Fred, all US dollars are created ex nihilo by private banks as debt every time they make a loan.
Whatever the borrower wants to do with the loan is his affair.
However, there is no need for any sovereign government to borrow money from banks, since the US Treasury could just as easily create digital US Treasury Notes equivalent in value to US Federal Reserve Notes.
But it’s the value of those notes that really matter, and we can see what’s happening to the value now as inflation eats that value up, and we have always borrowed from the banks except for when Abe said I have two enemies one in front which are the Southern forces and the one behind which are the bankers and of the two the bankers are the worse, so he created Federal Notes to bypass them the same thing JFK was trying to do when he took on the Federal Reserve by issuing millions in Federal Notes which rotted away in a warehouse, and it’s probably one of the reasons they killed him
Rob, Robert Mugabe got the sanctions from hell when he refused to bend the knee and kiss the ring of American and Western imperialism.
Which he never did.
He will get the last laugh from his grave
Actually a theory ‘proven’ by the Weimar republic. MMT is just the theory of Chartalism re-branded. The MMTers can demonstrate money mechanics accurately, but not the implications of their theory on the real world as it is an accounting tautology.
It would be interesting to see a listing of Gazprom’s LNG customers, where they are located, etc. My guess is this hits Germany hardest of all and is being used as a template for extending the rouble-purchase requirement to all Russian exports.
Of course, we would not want to cause any trouble for the Germans, Poles, French, Italians, Americans, or Ukrainians. No one.
It is unfortunate that governments, primarily Western governments, have been creating this crisis for years, since about 2008. What other event has to happen for the governments to start negotiating constructively?
After all, talk about “dependence on Russia” and “gas racketeering” is demagogy. Russia is just as dependent on products produced in other countries, and the governments of these countries actively use this by imposing sanctions.
What products might those be, Russia is depending on? Especially from countries which are sanctioning.
I think that are pretty few things and even less, that are essential.
Don’t forget, the absolute majority of countries are not imposing sanctions, especially those with the highest output of production.
Yes, it would be good to subject media publications about Russia’s dependence on the supply of goods and services from the West to critical thinking. But this would require a whole study of trade and industry statistics. I don’t have that kind of education and information. Therefore, I am writing in general terms. Of course, it depends on something. But to what extent and how critical it is is not known.
Some good points you make. You are probably aware that Russia is for all intents and purposes an Autarky? What, exactly, does Russia need from the west?
I think that Russia is an autarkic country due to sufficiently large fertile lands, large mineral reserves and sufficiently developed industries, agriculture, transport, but not an absolute autarky. And the Russian government does not seek to become an absolute autarky. As the Russian government says, it needs from the West the absence of a military threat, security and the absence of harassment in trade.
What do you mean with that? It has nothing to do with Russia, neither is Russia in any way to blame for “the war in the Ukraine” (Russia’s SMO).
It’s completely obvious that Russia was left no other choice than to defend itself, or than to eventually stop delivering its products when the West refuses to pay.
It’s just part of the controlled demolition (“Great Reset”) of the existing Western system by the AngloZionist shadow government, in order to forestall the otherwise imminent and inevitable uncontrolled collapse of their evil system.
Instead, the AngloZionists intend to hold on to power in the West with totalitarianism (disinformation, terror, tyranny, a new “Iron Curtain,” and so forth). But that’ll only work for a while, and their Empire of Lies will gradually collapse, anyway.
A breath of fresh air. For the last 24 hours rumors of Russia accepting Euros “for now” because finding rubles is just too difficult was maddening. Let’s Go Vladimir.
I know! Me too. So glad to see Putin is not budging. It’s Putin against the new world order ghouls. Sadly, most of the sheeple in the west will never understand that Putin and Russia are the only thing standing between them (the sheeple) and a one-world slavery based on a digital currency.
I’m an American, but the American government has made itself my enemy.
All of the First World “democracies” have embraced Anthropogenic Global Warming Theology then the Covidvirus plague to transform themselves into totalitarian regimes.
The enemy of my enemy is my friend. Russia and Vladimir Putin have become my friends.
Now for a joke.
In the wake of Vice President Kamella Harris giving her insipid, incomprehensible speech in Warsaw then Joe Biden revealing that US troops will be deployed to Ukraine, Polish people are now asking each other, “how many Americans does it take to screw in a lightbulb?”
Yep Im inclined to agree with every word you said there. Its refreshing to listen to a grown up speaking for a change . Johnson is an embarassment to the UK, to say the least. I actually admire Putin. He’s damn near a genius with his IQ . Apparently he’s a good chess player too. Always 10 steps ahead of the grifters in the West. He doesn’t give his game away like Schwab and Gates either.
So it’s basically, do it our way or freeze.
LMFAO. No less than the stupids deserve.
Additionally i would like to address Saker’s (and others’) opinion that Russia is crap at PR. Well, yes. Russia doesn’t do PR, it’s an entirely American concept with which they’ve infected Europe and the rest of the Anglo-Zionist Empire. (ref. Bernays & co.). China doesn’t do PR either. Instead, they speak and act diplomatically, with respect, presenting facts and ignoring all the rest. So it looks like they’re getting clobbered by the Mighty Wuerlitzer. But the MW eventually runs out of steam. Facts are facts no matter how you try and spin them. Look at the revenations about the Ukronaziusa biolabs–we certainly haven’t heard the last of them. Then there’s the torture of POWs, the treatment of civilians . . . it goes on and on, and none of it will go away, and eventually even the stupidest of the McStupids won’t be able to deny it.
I’ve never been to Russia and speak no Russian. But my heart is Russian.
Maybe one day, if we’re extremely lucky, we’ll look back on all this and ruefully wonder how the ELMS–the Empire of Lies, Madness, and Stupidity–transformed us in less than half a century from a reasonably politically diverse, reasonably sane, reasonably brained set of somewhat independent entities into a sheep-brained, propagandized fascist dictatorship. I imagine the Germans of the 1930s and 40s wondered much the same thing. It didn’t end well for them and it won’t end well for us.
It may just be my opinion, but I think it is the normal human group response to scarcity. America had to start going abroad around 1970 for the resources to continue the lifestyle they believed was their destiny. If you are as old as I am, you saw what happened to Jimmy Carter when he tried to level with Americans about the crisis they faced. They went straight out and voted for the optimistic Ronald Reagan, for whom “long-term” meant ten years. America’s overseas strategy since then has been based on getting and keeping control of energy resources, meanwhile to keep business chugging along like normal at home, they resorted to more and more elaborate schemes for forcing scarcity on the working class and rationalizing it as their deserving to suffer. So here we stand at a great crossroads. If the Empire of Lies, where the people themselves chose liars to lead them, can gain control of Russia’s resources in particular, followed by Iran’s and Venezuela’s, they can let some of the pressure off the deplorables and keep the Ponzi going for another decade or two. If they can’t, things are going to get very very interesting in the Empire, culminating in the scene where the elites sacrifice each other on the altar of Perpetual Progress. Human nature being what it is, Russia will most likely eventually face the same thing.
PR through war propaganda does not win wars, warriors do. And when they do, war propaganda is at long last perceived as the pathetic PR it had really been all along… It evaporates.
That is what will happen with the ongoing insubstantial imperial Ukrainian war propaganda in the West. Just like it happened recently after 20 years in Afghanistan, like it had happened in Saigon, ending the Vietnam war, as we had seen as well on the Eastern Front, at the end of WWII…
Contact with reality alone brings genuine victory and lasting peace.
I’m not sure I would describe what is taking place today in the west as ‘PR’. That was what used to happen in the 1950s and 60s. Now I would describe it as psychological warfare, weaponised neuro-linguistic programming, an insidious, poisonous, pathological anti-truth, satanic actually. I just briefly went to the BBC news site to see their reaction to this development, and the whole Ukraine narrative is just floating away in a carefully crafted bubble of unreality, completely disattached from actual events, a dismal fabricated fantasy. They are imposing a form of delusional mental illness on their captive audience. I repeat, it is satanic.
The fury in London & NY will however be extreme. It is amazing how they all persuaded themselves as recently as yesterday that this was a bluff, they do not learn.
How will it work? I assume payments are still made in € or whatever, and then exchanged by the recieving Russian bank for Roubles.
So it looks as if Russia is still recieving unfreindly currency & needs to spend it, not place it in an unfreindly bank or buy unfreindly bonds with it. It is going to be interesting to see how that end of things is handled.
Andrew – I think that the unfriendlies have to open ruble accounts in Russian banks and then they pay their bills in rubles. So effectively they buy rubles for euros somewhere and then sell them to the Russian bank in exchange for debt-removal.
