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Russian Sanctions And The Negative Effect On Global Energy Security

Tyler Durden's picture




 

Submitted by Igor Alexeev via OilPrice.com,

After a series of headline-grabbing statements about the possibility of “switching” European consumers over to American gas, the US media hastened to announce the launch of Obama’s oil and gas offensive against Russia. In reality the EU is not currently prepared, neither technically nor in terms of price, to buy its energy resources from the US.  It would take at least ten years to adapt even the technically advanced German energy system to work with American gas supply. In a crisis, when it is particularly urgent to see a quick return on an investment, such projects are unrealistic.

Whether German industry is ready to pay more for gas from overseas just for the dubious pleasure of “punishing” someone is a big question. Unlike EU officials, the German government is not publicly calling into question either its long-term contracts with Russia or the future of the South Stream pipeline. On March 13, 2014, the chairman of the board of Gazprom, Alexei Miller, attended a meeting with the Vice-Chancellor and Minister of Economics and Energy of Germany Sigmar Gabriel. “Germany is Russia’s number one partner in Europe’s gas and energy market,” Miller stated. “Russian gas accounts for 40% of all German imports. And we’re also noting an upwards tick in the quantity of gas supplies coming from Russia.  Last year, shipments totaled more than 40 billion cubic meters and we’ve seen a 20% annual increase.” Looking at these statistics, it’s clear that all the talk about Atlantic solidarity is having zero effect on the German government’s rational decision making. “We don’t need conflict escalation”, said Sigmar Gabriel during an expert roundtable on energy policy later in March. “Russia met its obligations under the gas contracts even in the darkest years of the Cold War”.

Sigmar Gabriel knows what he’s talking about. For Europe to be able to fully utilize gas supplies from the US, it will be necessary to build expensive facilities to decompress and store the gas. Moreover, in order to incorporate the “American” gas into the existing local energy systems, the European countries would need to construct new pumping stations. The associated infrastructure will further add to the price for the end consumer. Neither the bosses of the German industry nor the responsible political leaders will support such policy.

So who’s behind the demands that Russia be punished?

Barack Obama continues to look outside of Europe for ways to pressure Moscow. It is no coincidence that the US president’s recent statements on energy policy coincided with his visit to Saudi Arabia. President Obama came to Riyadh to bring down prices in exchange for the development of Saudi Arabian facilities to extract and liquefy gas for delivery to Europe. It’s unlikely that even Charles Maurice de Talleyrand himself could have persuaded the Saudis to dump as many resources as possible onto the market in exchange for the nebulous promise of American help to obtain new gas facilities at some unspecified date in the future.

Qatar’s position needs to be kept in mind too. There are serious personal disagreements between the Saudis and the hypersensitive former emir of Qatar as no one in the Middle East needs a new competitor in the gas industry. Obama’s attempt to repeat Ronald Reagan’s oil trick in the Middle East and “shake down” global prices will face many obstacles. A hike in oil prices below $80 would expose yet another issue that was a real controversy during Obama’s reelection campaign, namely - what to do about Iraq. Even a 10% drop in oil prices would finish off the Iraqi economy, still reeling from the US invasion. And Israel is closely monitoring the White House’s attempts to initiate a rapprochement with Iran. If Uncle Sam tries to levy energy sanctions against Russia using his political positions in the Middle East, he will quickly find he has loaded a gun only to shoot himself in the foot.

The US Secretary of Energy, Ernest Moniz, an Obama appointee and shale enthusiast, has jumped right into the discussion of “punishing” Russia. He promised to consider new efforts to ship LNG from the USA to Europe. In this particular case his verbal intervention is unlikely to reflect the position of the CEOs of the oil majors. They know very well that the industry’s real break-even points are nowhere near where they were 30 years ago due to inflation and higher operation costs. Today one facility—Cheniere's $10 billion Sabine Pass terminal in Cameron Parish—has the required approvals from the Energy Department and U.S. Federal Energy Regulatory Commission.

In early March, the American economist Philip Verleger, who worked in the White House and the US Treasury in the 1970s, spoke as an expert on the issue of using energy as way to “punish” Russia. In the March 3, 2014 newsletter that he publishes for his clients, Verleger wrote that the US has a tool it can use to influence Russia - its Strategic Petroleum Reserve (SPR). US Reserve currently contains almost 700 million barrels of oil, five million of which were unloaded onto the market during the Washington visit of the interim Ukrainian Prime Minister Arseniy Yatsenyuk. “It almost defies logic to think there isn’t a link,” noted John Kingston, the director of Platts’ news division. Tapping the SPR to manipulate the global market would be a highly extraordinary decision. The only way to exert any real pressure on global oil prices would be to open up at least 50% of the entire SPR and grant export licenses to anyone who wanted one. The American DoE is obviously not ready for such draconian measures.

