by Peter Koenig
The world is still hell-bent for hydrocarbon-based energy. Russia is the world’s largest producer of energy. Russia has recently announced that in the future she will no longer trade energy in US dollars, but in rubles and currencies of the trading partners. In fact, this rule will apply to all trading. Russia and China are detaching their economies from that of the West. To confirm this decision, in July 2014 Russia’s Gazprom concluded a 400 billion gas deal with China, and in November this year they signed an additional slightly smaller contract – all to be nominated in rubles and yuan.
The remaining BRICS – Brazil, India and South Africa – plus the members of the Shanghai Cooperation Organization (SCO) – China, Russia, Kazakhstan, Tajikistan, Kirgizstan, Uzbekistan and considered for membership since September 2014 are also India, Pakistan, Afghanistan, Iran and Mongolia, with Turkey also waiting in the wings – will also trade in their local currencies, detached from the dollar-based western casino scheme. A host of other nations increasingly weary of the decay of the western financial system which they are locked into are just waiting for a new monetary scheme to emerge. So far their governments may have been afraid of the emperor’s wrath – but gradually they are seeing the light. They are sensing the sham and weakness behind Obama’s boisterous noise. They don’t want to be sucked into the black hole, when the casino goes down the drain.
To punish Russia for Ukraine, Obama is about to sign into law major new sanctions against Russia, following Congress’s unanimous passing of a recent motion to this effect. – That is what the MSM would like you to believe. It is amazing that ten months after the Washington instigated Maidan slaughter and coup where a Washington selected Nazi Government was put in place, the MSM still lies high about the origins of this government and the massacres it is committing in the eastern Ukraine Donbass area.
Congress’s unanimity – what Congress and what unanimity? – Out of 425 lawmakers, only 3 were present for the vote http://www.informationclearinghouse.info/article40489.htm. The others may have already taken off for their year-end recess, or simply were ‘ashamed’ or rather afraid to object to the bill. As a matter of fact, of the three who were present to vote, two at first objected. Only after a bit of arm-twisting and what not, they were willing to say yes. This is how the ‘unanimous’ vote came to be, as trumpeted by the MSM – unanimous by three votes! The public at large is duped again into believing what is not.
What new sanctions does this repeatedly propagated bill entail? – It addresses mostly Russian energy companies and defense industry with regard to sales to Syria, as well more anti-Russia propaganda and ‘democratization’ programs in Ukraine – and Russia; all countries with the objective for regime change.
How do these sanctions affect Russia, especially since all Russian energy sales are no longer dollar denominated? – Sheer propaganda. The naked emperor once more is calling an unsubstantiated bluff. To show his western stooges who is in power. It’s an ever weaker showoff.
Now – as a consequence of declining oil prices and of western ‘sanctions’ – of course, what else? – Russia’s economy is suffering and the ruble is in free fall. Since the beginning of the year it lost about 60%; last week alone 20%. As a result and after serious consideration, says MSM, the Russian Central Bank decided a few days ago to increase the interest of reference from 10.5% to 17% to make the ruble more attractive for foreign investors. It worked only for a few hours. Raising the interbank interest was Putin’s reply to Obama’s bluff – feeding at the same time western illusion about Russia’s decline.
The propaganda drums tell you Russia is helpless because the world has lost the last bit of confidence in President Putin – of course. Regime change is on the agenda. Mr. Putin must be blamed as the culprit, hoping to discredit him with his people. He is leading Russia into a deep recession; the worst since the collapse of the Soviet Union. The mainstream media show you interviews with average mainstreet Russians saying they have lost all their savings, their salaries and pensions are worth nothing anymore and they don’t know how to survive this coming calamity.
In reality, at least 80% of the Russian population stands solidly behind Vladimir Putin. He has brought them universal education, health care and fixed infrastructure that was decaying after the fall of the Soviet Union. President Putin is literally revered as a hero by the vast majority of Russians – including the country’s oligarchy.
In fact, nobody in the western economic system these days is dealing in rubles. In short-sighted connivance with Washington, the treasuries of the western vassals are releasing their ruble reserves – which Russia does not buy, thereby flooding the market. Russia not only has large dollar reserves, plus the ruble is backed by gold, a fact consistently omitted in the MSM. For now, Russia prefers to let the ruble plummet.
Under another ‘arrangement’ by bully Obama, Middle Eastern oil producing puppets like Saudi Arabia and the Gulf States are overproducing and flooding the market with petrol and gas, thereby driving the price down to the ostensible detriment of Russia and Venezuela, both countries where Washington vies for regime change. A double whammy thinks Washington, buying kudos with the stooges. The sheiks that control their energy output apparently have been promised enough goodies from Washington to bite the bullet and take their own losses.
Russia needs rubles. That’s her currency. That is the currency Russia needs for future trading – detached from the western monetary system.
When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, and by now we know what that does to a currency – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, no by Washington style arm-twisting.
Is this another precursor to war? A nuclear confrontation or Cold War II? – Precursor to a false flag attempting Moscow to fall into the trap? – Not necessarily. Russia is playing a clever chess game, diplomacy at its best. Instead of sabre rattling – Russia is coin rattling. It might lead to a western financial fiasco early in 2015 for the dollar and euro denominated economies. And the winner is…?
Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, the Voice of Russia, now Ria Novosti, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.
Yes, I think you might be onto the right track here. I also found the western MSM blather a bit over the top with extremely one sided comments/anylisis of the ruble situation.
It became extremely obvious that there was foreign propaganda at work in norway when there was a heavy emphasis on the ruble decline while at the same time our Norwegian Krone was depreciating much the same but with less comments.
While its understandable that economies that rely heavily on oil sales gets a correction, it smells bad when you start analyzing the actual economic facts both of Norway and Russia. Both nations have little national debt, and a great surplus of reserves.
To me it all stinks of an engineered decline.
Great article *thumbs up*
[from Blue]
Two links:
One from Anonymous El Sid in the other thread is PCR interview
https://www.youtube.com/watch?v=SRrNs4mlHMA
Paul Craig Roberts-US Government Most Corrupt on Earth
Greg Hunter
Which covers much about the falling ruble and the US war on Russia
…
Second is again PCR
http://www.paulcraigroberts.org/2014/12/17/financial-market-manipulation-new-trend-can-continue/
December 17, 2014
Financial Market Manipulation Is The New Trend: Can It Continue?
Financial Imperialists Attack Russia
Paul Craig Roberts
…
One thing he says is :
Neoliberal economics is not merely incorrect. It is an ideology that fosters US economic imperialism. By following neoliberal prescriptions, Russian economists are helping Washington’s attack on the Russian economy.
…
Yes — this can be seen as traitorous actions. Something must be done about this, whether impeachemnt or some other mechanism, but Russia’s survival is threatened by this existential danger.
__Blue
There is one point that I agree with and one that I disagree.