And of course the price you buy for and the price you sell for are not the same so basically a price-hike on the gas as Russia controls both ends of the exchange …
Yes, this is correct, they have to buy rubles on the open market (like everyone else who wants rubles) then they put them in a nice new unsanctioned Russian bank account and when their bill is due they send payment to Gazprom. No rubles no gas.
Well, it is not “like everyone else who wants rubles”…I have been trying to buy Rubles for a month and no way, here in Europe, the Ruble (and Russia) are being canceled.
If somebody knows how to buy Rubles, please tell me…
The amount of newsprint this has generated is unbelievable.
Gazprombank is the only Russian bank able to transact in Euros. Gazprom will now only accept payment into its RUB account at Gazprombank.
Therefore EU buyers will have to send EUR to Gazprombank who will then credit Gazprom with the appropriate amount of RUB.
In other words banks will have to open a correspondent account with Gazprombank rather than whoever they were using as correspondent previously in Russia.
What Gazprom was doing internally (discounting Euros into Roubles within Gazprombank), now everybody has to do. And no doubt Gazprombank will make a tidy turn on each of those transactions.
Hi, I am a “little” confused: does gazprom get paid in euros? Would you explain more on that if you think you can make it more understandable. I have a tendency to get confused easily around finances. Also I read a while ago that JP Morgan was a big shareholder in Gazprom. Do you know the specifics of who owns Gazprom?
On my mind, the question is: how much control, and thus sovereignty, has the Russian government on its banks and strategic industries, like Gazprom. Thank you.
Russian goverment is the controlling shareholder in Gazprom.
According to the Russian constitution, the Central bank is independent of the Government or any other Russian Federal institution. That is a point of major criticism in Russia.
Payments are made in US$ or Euro to the accounts which are then blocked to Russian access. Imagine you are selling me something, I pay, but hold the payment in my pocket. “I payed, these is your money, but it will stay in my pocket until I decide you behaved as I want you to and then I will decide to give it to you or not.” Robbery. This is what happened. Russia had no choice, but to sell for rubles, which are to be payed to banks physically in Russia.
As expected, Germany are wrong, VVP isn’t bluffing. Will they, (EU states), still continue to insist they will not pay in Ruple, if so things are going to go very dark and cold in the EU.
Will now be the time the much talked about ‘chemical weapons’ false flag will be trotted out?
Indeed…. but what if Berlin, Brussels, etc think that the April 1st deadline is an April joke… lol.
Maybe April 2and would have been better?
On the other hand, this should have happened two or three weeks ago. Why sell gas in euro when that money gets confiscated immediately, basically giving Germany and others free gas.
Guess its going to be a while before we hear Helene Fischer sing Полюшко поле (meadowlands) again. A stirring performance of Russian Born Helena signing this song.
A new epoch is beginning. After five hundred years of western perfidy then thirty years of the supremacist semi-unipolar interregnum a new long cycle of history is beginning.
There are still rough times ahead but I am optimistic for the future of the new humanity that is being born in the East and Global South. The social, political, economic and military gravitational pull of the Russia/China alliance will draw towards it states escaping the tyrannical grasp of the West.
The Tibetans are all still there. No massacre, no genocide, no rape of the women, no separation of the children from their moms.
But if you want to know what it’s really like for true tyranny, then you should ask your own native populations, including, but not limited to, the Iroquois, Cherokee, Sioux, Shoshone, Crow, Cheyenne, Apache, etc, etc. That’s just starting with America. We haven’t even started to discuss the Maori in “New Zealand” and the Aborigines in “Australia”.
So, the next time you want to fling mud, bring your A game, bud. Cuz it looks like you have a high card, maybe.
Putin of course knows that the Eurotrash is entirely incorrigible as well as 100% insolvent, just like its US overlords. This means that Russia promptly cancels her gas exports to zone A, shifting them to zone B including any interested buyers throughout the global South. Dire times ahead for Germany in particular. What are the morons Baerbock and Scholz to do now? Nordstream II was just completed and then left to its fate at the drop of a hat.
What is happening now is nothing less than a quantum leap in the liberation process of the global majority.
There have been a lot of comments in the English-speaking press that demanding ruble payments would be a one-sided breach of contract.
About twenty-odd years ago it seemed like everyone I sat next to on the London-Moscow plane was a lawyer – more than one told me that with the huge expansion of gas contracts in Russia UK law expertise was much sought after and that many (most?) such contracts were based on UK contract law. So this may be true today.
A UK based contract would specify the law governing the contract – I expect Gazproms do as well. If Russian law applies and Russian law changes then Gazprom hasn’t broken the contract.
It might be force majeure (often a specified clause in commercial contracts) or it might render the contract invalid since the terms cannot be complied with legally or very likely something else – but at the end of the day Russia demands ruble payments so it is pay and get gas or don’t and don’t.
The ruble has regained the losses sustained since Feb 24 (back to about 84 per dollar from a low of about 130 per dollar) – expect it to strengthen more soon.
EU will agree in a flash. Nothing will really change – the currency of the contract is unchanged. They will still send the payment in Euros, exactly as per a contract, and will receive the agreed amount of gas, as per existing contract. Nothing changes here. The only thing that changes is an introduction of an easy bureaucratic procedure – they will have to open another account, in roubles, and, once they pay in Euros, as per contract, to send an order (may be a standing order) to buy roubles. Currently, all Russian importers have to sell 80% of their foreign currency earnings at the exchange. Here, it will be 100%. Big deal. The same result could have been achieved by a simple Central Bank letter to the importers – from now on, you sell 100% gas earnings at the exchange. This is an entirely internal matter that does not affect EU customers. In short, window dressing. Please, proceed; nothing interesting here to see.
Once it is established that euro/ruble accounts must be held at Gazprombank, and Russia formally sells in rubles, then it is a small step to a pricing of the underlying commodity in rubles also.
That will be the crux of the whole deal. Because with the ruble appreciating rapidly (due to Russia’s trade surplus), the malevolent “partner” countries will have to fork over ever greater amounts in euros/USD to obtain the necessary ruble amount of Gazprombank.
Checkmate. The well-deserved penalty for the spineless EU nazi backers.
I expect other commodities to move over to rubles only also, especially wheat. No rubles, no wheat. Its a bit like training Pavlovs dogs, you have to start somewhere but they’ll soon get used to it.
“Will it be allowed to spend them within the EU ?”
Perhaps not, but if the Russian government takes those Euros and apply to accounts available to creditors, then it may either happen:
1) The creditors are not able to grab their money due to sanctions from EU regulatory authorities, which creates a huge problem for them since Russia is paying them
2) The regulatory authorities let these monies be collected, but this weakens significantly the sanctions framework.
“Will it be allowed to spend them within the EU ?”
Probably not within the EU.
But a Russian company who wants to buy, lets say, shoes from Mozambique, phones from Malaysia or shirts from Pakistan is going to have access to those Euros and I suppose that Mozambique, Malaysia and Pakistan are going to accept them.
My understanding is that the buyer will deposit their euros (or whatever currency) in the Gazprom bank, who will immediately exchange them on the Moscow FX for roubles. These roubles will be placed in the Russia-based account that the buyer will be obliged to open, and Gazprom will take their payment, in roubles obviously, from that account. The euros will have been sold on the FX and will go wherever the FX market takes them.
Sounds interesting (not). It’s just the old meme of zone A’s untouchability you are peddling here. Again: Like so many times in the past, Putin isn’t bluffing. And he says explicitly that Russia demands payment in rubles, period. Hence, it’s up to the buyers to purchase these Russian rubles. Anyway, I guess the issue will be irrefutably settled by the ruble’s exchange rate.
For reference, remember how cool and contemptuous zone A was when Putin entered the scene in 1999? Like, “That guy has neither the wits, nor the will to stop our looting orgy. Doesn’t even amount to window dressing. Please proceed, noting to see here”.
That is what happens when you read “experts” and not the primary sources. I have just described not the “Zone A” thinking, whatever that is, but what is actually written in today’s decree signed by Putin. And no, this is not a small step to change the underlying contract into roubles. It is a huge step, and today’s decree is pure cosmetics for internal consumption. Putin is reluctant to do it, and, unless his entourage changes, he never will. One indication of that is an early bizarre remark of Peskov concerning Novotek in this context. Vey telling.
Lovely. Again: I believe the exchange rate of the ruble is the undisputable fact that settles if there is any “pure cosmetics” or something of appreciably bigger substance to see here. Over and out.