Looking at the 2014 report written by the DoE analysts who are known for their almost religious faith in alternative energy, the minimum price for oil in 2015 will be $89.75/barr. The Russian national budget in 2014, which was saddled with expenses related to the Olympics, was drawn up based on an average price of $93 per barrel. Ergo, even $80-90 would hardly spell disaster for Moscow, much less $100 a barrel. In addition, the “nonmarket” pressure by the US could be balanced by the exporter nations. For example, the idea of “energy currency” has long been a hot topic within OPEC and the Gas Exporting Countries Forum (GECF).

For the first time ever in the history of US-Russian relations we are seeing a public debate about a threat of economic sanctions that may have a long-range negative effect on global energy security. The Obama administration acts as if it is guided by a chapter out of an old Soviet textbook on political economy. At the moment, apparently, the sacred dogma of the free market, from Samuelson to Friedman, can be conveniently overlooked for the sake of punishing a sovereign nation. When the head of the most influential state in the world talks about manipulating market prices to punish recalcitrant players, what kind of “global free market” and fair play are we really talking about?

 

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Tue, 04/08/2014 - 18:50 | 4637307 johngaltfla
johngaltfla's picture

As I said back on March 7, Russia holds all the cards. Especially if they retaliate against the US and EU by refusing to accept dollars and Euros for oil or natural gas and demand payment in Rubles, Yuan, or gold. They will bring the West to its knees in quite a rapid fashion....

 

Russia’s Financial Nuclear Option against America
Tue, 04/08/2014 - 18:51 | 4637320 dow jones 20000
dow jones 20000's picture

yeah, things are really falling into place for the death of the petrodollar arrangement (which is really the main reason for the last few months events in Ukraine are happening in the first place).

Tue, 04/08/2014 - 18:55 | 4637338 zaphod
zaphod's picture

Why do you think we are suddenly approving natural gas EXPORT terminals from the US? The government is peparing for the fall of the petrodollar and they know once it falls the US needs a source of income since we don't produce anything anymore. 

Tue, 04/08/2014 - 18:57 | 4637341 McMolotov
McMolotov's picture

We're the world's leading producer of bullshit.

Tue, 04/08/2014 - 19:06 | 4637357 Anusocracy
Anusocracy's picture

I do believe we are at the top of producing believers in bullshit too.

Tue, 04/08/2014 - 19:11 | 4637366 dow jones 20000
dow jones 20000's picture

Yeah, in a country where at least half the population thinks WWE and the Old Testament are nothing but the truth, no wonder the deep state got away with 9/11.

Tue, 04/08/2014 - 19:16 | 4637376 Latina Lover
Latina Lover's picture

I think Obama has spent too much time smoking Crack with Reggie.

Tue, 04/08/2014 - 20:19 | 4637553 Doubleguns
Doubleguns's picture

When it comes to the foreign policy games and abilities here, Obama has brought a kids tricycle to a motor cycle race and Putin is setting on a kawasaki 900. Obamas helpers Kerry and Biden are pushing a little red wagon as pit crew.

 

Pathetic showing from the pathetic national duffer and community organizer. 

Wed, 04/09/2014 - 04:58 | 4638511 jeff montanye
jeff montanye's picture

barack obama, primary domestic accomplishment: obamacare; primary foreign policy accomplishment: tossup between destruction of libya or of the ukraine.  i would vote the latter since it has this add-on of the end of the forty year reign of the petrodollar. 

Wed, 04/09/2014 - 14:35 | 4640139 Rafferty
Rafferty's picture

I think Obama has spent too much time smoking Crack with Reggie.

 

And his crack was smoking after Reggie finished his services!

Tue, 04/08/2014 - 19:33 | 4637424 Harbanger
Harbanger's picture

Based on how many people throughout the World bought into the Global warming scam, I would say our BS has a lot of influence.  It also shows that idiocracy is a global problem.

http://en.wikipedia.org/wiki/File:Climate_change_awareness_by_country_20...

Tue, 04/08/2014 - 20:03 | 4637513 EatYourCornTake...
EatYourCornTakeyourPill's picture

Yes. Indeed Russia holds all the cards. Really powerful country with a really healthy middle class. With a ruble that devalues 30% in a matter of a week. I too am shocked that Russia does not require EU to pay with the petroruble. Things just don't make sense anymore.