I agree that the panic of Monday and Tuesday was probably engineered in Russia and intentionally so. Two reasons why this is quite plausible. The first is to create the impression in the histrionic West, that Russia is weak and about to go down. A similar tactic that was used with the tactical retreat of the Novorussia forces back in the summer. The Western media are always on the prole to make negative claims about Russia, that she is weak, that sanctions are bringing her to her knees, that the Russian people are suffering immensely at the mercy of the all powerful and prosperous West. This is the obscene fantasy of the Western supremacists. As we have seen, the entire collapse of Monday and Tuesday, was more than fully reversed on Wednesday. The second reason why I think that the fall was engineered in Russia is that Russian financial institutions were due to make debt payments and had to source dollars, this was partly done through money printing on the part of the Russian central bank. The short term collapse in the value of the ruble was probably also an effort to remind several cretins in the west that Russia could default on debts to Western financial institutions to the tune of half a trillion dollars. That sum is more than enough to send Western financial markets into some serious frenzy. Let alone the fact that already debt ladden Western governments would have to find a way to borrow even more money so as to pay for the loans that Russia can refuse to pay or forced to not pay.
What I disagree with from the claims made in the above article, is this Saudi-US so called secret pact to bring down the oil price. For anyone finding this plausible, I suggest they do some research on the cost of production in Canadian tar sands, and the US shale patch. They might also want to take a peek at the financial position of the firms involved in these expensive projects.
What must also be noted here is the news that the EU is wholly unwilling to provide even crumbs for their Banderastan allies. Talk is cheap for the corrupt eurocrats, their hatred of Russia is also well documented, but their hatred of Russia is only matched by their contempt for Ukraine.
I would not be surprised if the EU has already decided that the Ukraine-based assault on Russia is not worth their stolen euros. NATO statements and posturing are virtually free. Feeding and keeping warm the Ukrainian children is a waste of money for those reptiles in Brussels.
Viewing Russia From the Inside
Geopolitical Weekly
December 16, 2014
http://www.stratfor.com/weekly/viewing-russia-inside#axzz3MD8AbNxU
Peter Koenig, Sir, thanks for this nice article. I have enjoyed it.
Croat and Russophile
Putin said this in his press conference:
Maybe the bear should sit back and relax, not chase piglets and swine across the forest, but snack on berries and honey. Maybe they’ll leave him in peace?
They won’t leave him, because they’re always going to try and put him on a chain.
And as soon as they manage to put him on a chain, they’ll rip out his teeth and his claws. In today’s understanding that’s [our] nuclear deterrent forces.
As soon, God forbid, as that happens, and the bear’s done for, then they’ll start snapping up the forest straight away.
————–
I wonder if the reference to chasing “piglets and swine across the forest” is a veiled dig at Poroshenko. I understand the Russian word for piglet is “Porosenok.” Close enough, considering his face.
Putin is funny.
Those were my exact thoughts as well. Not only is Poroshenko’s name and face akin to a pig but he is a fat bastard as well. His behavior is also that of a brute.
The best part is that Yatsenyuk and Poroshenko now find themselves in the position of beggars. And the entire Western world won’t even throw them a dime. Sad and funny at the same time.
Ah well
http://www.bbc.co.uk/news/business-30525539
“Venus in the pincers”, wait for the weekend!
http://astromundanediary.blogspot.de/2014/12/venus-in-pincers.html
Here is a very good recognition of the general economic scenario the west has become trapped into and that Russia is avoiding:
http://www.oecd.org/els/soc/Focus-Inequality-and-Growth-2014.pdf
If even a dummie like me can see what this report is strongly suggesting, adopting measures which help the lower 40 percent of populations rather than those which ‘help’ the upper one percent are the only sustainable path to growth, even in those countries which glommed onto the neoliberalism credo that property is an aspect of personhood and pushed it right up to money is speech and corporations are persons.
That concept has been proven false by reductio ad absurdum, and it has been a horribly expensive experiment, but we will all rejoice when it comes to a very deserved end, and this is one slice of history we all had better remember. We came far too close to annihilation this time around, and only Russia and China and friends have saved us from extinction.
People of Russia, I salute you.
I agree with this article. It could have used a little more collateral for some of the points – I accept them but I’m not sure how well demonstrated a new reader might find some of them.
@ Stavros H – William Engdahl has reported extensively on the US-Saudi agreement to dump oil and collapse the price:
The Secret Stupid Saudi-US Deal on Syria. Oil Gas Pipeline War
The Ruble has been a “buy” situation for some time. Wish I had some money to invest. Maybe it is true that Russia “plans” to buy the Rubles at rock bottom and “flood” the market with USD. We’ve heard this idea for a couple of days now, but I don’t see any collateral for this appearing yet. Personally I suspect that Russia will act as responsibly as possible not to rock the Dollar when she reclaims her Rubles.
Here’s a useful report from ZeroHedge yesterday regarding China’s ability to help support the Ruble. China Prepares To Bailout Russia We should remember that BRICS has a development bank funded with $100 billion, and that China is sitting with over a trillion USD. There’s no shortage of help if Russia ends up needing some more muscle for the heavy lifting. Personally, I doubt the need.
I looked at these clerk’s records here and found peculiar notes that I need a mother-tongue brit/american to shed some light on. It was the following example:
“Mr. Brady (TX) asked unanimous consent to discharge from committee and consider.”
Did Mr Brady ask the committee to reconsider the bill? Or is it….. the other way around?
Re-blogged on EU: Ramshackle Empire
BTW Anonymous…. I have been a full-paying member of Stratfor and the idea of it is great, but they have shown themselves not being able to act and report independently. They are full of cheap propaganda, which is absolutely scandulous for an agency that asks 250 euros of anual membership fees.
Don’t waste your money on Stratfor.
@huntegard: Don’t waste your money on Stratfor.
They are a CIA mouthpiece just as DEBKA is a Mossad mouthpiece. I would not give them a single penny.
Frankly, I believe that you get much better info on informatonclearinghouse or here, and it is for free and, alas, we are not FSB/SVR/GRU paid ;-)
Cheers,
The Saker
It really hits me that Russia is the Sparta of the modern world.
Just substitute a few words from the classic scene in the film “300”:
Atlanticist Eurocrat to Putin:” All that the global hegemon requires is this: a simple offering of Oil and Gas, a token of Russia’s submission to the will of the Indispensable Nation”
Putin after some deliberation: “Submission. Now that’s a bit of a problem. See rumor has it that the Iranians have already turned you down, and if those mullahs and camel jockeys have found that kind of nerve”
Russian liberal interrupting: “We must be diplomatic”
Putin raising his voice: “And of course RUSSIANS, have their reputation to consider”
Eurocrat: “Choose your next words carefully Vladimir, they may be your last as President”
Putin appears thoughtful, even slightly stressed, flashes come to his mind of sacred Crimea, of the Ural mountains, of his beautiful and native St Petersburg, of all the mineral riches of Siberia, cute Russian children playing with snow… After this brief but intense flashback reel, Vladimir’s gaze falls upon a Kournikova-like Russian lady. She nods her lovely head in steely fashion. Vladimir turns to face the Eurocrat directly.