The exchange rate of the rouble has risen because of the requirement, introduced after the Western actions started, that Russian importers sell 80% of their foreign currency earnings at the Moscow currency exchange. After the gas scheme is introduced, an additional number of Euros will be traded at the excjange – additional 20% of the currency proceeding from gas earnings. That, in theory, should help rouble more, but not drastically. Repeat, this is pure cosmetics. The same result could have been achieved simply by telling Gasprom to sell 100% of currency received at the Moscow exchange. There was a serious pushback in Moscow against actually selling gas for roubles, and today’s simulacrum is all you get at this point, probably ever.
Gazprombank will create new rubles on its computer and delete the incoming Euros back out of existence, otherwise twice as much money would be created causing hyper inflation This procedure is just a book entry currency swap, nothing is being bought or sold. Gazprom will receive the rubles it can spend within the Russia economy.
“contract into roubles. It is a huge step, and today’s decree is pure cosmetics for internal consumption. Putin is reluctant to do it, and, unless his entourage changes, he never will.”
Can you explain? Thanks
You are just like ” billy” a quasi-economist with bias views to say the very least. Facts will always win over fiction, and Hollywood fantasy replaced by facts on the ground.
The simple fact is that Mother Russia explained to date that we have honored every oil and gas contract to date. However, in light of your evil, ignorant, racist and insane sanctions, and theiving our money, as you have done all over the world; we tell you that now you have to pay for our gas in roubles.
What are you going to do when Russia shuts off the taps? You pay us in rubles or no gas . But that this is only for the duration of agreed contracts, then Asia will receive the rest.
But what I would really like to see how powerful you biased etc. Brainwashed will be when Russia unleashes Phase 2. I might be wrong but then I have never been wrong in the merciless evil that Zion controlled upon this planet.
The never ending excuses will stop, just like the lies when the might of the Russian army is revealed, and the west will be faced with a reality that they orchestrated, and find some false nonsense to make them go into “shelters” where they belong.
” Get back to the 1997 borders, as you agreed to” , or else!
Perhaps. However, this only applies to existing contracts. Apparently quite a portion of European gas is purchased on the spot market. For this only roubles are acceptable.
How to get roubles?
Sell something to Russians that they want. But that can’t be done because sanctions.
This is a good start. Russia needs to demand unfreezing of its reserves in the EU before selling them Rubles. Russia’s central bank needs to deny Rubles to nations that have frozen its reserves.
Is Russia still paying transit fees to Ukraine? In which currency?
So Chinese, Indian, … companies can open an account at the Gazprombank and pay in their respective national currencies. If Russia wants its friends to pay in other currency than their national currencies, it will be acting unfairly towards its friends. Russia’s friends will be watching.
The desire of the Financial Empire is to weaken or “break” Russia, by “Overextending and Unbalancing Russia”, which is forcing it to extend excessively to unbalance and take it down. Any nation that is enabling this plan needs to be viewed as an existential threat by Russia, and treated so. Russia needs to stand up for its frozen reserves and free them. If Russia would have just invested those $300 billion in its economy, it would have benefited a lot and be in a better position. What a lost opportunity.
Russia needs to outsmart the EU and unfriendly nations that have frozen its reserves, and ensure that Ruble is a reserve currency in the basket of its trading partners going forward.
No CONVERSION. Russian central bank need to refuse Ruble conversion for those nations that have frozen its reserves.
No CREDIT. Gazprom and other Russian companies need to deny credit to the EU companies. Currently payments for most April gas deliveries are not due until May. This needs to be stopped immediately. The EU needs to pay one month in advance. No more credit to the EU or unfriendly nations. By denying credit for supplies, these unfriendly nations will have to create Ruble reserves. So Ruble will become a reserve currency in the basket of reserves!
This is a good fight and Russia needs to play hardball to win, so nations trade in their respective sovereign national currencies in the future! Let’s see how Russia will play the game and define the new financial order.
Japan rules out withdrawal from joint Russia gas project
Japan has no plans to withdraw from a joint Russian oil and gas project, despite joining tough sanctions on Moscow over its Ukraine invasion, Prime Minister Fumio Kishida said Thursday.
Energy resource-poor Japan is attempting to balance its need for fossil fuels with toeing a hard line on Russia, and has faced questions over its continued involvement in the Sakhalin 2 project.
Amazing. Japan is still an occupied nation, but once in a while they test the limits. I expect the Mighty Wurlitzer to crank up a notch in Japan in response, in response to which this morning my husband pointed out it is the screams of a dying witch. Still, pretty doggone persuasive to too many people.
Yep, restarting exploitation around Groningen, then you’ll have to pay all those people with broken
houses, as a result of sinking ground. This will be quit popular in that region. And millions to pay.
Thanks for that! Very informative. Here are a couple of more that may interest you. A history of how US dollar hegemony developed from World War 1 to the present:
Prof Michael HUDSON – De-Dollarization – Toward the End of U.S. Monetary Hegemony?
This is good news indeed. It’s about time. Start with gas first. Then maybe things like titanium, palladium, germanium, nickel and so many other stuff EU industries need from Russia to stay competitive. This is the outcome for EU elites who decide on foreign policy in moments of hysteria, or is it mania?
He is expressionless, as usual. EXCEPT when he states that he will not be involved with charity, he can barely contain a grin. I wish I could see the Neocons expressions when they listen to this. LOL indeed.
This is cruel and deceitful of Putin!
He knew the other side insisted that he was bluffing, so by not bluffing he disappointed, nay, shocked them.
This is not the first instance when he does exactly what he said he would do, perversely knowing that he is acting against their expectations to be bluffing or outright lying. When will he learn to behave as expected?!
Well done putin, just be brutal! Finish what you started! Like you said ” they didn’t want to be friends, but they didn’t have to make an enemy out of Russia “.
Je pense qu’il doit y avoir des “raisons” à la déraison de cette annonce, du même degrés d’importance que le soit disant “retrait russe” de la guerre d’Ukraine.
Qui sommes-nous pour penser tout savoir sur la stratégie et le déroulement d’une guerre à si multiples facettes ?
Ce n’est pas un jeux vidéo, ni une série Netflix…c’est un tournant de l’HISTOIRE dont beaucoup d’entre nous ne verrons pas l’issu et l’aboutissement.
Nous ne sommes que des mortels…l’Histoire est un peu plus longue que la mortalité commune des mourants.
Traduction automatique
I think there must be “reasons” for the insanity of this announcement, of the same degree of importance as the so-called “Russian withdrawal” from the war in Ukraine.
Who are we to think we know everything about the strategy and the course of a war with so many facets?
It is not a video game, nor a Netflix series…it is a turning point in HISTORY which many of us will not see the outcome and the outcome.
We are only mortals…history is a little longer than the common mortality of the dying.
Some shift in Putin’s rhetorics. Can we call it “downgrade” ?
Однако западные страны сделали свой шаг, и мы на него, конечно, должны ответить. Предлагаю исходить из того, что прежнего взаимодействия с бывшими партнёрами в ближайшее время не будет. Мы не собираемся ни от кого закрываться и мы не будем закрытой страной, но мы должны исходить из тех реалий, которые складываются.
However, western states made their move, and we should, of course, respond to it. I suggest to accept that in near future there would be no interactions that used to be with our former partners. We are not going to close up from anyone, we won’t be a sealed country, but we should be rooted in the reality that happenned to come.
The amount of newsprint this has generated is unbelievable.
Gazprombank is the only Russian bank able to transact in Euros. Gazprom will now only accept payment into its RUB account at Gazprombank.
Therefore EU buyers will have to send EUR to Gazprombank who will then credit Gazprom with the appropriate amount of RUB.
In other words banks will have to open a correspondent account with Gazprombank rather than whoever they were using as correspondent previously in Russia.
What Gazprom was doing internally (discounting Euros into Roubles within Gazprombank), now everybody has to do. And no doubt Gazprombank will make a tidy turn on each of those transactions.
This is not the end of the US or the $.
It is not even the beginning of the end or the end of the beginning.
There’s only so many times I can post the actual transactions up before I say. Ah, forget it. If they want to believe in a tooth fairy let them believe in the tooth fairy.
I blame the ” gold standard” freaks who have clogged up the internet with ideological nonsense for decades. The Austrian economists who have been ignored for over 70 years for very good reason.
Just watch things will carry on as if nothing had happened.