Also, yes the U.S spreads all of these scams all around the world like global warming, the jfk unassassination, wookies, AIDS, 9/11, pretending like Crimea doesn't belong to Russia, abduction of the malaysian aircraft and many more. American science is fake science. 

I don't think you really need a brain much bigger than a peanut to know that global warming exists and that human beings are horrible destroyers and wasters of the earth. But yeah if you rather wave your jesus flag and sings with hannity on fox news about the second coming of christ and turn around and ignore scientific logic and what seems to be pretty much hardcore fact, like evolution and relativity theory. Sure, be my guest.

Tue, 04/08/2014 - 20:45 | 4637581 Harbanger
Harbanger's picture

It's not a scientific fact, it's a NWO tax/control scam, so don't compare it to evolution or relativity theory.  And don't assume I'm religious, penis breath.  Many religious freaks are believers in Al Gore much like yourself.  You're just a different flavor of freak believer and proved what I said about US influence on global idiots.

Tue, 04/08/2014 - 21:00 | 4637640 Rock On Roger
Rock On Roger's picture

Global warming on the sunny side of Earth.

Global cooling on the night side of Earth.

Of course the climate changes.

Daily.

 

Stack On

Tue, 04/08/2014 - 23:48 | 4638146 MeelionDollerBogus
MeelionDollerBogus's picture

Except it isn't because the cooling at night is being stopped, which we can (and do) measure to provably show the warming effect happening.

Tue, 04/08/2014 - 22:51 | 4637984 Flakmeister
Flakmeister's picture

Still playing the idiot re: AGW?

You are in a tiny minority pitching a tent next to the Flat Earthers...

Wed, 04/09/2014 - 00:40 | 4638242 Rock On Roger
Rock On Roger's picture

The Earth Turns

Many Wobbles

Wed, 04/09/2014 - 01:01 | 4638269 Flakmeister
Flakmeister's picture

And your point is?

Why don't you write a paper about it...

You would have to show that the calculation of Milankovitch cycle that that predicts a peak about 6,000 BCE in perfect agreement with the paleo-data is wrong...

Are you or anybody you know up to it? 

Or are you just blowing smoke out of your ass...

Tue, 04/08/2014 - 19:16 | 4637377 negative rates
negative rates's picture

Are those horns or a laser coming out the top of that shit?

Tue, 04/08/2014 - 20:17 | 4637548 Beard of Zeus
Beard of Zeus's picture

Bullshit...and whores.

Tue, 04/08/2014 - 18:59 | 4637346 wintermute
wintermute's picture

The sad thing is that Obama, like a true Big Government socialist, has never understood the fundamental pillar of modern living standards which is a market set fair price for each good including money (are you listening Fed?).

Tue, 04/08/2014 - 19:32 | 4637422 NoDebt
NoDebt's picture

Not to pick nits, but since when did Obama care about living standards?  All he cares about is government control.  The more the better.

Nobody cares the state of the empire over which they rule, so long as they rule over it absolutely.

Tue, 04/08/2014 - 19:24 | 4637369 MrSteve
MrSteve's picture

Doubtless America's Last Black President has consulted with Pres / Reg / Imp / Czar Maduro of Venezuela for the most deft advice on managing oil supplies, prices and international / transnational disputes. Saul D.Alinsky would say put some pepper on top of a shot of vodka and call for yet another charm offensive by John Kerry. It has all worked so well in the past! Cynics will note that only Obama can make McCain look good in comparison to foreign policy genius wannabe.

You know when Jimmy Carter is on NPR telling the world that Obama doesn't call him for advice, the Ship of State is surely going aground. Carter's legacy as worst POTUS eveh has been saved by Obama's self-inflicted groin shot in the Ukraine. BH0's gun never even cleared his holster!

Tue, 04/08/2014 - 19:10 | 4637365 Winston Churchill
Winston Churchill's picture

Last move was announced by the PBoC on 3/29.

Full convertability of the yuan starts this coming June  in the Shanghai free

trade zone.Expect the Saudis ti start taking yuan for oil soon after.China is their biggest

customer now.

And that is checkmate for the petro dollar,

Tue, 04/08/2014 - 19:29 | 4637412 johngaltfla
johngaltfla's picture

And who was in Beijing the week of 3/29? Yup, the heir, the Crown Prince of the Saudi royal family.....they cut the deal, no doubt about it.

Tue, 04/08/2014 - 19:18 | 4637381 sushi
sushi's picture

In addition to the expiry of the Petrodollar

1) EU loses access to growth markets in the East

2) High energy costs in EU drive cost push inflation and render their exports less competitive

3) War breaks out and The EU has the great option of being on the front lines as Nuland and colleagues burnish thier careers.

