Did the West just score an own goal with their sanctions?

[Dear Mami]

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Putin just announced today that anyone buying gas from them needs to open a Russian account with a Russian bank, in Rubles, pay in said Rubles, failure to which they will be deemed to have breached their contracts with all attendant consequences. Their central bank is also announcing a plan to buy gold in Rubles from now too end of June at 50 Rubles per gram of Gold.

Just last week, the Western people were saying that they would be forced to SELL their gold to survive.

Expected to follow suit in coming months are wheat and other foods (Russia and neighbours produce 40% of the globe's supply!) Plus other materials, like minerals, etc that the West/Europe relied heavily on them for.

The German chancellor earlier today indicated they would be allowed to pay in EUR/USD into some Russian bank that's not under sanctions, which would then convert them into Rubles.

Just this announcement (pay us in Rubles) already strengthened the Ruble in a week, going from about 140/150 to the Dollar to now between 78 and 82 to the dollar. Already that's slightly stronger than it was BEFORE the war/sanctions.

The IMF just said today that this move by Russia is diminishing the USD. These guys in the linked video explain it better here (I don't pretend to know economics beyond a basic layman level), but the IMF say the USD will continue to be the most widely circulated but with other currencies alongside it. This is basically the beginning of the end of the USD as the World reserve currency!

I understand the EU and Germany need each other badly: Russia cannot immediately replace them with other buyers due to lack of infrastructure that hasn't yet been built (in the works, though, as part of Chinese Belt and Road). But Europe needs Russia even more(!) because nobody can replace Russian gas. They consume 15O billion or so from Russia (whatever units they use to measure gas). The US is pledging to supply only 10%(!) and this NEXT YEAR. And the US produces 22 billion as is, will need to produce 15 billion on top for Europe (at a higher price, too!).

So . . . What's EU to do? Their industry has no alternative to Russian gas. Methinks they will have to drop these sanctions asap or else kick their own economy very hard in the gut. If not, and Russia turns off the pipe starting 1st April, I predict all EU govts will have an impossible time coming back to power in whatever new elections are on the way. Because life is about to get very uncomfortable very fast for a population that's used to a very comfortable existence. I suspect they will soon forget about Ukrainians and find pitch forks to stick into their own politicians, as the self-centered human species is won to do in such times.

Again, I ain't no economist, but lots of really well informed people seem to think the EU is in for more than just a rough ride if they don't capitulate to Russia, buy gas in Rubles, and effectively kill their own sanctions that they were bragging about just one to two weeks ago.

[Dear Mami]

The EU needs to start charting their own path away from their warmongering Anglo-Saxon counterpart or tank their own economy, which is crazy. Basically, Russia will lose, become Chinese mpango wa kando and EU even more so. Only beneficiaries are US and China. Those guys better wake up quick. In the long run, all those American wars fought to maintain hegemony and USD will prove futile as the Dollar goes down. So long run, only winners are China and likes of India.

[Nowayhaha]

Germany, France will pretend to show strength but countries like Hungary ,Czeck etc will differ . They are actually playing into Putins hands who wants to divide them.
Putin also has a valid point when west is using sanctions to get free energy.

https://www.reuters.com/business/energy/russia-sets-deadline-rouble-gas-payments-europe-calls-it-blackmail-2022-03-31/

Putin said the switch to roubles would strengthen Russia's sovereignty. He said the West was using the financial system as a weapon, and it made no sense for Russia to trade in dollars and euros when assets in those currencies were being frozen.

"What is actually happening, what has already happened? We have supplied European consumers with our resources, in this case gas. They received it, paid us in euros, which they then froze themselves. In this regard, there is every reason to believe that we delivered part of the gas provided to Europe practically free of charge," he said.

"That, of course, cannot continue," Putin said,

[Kim Jong-Un's Pajama Pants]

Putin just announced today that anyone buying gas from them needs to open a Russian account with a Russian bank, in Rubles, pay in said Rubles, failure to which they will be deemed to have breached their contracts with all attendant consequences. Their central bank is also announcing a plan to buy gold in Rubles from now too end of June at 50 Rubles per gram of Gold.