Set the price of gas in Rubles, meaning EU customers need to pay X Rubles. In order to pay that number of Rubles, they need to pay in an equivalent amount of Euros to that number of Rubles. This reverses the forex risk from Russia to the EU, exports inflation to the EU and means the Ruble doesn’t fall as the US wanted. Effectively, EU nations subvert their own sanctions to keep the gas taps on.
The US wanted the Ruble to collapse, causing domestic hyperinflation and resulting in regime change in Russia. Unfortunately, this time the bulk of the world ignored the US in refusing to sanction Russia, and Russia is too important to the global economy to simply exclude, and now it is the Western nations that face the brunt of inflation and reduced trust in their currencies.
It’s usual for MMT ‘theorists’ to understand the mechanics of transactions but not the implications.
Billy, I do agree there would have to be more steps to follow to ‘end the $’. I imagine Moscow (and Beijing) is smart enough to understand that as well as (better than) us rubes on the intertubes. It’s one of the reasons that the scenario of Putin and Xi being in league with the globalist fascists can’t fully be ruled out with current publicly available information, because we won’t really know until the end game, if you will, rolls out.
The tone you take about “gold standard freaks” strikes me as a notable teaching moment. I think the reason that gets under your skin is because for all of MMT’s desire to be heterodox and different, the “JG freaks” actually depend upon the very same mainstream economic concept – that of a buffer stock anchoring prices.
To imagine a different form of political economy, one must first accept the reality that buffer stocks don’t work. What matters is how currency units are spent (and taxed).
The Western leaders are simply mad. Totally insane. And have no sense self awareness. So they expect to pay in dollars and euros and then they freeze the same? They are special and Russians are morons?
How exactly did they expect the whole thing to work?
There was this dude, a writer, a gentleman actually. He passed away some years back. In 1995 he published a book called ” The Whispering Winds of Change”. It describes some of these earth changes and he was talking about these events 20 years or more ago. He wrote an essay titled :- “The day the fat go hungry” in 2004 I think. A satirical piece about empires falling etc.
Gazprombank is selling the Euros for Rubbles at the Exchange market in Moscow. The amount is then credited to the K account of the european client.
This is good until Gazprombank will be sanctioned by Europe. We can expect that to occur in 2-3 years.
In the meantime, Russia will have completed its Power of Siberia 2 pipeline towards China.
We today heard from the foreign ministers from France/Germany that they will never pay in Rubbles, only in Euros. They will continue to do so until the Gazprombank is sanctioned.
Russian President Putin is spot on. There are no leaks in his logic on this one. People think they can do anything with impunity. No they cannot fellas.
I would imagine those euros held by Gazprombank can be spent with friendly nations, unlike the euros being held captive within western central banks.
This is yet another beautiful trap laid out by Putin. What are the western countries going to do? Sanction all countries that are doing business with Russia to prevent them from accepting the euro?
That would mean nobody would accept the euro, and the european union would be toast, along with NATO.
If there was ever a masterful judo move by president Putin, this is it! Also, it’s only the first step, music to the ears; just the genre is different depending on who is listening, LOL!
Need to be careful here. There are a lot of environmenatlists in Europe, especially in Germany, who would just love to see the gas cut off. Fuel prices in Germany I have heard are sky high right now. Not so much because of Putin, but more so because of taxes. The leadership really does not want people to use fuel.
Tomorrow being April 1, we will see who is fooling.
For the first time in recent history sanctions have boomeranged on the sanctions-loving West and hit them right between the eyes (and what an echo between the ears.)
Simply put, Russia has effectively told the Euro West that it has two choices — find roubles or … break your own sanctions . Exquisite.
Short article from researching the Ruble today:
What is the Ruble?
The Ruble is the currency used in Russia, Abkhazia, Belarus, South Ossetia and Transnistria. Elana Glinskaya, mother of Ivan the Fourth was responsible for introducing the first Ruble to standardize the Russian monetary system in 1534. Tsar Alexi, to finance the Russian – Polish war 1654 – 1667 introduced the “Copper Ruble” in 1662. In 1769 Empress Catherine introduced a “Paper Ruble” with notes backed by silver Rubles. In 1895 Serge Witte replaced the silver Ruble with a “Gold Ruble”. “Soviet Ruble” introduced in 1924 by Vladimir Lenin. 1925 – 1927 coins minted with Tsar Alexander for foreign trade because Western government refuse coins with soviet symbols. “Putins Ruble” 2000 – present.
12 Fun Facts about the Ruble:
1. The Ruble is almost 500 years old.
2. Elana Glinskaya in the year 1534 introduced the first Ruble.
3. The first Ruble was silver then in 1662 changed to copper.
4. 1704 Peter the Great reformes currency, 28 grains of silver = 1 Ruble, decimalized, divided into kopek, 100 kopek = 1 ruble.
5. Empress Catherine introduced the paper Ruble in 1769 backed by silver Rubles.
6. Serge Witte introduced the golden Ruble 1895.
7. 1922 USSR replaces the “Imperial Russian Ruble” with the “Soviet Ruble”.
8. 1925 – 1927, special golden Rubles with Tsar Alexander’s portrait were minted for foreign trade.
9. 1931 Soviet Ruble becomes a private domestic currency.
10. 2000 – present, era of Putins Ruble.
11. 2022 President Putin signs decree demanding hostile entities to pay for Russian goods in Rubles.
12. March 31, 2022, 1 Dollar = 80 Ruble.
Many countries have opted to turn away from US Dollar in favor of their own currency or currencies other than US $. However at the end of the day, they kept trading in US $. The main issue is the system that has been erected around $ for decades and it has made $ the currency of convenience.
Members of OPEC, ASEAN, BRICS…have spoken of a replacement for Dollar with no conclusion.
Spot the difference: Finance Capital, Debt Capital or Natural Resource Capital.
Fred, all US dollars are created ex nihilo by private banks as debt every time they make a loan.
Whatever the borrower wants to do with the loan is his affair.
However, there is no need for any sovereign government to borrow money from banks, since the US Treasury could just as easily create digital US Treasury Notes equivalent in value to US Federal Reserve Notes.
But it’s the value of those notes that really matter, and we can see what’s happening to the value now as inflation eats that value up, and we have always borrowed from the banks except for when Abe said I have two enemies one in front which are the Southern forces and the one behind which are the bankers and of the two the bankers are the worse, so he created Federal Notes to bypass them the same thing JFK was trying to do when he took on the Federal Reserve by issuing millions in Federal Notes which rotted away in a warehouse, and it’s probably one of the reasons they killed him
It’s even worse, it’s debt of the unborn. And demographics is a hidden bitch.
People who ‘believe’ in MMT (the theory grounded by financial genius Robert Mugabe), see and learn.
Cheers, Rob
Rob, Robert Mugabe got the sanctions from hell when he refused to bend the knee and kiss the ring of American and Western imperialism.
Which he never did.
He will get the last laugh from his grave
Actually a theory ‘proven’ by the Weimar republic. MMT is just the theory of Chartalism re-branded. The MMTers can demonstrate money mechanics accurately, but not the implications of their theory on the real world as it is an accounting tautology.
It would be interesting to see a listing of Gazprom’s LNG customers, where they are located, etc. My guess is this hits Germany hardest of all and is being used as a template for extending the rouble-purchase requirement to all Russian exports.
I am inclined to cheer VVP but I live in Zapad, this going to hurt.
Of course, we would not want to cause any trouble for the Germans, Poles, French, Italians, Americans, or Ukrainians. No one.
It is unfortunate that governments, primarily Western governments, have been creating this crisis for years, since about 2008. What other event has to happen for the governments to start negotiating constructively?
After all, talk about “dependence on Russia” and “gas racketeering” is demagogy. Russia is just as dependent on products produced in other countries, and the governments of these countries actively use this by imposing sanctions.
What products might those be, Russia is depending on? Especially from countries which are sanctioning.
I think that are pretty few things and even less, that are essential.
Don’t forget, the absolute majority of countries are not imposing sanctions, especially those with the highest output of production.
Yes, it would be good to subject media publications about Russia’s dependence on the supply of goods and services from the West to critical thinking. But this would require a whole study of trade and industry statistics. I don’t have that kind of education and information. Therefore, I am writing in general terms. Of course, it depends on something. But to what extent and how critical it is is not known.
George,
Some good points you make. You are probably aware that Russia is for all intents and purposes an Autarky? What, exactly, does Russia need from the west?
I think that Russia is an autarkic country due to sufficiently large fertile lands, large mineral reserves and sufficiently developed industries, agriculture, transport, but not an absolute autarky. And the Russian government does not seek to become an absolute autarky. As the Russian government says, it needs from the West the absence of a military threat, security and the absence of harassment in trade.
