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More Sanctions On Russia Will Destroy Europe
On February 21 Russia announced that it would recognize the Donbas republics. A day later it did so. The 'west' immediately announced sanctions which in fact had been prepared in advance. On February 24 Russian troops crossed the border into Ukraine.
The Russian ruble immediately took a big hit. It has since recovered a bit.
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Today's news will bring the ruble to a new heights.
Kommersant reports (machine translation):
Putin instructed to convert gas contracts with unfriendly countries into rubles
President Vladimir Putin instructed to issue a directive to Gazprom to convert contracts into rubles for unfriendly countries. In his opinion, supplying Russian goods to the EU, the USA and receiving payment in dollars and euros "does not make any sense for us." Against this background, the ruble moved to growth on the Moscow Exchange.
“Both the US and the EU have basically defaulted on their obligations to Russia. And now everyone in the world knows that obligations in dollars and euros may not be fulfilled. <…> It is quite obvious that in this regard, it makes no sense for us to supply our goods to both the EU and the USA and receive payment in dollars, euros and a number of other currencies. Therefore, I have decided to implement in the shortest possible time a set of measures to transfer payments for our natural gas supplied to unfriendly countries to Russian rubles,” Mr. Putin said at a meeting with the government.
The President instructed the Central Bank and the government to determine within a week the order of operations for the purchase of rubles on the domestic market by buyers of Russian gas. He claims that Russia will continue to supply gas "in accordance with the volumes and according to the pricing principles concluded in the contracts."
The dollar exchange rate on the Moscow Exchange fell below 100 rubles. for the first time since March 3rd. As of 15:37, the US currency is trading at 101.55 rubles. (-2 rubles). The euro exchange rate fell by 2.85 rubles to 111.65 rubles. The maximum dollar fell to 94.99 rubles, the euro – to 109.7 rubles.
The European Union, the United States, Great Britain and a number of other countries have imposed sanctions against Russia in response to the military operation in Ukraine, which has been carried out since February 24 on the orders of Mr. Putin. One of the measures was the freezing of about half of the Central Bank's gold and foreign exchange reserves ($300 billion).
To pay in ruble one first has to buy rubles. With higher demand for rubles and no change in supplies the price for the Russian currency will go up. As Russia is selling hydrocarbons and other resources for billions of dollars per day the ruble is likely to soon reach record heights.
On February 28 another round of sanctions hit Russia. The part of the Russian central bank reserves that were stored in the 'west' were frozen. The central bank immediately pushed its interest rate from 9% to 20% to prevent a flight from the ruble. This helped to lessen the damage but made credit expensive and has hit the future growth potential in Russia.
But with a high new rubles demand from the outside of Russia the central bank will soon be able to lower its interest rate to more normal levels. Credit conditions will ease and investment in Russia, to replace products that had so far been imported, will rise again.
Today's move to demand rubles for hydrocarbons is only on of the many steps Russia can, and likely will take, to retaliate for sanctions from the 'west'.
As I wrote previously:
All energy consumption in the U.S. and EU will now come at a premium price. This will push the EU and the U.S. into a recession. As Russia will increase the prices for exports of goods in which it has market power – gas, oil, wheat, potassium, titanium, aluminum, palladium, neon etc – the rise in inflation all around the world will become significant.
Meanwhile the New York Times writes:
As he heads to Europe, President Biden will press U.S. allies to help impose even more aggressive sanctions on Russia.
Biden demands that Europe suicides itself while he is protecting the U.S. industry. I hope that some people in the European capitals are still able to think clear enough to recognize the racket the U.S. is trying to run here:
Together with the economic devastation that U.S. and European sanctions on Russia are causing in their own economies this will end in regime-changes in several European countries. The U.S. is of course again protecting itself from as much as it can at the cost of others.
Source: Bloomberg – bigger
Tony Wood asks:
The question remains, why did all those who for so long foretold this war do so little to stop it, and so much to hasten the disaster Russia has now set in motion?
Indeed. Why didn't the government of Germany guarantee in writing that it would veto any additional NATO membership? It would have solved at least half of the problem. Why didn't any other NATO government do so?