Vladimir: “Oil and Gas? Oh you’ll find plenty of both down there!”
Eurocrat with his voice trembling: “No man, European or Asian, no man, threatens a messenger”
Vladimir: ” You incite color revolution after color revolution, you applaud as ukies shell civilians in the Donbass, you public bullshit all the time about me and Russia, you threaten my people with slavery and death. Oh I ‘ve chosen my words carefully Eurocrat, perhaps you should have done the same”
Panicking Eurocrat: “This is autocracy, this is madness!”
Vladimir lowers his AK-74, turns and stares to the lovely lady one more time. Her nod this time is even more steely, her eyes even more piercing.
Vladimir: “Madness? THIS IS RUSSIA!!!
The Eurocrat along with his minions from the Balts and Poland are thrown into an oil well as the snowfall intensifies.
Someone must make a cartoon out of this, it will smash YouTube records.
Apologies for the comments about Iranians, but the joke would not work otherwise.
There is a beautiful article over at the Oceania site –
http://www.vineyardsaker.co.nz/2014/12/18/how-vladimir-putin-upset-natos-strategy-by-thierry-meyssan/
Especially I love the final paragraph!
Interesting theory – let’s see whether it will describe reality.
Stavros H @ 15:26 says:
“What I disagree with from the claims made in the above article, is this Saudi-US so called secret pact to bring down the oil price. “
In the article I just linked the suggestion is made that it was the imposition of sanctions, resulting in capital flight, that brought down the oil price. It makes much more sense to me that the western policy makers shortsheeted themselves than that Russia did.
Do you believe that the Americans and the Canadians are so stupid as to actively undermine the only domestic industry that has been working for them during the past few years?
Maybe they thought that Putin would blink as soon as he saw lower oil prices. But that seems far fetched to me.
The most likely scenario is that the Saudis want North American unconventional production to go belly up as soon as possible so that their market share as well as the oil price itself rise significantly.
Putin himself may also be on this since economic troubles for Russia can now be blamed on the west. What better timing to launch an attack on extremely expensive North American oil production?
It is also widely reported that the Chinese are heavily involved with the Saudis in recent months holding monthly meetings since the start of the year. The current low oil price is more of an attack on Canada and the US rather than an attack on Russia.
That is my reading of the situation.
@VINEYARDSAKER
We’ve all been young and stupid. :)
Just some of us have been so more recently.
Russia used to have a 150 bln$ yearly trade surplus. As it exports for around 300 bln$ oil and gas a year with a halving of the oil price it will still have a sound trade balance. The sinking ruble actually may guarantee a continuing positive trade balance.
Engineered decline. I so agree with you Norwegian Bob.
Why so complex thinking ?
The russian firms have creitd in Dollar that run out. Now they need Dollar to pay the credits. Normal thing would be to pay from the cashflow (low because of oilprice for the oil industrie) or to get new credits to pay off the old ones – This is not possible because of the sanctions so western investors don´t give new credits.
That results in the russia firms selling rubbles to buy dollars. This results in the current fall of the ruble.
And now speculators jump on the train and make it worse.
Mr. Koenig’s math is wrong : not enough dollars to buy all the rubles in circulation . That’s the way banana republics go down by spending foreign reserves in the currency markets .
The only way to fight back currency speculators is to increase interest rates .
Interest rate is the only factor in foreign exchange market place , everything else is just wishful thinking .
This is very simple math : use prime interest rate to adjust foreign exchange rate . Introduce saving vehicles for general population , local businesses :
i.e. yuan , HK dollar , gold , oil ,land backed certificates of deposits . Utilize what you control to your advantage , don’t be sucked into flushing down foreign reserves , offer subsidized loans to general population and businesses for specific purposes i.e. buying first home or capital investment . Don’t subsidize speculation , let the speculators and gamblers pay prime + mark-up . Simple solution is the best solution .
Wow, a post by Peter Koenig that makes sense. It is his specialty.
Anon’s second link to Paul Craig Roberts is excellent (again, a specialty topic). I’ll put it here with a different link
http://www.counterpunch.org/2014/12/18/rigging-the-market/
because the title is better. He explains in clear language HOW the markets are rigged.
In fact the PCR one explains why it is urgent for everyone to get off the dollar and control (if not outright ban) derivatives and some other types of trade.
After all those, it strikes me that SOME places may not be short-selling rubles. They may be just stockpiling these very cheap ones, to be able to buy Russian goods with them in future (because Russia announced the change beforehand).
On the other hand, Russia doesn’t have to spend only dollars to buy them back. Rubles are traded against other currencies, too, such as the Euro, which I’m sure Russia has some of, too.
==============
Sad about Brazil. How did they get at Dilma Rousseff? her new finance minster is a guy nicknamed “Edward Scissorhands” ??? http://www.bloomberg.com/news/2014-11-27/levy-named-as-brazil-finance-minister-to-boost-confidence-1-.html
This is going to kill Brazil. Literally.
that anti-NK film Sony recently cancelled from release due to “NK hackers” attacking its website:
http://willyloman.wordpress.com/2014/12/18/state-department-and-a-rand-corp-chicken-hawk-played-roles-in-crafting-the-interview-daily-beast/
Well look at that. The State Department was just fine and dandy with Zionist Rogen using his forum to agitate against the Democratic People’s Republic of Korea. And it wasn’t just the State Department the film crew used during the process of making this “propaganda”. They also brought in warmongering neocons as well.
BTW Anonymous…. I have been a full-paying member of Stratfor and the idea of it is great, but they have shown themselves not being able to act and report independently. They are full of cheap propaganda, which is absolutely scandulous for an agency that asks 250 euros of anual membership fees.
Don’t waste your money on Stratfor.
18 December, 2014 16:21
__________________________
You are right.
I gave them my e-mail so that they can mail me for free some articles, after three weeks I shouted please stop sending me this propaganda.
They did not want and I closed that mail and opened a new one @yandex.
No telephone number, no Google, no CIA …etc.
Apropos Stratfor.
If I am not mistaken, their chief editor some hillbilly by the name of George Friedman, just can’t get around his little head that China has made biblical economic progress in recent years. He keeps repeating again and again that the vast chunk of China is of an African economic level. This is patently false, since even the very poorest Chinese province is far more prosperous and advanced than Africa and even India. He also fails to understand that China’s economic power is not her per capita income level, but the overall size of her economy, her centrality in the global economic system and her still rapid economic growth which handily outpaces everyone else. If per capita income reflected geopolitical cloud then Norway would be more powerful than the US, and Taiwan would be stronger than China. This is just one example of how stupid the people at Stratfor really are. I can give several more examples of how they get even the basics wrong.
But what I found interesting about Stratfor rhetoric was the open admission by this same George Friedman in that the US will do everything in conjunction with Poland so that Russia and Germany would be kept apart. This was in a lecture of his in Australia and the clip can be found on YouTube.