It was about time.
What do you mean with that? It has nothing to do with Russia, neither is Russia in any way to blame for “the war in the Ukraine” (Russia’s SMO).
It’s completely obvious that Russia was left no other choice than to defend itself, or than to eventually stop delivering its products when the West refuses to pay.
It’s just part of the controlled demolition (“Great Reset”) of the existing Western system by the AngloZionist shadow government, in order to forestall the otherwise imminent and inevitable uncontrolled collapse of their evil system.
Instead, the AngloZionists intend to hold on to power in the West with totalitarianism (disinformation, terror, tyranny, a new “Iron Curtain,” and so forth). But that’ll only work for a while, and their Empire of Lies will gradually collapse, anyway.
A breath of fresh air. For the last 24 hours rumors of Russia accepting Euros “for now” because finding rubles is just too difficult was maddening. Let’s Go Vladimir.
I know! Me too. So glad to see Putin is not budging. It’s Putin against the new world order ghouls. Sadly, most of the sheeple in the west will never understand that Putin and Russia are the only thing standing between them (the sheeple) and a one-world slavery based on a digital currency.
Amen!
I’m an American, but the American government has made itself my enemy.
All of the First World “democracies” have embraced Anthropogenic Global Warming Theology then the Covidvirus plague to transform themselves into totalitarian regimes.
The enemy of my enemy is my friend. Russia and Vladimir Putin have become my friends.
Now for a joke.
In the wake of Vice President Kamella Harris giving her insipid, incomprehensible speech in Warsaw then Joe Biden revealing that US troops will be deployed to Ukraine, Polish people are now asking each other, “how many Americans does it take to screw in a lightbulb?”
Yep Im inclined to agree with every word you said there. Its refreshing to listen to a grown up speaking for a change . Johnson is an embarassment to the UK, to say the least. I actually admire Putin. He’s damn near a genius with his IQ . Apparently he’s a good chess player too. Always 10 steps ahead of the grifters in the West. He doesn’t give his game away like Schwab and Gates either.
As European I am willing to live on water and cabbage just to see these wagging Western hypocrites getting spanked by Russia.
If the EU and its master race in the US burn, and those “Masters of the Universe” are in line for a crash landing, it definitively will be worth it.
So it’s basically, do it our way or freeze.
LMFAO. No less than the stupids deserve.
Additionally i would like to address Saker’s (and others’) opinion that Russia is crap at PR. Well, yes. Russia doesn’t do PR, it’s an entirely American concept with which they’ve infected Europe and the rest of the Anglo-Zionist Empire. (ref. Bernays & co.). China doesn’t do PR either. Instead, they speak and act diplomatically, with respect, presenting facts and ignoring all the rest. So it looks like they’re getting clobbered by the Mighty Wuerlitzer. But the MW eventually runs out of steam. Facts are facts no matter how you try and spin them. Look at the revenations about the Ukronaziusa biolabs–we certainly haven’t heard the last of them. Then there’s the torture of POWs, the treatment of civilians . . . it goes on and on, and none of it will go away, and eventually even the stupidest of the McStupids won’t be able to deny it.
I’ve never been to Russia and speak no Russian. But my heart is Russian.
Yes, pasha you are very right. I’m from the khasarian mafia controlled usa vasall state of norway. Russia is doing us all a big favour it seems.
Maybe one day, if we’re extremely lucky, we’ll look back on all this and ruefully wonder how the ELMS–the Empire of Lies, Madness, and Stupidity–transformed us in less than half a century from a reasonably politically diverse, reasonably sane, reasonably brained set of somewhat independent entities into a sheep-brained, propagandized fascist dictatorship. I imagine the Germans of the 1930s and 40s wondered much the same thing. It didn’t end well for them and it won’t end well for us.
It may just be my opinion, but I think it is the normal human group response to scarcity. America had to start going abroad around 1970 for the resources to continue the lifestyle they believed was their destiny. If you are as old as I am, you saw what happened to Jimmy Carter when he tried to level with Americans about the crisis they faced. They went straight out and voted for the optimistic Ronald Reagan, for whom “long-term” meant ten years. America’s overseas strategy since then has been based on getting and keeping control of energy resources, meanwhile to keep business chugging along like normal at home, they resorted to more and more elaborate schemes for forcing scarcity on the working class and rationalizing it as their deserving to suffer. So here we stand at a great crossroads. If the Empire of Lies, where the people themselves chose liars to lead them, can gain control of Russia’s resources in particular, followed by Iran’s and Venezuela’s, they can let some of the pressure off the deplorables and keep the Ponzi going for another decade or two. If they can’t, things are going to get very very interesting in the Empire, culminating in the scene where the elites sacrifice each other on the altar of Perpetual Progress. Human nature being what it is, Russia will most likely eventually face the same thing.
Mine too,, I love my country, México, but,,, maybe someday I’ll visita mother Russia.
I concur, pasha.
PR through war propaganda does not win wars, warriors do. And when they do, war propaganda is at long last perceived as the pathetic PR it had really been all along… It evaporates.
That is what will happen with the ongoing insubstantial imperial Ukrainian war propaganda in the West. Just like it happened recently after 20 years in Afghanistan, like it had happened in Saigon, ending the Vietnam war, as we had seen as well on the Eastern Front, at the end of WWII…
Contact with reality alone brings genuine victory and lasting peace.
I’m not sure I would describe what is taking place today in the west as ‘PR’. That was what used to happen in the 1950s and 60s. Now I would describe it as psychological warfare, weaponised neuro-linguistic programming, an insidious, poisonous, pathological anti-truth, satanic actually. I just briefly went to the BBC news site to see their reaction to this development, and the whole Ukraine narrative is just floating away in a carefully crafted bubble of unreality, completely disattached from actual events, a dismal fabricated fantasy. They are imposing a form of delusional mental illness on their captive audience. I repeat, it is satanic.
I feel the same.
My admiration for Russia is growing so much that i have been willing to kearn the language and visit one day.
Sounds fair.
The fury in London & NY will however be extreme. It is amazing how they all persuaded themselves as recently as yesterday that this was a bluff, they do not learn.
How will it work? I assume payments are still made in € or whatever, and then exchanged by the recieving Russian bank for Roubles.
So it looks as if Russia is still recieving unfreindly currency & needs to spend it, not place it in an unfreindly bank or buy unfreindly bonds with it. It is going to be interesting to see how that end of things is handled.
Andrew – I think that the unfriendlies have to open ruble accounts in Russian banks and then they pay their bills in rubles. So effectively they buy rubles for euros somewhere and then sell them to the Russian bank in exchange for debt-removal.
And of course the price you buy for and the price you sell for are not the same so basically a price-hike on the gas as Russia controls both ends of the exchange …
Yes, this is correct, they have to buy rubles on the open market (like everyone else who wants rubles) then they put them in a nice new unsanctioned Russian bank account and when their bill is due they send payment to Gazprom. No rubles no gas.
Well, it is not “like everyone else who wants rubles”…I have been trying to buy Rubles for a month and no way, here in Europe, the Ruble (and Russia) are being canceled.
If somebody knows how to buy Rubles, please tell me…
“If somebody knows how to buy Rubles, please tell me…” – yes please, I’d be interested too…!
This is how it works
https://new-wayland.com/blog/rouble-gas-payments-false-flag/
The amount of newsprint this has generated is unbelievable.
Gazprombank is the only Russian bank able to transact in Euros. Gazprom will now only accept payment into its RUB account at Gazprombank.
Therefore EU buyers will have to send EUR to Gazprombank who will then credit Gazprom with the appropriate amount of RUB.
In other words banks will have to open a correspondent account with Gazprombank rather than whoever they were using as correspondent previously in Russia.
What Gazprom was doing internally (discounting Euros into Roubles within Gazprombank), now everybody has to do. And no doubt Gazprombank will make a tidy turn on each of those transactions.
Hi, I am a “little” confused: does gazprom get paid in euros? Would you explain more on that if you think you can make it more understandable. I have a tendency to get confused easily around finances. Also I read a while ago that JP Morgan was a big shareholder in Gazprom. Do you know the specifics of who owns Gazprom?
On my mind, the question is: how much control, and thus sovereignty, has the Russian government on its banks and strategic industries, like Gazprom. Thank you.
Russian goverment is the controlling shareholder in Gazprom.
According to the Russian constitution, the Central bank is independent of the Government or any other Russian Federal institution. That is a point of major criticism in Russia.
