sensitive incidents recorded in the past eight months alone, according to a report published on Monday.

The report, Dangerous Brinkmanship by the European Leadership Network, logs a series of “highly disturbing” incidents since the Ukrainian crisis began earlier this year, including an alarming near-collision between a Russian reconnaissance plane and a passenger plane taking off from Denmark in March with 132 passengers on board.

What made the incident especially dangerous was that the Russian plane did not have on its transponders, the usual method of signalling its presence to other aircraft.

The report by the London-based thinktank comes after a warning from former Soviet president Mikhail Gorbachev that the world is “on the brink of a new cold war”.

The encounters have taken place mainly around the Baltic Sea but also in the Black Sea and along the US and Canadian borders.

“We believe the nearly 40 incidents logged are a very serious development, not necessarily because they indicate a desire on the part of Russia to start a war but because they show a dangerous game of brinkmanship is being played, with the potential for unintended escalation in what is now the most serious security crisis in Europe since the cold war,” say the report’s authors Thomas Frear, Lukasz Kulesa and Ian Kearns.

Since the collapse of the Soviet Union in the early 1990s, Russian and Nato forces have routinely tested one another’s air defences, with both sending planes close to international borders to see how fast the other responds. But this year has seen not only a surge in such encounters but limits being pushed to new, more risky levels.

The US, Britain and other Nato allies accuse Russia of ramping up military action, but Moscow places the blame on the US and its European allies, accusing them of provoking the crisis in the Ukraine and through the imposition of sanctions on Russia. Gorbachev, normally a critic of Vladimir Putin, took the unusual step of siding with the Russian leader and called for new mechanisms for lowering tensions.

Some anti-war activists in the US and the west argue that Nato is hyping up encounters and risking all-out war.

The report authors urge the Russian leadership to “urgently re-evaluate the costs and risks of continuing its more assertive military posture”. They also call on all sides to exercise military and political restraint and improve military-to-military communication and transparency.

Nato logged up to late October more than 100 intercepts of Russian aircraft, three times more than last year.

These and other incidents add up to a highly disturbing picture of violations of national airspace, emergency scrambles, narrowly avoided mid-air collisions, close encounters at sea, and other dangerous actions happening on a regular basis over a very wide geographical area, the report says.

Among high-risk incidents it lists are: the abduction by Russia of an Estonian intelligence agent in September: a mock Russian bombing raid on a heavily populated Danish island; simulated cruise missile attacks by Russian bombers on the US and Canada; Canadian warships locking radar on approaching Russian aircraft in the Black Sea; and a US plane making unauthorised entry into Swedish airspace after being chased by Russian planes.

Estonian defence minister Sven Mikser said last week that while he did not see outright military conflict with Russia as likely, Russia had returned to cold war ways by stepping up incursions.

According to Lithuania’s defence ministry, Nato fighter jets around the Baltic states had been scrambled 86 times by mid-October, nearly twice as many as the whole of last year. Estonia has reported six breaches of its airspace by Russian aircraft this year, up from two in all of 2013. Latvia says it has sighted more than 40 Russian military vessels near its waters.

British general Sir John McColl, former deputy supreme allied commander in Europe, said the potential for miscalculation or escalation could be a matter not of if but when. While the recent increases in incidents were central high-level decisions, the physical execution of policy was delegated down.

“Junior commanders with highly capable equipment under their control will be interpreting broad direction using their initiative as circumstances develop in front of them. The potential for error and escalation is clear, and extremely dangerous; more a matter of when rather than if,” McColl said.

Former British defence secretary Des Browne shared the concern, singling out the near collision between the passenger plane and the warplane as well as the abduction of the Estonian, which he described as “a Russian incursion into Nato territory which had it got out of hand, could have had incalculable consequences”.

Kearns, who has been engaged with senior British foreign and defence policy makers for two decades, said: “We badly also need to negotiate a new crisis management arrangement with Russia to avoid a major unintentional escalation. The Chinese and Japanese have negotiated just such an arrangement in the East China Sea in the last few days. That is what we now need in Europe.’

China and Japan reached agreement on Friday on just such mechanisms in the East China Sea after similar tension. The two have been in dispute over tiny unpopulated islands controlled by Japan but claimed by Beijing and known as the Diaoyu in China and the Senkaku in Japan.

Credit to the Guardian

It Begins, Russia Detaches From The Dollar/Euro Currency