And what are they doing now? Where are their initiatives for peace?
Wake up. Otherwise this will end in disaster. Not for Russia but for the rest of Europe.
From A Fly On The NATO Wall in Brussels
First, it must be asked “Do any rational leaders exist within NATO?” A rational leader is presumed to be one familiar with the “realist” school of international relations. A realist doctrine may be summarized as the following: “If you find yourself in a bottomless pit, the first thing to do is stop digging.”
I suspect Scholz may be both rational and a realist.
Sputnik reports him saying the following:
“We will end dependence [on Russian energy] as quickly as possible. But to do this in one day would plunge our country and the whole of Europe into a recession. Hundreds of thousands of jobs and entire branches of industry would be at risk,” Scholz said.
Putin’s demand for payment in rubles delivers the above result within one day. Scholtz therefore makes clear he understand the consequences for Germany.
German media also reported on “out of control” price rises at major food retailers, with sunflower oil doubling in cost, mineral water, coffee and toilet paper up 10 percent, and dairy products up by five percent.
On Wednesday, the Munich-based Ifo Institute for Economic Research predicted that inflation would reach an average of 6.1 percent in 2022, with growth expected to slow to between 2.2 and 3.1 percent
The above quote from a German economic research institute is found in the same Sputnik article (Search on the headline Germany’s Scholz Admits to Blowback From Anti-Russian Sanctions as Food, Energy Prices Skyrocket)
Colonel Cassad reports on Telegram:
There is also reporting of a telephone call between Macron and Putin. The public readout on the call disclosed little. The associated comment was to the effect that this non-disclosure revealed the discussions were substantive.
Being kicked in the teeth by the Australian / US submarine deal, will I suspect, have awakened Macron’s inner realist. The fact Macron is facing an election at a time when diesel is in increasingly short supply (food and consumer goods transport affected with supply issues causing inflationary pressures) and the French economic outlook is likely not much different to that of Germany, leads me to the supposition Macron may be increasingly rational particularly when it comes to his own continuation in office.
What follows is conjecture obtained from a fly on the wall at the March 24th meeting at NATO HQ in Brussels.
1) Poland will be informed it is free to march into Ukraine and be slaughtered by Mr Kaliber and Ms Zircon and neither the US or any other member of NATO will rush into the same charnel house.
2) I suspect Scholz or Macron (perhaps both as they double team) will inform Biden that while the US is clearly willing to fight Russia down to the last Right Sektor, Azov, or other Ukrainian fascist, they are both disinclined to see a similar fate befall the citizens of Europe. They will jointly state that the conflict in the Ukraine proceeds directly from US, UK and Canadian involvement in the training and delivery of a vast range of offensive weapons as depicted in imagery of captured UAF stockpiles. That NATO is a defensive partnership, not an action element of US, UK, and Canadian destabilization operations. Further, in a reprise of the 2014 “Fuck the EU” moment, they will both advise their intent to inform their publics that the sole motive for the Biden administration’s creation of physical and economic carnage derives solely from an attempt to improve Biden’s failing domestic approval ratings in advance of the November elections. They refuse to support Biden’s futile and destructive wag the dog endeavour. Biden caused the conflict by his failure to respect the indivisible security interests of both RF and Europe. Biden instigated the conflict by failing to pressure Zelensky into respecting the Minsk accords, by failing to stop the 8 years shelling of the Donbass, by inciting Zelensky in a conflict he could not hope to win, by supplying weapons that created false hopes for UAF and led to the belief they could attack and would have American backing when they did so.
In short, behind closed doors, Scholz and Macron will make a clear statement of “Fuck the US.” They will jointly issue an ulitmatum to Biden that he instruct his henchmen, and his neocon cabal, that they bring Zelensky to his senses, force Zelensky to agree to RF terms and halt the combat.
Biden will counter with a threat to abandon participation in NATO and leave the Europeans to their fate.
Scholz and Macron will inform Biden of their plans to exit NATO. These plans will be put into effect should Biden fail to deliver they outcomes they have described.