Payments are made in US$ or Euro to the accounts which are then blocked to Russian access. Imagine you are selling me something, I pay, but hold the payment in my pocket. “I payed, these is your money, but it will stay in my pocket until I decide you behaved as I want you to and then I will decide to give it to you or not.” Robbery. This is what happened. Russia had no choice, but to sell for rubles, which are to be payed to banks physically in Russia.
Why would a Russian bank accept euros if there is nothing they can do with it?
As expected, Germany are wrong, VVP isn’t bluffing. Will they, (EU states), still continue to insist they will not pay in Ruple, if so things are going to go very dark and cold in the EU.
Will now be the time the much talked about ‘chemical weapons’ false flag will be trotted out?
Putin caved.
He moved it from March 31 to April 1.
Total surrender to the global financial masters. (this is sarcasm, folks, for those who don’t get it)
In just a few days, the ruble has increased in value, over 40%. He should have pushed it to April 2nd.
Western elites said he was bluffing!
The EU has the option of paying for Russian gas with rubles or gold ingots.
If gold is used the customer is credited with the equivalent of $1,600 per troy ounce.
Indeed…. but what if Berlin, Brussels, etc think that the April 1st deadline is an April joke… lol.
Maybe April 2and would have been better?
On the other hand, this should have happened two or three weeks ago. Why sell gas in euro when that money gets confiscated immediately, basically giving Germany and others free gas.
The Eurorats think they are smart. They are NOT.
Nah, April 1. Who’s the fool now?
you would be surprised how many people in western MSM Land are saying this without the irony! Despertae people say desperate things.
April 1st is April Fools Day. How appropriate! Ha!
Haha, not cave in but adjust slowly on that pain dial… like a mock execution before the real one
Guess its going to be a while before we hear Helene Fischer sing Полюшко поле (meadowlands) again. A stirring performance of Russian Born Helena signing this song.
https://www.youtube.com/watch?v=V7VXruhp18c
A new epoch is beginning. After five hundred years of western perfidy then thirty years of the supremacist semi-unipolar interregnum a new long cycle of history is beginning.
There are still rough times ahead but I am optimistic for the future of the new humanity that is being born in the East and Global South. The social, political, economic and military gravitational pull of the Russia/China alliance will draw towards it states escaping the tyrannical grasp of the West.
Tibet could not be reached for comment.
The Tibetans are all still there. No massacre, no genocide, no rape of the women, no separation of the children from their moms.
But if you want to know what it’s really like for true tyranny, then you should ask your own native populations, including, but not limited to, the Iroquois, Cherokee, Sioux, Shoshone, Crow, Cheyenne, Apache, etc, etc. That’s just starting with America. We haven’t even started to discuss the Maori in “New Zealand” and the Aborigines in “Australia”.
So, the next time you want to fling mud, bring your A game, bud. Cuz it looks like you have a high card, maybe.
Putin of course knows that the Eurotrash is entirely incorrigible as well as 100% insolvent, just like its US overlords. This means that Russia promptly cancels her gas exports to zone A, shifting them to zone B including any interested buyers throughout the global South. Dire times ahead for Germany in particular. What are the morons Baerbock and Scholz to do now? Nordstream II was just completed and then left to its fate at the drop of a hat.
What is happening now is nothing less than a quantum leap in the liberation process of the global majority.
There have been a lot of comments in the English-speaking press that demanding ruble payments would be a one-sided breach of contract.
About twenty-odd years ago it seemed like everyone I sat next to on the London-Moscow plane was a lawyer – more than one told me that with the huge expansion of gas contracts in Russia UK law expertise was much sought after and that many (most?) such contracts were based on UK contract law. So this may be true today.
A UK based contract would specify the law governing the contract – I expect Gazproms do as well. If Russian law applies and Russian law changes then Gazprom hasn’t broken the contract.
It might be force majeure (often a specified clause in commercial contracts) or it might render the contract invalid since the terms cannot be complied with legally or very likely something else – but at the end of the day Russia demands ruble payments so it is pay and get gas or don’t and don’t.
The ruble has regained the losses sustained since Feb 24 (back to about 84 per dollar from a low of about 130 per dollar) – expect it to strengthen more soon.
EU will agree in a flash. Nothing will really change – the currency of the contract is unchanged. They will still send the payment in Euros, exactly as per a contract, and will receive the agreed amount of gas, as per existing contract. Nothing changes here. The only thing that changes is an introduction of an easy bureaucratic procedure – they will have to open another account, in roubles, and, once they pay in Euros, as per contract, to send an order (may be a standing order) to buy roubles. Currently, all Russian importers have to sell 80% of their foreign currency earnings at the exchange. Here, it will be 100%. Big deal. The same result could have been achieved by a simple Central Bank letter to the importers – from now on, you sell 100% gas earnings at the exchange. This is an entirely internal matter that does not affect EU customers. In short, window dressing. Please, proceed; nothing interesting here to see.
This is a first step only.
Once it is established that euro/ruble accounts must be held at Gazprombank, and Russia formally sells in rubles, then it is a small step to a pricing of the underlying commodity in rubles also.
That will be the crux of the whole deal. Because with the ruble appreciating rapidly (due to Russia’s trade surplus), the malevolent “partner” countries will have to fork over ever greater amounts in euros/USD to obtain the necessary ruble amount of Gazprombank.
Checkmate. The well-deserved penalty for the spineless EU nazi backers.
I expect other commodities to move over to rubles only also, especially wheat. No rubles, no wheat. Its a bit like training Pavlovs dogs, you have to start somewhere but they’ll soon get used to it.
I wonder what Gazprombank will do with the incoming Euros from buyers of Russia gas.
Will it be allowed to spend them within the EU ?
“Will it be allowed to spend them within the EU ?”
Perhaps not, but if the Russian government takes those Euros and apply to accounts available to creditors, then it may either happen:
1) The creditors are not able to grab their money due to sanctions from EU regulatory authorities, which creates a huge problem for them since Russia is paying them
2) The regulatory authorities let these monies be collected, but this weakens significantly the sanctions framework.
“Will it be allowed to spend them within the EU ?”
Probably not within the EU.
But a Russian company who wants to buy, lets say, shoes from Mozambique, phones from Malaysia or shirts from Pakistan is going to have access to those Euros and I suppose that Mozambique, Malaysia and Pakistan are going to accept them.
That should not be possible because of sanctions.
My understanding is that the buyer will deposit their euros (or whatever currency) in the Gazprom bank, who will immediately exchange them on the Moscow FX for roubles. These roubles will be placed in the Russia-based account that the buyer will be obliged to open, and Gazprom will take their payment, in roubles obviously, from that account. The euros will have been sold on the FX and will go wherever the FX market takes them.
Literally exporting the inflation pressure back to the Western Central banks. Hot damn these folks now would think thrice before printing their fiats!
Sounds interesting (not). It’s just the old meme of zone A’s untouchability you are peddling here.
Again: Like so many times in the past, Putin isn’t bluffing. And he says explicitly that Russia demands payment in rubles, period. Hence, it’s up to the buyers to purchase these Russian rubles. Anyway, I guess the issue will be irrefutably settled by the ruble’s exchange rate.
For reference, remember how cool and contemptuous zone A was when Putin entered the scene in 1999? Like,
“That guy has neither the wits, nor the will to stop our looting orgy. Doesn’t even amount to window dressing. Please proceed, noting to see here”.
That is what happens when you read “experts” and not the primary sources. I have just described not the “Zone A” thinking, whatever that is, but what is actually written in today’s decree signed by Putin. And no, this is not a small step to change the underlying contract into roubles. It is a huge step, and today’s decree is pure cosmetics for internal consumption. Putin is reluctant to do it, and, unless his entourage changes, he never will. One indication of that is an early bizarre remark of Peskov concerning Novotek in this context. Vey telling.
Lovely. Again: I believe the exchange rate of the ruble is the undisputable fact that settles if there is any “pure cosmetics” or something of appreciably bigger substance to see here. Over and out.
The exchange rate of the rouble has risen because of the requirement, introduced after the Western actions started, that Russian importers sell 80% of their foreign currency earnings at the Moscow currency exchange. After the gas scheme is introduced, an additional number of Euros will be traded at the excjange – additional 20% of the currency proceeding from gas earnings. That, in theory, should help rouble more, but not drastically. Repeat, this is pure cosmetics. The same result could have been achieved simply by telling Gasprom to sell 100% of currency received at the Moscow exchange. There was a serious pushback in Moscow against actually selling gas for roubles, and today’s simulacrum is all you get at this point, probably ever.
But who in Russia would give roubles for euros when those euros can’t be spent?
Gazprombank will create new rubles on its computer and delete the incoming Euros back out of existence, otherwise twice as much money would be created causing hyper inflation This procedure is just a book entry currency swap, nothing is being bought or sold. Gazprom will receive the rubles it can spend within the Russia economy.
“contract into roubles. It is a huge step, and today’s decree is pure cosmetics for internal consumption. Putin is reluctant to do it, and, unless his entourage changes, he never will.”
Can you explain? Thanks
Please stop feeding the troll. Mod.
You are just like ” billy” a quasi-economist with bias views to say the very least. Facts will always win over fiction, and Hollywood fantasy replaced by facts on the ground.
The simple fact is that Mother Russia explained to date that we have honored every oil and gas contract to date. However, in light of your evil, ignorant, racist and insane sanctions, and theiving our money, as you have done all over the world; we tell you that now you have to pay for our gas in roubles.
What are you going to do when Russia shuts off the taps? You pay us in rubles or no gas . But that this is only for the duration of agreed contracts, then Asia will receive the rest.
But what I would really like to see how powerful you biased etc. Brainwashed will be when Russia unleashes Phase 2. I might be wrong but then I have never been wrong in the merciless evil that Zion controlled upon this planet.
The never ending excuses will stop, just like the lies when the might of the Russian army is revealed, and the west will be faced with a reality that they orchestrated, and find some false nonsense to make them go into “shelters” where they belong.
” Get back to the 1997 borders, as you agreed to” , or else!
How is Europe to buy roubles when there is a sanction on Russia?
Perhaps. However, this only applies to existing contracts. Apparently quite a portion of European gas is purchased on the spot market. For this only roubles are acceptable.
How to get roubles?
Sell something to Russians that they want. But that can’t be done because sanctions.
This is a good start. Russia needs to demand unfreezing of its reserves in the EU before selling them Rubles. Russia’s central bank needs to deny Rubles to nations that have frozen its reserves.
Is Russia still paying transit fees to Ukraine? In which currency?
So Chinese, Indian, … companies can open an account at the Gazprombank and pay in their respective national currencies. If Russia wants its friends to pay in other currency than their national currencies, it will be acting unfairly towards its friends. Russia’s friends will be watching.
The desire of the Financial Empire is to weaken or “break” Russia, by “Overextending and Unbalancing Russia”, which is forcing it to extend excessively to unbalance and take it down. Any nation that is enabling this plan needs to be viewed as an existential threat by Russia, and treated so. Russia needs to stand up for its frozen reserves and free them. If Russia would have just invested those $300 billion in its economy, it would have benefited a lot and be in a better position. What a lost opportunity.
RAND 2019 Plan to break Russia:
https://www.zeit-fragen.ch/en/archives/2022/no-7-29-march-2022/ukraine-it-was-all-written-in-the-rand-corp-plan.html
I 100% agree with you. In fact, gas to the Eurozone had to be shut down immediately when Russian reserves were frozen.
ay, that’s the difference between a statesman, a chess player and a street smart guy
what VVP is doing is equivalent of boiling a frog
Russia needs to outsmart the EU and unfriendly nations that have frozen its reserves, and ensure that Ruble is a reserve currency in the basket of its trading partners going forward.
No CONVERSION. Russian central bank need to refuse Ruble conversion for those nations that have frozen its reserves.
No CREDIT. Gazprom and other Russian companies need to deny credit to the EU companies. Currently payments for most April gas deliveries are not due until May. This needs to be stopped immediately. The EU needs to pay one month in advance. No more credit to the EU or unfriendly nations. By denying credit for supplies, these unfriendly nations will have to create Ruble reserves. So Ruble will become a reserve currency in the basket of reserves!
This is a good fight and Russia needs to play hardball to win, so nations trade in their respective sovereign national currencies in the future! Let’s see how Russia will play the game and define the new financial order.
Wonderful first step. Please just follow through with it,and move to more than just gas quickly.
More fun. The Western ship is sinking..
https://www.japantimes.co.jp/news/2022/03/31/national/japan-russia-sakhalin-no-withdrawal/
Japan rules out withdrawal from joint Russia gas project
Japan has no plans to withdraw from a joint Russian oil and gas project, despite joining tough sanctions on Moscow over its Ukraine invasion, Prime Minister Fumio Kishida said Thursday.
Energy resource-poor Japan is attempting to balance its need for fossil fuels with toeing a hard line on Russia, and has faced questions over its continued involvement in the Sakhalin 2 project.
Amazing. Japan is still an occupied nation, but once in a while they test the limits. I expect the Mighty Wurlitzer to crank up a notch in Japan in response, in response to which this morning my husband pointed out it is the screams of a dying witch. Still, pretty doggone persuasive to too many people.
We have been waiting for this move from Russia since the assets of the Russian national bank were frozen. But it’s also good from April 1st.
Please Mr Putin turn that tap off tomorrow if those rats don’t back down.
Netherlands will be fine we go green and have gasfields we can cut exports (germany belgium will cry).
FINALLY a soft countersanction.
Yep, restarting exploitation around Groningen, then you’ll have to pay all those people with broken
houses, as a result of sinking ground. This will be quit popular in that region. And millions to pay.
Excellent Analysis
https://tomluongo.me/2022/03/28/got-gold-rubles-russia-just-broke-the-back-of-the-west/
SL,
Thanks for that! Very informative. Here are a couple of more that may interest you. A history of how US dollar hegemony developed from World War 1 to the present:
Prof Michael HUDSON – De-Dollarization – Toward the End of U.S. Monetary Hegemony?
https://www.youtube.com/watch?v=IbWaNPAS39s&t=347s
And here is another ( 3 mins). Notice how Mearsheimer talks Taiwan and Yiwei talks about the US dollar, as if they are talking past each other:
Dialogue between American scholar John Mearsheimer and Chinese scholar Wang Yiwei
https://youtu.be/tY-7ZXerra0
Ukraine & Taiwan are the distraction, the US dollar is the target. IMHO
This is good news indeed. It’s about time. Start with gas first. Then maybe things like titanium, palladium, germanium, nickel and so many other stuff EU industries need from Russia to stay competitive. This is the outcome for EU elites who decide on foreign policy in moments of hysteria, or is it mania?
He is expressionless, as usual. EXCEPT when he states that he will not be involved with charity, he can barely contain a grin. I wish I could see the Neocons expressions when they listen to this. LOL indeed.
This is cruel and deceitful of Putin!
He knew the other side insisted that he was bluffing, so by not bluffing he disappointed, nay, shocked them.
This is not the first instance when he does exactly what he said he would do, perversely knowing that he is acting against their expectations to be bluffing or outright lying. When will he learn to behave as expected?!
What is he end-game here? To ruin the EU? If so, it is working.
To build a multipolar world/ financial system and a new European/Russian security architecture.
Well done putin, just be brutal! Finish what you started! Like you said ” they didn’t want to be friends, but they didn’t have to make an enemy out of Russia “.
Je pense qu’il doit y avoir des “raisons” à la déraison de cette annonce, du même degrés d’importance que le soit disant “retrait russe” de la guerre d’Ukraine.
Qui sommes-nous pour penser tout savoir sur la stratégie et le déroulement d’une guerre à si multiples facettes ?
Ce n’est pas un jeux vidéo, ni une série Netflix…c’est un tournant de l’HISTOIRE dont beaucoup d’entre nous ne verrons pas l’issu et l’aboutissement.
Nous ne sommes que des mortels…l’Histoire est un peu plus longue que la mortalité commune des mourants.
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I think there must be “reasons” for the insanity of this announcement, of the same degree of importance as the so-called “Russian withdrawal” from the war in Ukraine.
Who are we to think we know everything about the strategy and the course of a war with so many facets?
It is not a video game, nor a Netflix series…it is a turning point in HISTORY which many of us will not see the outcome and the outcome.
We are only mortals…history is a little longer than the common mortality of the dying.
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Some shift in Putin’s rhetorics. Can we call it “downgrade” ?
Однако западные страны сделали свой шаг, и мы на него, конечно, должны ответить. Предлагаю исходить из того, что прежнего взаимодействия с бывшими партнёрами в ближайшее время не будет. Мы не собираемся ни от кого закрываться и мы не будем закрытой страной, но мы должны исходить из тех реалий, которые складываются.
https://aftershock.news/?q=node/1088587
However, western states made their move, and we should, of course, respond to it. I suggest to accept that in near future there would be no interactions that used to be with our former partners. We are not going to close up from anyone, we won’t be a sealed country, but we should be rooted in the reality that happenned to come.
