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US Threatens Russia Over Petrodollar-Busting Deal
On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar
- *U.S. HAS WARNED RUSSIA, IRAN AGAINST POSSIBLE OIL BARTER DEAL
- *U.S. SAYS ANY SUCH DEAL WOULD TRIGGER SANCTIONS
- *U.S. HAS CONVEYED CONCERNS TO IRANIAN GOVT THROUGH ALL CHANNELS
We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.
As we explained earlier in the week,
Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.
...
"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime,"
And here is Voice of Russia, "Russia prepares to attack the Petrodollar":
The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.
The existence of “petrodollars” is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.
Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the “sanctions war” between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .
The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosneft, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.
First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must should ditch the dollar. “ They must be braver in signing contracts in rubles and the currencies of partner-countries, ” he said.
Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. “ I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ”, Kostin told the attendees of the annual Russian Bank Association meeting.
Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. “ Some ‘hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines,” she said.
It seems that Moscow has decided who will be in charge of the “boomerang”. Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that " it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies ". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.
Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a “jumbo deal” with Indian companies. In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the “petroruble” and will hurt the petrodollar.
It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency. The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia? During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.
Finally, those curious what may happen next, only not to Iran but to Russia, are encouraged to read "From Petrodollar To Petrogold: The US Is Now Trying To Cut Off Iran's Access To Gold."
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http://izvestia.ru/news/544100
It amazing how really stupid the gub'ment is. When the SHTF these creeps will have no where to hide from the pissed off serfs who remember what they've done.
http://www.youtube.com/watch?v=bX3EZCVj2XA
Maybe Barack Oil can just print $100 trillion Yellen Bitcoins and buy the next 50 years worth of crude. Game over.
Well.....http://vineyardsaker.blogspot.com/2014/04/amazing-poll-at-independent.html
Yeah, well, there is still the 'Obama administration'. And, hopefully there really is a God who will be merciful.
"rapidly turning out into a terminal confirmation of weakness."
ZH is behind the curve on this, it's approaching loss of reserve currency status for USD, far worse than mere "confirmation of weakness".
A petrodollar collapse would make American exports very cheap, and would quickly right the trade imbalances with e.g. China.
In fact, it may be just the thing to solve the American debt crisis, without a default.
Of course, all of the kooks that pray daily for Armageddon will be disappointed when there is no war, and when gold is still worth nothing. Keep a few coins around for the Apocalypse, if it makes you feel good, but the people that paper trade gold or hold it in vaults they've never seen are just absolute morons. And there isn't even a word for people that hold gold in order to get a return. Why don't you just buy the VIX? Better yet, why don't you just fly to Vegas? At least the girls are pretty in Vegas, and you can buy a nice one to console yourself for your losses. Sitting at home and losing on gold is just plain sad.
As far as Ron Paul goes, he does not seem to understand the operation of credit, or think that it is necessary, and so regardless of how you feel about the rest of his views, he simply cannot be taken seriously on economics. I don't dislike the guy, but he's a bit naive on some things. It's also entertaining that he's so popular with people who are also extremely anti-immigration and anti-amnesty, since a purely libertarian worldview requires open borders, not to mention that perennial impossibility, a "free market."
Greenspan is that you?
Credibility of this headline not-withstanding, you seem to have poor knowledge of the present state of economic world affairs. Are you the Yellin Yellen ?
Hey, stopthejunk, sure a petrodollar collapse would make American exports very cheap, and would quickly right the trade imbalances with e.g. China, that is IF all the jobs had not been shipped overseas to places like,,,,CHINA, and America had real stuff to export, other than weapon systems, and Banksters services that lead to bankruptcy (see Greece).
OK, now go crawl back into your spiderhole.
Sorry to break your bubble guys. This report is bogus. The US never said that they would sanction Russia because of this deal. It seems this site has been taken over by RT. I find it worrying that no-one questions anything anymore. You all swallow happily for your chosen teet. You deserve what's coming to you.
Well maybe we should plug into CNN, FOX / sarc.
What/who was the source of these remarks, please?
Just think, if the dollar collapses, there will be no option but to bring back all the factories and put all the unemployed back to productive jobs again.
What a disaster ?
Yes, but do not forget that the US is working day and night on the new "wunderwaffen". The Trillion Dollar Platinium Coin is soon available and this is going to solve all problems for the US.
Has anyone got any idea how long it will take before the BRICs countries conversion to the petroruble is reflected in our monthly budgets? For example, what effect will there be at the grocery store, and when will we first notice it?
http://tarpley.net/metaphysical-doubts-concerning-the-existence-of-modern-ukraine-a-1918-creation-of-the-german-general-staff/
Metaphysical Doubts Concerning the Existence of Modern Ukraine, a 1918 Creation of the German General StaffWebster G. Tarpley, Ph.D.
April 5, 2014