Ruble rumble:
http://www.boilingfrogspost.com/2014/10/24/the-secret-stupid-saudi-us-deal-on-syria/
The Russians may well have engineered the ruble “collapse”. Regardless, too much attention is paid to the money side of the economy by westerners. I have a sneaky suspicion that the Russians are more real economy people.
Financialization is a malignancy, both of the western economy and the western analytic brain. It will meet its end, hopefully in this economic confrontation between Russia and the west.
American analysts in particular seem to have completely forgotten that there is anything else to an economy other than money. They seek to explain the course of entire economies simply in monetary terms. While this can be excused in a fully mature economy with few opportunities for real investment, it is unforgivable in a developing economy with abundant investment options.
Russia is such an economy. There are almost infinite real projects that can be undertaken in Russia to provide jobs and generate wealth. Even with rubles alone, without a dollar of foreign investment. Russia is really a developing economy with a high skill level and great industrialization potential. It is not the US, Japan or Western Europe. It is China albeit with less industry, exports and population, but with a better skills base and high technology potential.
They key factor determining the continued success of the Russian economy will not be monetary policy. It will be state investment and trade policy. Just was was the case with Japan in the 60s, 70s, and 80,s. As has been the case with China since the 90s.
The attacks on the ruble are a sideshow. Its one thing to attack the currency of a 3rd world country whose economy is based on some nonessential product with numerous alternative sources. And quite another thing to do the same to a major economy whose output is essential and whose buyers have few if any alternatives.
Russia has just too many real economy policy options for it to lose an economic confrontation with the west. No, the key dangers for Russia are geopolitical not economic. ANd here Russia is too well led for me to believe it will lose.
..good comment…
If anyone is interested in Putin’s latest
I have the transcript up at my place
Koenig’s article is certainly interesting!?
A different take then the one given us all by the msm-
In Putin’s press conference he is pretty optimistic also- The western media is spinning it as “harsh”
I didn’t find it harsh, just factual
Typical Putin really- shrugs shoulders
The Norwegian Krone is down too
Of course that is due to the oil
The Canadian dollar has dropped like a stone and the msm ignores that also- as they beat the “ruble falling” meme to death
It’s annoying
In fact all the world’s currencies have depreciated against the dollar in recent months. This is partly due to growth in the world economy decelerating and partly down to the probably mistaken anticipation that the NY Fed will soon be raising rates. The currencies of the oil exporters of course have suffered the most. Even very mature and wealthy economies such as that of Australia and Canada have seen massive currency depreciation. The mainstream media have opted not to report on this very much. Let us also note here that when the Japanese yen depreciates the financial press wax lyrical about the so called genius of Abenomics. I must also note here that all world currencies outside the USD have also depreciated against gold which has largely remained constant versus the USD, perhaps has even appreciated slightly. This situation also means that oil is really much cheaper only in the USA, which is even more bad news for shale oil production. In the rest of the planet, the fall in the dollar price of oil is partly negated by the reduced dollar value of rest of the planet currencies. In fact this places US shale in an even worse position. The price of oil in the US is now very low while the costs are high. While the price of oil in the rest of the planet (and what concerns us here is the price of oil in non-US oil producing countries) has fallen by a lot less. This is another example of how the USD being the global reserve currency is a mixed bag for the Americans. It very often serves to undermine American production and encourage imports.
Remember back about seven or eight years ago, when they started printing dollars in astronomical amounts? Economists told us that a cheap currency was good for the economy.
So now, a cheap Russian currency is bad for the Russian economy?
We are at war with Eastasia. We have always been at war with Eastasia — 1984
The Center for Preventive Action of the Council on Foreign Relations has released its survey of action priorities for 2015. 2200 Washington personalities responded to a questionnaire which, rather than outlining a forecast for the coming year, establishes a hierarchy of concerns.
According to this document, Washington is primarily concerned with the following issues:
8 items follow here…
http://www.voltairenet.org/article186226.html
Financial markets are general much simpler than one might imagine.
Oil has collapsed from over 100 to 60 $/brl
That is massive. but there does not have to be a secret reason for it. And it might even return within a year or so.
It collapsed because $100 was too high – simple. It collapsed because an awful lot of projects with an estimated cost of $50-$80 were being planned.
No conspiracy is needed.
The ruble is an Oil currency. I stopped falling 2 days ago – same time as the oil price stopped falling. Once oil settles, he ruble will settle at a new equilibrium price. If Oil sticks at $60, the rouble will stick soon after (though probably not at the current level, maybe 10 or 15% above or below.
This has nothing to do with a US or Saudi war on Russia. There are more than enough conspiracy theories out there, but they shoul d be applied to genuinely unusual events. The oil and rouble shifts happen about every 5 years.
Really strange was MH370
While the possibility of a conspiracy behind the recent fall in the oil price cannot be excluded the far more likely scenario is that this is down to an excess in supply of oil. I will repeat again here that demand for oil is massively inelastic. What this means in everyday language is that only minor fluctuations in the demand and supply equilibrium can cause violent swings in either direction.
http://willyloman.wordpress.com/2014/12/18/palestinian-un-draft-against-israel-act-of-war-intelligence-min/
Found it. But sorry, it’s a German translation of a Russian article:
Russian:
http://ru.faktxeber.com/ggg-ggggg-gggggggg—ggg-ggggg-_h432613.html
Путин сделал гениальный “Ход конем”
German:
Putins genialer Schachzug
Kollektive – unautorisierte – Übersetzung des heutigen (15. März 2014) Artikels auf FaktXeber
“Russland hat einen GENIALEN ökonomischen „Schachzug” gemacht, sie alle um den Finger gewickelt und in nur ein paar Tagen über 20 Mrd. Dollar verdient. Dazu hat es etwa 30 % der Aktien der eigenen Monopole zurückgeholt. (…) Früher gehörte ein Teil der Aktien der Energiegesellschaften ausländischen Investoren (den Amerikanern und den Europäern) – das bedeutet, dass fast die Hälfte der Einkünfte aus der Öl- und Gasindustrie nicht in die Staatskasse Russlands, sondern auf die Konten der “Finanzhaie” Europas ging. Im Zusammenhang mit der Situation auf der Krim fing der Rubel an, stark zu fallen, aber die Zentralbank machte nichts, um den Rubelkurs zu unterstützen. (…) die “Finanzhaie” fingen an, die Aktien für den Verkauf anzubieten, bevor die sich ganz entwertet haben. Putin wartete die ganze Woche und lächelte nur auf Presskonferenzen, als der Preis aber in den Keller fiel, gab er Anweisung, diese Aktien schnell und gleichzeitig bei allen Europäern und Amerikanern aufzukaufen. Bis diese “Finanzhaie” kapierten, dass sie um den Finger gewickelt worden waren, war es schon zu spät: die Aktien waren in Russlands Händen. Nicht bloß, dass Russland in diesen Tagen über 20 Mrd. Dollar verdient hat, es hat auch die Aktien seiner Unternehmen nach Russland zurückgeholt. Jetzt wird das Einkommen aus Erdöl und Gas nicht ins Ausland abfließen, sondern in Russland bleiben, der Rubel erhebt sich von sich aus und für seine Unterstützung muss man keine Goldwährungsreserven Russlands verbrauchen
Sergey Schikunow
re: trying to destroy a country’s currency is tantamount to a declaration of war. Of course the knives were well hidden so there may be plausible deniability, but like the Malaysian flight, the main players know the score, where the bodies are buried and who did the deed.
I expect a reply in deed from Putin very soon. Expect the unexpected. I think he hid his fury well during the press conference. It is time the West learned that the Russians are not the Iranians.
The greenback v the rising redback: China and other economies in the emerging world are intent on freeing themselves from the stranglehold of the US dollar. Is it only a matter of time before the Chinese currency seriously challenges the dollar? And what about America’s incredible debts? CrossTalking with Liam Halligan, Alasdair Macleod and Ann Lee.
http://rt.com/shows/crosstalk/215095-china-emerging-world-dollar/
East versus West approach to Geopolitics through the lens of Chess and Weiqi (Go, Othello)
Object Of The Game
Chess: Checkmate Opposing King = Total Victory
Weiqi: Obtain Larger Territory = Greater “market share”
Brain Functions Used In Playing
Chess: Almost Entirely Analytical (left brain).
Weiqi: Fully utilizes/integrates analytic (left brain) and artistic/pattern recognition (right brain) functions. Intuitive analysis. One requiring multi-tasking.
Number of possible First Moves.
Chess: 20 White x 20 Black = 400.
Weiqi: 361 Black x 360 White = 129960, although symmetry reduces this number to an effective 32,490.
Estimated Number of Possible Board Configurations
Chess: 10 to the 120th power
Weiqi: OMNI Magazine in June, 1991 proposed 10 to the 761th, but most believe that the correct figure is really on the order of 10 to the 174th.
Military Analogy
Chess: A single battle.
Weiqi: An entire multi-front war.
The Nature of Play
Chess: Primarily tactical, with only a modest strategic component.
Weiqi: Profoundly strategic, but with incisive, complex, integral tactics.
Countries Using This Kind Of Thinking In Their Political Decision Making.
Chess: US, Western Democracies, Russia, and Eastern European Nations.
Weiqi: China, Japan, Taiwan, South Korea, Hong Kong, Singapore.
Read the whole thing…
http://winningbysharing.typepad.com/oaxaca/2012/10/-what-kind-of-superpower-could-china-be.html
Sorry, that was a re-post.
Here is the original:
http://www.tlaxcala-int.org/article.asp?reference=11838
…
Quelle: http://ru.faktxeber.com/ggg-ggggg-gggggggg—ggg-ggggg-_h432613.html
Erscheinungsdatum des Originalartikels: 15/03/2014
Sergey Shikunov Сергей Шикунов
OK, back to my work again, close deadline.
Αnderssen’s Opening is named after unofficial World Chess Champion Adolf Anderssen, who played it three times[1][2][3] in his 1858 match against Paul Morphy. While Anderssen was defeated decisively in the match, the games he opened with this novelty scored 1½/3 (one win, one loss, one draw).
As Anderssen’s Opening is not commonly played, it is considered an irregular opening. The move is classified under the A00 code in the Encyclopaedia of Chess Openings.
This article uses algebraic notation to describe chess moves.
Discussion[edit]
This opening move does little for development or control of the center. In some cases, White can transpose the game to an opening where 1.a3 might have been useful, but using a tempo on such a move already on move one seems premature. In fact, this opening is based on the idea that White is playing with the black pieces, but he has the move 1.a3 already played. If a game starts 1.a3 e5 2.e4 Nf6 3.Nc3, Black cannot proceed in Ruy Lopez-fashion, and if Black plays 3…Bc5, then 4.Nf3 puts Black into the Two Knights’ Defence and White’s a3 precludes many possibilities.
Anderssen’s Opening is not a very constructive move for White, more a WAITING MOVE. Some players may enjoy the psychological value of such a move, however, or believe it will help them against an opponent with a superior knowledge of opening theory.
Among the more common Black responses to Anderssen’s Opening are:
1…d5, which makes a straightforward claim on the center;
1…g6, which prepares to fianchetto the bishop to g7 (since developing the bishop to b4 is unlikely) where it puts pressure on the slightly weakened queenside squares;
1…e5 is also possible, but White can then play 2.c4, leading to a kind of Sicilian Defence with colors reversed, where a pawn on a3 can be useful. Another approach is 2.e4 Nf6 3.Nc3, transposing to Mengarini’s Opening.
This is a good article. Obviously the market is being manipulated, and even an earlier Saker economist claimed it was hurting the Russian people. However, it does seem like when the ruble bottoms, Russia will be able to buy them back with gold or US dollars and reverse the damage. Still, Putin is predicting a 2 year long recession because of the manipulated drop in oil prices and investment capital. This is economic warfare, and all this was foreseeable as this is pretty much the same as happened in the 90s.
“Russia and China are detaching their economies from that of the West.” (Peter Koenig)
“Apparently, Putin has been sold, along with his internal enemies, the Atlanticist integrationists, on “free trade globalism.” Globalism destroys the sovereignty of every country except the world reserve currency country that controls the system.”
(Paul Craig Roberts)
These are voices of the controlled opposition. Russia and China support the IMF + BIS in resetting the world USD monetary system to a world SDR monetary system. The IMF + BIS system will not depend on a country’s currency as the reserve asset. The SDR is not linked to any one sovereign, but will be a basket of currencies plus gold. The currency basket will more closely reflect the GDP of each major nation or currency block. The reset will be turbulent, as the USD denominated assets and its elites will find their wealth and privilege devalued. I do not want to criticize either man’s work, but to point out their role in the narrative, necessary to maintain political and economic stability during the reset from USD to SDR as the asset reserve.
You may not like the reality, but it is probable Russia is part of the monetary transition narrative from the debt burdened USD System to a world SDR System managed by the IMF + BIS. It is my opinion that these supra-banking entities are a ‘priesthood’ interested in maintaining stability in global trade and the status quo of a master/slave relationship of economics which reflects the deep heritage of human nature evolved over millions of years of evolution. These institutions reflect the unfinished evolution of the human mind. I appreciate Saker’s mix of economics, politics, and religion. It enables further evolution of human spiritual development, which will in turn be reflected in the global institutions. The solution to the corruption of our world can be found…by looking in the mirror!
Global Stagnation
“”This brilliant, modern free trade system and all of its benefits cannot be implemented using the US dollar as a reserve currency. It shuts off commerce that in turn limits the use of commodities such as oil, metals, food and the like. Many hail the low price inflation in the US as a victory and ignore the intent other nations had in following “free trade”. That being to promote a world economy, not just a US economy….”