“our western partners” ==> “our former partners”
The amount of newsprint this has generated is unbelievable.
Gazprombank is the only Russian bank able to transact in Euros. Gazprom will now only accept payment into its RUB account at Gazprombank.
Therefore EU buyers will have to send EUR to Gazprombank who will then credit Gazprom with the appropriate amount of RUB.
In other words banks will have to open a correspondent account with Gazprombank rather than whoever they were using as correspondent previously in Russia.
What Gazprom was doing internally (discounting Euros into Roubles within Gazprombank), now everybody has to do. And no doubt Gazprombank will make a tidy turn on each of those transactions.
This is not the end of the US or the $.
It is not even the beginning of the end or the end of the beginning.
There’s only so many times I can post the actual transactions up before I say. Ah, forget it. If they want to believe in a tooth fairy let them believe in the tooth fairy.
I blame the ” gold standard” freaks who have clogged up the internet with ideological nonsense for decades. The Austrian economists who have been ignored for over 70 years for very good reason.
Just watch things will carry on as if nothing had happened.
You don’t get it.
Set the price of gas in Rubles, meaning EU customers need to pay X Rubles. In order to pay that number of Rubles, they need to pay in an equivalent amount of Euros to that number of Rubles. This reverses the forex risk from Russia to the EU, exports inflation to the EU and means the Ruble doesn’t fall as the US wanted. Effectively, EU nations subvert their own sanctions to keep the gas taps on.
The US wanted the Ruble to collapse, causing domestic hyperinflation and resulting in regime change in Russia. Unfortunately, this time the bulk of the world ignored the US in refusing to sanction Russia, and Russia is too important to the global economy to simply exclude, and now it is the Western nations that face the brunt of inflation and reduced trust in their currencies.
It’s usual for MMT ‘theorists’ to understand the mechanics of transactions but not the implications.
Billy, I do agree there would have to be more steps to follow to ‘end the $’. I imagine Moscow (and Beijing) is smart enough to understand that as well as (better than) us rubes on the intertubes. It’s one of the reasons that the scenario of Putin and Xi being in league with the globalist fascists can’t fully be ruled out with current publicly available information, because we won’t really know until the end game, if you will, rolls out.
The tone you take about “gold standard freaks” strikes me as a notable teaching moment. I think the reason that gets under your skin is because for all of MMT’s desire to be heterodox and different, the “JG freaks” actually depend upon the very same mainstream economic concept – that of a buffer stock anchoring prices.
To imagine a different form of political economy, one must first accept the reality that buffer stocks don’t work. What matters is how currency units are spent (and taxed).
81,50 Rubles? For a US Dollar? Do me a favour*, Biden!
* – Cockney slang for “You must be kidding” “No way” “No” and “Not likely,” apart from the literal meaning we all know.
The Western leaders are simply mad. Totally insane. And have no sense self awareness. So they expect to pay in dollars and euros and then they freeze the same? They are special and Russians are morons?
How exactly did they expect the whole thing to work?
I wish deeply in my evil heart of hearts that Democrats, RINO’s and Deep Staters all sold Rubles short in the financial markets in recent weeks.
US has just added fertilizers from Russia to it’s “exempt” list
There comes the beggar thy neighbour policy, trademark of the USA
I hope VVP says, bro, we take Rubles only and I have a special deal for you…
When the USA has Washington DC, why does it need to import fertiliser at all?
I see what you did there. Excellent!!
There was this dude, a writer, a gentleman actually. He passed away some years back. In 1995 he published a book called ” The Whispering Winds of Change”. It describes some of these earth changes and he was talking about these events 20 years or more ago. He wrote an essay titled :- “The day the fat go hungry” in 2004 I think. A satirical piece about empires falling etc.
Could this be the day, April 1?
Gazprombank is selling the Euros for Rubbles at the Exchange market in Moscow. The amount is then credited to the K account of the european client.
This is good until Gazprombank will be sanctioned by Europe. We can expect that to occur in 2-3 years.
In the meantime, Russia will have completed its Power of Siberia 2 pipeline towards China.
We today heard from the foreign ministers from France/Germany that they will never pay in Rubbles, only in Euros. They will continue to do so until the Gazprombank is sanctioned.
Russian President Putin is spot on. There are no leaks in his logic on this one. People think they can do anything with impunity. No they cannot fellas.
April 1, making the EU the April fool, yea VVP party on, tho credit where credit’s due, it was Biden his time with nothing to do’s joke
My first post here but long time reader.
I would imagine those euros held by Gazprombank can be spent with friendly nations, unlike the euros being held captive within western central banks.
This is yet another beautiful trap laid out by Putin. What are the western countries going to do? Sanction all countries that are doing business with Russia to prevent them from accepting the euro?
That would mean nobody would accept the euro, and the european union would be toast, along with NATO.
Further to that, it seems like everyone has forgotten that oil is priced in USD. Putin just gave the europeans the ability to buy oil in euro.
I can see Putin and team laughing their heads off watching the EU and US duke it out. Putin just set friends against each other folks.
Grandmaster versus patzer.
I had always thought the deal with the Saudis was that they demand USD for oil, and in return the US protects their monarchy.
If there was ever a masterful judo move by president Putin, this is it! Also, it’s only the first step, music to the ears; just the genre is different depending on who is listening, LOL!
Cats on a hot tin roof – see how they jump – for any Southerners here!
April 1 is going to be a dance – popcorn ready?
Tough guy EU in a last resort demand to RU: “If you don’t honor the original terms of our gas contracts, we’ll send NATO forces to fight you!”
“… Oh, wait … we already tried that” :(
Need to be careful here. There are a lot of environmenatlists in Europe, especially in Germany, who would just love to see the gas cut off. Fuel prices in Germany I have heard are sky high right now. Not so much because of Putin, but more so because of taxes. The leadership really does not want people to use fuel.
Tomorrow being April 1, we will see who is fooling.
A masterly move by VV Putin. Historical.
For the first time in recent history sanctions have boomeranged on the sanctions-loving West and hit them right between the eyes (and what an echo between the ears.)
Simply put, Russia has effectively told the Euro West that it has two choices — find roubles or … break your own sanctions . Exquisite.
My understanding is that the sanctions voided any existing contracts which leads to force majeure and payment in rubles
Short article from researching the Ruble today:
What is the Ruble?
The Ruble is the currency used in Russia, Abkhazia, Belarus, South Ossetia and Transnistria. Elana Glinskaya, mother of Ivan the Fourth was responsible for introducing the first Ruble to standardize the Russian monetary system in 1534. Tsar Alexi, to finance the Russian – Polish war 1654 – 1667 introduced the “Copper Ruble” in 1662. In 1769 Empress Catherine introduced a “Paper Ruble” with notes backed by silver Rubles. In 1895 Serge Witte replaced the silver Ruble with a “Gold Ruble”. “Soviet Ruble” introduced in 1924 by Vladimir Lenin. 1925 – 1927 coins minted with Tsar Alexander for foreign trade because Western government refuse coins with soviet symbols. “Putins Ruble” 2000 – present.
12 Fun Facts about the Ruble:
1. The Ruble is almost 500 years old.
2. Elana Glinskaya in the year 1534 introduced the first Ruble.
3. The first Ruble was silver then in 1662 changed to copper.
4. 1704 Peter the Great reformes currency, 28 grains of silver = 1 Ruble, decimalized, divided into kopek, 100 kopek = 1 ruble.
5. Empress Catherine introduced the paper Ruble in 1769 backed by silver Rubles.
6. Serge Witte introduced the golden Ruble 1895.
7. 1922 USSR replaces the “Imperial Russian Ruble” with the “Soviet Ruble”.
8. 1925 – 1927, special golden Rubles with Tsar Alexander’s portrait were minted for foreign trade.
9. 1931 Soviet Ruble becomes a private domestic currency.
10. 2000 – present, era of Putins Ruble.
11. 2022 President Putin signs decree demanding hostile entities to pay for Russian goods in Rubles.
12. March 31, 2022, 1 Dollar = 80 Ruble.
http://www.cbr.ru/eng/about_br/history/
https://www.rbth.com/business/332176-history-russian-ruble
Bingo!
Many countries have opted to turn away from US Dollar in favor of their own currency or currencies other than US $. However at the end of the day, they kept trading in US $. The main issue is the system that has been erected around $ for decades and it has made $ the currency of convenience.
Members of OPEC, ASEAN, BRICS…have spoken of a replacement for Dollar with no conclusion.