Putin pegs the Russian rouble to gold
I don’t think this movement by Vladimir Putin can be dismissed.
When Saddam Hussein and Col. Gadhaffi announced the introduction of a gold dinar they were marked for destruction.
Times have changed.
“Russia won’t engage in charity”
“Russian President Vladimir Putin has made a public statement on video about what has taken place with binding the Ruble to Gold.
In that statement, he points out that Western Nations have simply STOLEN Russia’s foreign currency reserves and Gold Bullion Reserves, and by doing so, worldwide trust in so-called “First-Class” safety of investing in the West, has been smashed.
He goes on to predict that people will now dump their holdings of Dollars and EUROS to safer investments like land, food, and raw materials.”
Russia sets ruble gas payment deadline
Russian President Vladimir Putin has authorized the government, the central bank, and Gazprombank to take the necessary steps to switch all payments for Russian natural gas from “unfriendly states” to rubles starting March 31.
The measure targets “member states of the EU and other countries that have introduced restrictions against citizens of the Russian Federation and Russian legal entities,” the mandate published on the Kremlin website reads.
Russia will stop shipping natural gas to countries refusing to settle payments in rubles, Kremlin spokesperson Dmitry Peskov said on Monday.
The decision, first announced last week, came as Russia’s oil trade has been left in disarray as importers put orders on hold due to the latest sanctions introduced against Moscow over its military operation in Ukraine.
The conflict in Ukraine and the anti-Russia sanctions that followed have raised concerns of a global economic crisis. Skyrocketing commodity prices are sending the costs of consumer goods, energy, and food ever higher, giving rise to fears of a possible recession in many countries and even hunger in some parts of the world.
Russia’s decision to switch payments to its domestic currency has been made in response to the unprecedented penalties imposed by the US and its allies on the country’s financial system.
The ruble plummeted to record lows after Western nations and Japan blocked Russia’s access to some of its international reserves. Since last week’s currency-switch announcement, the ruble has reached its strongest level against the US dollar and the euro in nearly a month.
Russia on Monday has issued a firm and unyielding response to G-7 ministers who had dismissed as “unacceptable” its plan to only accept ruble payments for Russian gas going to “unfriendly” nations.
Earlier Monday German Economy Minister Robert Habeck said from Berlin that the Kremlin demand for natural gas contracts to be paid in rubles is a “one-sided and clear breach of contracts” – saying the contracts must be honored under prior conditions, according to Bloomberg. “That means that a payment in rubles is not acceptable and we urge the relevant companies not to comply with Putin’s demand,” Habeck said. “Putin’s effort to drive a wedge between us is obvious but you can see that we won’t allow ourselves to be divided and the answer from the G-7 is clear: the contracts will be honored.”
The Kremlin’s quick shooting down of the German economy minister’s comments and the G-7’s stance on the ruble came Monday via a Russian lawmaker to state-run RIA Novosti: “Russian lawmaker Abramov says G7’s refusal to pay in Russian roubles for gas will definitely lead to a halt in supplies.”
Elsewhere the Kremlin said it’s not running a “charity” – according to TASS:
Moscow is handling the details of its gas delivery plans to unfriendly countries for payment in rubles, but it won’t engage in charityif Europe refuses to pay in the Russian currency, Kremlin Spokesman Dmitry Peskov told reporters on Monday.
…The Kremlin spokesman remained tight-lipped on what measures Russia might take if Europe refused to pay for gas in rubles, noting that these “issues should be sorted out as they develop.” “But we will definitely not supply gas for free, that’s for sure. It is hardly possible and reasonable to engage in charity in our situation,” he emphasized.
Putin has reportedly set a deadline for days away…
This is the response of the markets
The US will emerge as the world’s largest natural-gas exporter this year, a top energy market historian says
A little truth here
EU confirms date of its energy independence from Russia
The European Commission has confirmed that it expects the EU to remain dependent on energy imports from Russia for at least another five years, the TASS news agency reported on Monday.