Posted by: Sushi | Mar 23 2022 21:04 utc | 159
Oh happy day! Madeleine Albright, one of the evil witches of the west, just kicked the bucket! 😀 On occasions like this I wish I was religious, so I could believe the bitch is going to get spitroasted in hell for all eternity. Probably not, but it’s a very encouraging thought. I have to be thankful to her though, because she, next to Condoleeza and later Killary cured me from my naive wishful thinking I nurtured back in the 1990ies that once women came into power, the world would be a more peaceful place. Back then I thought that women, as givers of life, would be a significant counterweight to violent solutions in our civilization and would try and in the end be capable to prevent wars and suffering. Boy was I wrong. It’s not only men who are assholes, it’s just most people, regardless of gender. On the other hand: a big step towards equality…
Speaking of witches/bitches: Killary seems to have gotten the almighty killer virus, and again I wish there was a deity I could pray to for her choking to death on her own mucus very slowly and getting impaled in hell (just like Ghaddafi on earth) to end on a spitroast next to Madeleine.
And to connect it with the topic at hand, I really think that if Trump wouldn’t have won back then, we would have had the situation we have today in 2016/17. I’m convinced there was a schedule under Obama and Killary, and Biden just picked up at the point where they were forced to drop the ball. Trump was a real disruption, that’s why they hated him so much. They couldn’t really involve him in their plans, because they couldn’t be sure he buys and/or understands their strategy, or maybe would even counteract and expose them. So all the anti Trump propaganda in my eyes wasn’t ignited because he was an awful human being or an incompetent leader or whatever, it was because he seriously disrupted the schedule. Russia was supposed to get provoked and humiliated back then the same way it was in the last years. But she wouldn’t have had the means she has today and chances were good the plan would have worked.
Back when Trump came into office the media campaign against him wasn’t limited to the US itself, it had the same intensity in Germany, even though 99.5% here couldn’t vote for or against him anyway. The same propaganda machine that is spewing hate against Russia nowadays did spew hate against him back then. And that is when it occured to me that the transatlantic network/think tank policies today are dominantly identical with the policies of the “Democrats” – whose alter egos in Germany, politically, are the “Greens” (Baerbock). Built up and brought into power by the same networks. Germany has always been the beacon of Transatlanticism in Europe and is now politically almost where the US is – the *perceived* conservatives are hardly distuingishable from the *perceived* left. Meaning the network just copy/pasted its political strategy from US to Europe, and rather successfully. A more or less just nominal two-party-system (with basically the same goals). Only that today it favours new money (“progressive”) over old money (“conservative”), unlike in the old cold war.
I tried to explain to some people back then what a blessing it was that Trump got elected, because he would show the world and especially all pro-american Germans the real, ugly face of the US. And boy was I right about that, but most still didn’t understand what I was getting at. And I really, really hoped that he would get a second term to prevent German/European politics to fall back to that imbecile behaviour to do whatever the US tells them. And then there came Biden, ironically a powerful old white man after a year of black lifes matter protests, and crushed all my hopes. ALL the media and politicians here were so relieved, they kicked each other out of the way to be the first to crawl up his butt. Everything now is going according to plan again, and all of the parasites are happy again… Except for a few things.
In the meantime Russia has hardened her self-sufficiency and has a certain military superiority (hypersonic) that she didnt’t have 6 years ago. And if she had any doubts left about western intentions, they are now completely gone. In conclusion I’d say that if Killary would have won instead of Trump, the war between Ukraine and Russia would have started shortly after her taking office, and would either still go on today as a low intensity conflict, with enormous losses for Russia, or maybe even would have been ended with Russia losing due to running out of ressources. Therefore, for me, Trump, as awful a humang being he is (and even worse politician), he deserves his place in history for having enabled Russia to do what she does today. And funnily/ironically enough that’s the same thing Killary accused him of doing – may she suffer long and painful on Covid and very soon join Madeleine “500.000 children worth it” Albright.
Posted by: xototox | Mar 23 2022 21:13 utc | 164
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