Kiev is Burning: 13 Dead in Ukrainian Protests.

Anti-Government protests in the Ukrainian capital of Kiev have left 13 confirmed dead thus far, 6 of them being police officers. The current riots, as part of the weeks-long ongoing protests, have seen thousands of protestors and rioters pitted against government security forces in a battle for control of the city center. This the worst political crisis Ukraine has seen since the 2005 Orange Revolution.

As Fox News reports:

With stun grenades and water cannons, Ukrainian riot police moved in against a protest camp in Kiev’s center Tuesday night after 13 people were killed in violent street protests. A large section of the camp has been engulfed in flames as police advance on the demonstrators. Six police officers were killed in the riots and 39 sustained gunshot wounds, Reuters reported. 

Thousands of protesters had filled Independence Square just hours before, sensing that Ukraine’s political standoff was reaching a critical turning point after the deadliest violence yet in nearly three months of protests that have paralyzed the capital and the nation.

Opposition leader Vitali Klitschko urged the protesters to defend the camp.”We will not go anywhere from here,” Klitschko told the crowd, speaking from a stage in the square as fires burned around him, releasing huge plumes of smoke into the night sky. “This is an island of freedom and we will defend it,” he said. Many heeded his call.

“This looks like a war against one’s own people,” said Dmytro Shulko, 35, who was heading toward the camp armed with a fire bomb. “But we will defend ourselves.”

Raging protests are erupting across Europe these days. Ukraine, Italy, Sweden, the United Kingdom, and Greece have all experienced severe riots within the past few years. Most European nations have some type of lively protest movement that has sprung up within the past few years. The idyllic image of a peaceful post-Cold War Europe seems to be faltering a little bit.

All of this is related. All of these protests can largely be traced back to a single source, which can be summed up in this phrase: It’s the banking system, stupid.

Throughout the 1990’s and into the 2000’s, nearly every European nation embarked on massive accumulations of debt and credit expansion. This mindset became even worse amongst nations that adopted the Euro. Government spending throughout Europe skyrocketed. The national and international banking systems in Europe were kept fat and happy through enormous expansions of credit. This all generated an artificial boom. All of this artificial prosperity compounded upon itself, madly distorting the general European economy. Finally, in 2008, the global financial crash brought the business cycle full circle as these European nations experienced a very-real economic bust, from which they have still not recovered.

Ukraine is in turmoil for a number of reasons which have simmered under the surface for years. However, the most recent riots were sparked by one major incident: the symbolic realigning of Ukraine with Russia, as Ukrainian President Viktor Yanukovych cut major trade ties with Europe in a turn towards the Russian sphere. He did this for one basic reason: Ukraine needs money. The Ukrainian economy has suffered ever since the 2008 global financial meltdown. The Ukrainian Government is practically bankrupt. One government official was cited as saying that they had only 2 month’s worth of cash left to cover expenses. The Russian Government is prepared to provide a bailout package. The West was prepared to offer them a bailout as well, but there’s a problem with that: Ukraine imports nearly all of it’s natural gas from Russia. The gas companies in Russia are state-owned. This gives the Russian government a great deal of leverage over Ukrainian political and foreign affairs.

This is not an issue of greedy Russians wringing the Ukrainians for every last penny over natural gas. The issue is that the Ukrainian Government is in this position to begin with: bankrupt and desperate. They can take solace in knowing that they aren’t alone: Many European governments are bankrupt and desperate. If these Governments hadn’t subscribed to foolish banking practices (under policies known as ‘Keynesian’), most crises of this sort could have been entirely averted. Instead, the governments of Europe selected artificial credit expansion and massive governmental over-leveraging. The fruits of this are becoming apparent.

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