In response to a question posed during a press briefing in Brussels as to how soon US liquefied natural gas (LNG) would help Europe ditch Russian gas, European Commission Spokesperson for Climate Action and Energy Tim McPhie said the bloc would “be dependent on carbon fuels from Russia until 2027.” McPhie said the EU had estimated it could reduce its dependence on Russian gas by two-thirds this year and that a detailed plan about how it would achieve this would be presented by the end of May.
McPhie’s comments follow the bloc’s talks with the United States last week, which focused on an expansion of American LNG supplies to the European Union as a way to reduce the continent’s dependence on Russian gas. US President Joe Biden had met with Brussels officials to try to push for an embargo on Russian oil too, which Europe had refrained from imposing, citing recession fears.
The statement released by the US and the European Commission on energy security after the summit affirmed their “joint resolve to terminate EU dependence on Russian fossil fuels by 2027,” and announced that a working group had been set up to achieve that end.
The bloc said it had sought to ensure stable demand for additional US LNG of approximately 50 billion cubic meters of natural gas a year until at least 2030, “on the understanding that the price formula of LNG supplies to the EU should reflect long-term market fundamentals.”
The European Union has decided to stop buying natural gas from Russia as part of a wide-ranging array of sanctions imposed in response to Moscow’s military operation in Ukraine. Russia currently meets about 40% of the EU’s demand, supplying about 175 billion cubic meters per year.
“The longer the war goes on, the more Russia has been separated from the global economy,”
Of course China, India and the rest of the non-western world are just minor players (sic).
RT via SOTT
India PM Narendra Modi • Russian President Vladimir Putin
A system allowing direct rupee-ruble payments in trade between Russia and India could be launched this week, the president of the Federation of Indian Export Organizations (FIEO), A Sakthivel, told CNBC on Wednesday. The arrangement would allow India and Russia to carry out financial operations bypassing the US dollar. Russia is effectively blocked from using US currency due to Western sanctions over the conflict in Ukraine.
According to the official, the Indian government is working on a proposal to allow up to five nationalized Indian banks to be engaged in the rupee-ruble trade mechanism, and discussions between the central bank governor, the finance minister, and the banks on the matter have already been held. The arrangement would let Indian exporters continue doing business with Russia despite sanctions banning, among other things, international payment mechanisms in the country, such as SWIFT. It would also let India continue buying Russian energy exports and other goods.
According to Sakthivel, the Indian economy could profit from sanctions Russia is facing, as they give Indian exporters an opportunity to expand on the Russian market. He stated:
“Export to Russia is not much, only in agriculture and pharmacy products. Now that the whole of the West is banning Russia, there will be a lot of opportunities for Indian firms to enter Russia.”
India’s finance ministry and the Reserve Bank of India have not yet commented on the new trade arrangement.
Unlike the US and the EU, India has not criticized Russia over its military operation in Ukraine, and has abstained from condemning Moscow during the recent UN voting rounds. When asked whether India’s continued commerce with Russia would draw Western ire, Sakthivel said his country had taken a “neutral stand” on the situation in Ukraine. He stressed:
“The government will take into account all the factors. The government is playing it very carefully.”
India exported $3.3 billion worth of goods to Russia in 2021, mostly pharmaceutical products, tea, and coffee. In terms of imports, India bought $6.9 billion worth of Russian products, including arms and defense goods, mineral resources, fertilizers, metals, diamonds and other precious stones. India also imports Russian oil, with recent media reports stating that the country’s major refiner, Indian Oil Corp, has stepped up purchases of Russian crude over the past month. India is also reportedly considering buying raw materials from Russia and Belarus for fertilizer production amid skyrocketing commodities’ prices.
This is what Hal Turner has to say (quite a bit!)
It’s Official! Russia Central bank Announces Ruble Bound to Gold! 5000 Rubles per Gram
(UPDATED 10:39 AM EDT SEE BOTTOM) The Central Bank of Russia has officially announced that, as of March 28, 2022, the Russian Ruble currency is BOUND to Gold. The rate is 5,000 Rubles per gram of gold bullion.
(NOTE: This story has been corrected to report “TROY” ounces as opposed to dry ounces, and the values recomputed to reflect there are more grams per TROY ounce than in a dry ounce.)
