What Conflicts Continue as Russia Moves to Dominate Again Russia Economic System
For one affair, Russia has started to need payment in rubles when it sells natural gas to not-friendly nations. A lot of countries in western Europe are quite upset well-nigh this, only they actually have no option, because they are exceedingly dependent on Russian gas. Then from this bespeak forward, western powers are actually going to be forced to help prop upward the value of the ruble…
Russia wants "unfriendly countries" to pay for Russian natural gas in rubles. That's a new directive from President Vladimir Putin equally he attempts to leverage his country's in-demand resources to counter a barrage of Western sanctions.
"I accept decided to implement … a serial of measures to switch payments — we'll start with that — for our natural gas supplies to so-called unfriendly countries into Russian rubles," Putin said in a televised government coming together, calculation that trust in the dollar and euro had been "compromised" by the Due west's seizure of Russian assets.
Secondly, the Russians have decided that U.S. dollars will no longer be accepted as payment for anything that they sell to other nations. Pavel Zavalny, the caput of the Russian parliament, says that U.S. currency "has lost all interest for us"…
Much more interesting was Zavalny's main point, even though it has been mostly overlooked. If other countries want to purchase oil, gas, other resources or anything else from Russia, he said, "let them pay either in hard currency, and this is gold for u.s.a., or pay as it is convenient for us, this is the national currency."
In other words, Russia is happy to take your national currency — yuan, lira, ringgits or whatever — or rubles, or "hard currency," and for them that no longer means U.S. dollars, it means gilded.
"The dollar ceases to be a means of payment for us, it has lost all involvement for us," Zavalny added, calling the greenback no better than "candy wrappers."
This is huge, but it isn't being discussed much by the corporate media in the United states.
The Russians aren't just saying that they do not recognize U.Southward. dollars as the reserve currency of the world any longer.
That would be bad enough.
At this indicate, they are actually proverb that they volition no longer take U.S. dollars equally a grade of payment at all.
Wow.
Thirdly, the fundamental bank in Russia has stock-still the value of the ruble to the price of gold for at least the next three months…
The Russian cardinal banking company will restart ownership gold from banks and will pay a fixed cost of 5000 roubles ($52) per gramme between March 28 and June 30, the bank said on Fri.
But you lot won't hear virtually this on CNN or MSNBC.
This is a move that could potentially alter everything.
Once upon a time, the value of the U.S. dollar was tied to gold, and that helped the U.S. dollar become the dominant currency on the unabridged planet.
Just then Nixon took the states off the gold standard in the early 1970s, and things have gone haywire ever since.
Now Russian federation has linked the value of the ruble to the price of gilt, and many believe that this is really going to milk shake things up…
"I am reminded of what the U.S. did in the middle of the Great Depression. For the next twoscore years, gold's price was pegged to the U.Southward. dollar at $35. There is a precedent for this. It leads me to believe that Russia'due south intention would exist for the value of the ruble to be linked straight to the value of gold," Gainesville Coins precious metals expert Everett Millman told Kitco News. "Setting a stock-still cost for rubles per gram of gold seems to exist the intention. That'southward pretty of import when it comes to how Russia could seek funding and manage its central banking company financing exterior of the U.S. dollar system."
Others believe that this move volition create peachy instability in the global financial system.
For example, Tom Luongo is warning that the post-obit could before long happen…
- i: At $1550 per ounce the outset guild consequence hither is that is implies a RUB/USD rate of effectually 75. Incentivizing those property RUB to continue and those needing them to bid up the toll from electric current levels.
- 2: This creates a positive incentive loop to bring the ruble back to pre-war levels. And so after that market effects accept over as ruble demand becomes structural, based on Russia's merchandise balance.
- 3: Once that happens and the RUB/USD falls beneath 75, then the USD toll of gold rises structurally draining the paper gilt markets and collapsing the fiscal system based on leveraged/hypothecated gold. At present we're into the arb. phase @Lukegromen postulated w/ 1000bbls/oz.
Time will tell if Luongo is right or if he is wrong.
Merely without a doubt, things accept not played out the manner that Biden administration officials were hoping.
They had hoped that U.S. sanctions would crush the ruble, the Russian financial system and the unabridged Russian economy.
Instead, the Russians have been able to successfully prop up the value of the ruble and have made moves that directly threaten the dominance of the U.S. dollar.
No affair what happens with the ceasefire talks, I wait the The states and Russia to proceed this economic disharmonize for the foreseeable future.
Ultimately, that will be bad for both of our nations.
And as history has shown, economic conflicts take a way of becoming shooting wars fashion also oftentimes. Needless to say, we definitely exercise not want a shooting war with Russia.
Leaders on both sides should be attempting to observe ways to achieve peace and to fix the tremendous damage that has already been done.
Unfortunately, everyone seems to want to go along to escalate matters, and that should deeply alarm all of us.
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Source: http://theeconomiccollapseblog.com/the-ruble-the-dollar-and-the-price-of-gold-who-is-really-winning-the-economic-chess-game/
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