The End Game
“China is NOT anti-establishment or anti-new world order, nor is Russia. Eastern opposition to the NWO is a lie. Period. In fact, the BRICS have argued only for greater inclusion in the IMF system and have no intention of developing a legitimate alternative to “Western” globalization. If you do not understand that the BRICS are part of the NWO, not opposed to it, then you do not understand a thing.”
The SDR Purpose of BRICS
“In line with transitioning away from the USD based system, SDR pegging would encourage a true multilateral global monetary policy and framework which would stand in contrast to the imbalances found in the current system, which is based on the policies of a single country, or economy, being the USD.”
Grieved, I agree noone wants to crash the dollar. Everybody is holding a LOT of dollars.
Nor is the switch out of dollars even in trade happening all that fast. Even Russia and China still conduct 75% of their trade in dollars.
I should think that China is building all the wonderful infrastructure projects with that huge backlog of dollars she’s holding.
Of course no one wants to crush the US dollar. That would cause devastation the world over. What is bound to happen however is that a host of countries will ask for a rearrangement of the entire global monetary system. Clearly the US dollar as the global currency is approaching its end and that is precisely why the American neoconservatives are being ultra aggressive all over the world. They want to enter the new post dollar era from a position of strength.
While the use of the US dollar is still extremely widespread, it is definitely significantly reduced from previous decades and at the same time more and more countries are openly calling for its replacement. Moreover, new bilateral trade deals are being signed all the time from a vast array of countries. Even US vassals are involved in this process.
Mr. Koenig begins: “The world is still hell-bent for hydrocarbon-based energy. Russia is the world’s largest producer of energy.” In other words, Russia is leading us to hell.
Further, Russia is portrayed as winning at this global chess game of carbon out-of-control. The tragic irony is that the world will lose whoever wins that game, be it Russia, the West or an unknown.
The world as we know it is in grave danger of extinction due to over-consumption of carbon, the killing of trees and other plants which transform carbon into oxygen and our own stupidity + criminality.
Of course, Putin must fight fire with fire. The unanswered question is: if Russia wins this chess game, will it also be able to lead us into a sustainable future by reducing carbon consumption? — not to mention reducing stupidity and criminality.
As long as there is geopolitical rivalry, the environment is at best an afterthought. At this point in time Russia cannot afford to waste a single ruble or a moment’s thought in relation to the environment. This is a problem for the future though. Now is definitely not the time to worry about the climate.
ForYourInformation: History for fun.
In 1900 Germany financed construction of Berlin-Istanbul rail line to bypass sea routes.
Istanbul links to entire Eastern markets.
Now look at that on a world map.
Do you see any Empire-size Toes in that direction?
What happens when you step toward some Empire-size Toes?
Who benefits if they connect?
Who benefits if they fail to connect?
Does this contribute to understanding history since then?
from Rick the geography-dabbler.
IMHO: Barbarossa 2, gates of Moscow, December 1, 1941. How will it end? William
Here’s an interesting commentary;
U.S. Declares (Currency) War On Russia
Excerpt;
“[…] The United States has a bankrupt economy. It is mired in a permanent, worsening Greater Depression. Its own currency, the mighty dollar is fundamentally worthless, based on three different, objective metrics. Yet despite the U.S.’s interest rate being permanently frozen at 0% (because the U.S. can’t afford to pay legitimate interest on its debts); the U.S. dollar is once again at the top of the totem-pole amongst the world’s currencies.
For those readers who don’t understand the relationship between interest rates and the value of a nation’s currency; it is a simple equation. We live in a global economy filled with an ocean of “liquidity”, almost all of it the paper wealth of the world’s oligarchs.
Very little of this “money” is ever productively invested; thus the oligarchs are permanently on the hunt for the best place to park this paper wealth. The higher the interest rate of any particular nation, the more interest the oligarchs can collect by converting their wealth into that nation’s currency. As (the equivalent of) trillions of dollars of this currency is bought-up on global markets, this forces the value of that currency higher – in legitimate markets.
Yet today, Russia’s national interest rate is set at 17%, and the value of the ruble is still falling. The interest rate of the (bankrupt) United States is still frozen at 0%, but the dollar is (still) rising. It is not simply nonsensical. It is blatant fraud, on a level never before seen in the history of the global economy.
Based on all of the fundamentals of the two economies; it is the U.S. economy which should be experiencing a “currency crisis”. And with its national interest rate at an ultra-extreme high; it is the Russian ruble which should be soaring in value. The actual value of these currencies is not merely “wrong” it is totally, absolutely perverse – and totally, absolutely illegal.”
LINK> http://bullionbullscanada.com/us-commentary/26577-us-declares-currency-war-on-russia
-TL2Q
A book, The Economic Weapon, was written during WW1 by Alfred Zimmern.
I have seen references and descriptions of its content. Have not read it. Has an Anglo flavor.
Interesting, huh?
Rick thinks so.
OT but extremely important if confirmed as true:
Ukrainian Soldier Confirms: Ukraine’s Military Shot Down Malaysian MH17 Plane
“A Ukrainian soldier who was part of the crew that operated the supposed missile-battery that the Ukrainian Government claims shot down the Malaysian MH17 airliner on July 17th has testified publicly for the first time, saying that the missile-battery was operated by the Ukrainian military, not by the rebels as asserted, and that he and his former crew-mates who operated it laughed when they heard their Government say that this missile-battery was operated by rebels and had shot the airliner down.”
“THIS JUST IN (3:21PM Eastern time in U.S.) from Michael Collins: “George [Eliason, a third member of our team at UkraineWar.Info, and a resident inside the conflict-zone] says that due to the pub from the article, the ukraine govt took down their ‘damning’ pic of BUK 312 today and that the reporter who did the interview is underground and fleeing the country.”
LINK> http://www.globalresearch.ca/ukrainian-soldier-confirms-ukraines-military-shot-down-malaysian-mh17-plane/5420559
More details at ukrainewar.info > http://www.ukrainewar.info/shooting-mh-17-buk-312-story-false-says-ukraine-crew-member/
.
-TL2Q
Cross Talk
https://www.youtube.com/watch?v=CV3ABvDZSlw …Dumping the dollar
Dear The Saker,
Interesting article by Pepe on the RT website:
http://www.rt.com/op-edge/215675-putin-economic-sanctions-us-oil/
Kind of sums it up – everything is not what it seems…a lot of things going on in the background…
Glad to see the Upper House is probing the RCB – all they need is 34 votes to get the ball rolling :). Lets see what that probe exposes and what heads will roll and the outcome for the future of the RCB.
Rgds,
Veritas
An interesting analysis, but it doesn’t quite pass the smell test for me. If the game was about buying up rubles at their lowest price, then why didn’t Russia do that on Monday instead of raising interest rates?
Inflation in Russia is quite high and rising at the moment. Hence the rise in interest rates may be justified.
Was the article written for your blog, or was it published somewhere else? If the latter the case, a link would be greatly appreciated. Thank you.
The part of Roberts’ article pertaining to Russia’s financial crisis:
The US government, perhaps surprised at the ease at which all financial markets can be rigged, is now rigging, or permitting large hedge funds and perhaps George Soros, to drive down the exchange value of the Russian ruble by massive short-selling in the currency market. On December 15 the ruble was driven down 19%.
Just as there is no economic reason for the price of gold to decline in the futures market when the demand for physical gold is rising, there is no economic reason for the ruble to suddenly loose much of its exchange value. Unlike the US, which has a massive trade deficit, Russia has a trade surplus. Unlike the US economy, the Russian economy has not been offshored. Russia has just completed large energy and trade deals with China, Turkey, and India.
If economic forces were determining outcomes, it would be the dollar that is losing exchange value, not the ruble.
The illegal economic sanctions that Washington has decreed on Russia appear to be doing more harm to Europe and US energy companies than to Russia. The impact on
Russia of the American attack on the ruble is unclear, as the suppression of the ruble’s value is artificial.
There is a difference between economic factors causing foreign investors to withdraw their capital from a country, thereby causing the currency to lose value, and manipulation of a currency’s value by heavy short-selling in the currency market. The latter can cause the former also to occur. But the outcome for Russia can be positive.
No country dependent on foreign capital is sovereign. A country dependent on foreign capital, especially from enemies seeking to subvert the economy, is subject to destabilizing currency and economic swings. Russia should self-finance. If Russia needs foreign capital, Russia should turn to its ally China. China has a stake in Russia’s strength as part of China’s protection from US aggression, whether economic or military.
The American attack on the ruble is also teaching sovereign governments that are not US vassals the extreme cost of allowing their currencies to trade in currency markets dominated by the US. China should think twice before it allows full convertibility of its currency. Of course, the Chinese have a lot of dollar assets with which to defend their currency from attack, and the sale of the assets and use of the dollar proceeds to support the yuan could knock down the dollar’s exchange value and US bond prices and cause US interest rates and inflation to rise. Still, considering the gangster nature of financial markets in which the US is the heavy player, a country that permits free trading of its currency sets itself up for trouble.
The greatest harm that is being done to the Russian economy is not due to sanctions and the US attack on the ruble. The greatest harm is being done by Russia’s neoliberal economists.
Neoliberal economics is not merely incorrect. It is an ideology that fosters US economic imperialism. By following neoliberal prescriptions, Russian economists are helping Washington’s attack on the Russian economy.
Apparently, Putin has been sold, along with his internal enemies, the Atlanticist integrationists, on “free trade globalism.” Globalism destroys the sovereignty of every country except the world reserve currency country that controls the system.
sarz
LOL… I told you long time ago that things are notwhat they seem (especially re Obama)…
I just wish there was a way to save innocents slaughtered in Novorossiya, ME, Africa, but that’s up to the masses of “useful idiots”, impartals, and cynics to finaly wake up and start showing solidarity with the oppressed.
Have a great holiday!
I believe that Nabiullina, the CB chair, is doing what she can to grow the REAL Russian economy as she echoes Putin’s call for self sufficiency rather than just being a globalist energy plantation as evidenced by her recent statement:
“We must learn to live in a new reality, to focus more on our own resources to finance projects and give import substitution a chance,”
“She has also cut money supply growth to single digit levels from the 15.3% money growth that was going on when she first took the helm at the Bank of Russia.”
See: Elvira Nabiullina: Central Banker of the Year
http://www.lewrockwell.com/2014/12/robert-wenzel/whos-the-central-banker-of-the-year/
The links by “@Grieved” are also important to understanding the recent Rouble volatility.
What Peter Koenig forgets to mention is that many Russian companies need to pay off loans in dollars and euros that cannot be renewed because of sanctions.
So the period of a low ruble has been calculated to coincide with a period where Russia needs many foreign currencies to pay off its debts.
Thanks for Pepe’s article Veritas :)
It does lend support to Koenig’s (and plenty of others) theory, here’s a key part:
“Russia sells oil in US dollars to the West. Lukoil, for instance, would have a deposit in US dollars in an American bank for the oil they sell. If Lukoil has to pay wages in rubles in Russia, then they will have to sell the US dollar deposits and buy in Russia a ruble deposit for their bank account. This in effect supports the ruble. The question is whether Lukoil, Rosneft and Gazprom are hoarding US dollars overseas – and holding back. The answer is no. And the same applies to other Russian businesses.”
–
*sigh* Also there’s this Breaking News…:
Obama signs Russia sanctions bill, [no plans to use it for now]
“My administration will continue to work closely with allies and partners in Europe and internationally to respond to developments in Ukraine and will continue to review and calibrate our sanctions to respond to Russia’s actions,” Obama said in a statement. “At this time, the Administration does not intend to impose sanctions under this law, but the Act gives the Administration additional authorities that could be utilized, if circumstances warranted.”
“We remain prepared to roll back sanctions should Russia take the necessary steps,” he added. […]”
“Necessary steps” as in:
“We again call on Russia to end its occupation and attempted annexation of Crimea, cease support to separatists in eastern Ukraine, and implement the obligations it signed up to under the Minsk agreements.”
LINK> http://rt.com/usa/215763-obama-russia-sanctions-sign/
^ This guy is like a broken record, or what!?
So… Who are the ones doing more of the same then, Saker? ;-)
.
-TL2Q
I come here everyday to witness a great melodrama unfold. I watch the leviathans of global power and finance clash in a battle of wits as they trumpet mocking propaganda to sway the masses of humanity and whip their military hounds to growl threats and gnash teeth. Will one Titan triumph over the other or will they both perish in a deathly clench and destroy themselves in fiery mushrooms that sweep across our beautiful blue planet? This is a horror of reality, not a Hollywood movie nor a John Grisham novel. Perhaps I do not want to come here anymore for the words are too terrible to read. Men enslaving other men, killing other men, women and their babies; all for greed and lust of material possession.
However this vineyard is a good place. I see the falcon tend to it, nurture it so the vines of knowledge bear sweet grapes of truth for our consumption and spiritual nourishment. I will stay, learn and endure for I am mortal, imperfect and in need of this rich food to survive against the devil as he constantly stirs the pot of worldly vice.
I close my eyes now, I need to rest and dream. I see in my mind’s eye the image of a celestial painter dip his brush into a bucket of stardust and touchup one of the ancient and venerated constellations in God’s heaven. I see her now with clarity. She is Ursa Major, our Russian mother who tends to her cub Ursa Minor. The tip of the painter’s brush carefully strokes the edge of Dubhe so its lantern of light shines bright towards Polaris.
I know now that we will survive because the Holy Spirit whispered to remind me that like Ursa Major, Russia too, is eternal and will lead mankind back to the light; if only we are patient and trust in her millennia of suffered wisdom.
Someone enlighten me what’s so brilliant about letting speculators stuff their pockets with dollars while ruble is in free fall and foreign reserves are shrinking.