There are 32 grams in each TROY ounce. 32 grams times 5,000 rubles per Gram is 160,000 Rubles. Ya with me so far?
The conversion rate of Rubles to U.S. Dollars is 100 Rubles, 90 Kopecs, to each US Dollar.
If Rubles are bound to Gold at 5000 Rubles per gram, and there are 32 grams per TROY ounce, meaning one ounce of gold would cost 160,000 Rubles, then converting that to US Dollars means Gold is $1600 per ounce when using Rubles, instead of $1,928 per ounce using Dollars.
Russia just wiped out about thirty percent (30%) of the value of the US Dollar, worldwide, when it comes to Gold Bullion.
Worse, because Russia will only sell its oil and gas in Rubles, and Rubles are now fixed at 5,000 Rubles per gram, anyone wishing to buy Oil or Gas will need to either pay in Rubles or pay in Gold, and they won’t get the US Dollar value for the gold they tender as payment!
People around the world will be literally THROWING their money at the Ruble and DUMPING Dollars and EUROS to do it.
What Russia just did is the financial equivalent of detonating a nuclear bomb.
FWIW, the last guy on this planet who tried to back a currency with Gold, was Muammar Quadaffi of Libya.
NATO went into Libya, bombed the shit out of it, until the people of Libya grabbed Quadaffi on the street, beat him bloody, and put a bullet in his head.
As of this hour, 10:39 PM EDT, I suspect Bankers all over the world are on the phones with each other and with heads of state, instructing them that what Russia has done will totally smash both the US Dollar and the EURO, and those Bankers will be telling the heads of State that World War 3 must commence immediately.
Let me explain why.
Today, the Russian Central Bank pegged Rubles to Gold.
Last week, Russia declared they would only sell OIL and GAS in . . . Rubles.
This means Russian OIL and GAS are pegged to Gold with Rubles as the proxy for Gold.
EFFECT: Europe (that needs Russian Gas and Oil) will now have to buy Rubles from Putin using Gold, or pay for the Oil and Gas with Gold itself.
Currently, the FOREX Rate for Rubles to Dollars is about 100:1
BUT . . . with 5,000 Rubles now equaling one gram of Gold, and oil being priced directly in Gold, we are going to see a MASSIVE price disruption in FOREX markets, in terms of how much Gold a Dollar can still buy.
Foreign countries holding our Dollar Debt Notes in Reserve, will see an immediate, and far less use for them and will want to start dumping them in favor of something more stable; something which holds its value.
Basically, any currency pegged to Gold will fit the bill. which means countries like that — like Japan — will start dumping their Dollar Debt as fast as they can — they are NOT going to go down with the ship! They will move into more stable currencies, like . . . the Ruble.
This will have a DE-flationary effect on the Ruble, making it more valuable over time.
This also means Putin can re-peg the Ruble any time he wants, to like 500, or 50, or 10. IT just keeps getting more valuable for him.
The instant result is that all those foreign countries dumping their Dollar Reserves will cause all those excess Dollars to start coming home, triggering worse hyper-inflation than we already have now in the USA.
Is it any wonder why Biden was on stage last week calling for Regime change in Russia? He is about to have masses of angry and literally starving Americans marching through the streets here at home demanding answers.
UPDATE 10:39 AM EDT —
Russian President Vladimir Putin has made a public statement on video about what has taken place with binding the Ruble to Gold.
In that statement, he points out that Western Nations have simply STOLEN Russia’s foreign currency reserves and Gold Bullion Reserves, and by doing so, worldwide trust in so-called “First-Class” safety of investing in the West, has been smashed.
He goes on to predict that people will now dump their holdings of Dollars and EUROS to safer investments like land, food, and raw materials.
Here is the video with English language caption:
Putin is correct.
The impact of what Russia has just done is a literal dagger to the heart of the US Dollar and to the EURO. No one will want those currencies anymore, and since the US barely manufactures anything domestically, when foreign countries cease accepting the dollar for payment, shortages of everything will slam the U.S. and Europe.
Confirmation of EU energy independence date:
UAE says there is no substitute for Russian oil: