After 9/11 it was obvious that in order to move away from the petrodollar, only a nuclear power could make the first step, and do so probably only at gun point. There we are.
Printing oil: If you control a major currency (USD) and the major exporters (Saudi Arabia) of the most important resource (oil) sell only for your currency and then invest a large part of the proceeds in your financial market, then you can in effect *print oil*, ...
@vtchakarova
@AlexGabuev
After 300+ dsys of NATO war against Russia, China understands that either Russia wins or China loses. Thus, before there will be any Ukrainian soldiers on Crimea, there would be Chinese troops defending Crimea for Russia.
@kruuk
@sethharpesq
Implement Minsk II, talk to Russia and assure them you will not be a NATO advanced outpost against them, and thus avoid the war in the first place. That's what you do.
The Iron Curtain 2.0 - The Empire of the United States is coming to an end. Since 1971, everone who needed oil, had to pay for this oil in USD. Ultimately, the only way of obtaining these USD, was selling real goods to the U.S. Hence, the U.S. were able to fund an Argentina style
@vtchakarova
@AlexGabuev
It's worse than that. The longer the sanctions war drags on, the greater the developmental advantage granted to the BRICS, simply for availability and import price of all sorts of industrial resources, especially energy.
@vtchakarova
@AlexGabuev
That also tells you why US & EU is now a slowly sinking ship. Militarily, you were never able to defeat Russia (nuclear war). But even economically, it will be impossible to wear out the Russia & China alliance.
i.e. increase credit volume or expand monetary base and pay for imported oil without any real (=real economy) expenditures. The U.S. was able to *print oil* since the 1971 end of gold convertibility and 1973 trip to Saudi Arabia by Treasury "energy czar" Bill E Simon.
With the Western sanctions against RU and with the West rendering FX reserves and even custorial gold storage questionable, we are *not* in the scenario in which the EUR suceeds the USD as the world oil currency. We are rather in the "direct bid for gold" scenario.
Printing gas: Soviet Union/Russia has delivered nat gas to Germany since the 1980s, being paid for in DEM/EUR. Now the EUR is a major currency, and until recently, Russia accumulated EUR reserves. This would put euro area in a position to *print gas*.
But be nice to your commodity exporter. If they immediately sell their USD into the FX market or, much worse, ask directly for gold, then (1) you lose the ability to *print oil* and (2) gold begins to trade like money.
In such world, the printer is powerless - any expansion of credit volume or base money will quickly lead to inflation, not give the printer any actual power. The resource exporter, however, will never get 100 bbl/oz for their oil when gold trades like money. Pehaps 500 bbl/oz.
Tectonic shift of global financial system in one tweet: If you can buy oil and natural gas with other currencies, what is the point of holding USD exchange reserves?
The destruction of Ukraine is a major nuisance for Russia. It is a catastrophe for Ukraine and for Western Europe. But for the US, it is a relative advantage. That's all you need to know.
@vtchakarova
@AlexGabuev
So again the US is fighting a long term question (ability to have their double deficits funded by the Rest of the World via the reserve status of the USD) with a short term band aid. Thus the US are forcing themselves to start another war in the middle east within a few years.
@WestonAPrice
@ProfTimNoakes
@BrianHookerPhD
Infants have a high risk of contracting hepatitis B from homosexual intercourse and also from unclean reused syringes when they try to inject illegal drugs, don't you understand?
@EU_FPI
While your "peace facility" killed thousands of Ukrainians, your "purchasing power stability facility" has lowered people's real incomes by 12%.
Without commodity support for the EUR, the ECB has only bad choices: (1) raise rates, sell bonds, reverse their QE, accept the recession Volcker style and save the currency or (2) inflate and end up like the USD.
@JulianRoepcke
Ukrainian lines in the east are collapsing. Soon Russia will march through towards river Dnepr without much resistance. UA losses now amount to way over 50 thsd casualties, irreplaceable for a decade.
If true that Saudis are willing to switch to EUR, even more so, the euro area would be able to *print oil and gas*. The resource exporters could directly ask for gold, but if they don't, then "the printer knows gold in the many thousands" (Another).
@imetatronink
As soon as the US realize they cannot win without destroying the world, they still have the option of abandoning the USD in favour of gold and to reset the system themselves.
@vtchakarova
Well, it's not that Russia cannot pay - they are drowning in money. It's just that US, EU governments are expropriating investors in Russian bonds. Your tweets are misleading. You can do better.
@vtchakarova
@AlexGabuev
This war will not be for denial of sales (as the moves against Iraq & Iran used to be - i.e. in order to take out competition), but rather trying to get their hands on the oil. I hope the Arabs have thought about it and have found a way of deterring the US.
Why remain prudent if the opposite is not immediately punished? Now that RU is withdrawing gas support from the EUR, the policy choices of the ECB are seriously narrowed. They must absolutely hate the sanctions lady in Brussels.
@anders_aslund
Read: Oh, sh*t, the Russians are united - no regime change anywhere near. But let's write something anyway. Dump twitter readers already forgot that I told them Russia would run out of missiles by mid March. So just make something up and write it.
Did you notice that since about 2012, when EUR partly became a gas currency, euro area policitians were tempted to go on spending sprees, ECB began to monetize government debt, later some demanded common euro debt to be issued, at least the EFSF now exists.
@Glenn_Diesen
@TheSuperbubble
When Taiwan has been destroyed, the US will have a near monopoly on microprocessors outside of China. That's the goal. That's why there will be war irrespectively of what the Taiwanese think or want.
@guyverhofstadt
How is Julian Assange doing? How many tweets have you sent on order to support him? How about Edward Snowden? What did you do in order to support Charles/Chelsea Manning? You have *zero* credibility.
In such a financial world, gold trades like a commodity (close to production cost of the mines) b/c the purchases by the commodity exporters fly under the radar and everyone else is happy with USD.
Why is this attractive to the resource exporter? They get, say $30/bbl in cash plus $5/bbl in gold at $500/oz (historic figures) which is they pay for gold only 100 bbl/oz (ignore the currency part which has to go into gov't bonds and will shrink over time anyway).
@RnaudBertrand
All these sanctions are *not* against Russia nor China, for the dragon bear is self-sufficient and independent. That's merely the narrative. The sanctions are rather economic warfare against Europe. Very effective.
@vonderleyen
Soon plenty of happy parents will be freezing in the dark. Thank you, Uschi! Your American superiors will reward you $$$ nicely for your service.
If the gas exporter allows ECB to print (and as we suspect the oil exporter might soon, too), why not exploit this privilege to print, and so after 2012 the EUR became ever more like the USD in terms of debt issuance and spend thrift politicians.
@TrueGrit_3rd
@GeromanAT
This is not an S-500, but the "hypersonic interceptor"/"satellite killer" which may later go as S-550. The S-500 is still truck based, two tubes per track and cold launched as are the S-300 and S-400. The hypersonic interceptor is silo based and hot launched.
Once you can buy oil (in size) for other currencies, nobody is forced to purchase USD reserves any longer. At that moment the existing USD reserves instantly become toxic because of the structural trade deficit of the U.S.
Globalization: globalization as we know it is a small part of specialization and supply chain management and a large part of petrodollar induced trade imbalances. How so?
Around 1970, Kissinger, Volcker & Co decided that the price of oil had to increase by 400% (listen to Sheikh Akhmed Zaki Yamani) in order for the USD backing to switch from gold to oil.
@Bundeskanzler
@ZelenskyyUa
Germany declares war on Russia. A war that it cannot even fight b/c they don't have an army that's capable of confronting Russia. How can this be in the interest of the German people, I ask?
@SNMilitary
@HawkEye02723358
Problem with this assessment is that the downside (refugees, risk of escalation, damage by sanctions, loss of commodity/energy trade relationships) is concentrated in Europe whereas a potensial upside pops up in America.
@vtchakarova
@frankknopers
China knows that should Russia lose in Ukraine, the US would move to cut off China from her resource imports. So a Russian "win" in Ukraine is an existential question for China. You coined the term "dragonbear". It's way more relevant than you are prepared to admit.
@vonderleyen
I call bullshit. Whose shipping companies stopped doing business with Russia b/c of the sanctions? It's in your hands to restart global trade.
@vtchakarova
High time to end the sanctions that NATO imposed against European industry, talk to Russia, cut a deal, and return to cooperation. Time to tell Ukrainian nationalists and Washington neocons a couple of hard truths and make policy *for* Europe (which includes Russia).
@taxibistront
They presented a prepared statement saying he retired on April 5. Weird. Did they just cut formal ties when it became clear they were irrevocably surrounded in Mariupol? Then joining black ops was his get-out-of-jail-free card in Canada? Anyway, confirmation still missing.
Britain. The most vulnerable from an end to the petrodollar, hence thd most desperate and also the most aggressive. Virtually no domestic resources, hardly any manufactured products to sell internationally, small gold reserve, increasingly isolated after
#brexit
.
Ruble gold arbitrage thoughts: RU had a pre-war trade surplus of about $100bn. They will eventually sell all their commodity exports to *someone*. Assume $50bn will have to be paid in RUB - the rest in other currencies that the RU CB keeps as reserves.
@ianbremmer
Russia has a trade surplus of about $100million per year at last year's prices. Everyone from Turkey to China to Africa to South America want to buy their stuff. A freely convertible ruble would be the strongest currency. They will need regulations to weaken it.
Volcker to Kissinger, about 1969: "For the US to remain hegemonic, we should handle other people's surpluses." Former Greek Finance Minister Yanis Varoufakis spills the beans (minute 19:00 to 23:00)
@karlnehammer
Yeah, OMV has got two accounts at Gazprombank, one in EUR and one in RUB. They pay the contract price in EUR (not RUB and that's what Nehammer refers to), but the amount is then exchanged for RUB (for the intended monetary policy effect).
@SamRamani2
In Poland it's an open secret that the total losses (not limited to Bakhmut) are closer to 5000. But they were volunteers, and so who's going to complain and about what?
If the Gulf Arab states wanted to help Palestine, the best move would be to sell oil only for physical gold. That would reset the international financial system from credit to real assets and make funding Israel increasingly painful for the US
@ebrahim
@RWApodcast
Acc. to US info, Russia surrounded the bulk of the UA forces east of river Dnepr over a week ago, since then told them to surrender, also told UA negotiating team. Guess they decided not to surrender.
@guyverhofstadt
Arsenej Yatsenyuk, former Ukrainian prime minister (when the Ukrainian air force bombed their ethnic Russian citizens in Donezk and his hooligans burned Russian protestors alive at Odessa). Just a stiff arm. Another sports injury. Never mind. European values.
@thesiriusreport
@mortymer001
You shoot your own foot and when it's bleeding and hurting, you say to your people "Putin did it.". The rule of Western propaganda.
@aaronjmate
Why are the US in Syria? Because Assad is not a US puppet and was to be regime changed? Because they wanted to deny Russia access to the Mediterranean at Tartus? Or because Qatar wanted a pipeline route, Assad said no, and Qatar paid off Hilary Clinton? Other motivations?
@AZgeopolitics
Who withdrew unilaterally from the ABM and from the INF Treaties? The West is not "agreement capable" - that's a new technical term in a rapidly changing world order.
@vtchakarova
If NATO loudly announce that they will keep attacking Russia from what's left of Ukraine, this shouldn't surprise you. Of course, it's about NATO.
@DeItaone
Rumour says that there were military advisors with the Azov batallion in Mariupol who did not get out before Russia cut off the city. Attempt to evacuate by helicopter ended in two shot down, not all evacuated, some still captured.
@SamRamani2
Imagine Belgium announced that all education would be provided in French only. You'd have a major civil war the next day. Same if Switzerland decided that all education would be in German only. So I assume civil war is their goal. Good luck with that.
trade deficit without an Argentina style currency crisis. The world is changing fast. A global nuclear power (RU) who is at the same time the world's largest resource exporter, no longer accepts these USD. The world's largest manufacturer and exporter of consumer goods (CN), also