It would make much more sense to issue rubles and provide liquidity while foreign reserves are untouched.
http://www.zerohedge.com/news/2014-12-18/russia-has-begun-selling-its-gold-according-socgen
I don’t really see this as newsworthy, since Russia sells gold every year. 2013 she mined 181* metric tons; her commercial banks bought 90% of it; 77 tons was sold to the CBR, the rest to foreign banks. 2012 was similar. In 2014 supposedly the foreign banks refused to buy it from her altho not sanctioned. Russia’s estimated gold reserves in the ground:12,500 tons, the 2d largest worldwide. *other sources say 254 tons, may include nonmining sources (smaelting, scrap)
Ixtlan,
I’ve talked GO for months. You have it right.
However, I believe the Russian game is a hybrid. They are playing strategically like GO more than Chess.
And they are deeply hooked up with China, so the game has to be GO.
Also, for those others today talking currencies. Russia and China have a currency swap/supply agreement which is not huge, but has a three year life so far (just signed in Oct).
This means China will give Russia/corporations whatever currencies they need for loans to be repaid in the West.
China must have Russia upright and strong. And it has the wealth to do it.
http://rt.com/politics/215243-russia-central-bank-parliamentary-probe/
Also asking about those speculators mentioned in Putin’s speech.
In this excellent article, the author says “It is amazing that ten months after the Washington instigated Maidan slaughter and coup where a Washington selected Nazi Government was put in place, the MSM still lies high about the origins of this government and the massacres it is committing in the eastern Ukraine Donbass area.” To me, what is even more amazing is that Putin, while not technically lying, glosses over the massacres committed in the eastern Ukraine Donbass area. For a frank critique of Putin’s press conference, see
http://quemadoinstitute.wordpress.com/2014/12/18/novorossiya-rolling-analysis-dec-14-18/
‘ Russia needs many foreign currencies to pay off its debts.’
It’s been said that if I owe the banks $1000 I have a problem. If I owe the bank $1000000 they have a problem.
I’ve been following this crap for longer than I care to remember (ever since I studied the published Soviet financials) and have been waiting and wishing for some powerful entity to bring down this murderous house of cards that is the international banking system.
The fall of the Rouble is in effect a tarrif on imported goods.
Withing Russia it has no effect, except to put the price of imported goods up.
Russia does not have to import energy so that should not be an issue.
Surely the Russian Government could subsidize essential goods that ‘have’ to be imported because Russia does not produce them.
As noted elsewhere, this is an incentive for Russia to become self-sufficient, or, only import from BRICS countries.
Also, why not just peg the Rouble to the US Dollar? If the west wants Russia’s energy, then they pay at that exchange rate. Other countries in BRICS can negotiate bil-lateral exchanges.
Doubt the free- marketers will agree with that.
Anonymous 12/18 @17:09
Yeah, I think CBR IS maintaining a different interest rate for businesses. I think I read that it’s still 6.5% for businesses. Unfortunately don’t remember where I read it– RT, I think.
I see many people are linking
The Oil Coup by Mike Whitney
besides the ruble fall, what you need to consider, or should consider is the bail in scenario and the instability the oil war brings to the banks and the derivative market- one should read that article and then read Ellen Brown and then think about each of their nations creating bail in schemes that are set to go global in 2015..
After that- your bank deposits (and mine) pension funds etc are ripe for the pickin’
the oil coup may cost us all more then it will cost Russia
A multitude of links are available here- settle down for a while because there is reading
I am enjoying a nice Pinot Noir at this time- Because Saker is not along in stalking the Vineyards ;)
BTW Saker, here in Canada it’s ‘Blame Russia” time because the well vaccinated NHL’rs have the mumps and I mean well vaccinated
boosters before Sochi and boosters again when the outbreak began
Apparently there is even a parody song inspired by the NHL mumps outbreak
Russia can do no right -eyes roll
KatKan, About Brazil’s capitulation– the reason they are going to austerity and opening to foreign investors by trying to maximize their profits is:
-previous involvement w IMF w resultant recession. They’ve fallen into the neoliberal trap that US/Western fiat currencies are better than their own fiat currency.
Modern Monetary Theory and many historical examples show clearly that a country’s own currency can be used for investment, so long as printing of new currency is used to produce goods & services–not speculation like US.
For anyone interested in MMT, see Michael Hudson’s book ‘The Bubble and Beyond”, or his new one.
http://politrussia.com/ekonomika/tezisno-o-situatsii-550/
http://politrussia.com/ekonomika/tezisno-o-situatsii-550/
Three options left for Putin now:
1)doing nothing,awaiting being reactive only..let the Ukraine collapse(it will take some time)but they already have big problems to get EU money and even US bucks.
It is true that the IMF decided yesterday(under US pressure)to give an additional 15 billions ‘loan’ to KIEV,which already gives us a total amount of 22 billions for 2014/2015.
The EU has no money(they are in meeting right now in Brussels)said Juncker.
2)invade the Ukraine or fully or following the Odessa/Mariupol/Kharkov line.
Before the lethal US weapons arrive eventhough probably a good part of it is already there(then it will be too late).
What worst could happen?The West is running out of sanctions,except Swift they already used all other weapons including financial war via the attack on the ruble and the oil price.
Their only option left would be a military one with boots on the ground,the European will never be able to sell this to their people a big war in the middle of Europe even less against a nuclear power.
Not to talk about the economy in the EZ which is dead and in deflation.
3)last option of course is to surrender the Donbass AND Crimea..but like Putin says it will never be enough,they will always ask something else.They are talks today..about..reparations,they would like to force RF to pay 500 billions for the destruction of the Donbass(it is not a joke).
Defiant Vladimir Putin digs in for two-year slump, dismisses talk of palace coup.
http://www.telegraph.co.uk/finance/economics/11302527/Defiant-Vladimir-Putin-digs-in-for-two-year-slump-dismisses-talk-of-palace-coup.html
Whatever will happen it is clear that the West ‘won’ as they got what they want:to separate if not forever for a long time the EU and RF.They can now force their vassals/puppets to sign the tafta(transatlantic free trade agreement),which will be a total disaster for the people of Europe.
@Roffek 20:24
perhaps invoking force majeure for companies, not just for countries…
A Different Theory as to why Rubel plunged:
“Well, the biggest reason for the freefall of the ruble is the fact that the Central Bank of Russia just printed up about 625 billion rubles and gave it to their friends at Rosneft.
Rosneft is an absolutely massive oil company that is controlled by the Russian government. For months, Rosneft has been asking for a bailout (sound familiar?) to refinance loans that can no longer be rolled over with western banks because of economic sanctions.
And on Friday they got one.
In an attempt to quietly slip this massive injection of new money past everyone, Rosneft issued 625 billion rubles worth of new bonds just before the weekend and the Central Bank of Russia gobbled most of those new bonds up with freshly created money. Unfortunately for Rosneft and the Central Bank of Russia, the rest of the world took notice…
With the oil giant in a bind, the central bank ruled that it would accept Rosneft bonds held by commercial banks as collateral for loans.”
more at http://www.globalresearch.ca/a-full-blown-economic-crisis-has-erupted-in-russia/5420339