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Tuesday, January 20, 2015 4:24 PM

Forced Conscription: Ukraine to Mobilize 200,000 Armed Forces; Hyperinflation on the Way?

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The war in Ukraine is going so well for Kiev that .... Ukraine will force 200,000 more into the army.

According to military prosecutor Anatoly Matios, there will be three waves of mobilization in 2015. The overall plan is to call 200,000 Ukrainians into military service.

Ukraine will begin on January 20, 2015 with 50,000 reservists and conscripts. There will be mandatory training at training centers. The next wave of fighters will be directed to the ATO (Anti-Terrorist Operation) Zone until March 2015.

"Azov" and "Kiev" fighters will also join ATO on a rotation basis.
Thoughts From Europe

Reader Steven writes...
Hello Mish

The 50,000-100,000 reserve call-up is for ATO (Anti-Terrorist Operations), what they call the war in eastern Ukraine. These future soldiers will generally be from 25-60 years old.

Call-ups impact nearly every family in Ukraine. My girlfriend's son-in-law is a reserve officer. Her ex-husband is a retired officer who has already been called.

Interestingly, he is absolutely pro-Russian, but accepts his position as an artillery trainer where he personally does not shoot at the "enemy" to keep his pension.

Her son, a 19-year-old who recently dropped out of school, is suddenly eligible for the special call-up beginning today. Her best friend's son, mid 30's, came to Prague illegally to escape this "draft". He was sitting in my flat a couple days ago. He used to work in Poland, but the Poles have dramatically tightened up to avoid an onslaught of Ukrainian workers.

Hyperinflation on the Way?

Ukraine is down to five weeks of currency reserves. The only way to pay these soldiers is to print Hryvnia, constantly dwindling in value.

Seeds Sown

The Hryvnia is down 48% vs. the US dollar since the end of 2013 (nearly 50% in just over a year). That is not hyperinflation material, but the seeds are sown.

Even if some sort of bailout does come, if Ukraine blows it all on war (which sure seems to be the pledge), the decline in the Hryvnia is far from over.

And if Ukraine does not get another bailout, the Hryvnia is toast. Pension promises will be worthless.

For what?

Smart Decisions

Those fleeing Ukraine for Prague or elsewhere in Europe are the smart ones.

Mike "Mish" Shedlock

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