Just last week, the Western people were saying that they would be forced to SELL their gold to survive.

Expected to follow suit in coming months are wheat and other foods (Russia and neighbours produce 40% of the globe's supply!) Plus other materials, like minerals, etc that the West/Europe relied heavily on them for.

The German chancellor earlier today indicated they would be allowed to pay in EUR/USD into some Russian bank that's not under sanctions, which would then convert them into Rubles.

Just this announcement (pay us in Rubles) already strengthened the Ruble in a week, going from about 140/150 to the Dollar to now between 78 and 82 to the dollar. Already that's slightly stronger than it was BEFORE the war/sanctions.

The IMF just said today that this move by Russia is diminishing the USD. These guys in the linked video explain it better here (I don't pretend to know economics beyond a basic layman level), but the IMF say the USD will continue to be the most widely circulated but with other currencies alongside it. This is basically the beginning of the end of the USD as the World reserve currency!

I understand the EU and Germany need each other badly: Russia cannot immediately replace them with other buyers due to lack of infrastructure that hasn't yet been built (in the works, though, as part of Chinese Belt and Road). But Europe needs Russia even more(!) because nobody can replace Russian gas. They consume 15O billion or so from Russia (whatever units they use to measure gas). The US is pledging to supply only 10%(!) and this NEXT YEAR. And the US produces 22 billion as is, will need to produce 15 billion on top for Europe (at a higher price, too!).

So . . . What's EU to do? Their industry has no alternative to Russian gas. Methinks they will have to drop these sanctions asap or else kick their own economy very hard in the gut. If not, and Russia turns off the pipe starting 1st April, I predict all EU govts will have an impossible time coming back to power in whatever new elections are on the way. Because life is about to get very uncomfortable very fast for a population that's used to a very comfortable existence. I suspect they will soon forget about Ukrainians and find pitch forks to stick into their own politicians, as the self-centered human species is won to do in such times.

Again, I ain't no economist, but lots of really well informed people seem to think the EU is in for more than just a rough ride if they don't capitulate to Russia, buy gas in Rubles, and effectively kill their own sanctions that they were bragging about just one to two weeks ago.

Interesting take on the Ruble.  Good sound bytes for the populace.  But long term a losing proposition I think.  You are under an embargo, and then you make it even easier for trade partners to look elsewhere.

Alexander Mercouris, has a pretty colorful history if this info about him is true.  Dubious character to say the least.

https://www.legalcheek.com/2017/07/barrister-who-was-disbarred-after-forging-lady-hale-letter-sued-for-200000-by-ex-client/

[Dear Mami]

Interesting take on the Ruble.  Good sound bytes for the populace.  But long term a losing proposition I think.  You are under an embargo, and then you make it even easier for trade partners to look elsewhere.

Well, two things: (1) Those trade partners have already announced they are permanently cutting off that relationship in a few years (as soon as they can). (2) In the meantime, they've made EUR & USD unusable in Russia/to Russia. This means the choice for Russia is to supply gas for free (in EUR/USD) or for money they can use (Rubles). They're choosing the latter, which is the only logical option they have.

Long term, Russia will have no problem selling gas: It's an essential commodity in demand everywhere all the time, as long as some alternative fuel has not emerged that can replace it. So ain't nobody (but West) refusing to buy it if they can get it. It was also very cheap: would continue to be once they have their pipelines. In fact, the biggest problem both Russia and EU have at the moment is infrastructure. Both will need a couple of years to build infrastructure that lets them get/supply gas to other places in larger quantities.

So the west made it so that there's no/very little incentive for Russia to behave differently from how they are now. They have nothing for them either in future (future trade in gas) or present (usable money). They just presume that Russia can't/won't turn off the taps because, well, even at the height of the cold war, the USSR kept the gas flowing. But that's a risky and arrogant assumption, given the unprecedented sanctions they've levied. We're all waiting to see who will blink first.

That said, Russia gets a third of its money from EU so needs it very much yes. However, the EU has no alternative to Russian gas! Bottom line, they both stand to suffer while the US and China gain, but the EU MUCH more. Their economies would be in real trouble if this happens

[KenyanPlato]

Dear Mami
Think of Cuba or Venezuela. Actually think of Iran without Theoracy. This is Russian ruble and economy future.
Currency is just a tool but not the gear or engine.

[Kim Jong-Un's Pajama Pants]

Interesting take on the Ruble.  Good sound bytes for the populace.  But long term a losing proposition I think.  You are under an embargo, and then you make it even easier for trade partners to look elsewhere.

Well, two things: (1) Those trade partners have already announced they are permanently cutting off that relationship in a few years (as soon as they can). (2) In the meantime, they've made EUR & USD unusable in Russia/to Russia. This means the choice for Russia is to supply gas for free (in EUR/USD) or for money they can use (Rubles). They're choosing the latter, which is the only logical option they have.

Long term, Russia will have no problem selling gas: It's an essential commodity in demand everywhere all the time, as long as some alternative fuel has not emerged that can replace it. So ain't nobody (but West) refusing to buy it if they can get it. It was also very cheap: would continue to be once they have their pipelines. In fact, the biggest problem both Russia and EU have at the moment is infrastructure. Both will need a couple of years to build infrastructure that lets them get/supply gas to other places in larger quantities.

So the west made it so that there's no incentive for Russia to behave differently from how they are now. They have nothing for them either in future (future trade) or present (usable money). They just presume that Russia can't/won't turn off the taps because, well, even at the height of the cold war, the USSR kept the gas flowing. But that's a risky and arrogant assumption, given the unprecedened sanctions they've levied.

That said, Russia gets a third of its money from EU so needs it very much yes. However, the EU has no alternative to Russian gas! Bottom line, they both stand to suffer while the US and China gain, but the EU MUCH more. Their economies would be in real trouble if this happens

That is just not true.  Russia is still selling the gas and getting paid for it.  I don't know where you get the notion that this is not the case.

That aside, Russia could also choose to stop attacking neighboring countries.  Then they can be taken more seriously,  when they accuse others of breach of some trust or contract.

[patel]

Currency is king...once Russia accepts payments in 'rubble' or yuan and Saudi accepts oil payments in yuan your subsidies and easy living in Delaware courtesy of petro dollar will only get harder...no more dollar value menu at Macdonalds or burger king...

Dear Mami
Think of Cuba or Venezuela. Actually think of Iran without Theoracy. This is Russian ruble and economy future.
Currency is just a tool but not the gear or engine.

[KenyanPlato]

Russia will have to rewrite existing contracts or void them. The market for oil and gas is sophisticated. This would require Russian customers or Russia to insure huge fx losses to void these contract. For now Russia will have to go to the black market and sell her fossil fuels there and may be cut off Europe from the legit market

[KenyanPlato]

Currency is king...once Russia accepts payments in 'rubble' or yuan and Saudi accepts oil payments in yuan your subsidies and easy living in Delaware courtesy of petro dollar will only get harder...no more dollar value menu at Macdonalds or burger king...

Dear Mami
Think of Cuba or Venezuela. Actually think of Iran without Theoracy. This is Russian ruble and economy future.
Currency is just a tool but not the gear or engine.

If rhe world was just that simple like selling fish in homeboy. This is a very complicated market that is not for small boys like you

[Dear Mami]

That is just not true.  Russia is still selling the gas and getting paid for it.  I don't know where you get the notion that this is not the case.

I got it from Putin himself in the announcement: You can watch/read for yourself here, without middle-men (it;s only two minutes):

Do you have statements of EU governments denying that this is true?

They are getting paid in the currency they are barred from using which makes it monopoly paper to them. Supplying gas and not getting the money they can use means they're giving EU gas free of charge. The EU just stole (kept/froze/whatever) money they already "paid" for gas in March. Why would anyone expect the arrangement to remain the same?

As for breach of contract: that died with sanctions. If the EU feel aggrieved, they can, well . . . sanction them? It's up to them. My bet is EU throws tantrums then curls their tails and gets their gas, eventually.

[patel]

Contract payments/billing cycle....you supply gas for let's say 60 days before you receive payments. The payment in dollars is deposited in some accounts at a European bank...due to sanctions the banks cannot remit those payments....so Russia supplied gas, payments made but money stuck in the bank...hence free gas.

Interesting take on the Ruble.  Good sound bytes for the populace.  But long term a losing proposition I think.  You are under an embargo, and then you make it even easier for trade partners to look elsewhere.

Well, two things: (1) Those trade partners have already announced they are permanently cutting off that relationship in a few years (as soon as they can). (2) In the meantime, they've made EUR & USD unusable in Russia/to Russia. This means the choice for Russia is to supply gas for free (in EUR/USD) or for money they can use (Rubles). They're choosing the latter, which is the only logical option they have.

Long term, Russia will have no problem selling gas: It's an essential commodity in demand everywhere all the time, as long as some alternative fuel has not emerged that can replace it. So ain't nobody (but West) refusing to buy it if they can get it. It was also very cheap: would continue to be once they have their pipelines. In fact, the biggest problem both Russia and EU have at the moment is infrastructure. Both will need a couple of years to build infrastructure that lets them get/supply gas to other places in larger quantities.

So the west made it so that there's no incentive for Russia to behave differently from how they are now. They have nothing for them either in future (future trade) or present (usable money). They just presume that Russia can't/won't turn off the taps because, well, even at the height of the cold war, the USSR kept the gas flowing. But that's a risky and arrogant assumption, given the unprecedened sanctions they've levied.

That said, Russia gets a third of its money from EU so needs it very much yes. However, the EU has no alternative to Russian gas! Bottom line, they both stand to suffer while the US and China gain, but the EU MUCH more. Their economies would be in real trouble if this happens

That is just not true.  Russia is still selling the gas and getting paid for it.  I don't know where you get the notion that this is not the case.

That aside, Russia could also choose to stop attacking neighboring countries.  Then they can be taken more seriously,  when they accuse others of breach of some trust or contract.

[Dear Mami]

Contract payments/billing cycle....you supply gas for let's say 60 days before you receive payments. The payment in dollars is deposited in some accounts at a European bank...due to sanctions the banks cannot remit those payments....so Russia supplied gas, payments made but money stuck in the bank...hence free gas.

Exactly! It's what Putin says himself as he announces the new decree they signed. The EU "pay" and then freeze/keep the payment or otherwise make it unusable. Why would any rational "partner" repeat said transaction next month?

PS. It's not Russia screaming "breach of contract." It's the EU. Russians have simply retaliated with their own "breach" (which has been forced by circumstances).

[patel]

What's complicated bro! I thought a bean counter like you would easily get it ama you need graph and charts? All you need to know petro dollar is backed by oil. countries have to hoard billions of dollar inorder to buy/sell oil. Once you take that away all those trillions of dollars are coming back to states. Inflation on steroids.

Currency is king...once Russia accepts payments in 'rubble' or yuan and Saudi accepts oil payments in yuan your subsidies and easy living in Delaware courtesy of petro dollar will only get harder...no more dollar value menu at Macdonalds or burger king...

Dear Mami
Think of Cuba or Venezuela. Actually think of Iran without Theoracy. This is Russian ruble and economy future.
Currency is just a tool but not the gear or engine.

If rhe world was just that simple like selling fish in homeboy. This is a very complicated market that is not for small boys like you

[Kim Jong-Un's Pajama Pants]

That is just not true.  Russia is still selling the gas and getting paid for it.  I don't know where you get the notion that this is not the case.

I got it from Putin himself in the announcement: You can watch/read for yourself here, without middle-men (it;s only two minutes):

Do you have statements of EU governments denying that this is true?

They are getting paid in the currency they are barred from using which makes it monopoly paper to them. Supplying gas and not getting the money they can use means they're giving EU gas free of charge. The EU just stole (kept/froze/whatever) money they already "paid" for gas in March. Why would anyone expect the arrangement to remain the same?

As for breach of contract: that died with sanctions. If the EU feel aggrieved, they can, well . . . sanction them? It's up to them. My bet is EU throws tantrums then curls their tails and gets their gas, eventually.

He is saying gazprom will accept Rubles instead of other currencies to prop up the value of the Ruble.  It has nothing to do with not being paid for the gas or usable currency.

[Dear Mami]

He is saying gazprom will accept Rubles instead of other currencies to prop up the value of the Ruble.  It has nothing to do with not being paid for the gas or usable currency.

Yes, he's saying that . . . and then more. Maybe I posted a shorter clip? Please watch from 0.47 when he says "Nobody sells us anything for free and we refuse to do charity, either" . . . 

You can also refer to Western sanctions and what Russia and its targetted entities are able and unable to do with Russian money they 'hold'.

[Kim Jong-Un's Pajama Pants]

He is saying gazprom will accept Rubles instead of other currencies to prop up the value of the Ruble.  It has nothing to do with not being paid for the gas or usable currency.

Yes, he's saying that . . . and them more. Maybe I posted a shorter clip? Please watch from 0.47 when he says "Nobody sells us anything for free and we refuse to do charity, either" . . . 

You can also refer to Western sanctions and what Russia and its targetted entities are able and unable to do with them.

Those sanctions are because of Russia's invasion of Ukraine.  How can Russia complain about someone else being in breach when they themselves are doing it willy-nilly?  I just get sense that pro-Russians(anti-Westerners etc) are behaving as if Russia is just a helpless victim, with zero-agency.  They are not and they should bear full responsibility for what's happening to them and Ukraine.

[Dear Mami]

Those sanctions are because of Russia's invasion of Ukraine.  How can Russia complain about someone else being in breach when they themselves are doing it willy-nilly?  I just get sense that pro-Russians(anti-Westerners etc) are behaving as if Russia is just a helpless victim, with zero-agency.  They are not and they should bear full responsibility for what's happening to them and Ukraine.

Look, you can turn the discussion about us so-called "anti-Westerners" rather than the topic in discussion, but the bottom line is that the EU appears to have gambled their own economies on the presumption that Russia would just take it, just as they arrogantly did with NATO expansion. The US and China will gain, the EU and Russia will suffer. I suspect the EU will find a way out of these sanctions for the sake of their own economies, and perhaps eventually, a workable solution for Ukraine that caters for both their sovereignty and Russia's security concerns. But we'll wait and see.

[Kim Jong-Un's Pajama Pants]

Those sanctions are because of Russia's invasion of Ukraine.  How can Russia complain about someone else being in breach when they themselves are doing it willy-nilly?  I just get sense that pro-Russians(anti-Westerners etc) are behaving as if Russia is just a helpless victim, with zero-agency.  They are not and they should bear full responsibility for what's happening to them and Ukraine.

Look, you can turn the discussion about us so-called "anti-Westerners" rather than the topic in discussion, but the bottom line is that the EU appears to have gambled their own economies on the presumption that Russia would just take it, just as they arrogantly did with NATO expansion. The US and China will gain, the EU and Russia will suffer. I suspect the EU will find a way out of these sanctions for the sake of their own economies, and perhaps eventually, a workable solution for Ukraine that caters for both their sovereignty and Russia's security concerns. But we'll wait and see.

It's about Russia's role in this crisis.  The EU did not just wake up one morning and opted to impose sanctions in a vacuum.  Are they are aware of the risks to their economies When they did this?  I wouldn't be surprised.

[Dear Mami]

Dear Mami
Think of Cuba or Venezuela. Actually think of Iran without Theoracy. This is Russian ruble and economy future.
Currency is just a tool but not the gear or engine.

I agree that Russia will be weakened a lot. I'm just adding that they're dragging the EU down with them. It's their way of forcing the EU to switch strategies. You see, the difference in your examples is that the US was never dependent on either Cuba or Iran in the manner the EU is on Russian gas and minerals. This is why the EU should have its own foreign policy and not just follow the US. Their interests are NOT identical all the time.

Also, long term: Why would the West want a Russia that is China's vassal state? Is that really better than enforcing neutrality along Russia's border and integrating it in the EU? Long term, nobody wins but China (and likes of India following from behind), so I don't get what future they're planning here at all. It's in EU's and Russia's interests to find a solution for their shared landmass for lasting peace and stable economies. Hii mambo ya U.S. itawacost.