Andrei Illarionov resigned just in time. As an admirer of the capitalist philosophy of Ayn Rand and the laissez faire economics of Ludwig Von Mises, his resignation this week as Vladimir Putin’s chief economic advisor is a disaster for Russia.

But his announcing that “Russia is no longer a democracy,” serves to keep intact the record of there never being a war between two democracies should war break out between Russia and Ukraine.

For the day of Illarionov’s resignation (Tuesday, December 27), the Russian Defense Minister threatened to invade Ukraine.

Russia risks a wave of capital flight and a shattering economic crisis as the West prepares a package of sanctions over the seizure of Crimea.

Chancellor Angela Merkel spelled out the danger for Russia in a speech to the German Parliament yesterday (3/13) that silenced pro-Kremlin voices in her own coalition and left no doubt that Europe is now fully behind the US on punitive measures.

"If Russia continues on its course of the past weeks, that will not only be a great catastrophe for Ukraine. It will cause massive damage to Russia, both economically and politically," she said. "None of us wants it to come to this, but we are determined to act. Let me be absolutely clear; the territorial integrity of Ukraine is not up for discussion."

The West has threatened visa bans and an asset freeze on individuals as early as next Monday (3/17) unless Russia steps back from the brink on the annexation of Crimea. And that is only the begining.

Russia has threatened to retaliate with "symmetrical sanctions" but Tim Ash, from Standard Bank, said it is a one-sided contest that Moscow cannot win.  Here's why.

Last week was Europe. This week it’s Asia. I’ve been giving speeches and meeting with folks in Hong Kong, Singapore, and now here in Taiwan about how to democratize China.

The text of one of these speeches, delivered at Chung Hsing University in Taichung, Taiwan, is a companion article following this, entitled, Freedom and Peace in China.

The meetings with democracy activists discussed the extraordinary urgency in transforming dictatorship in China to democracy within the next 15 to 18 months. For that may be all the time Taiwan has before China attacks, and the US is drawn into a full scale war that could go all-out nuclear.

The Beijing Olympics are to be held in the summer of 2008. That’s 32 months from now. For all the saber-rattling China has indulged in over Taiwan, most Taiwanese figure they’ve got until after 2008 before the Chicoms will consider a military assault upon them. It really startles them to hear they may have only months and not years to go.

China's Xi Jinping has cast the die. After weighing up the unappetizing choice before him for a year, he has picked the lesser of two poisons.

The balance of evidence is that most powerful Chinese leader since Mao Tse-tung aims to prick China's $24 trillion credit bubble early in his 10-year term, rather than putting off the day of reckoning for yet another cycle.

This may be well-advised for China, but the rest of the world seems remarkably nonchalant over the implications. Brazil, Russia, South Africa, and the commodity bloc are already in the cross-hairs.

"China is getting serious about deleveraging," says Patrick Legland and Wei Yao from Societe Generale. "It is difficult to gently deflate a bubble. There is a very real possibility that this slow deflation may get out of control and lead to a hard landing."

Societe Generale has defined its hard landing as a fall in Chinese growth to a trough of 2%, with two quarters of contraction. This would cause a 30% slide in Chinese equities, a 50% crash in copper prices, and a drop in Brent crude to $75.