Some sane people somewhere must be asking how this mess got started, who started it, and was it really worth $5 billion in State Department funding.

Tue, 04/08/2014 - 18:52 | 4637329 Deathrips
Deathrips's picture

Gazprom will not be denied. Fuck off Warmongers.

 

Sincerely,

 

Everyone in the world, and RIPS

Tue, 04/08/2014 - 18:54 | 4637333 Breaking Wind
Breaking Wind's picture

How many gallons of gas can I get for my wedding band?

Tue, 04/08/2014 - 19:59 | 4637503 CrashisOptimistic
CrashisOptimistic's picture

Fewer and fewer because that wedding band has no function in Russian society.

Offer up an acre's worth of potatoes, though, and you're talking business.

Tue, 04/08/2014 - 19:27 | 4637406 falconflight
falconflight's picture

Russia alone can't pull it off...they'd need China full bore...

Tue, 04/08/2014 - 18:49 | 4637308 TeamDepends
TeamDepends's picture

Can't we all just get along?

Tue, 04/08/2014 - 18:56 | 4637339 nightshiftsucks
nightshiftsucks's picture

Are you one of my coworkers ?

Tue, 04/08/2014 - 18:50 | 4637317 BeetleBailey
BeetleBailey's picture

Fuckbama and his band of douchebags will find a way to fuck this up. Count on it.

Tue, 04/08/2014 - 18:51 | 4637322 mtndds
mtndds's picture

you know it, bro!

Tue, 04/08/2014 - 18:55 | 4637336 Dr. Engali
Dr. Engali's picture

"When the head of the most influential state in the world talks about manipulating market prices to punish recalcitrant players, what kind of “global free market” and fair play are we really talking about?"

Two points about this statement. 1) The central planners have taken over and destroyed the free markets long ago. 2) Can we really say we are the most influential state in the world? The way I see it the world is laughing at the lumbering giant retard.

Tue, 04/08/2014 - 19:04 | 4637354 i_call_you_my_base
i_call_you_my_base's picture

"lumbering giant retard"

Definitely the way it looks. I'm warming to the idea that it's not an act.

Tue, 04/08/2014 - 19:39 | 4637436 NoDebt
NoDebt's picture

So is the rest of the world.  

Putin figured it out years ago.  His first confirmation was probably when Obama accepted an obviously undeserved Nobel Peace Prize.  "Oh, so this guy is all about his own ego.  I see.  Well, time to make some plans and lay a few traps for this tool."  

 

Tue, 04/08/2014 - 19:13 | 4637370 Uncle Remus
Uncle Remus's picture

.

Can we really say we are the most influential state in the world?

In the context of Murphy, yes.

Tue, 04/08/2014 - 18:55 | 4637337 Karl von Bahnhof
Karl von Bahnhof's picture

You cannot beat a guy, who looks like James Bond.

http://www.thisblogrules.com/2011/02/showdown-daniel-craig-as-james-bond...

Tue, 04/08/2014 - 18:57 | 4637340 Snidley Whipsnae
Snidley Whipsnae's picture

The US is going to replace Russian gas to Western Europe?... 

Maybe someone should tell the planners that the US is still an importer of gas?

Tue, 04/08/2014 - 19:17 | 4637378 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The US has so much of it without infrastructure in place yet that to make use of the excess.

Infact there so much shale gas that they can't make money importing LNG so Cheniere is converting their import stations into exporting stations to process about 2.5 billion cubic feet of natural gas per day in Sabine Pass. Only issue everything probably wont be ready until 2015 plus once they finish widening the Panama Canal that will open up more markets for export.

The other factor is the ability to predict output and you don't want to overbuild exporting infrastructure capacity that winds up being unused.

 

Tue, 04/08/2014 - 21:26 | 4637712 CrashisOptimistic
CrashisOptimistic's picture

ENI runs GAZPROM's fields.  ENI CEO says Cheniere can't deliver LNG to Europe for less than $9.  GAZPROM delivers at $6.

Cheniere will never ship.

Tue, 04/08/2014 - 19:25 | 4637398 falconflight
falconflight's picture

We import petroleum, not much gas...

Tue, 04/08/2014 - 19:33 | 4637425 sushi
sushi's picture

Up in the Bakken they flare (means burn) all the associated gas as it costs too much to install the required infrastructure to get to market.

Of course once the gas is headed for FUCK THE EU then all those infrastructure costs will drop remarkably. Much cheaper to ship from North Dakota to Bavaria than to some place like Salt Lake City.

Tue, 04/08/2014 - 19:43 | 4637460 Snidley Whipsnae
Snidley Whipsnae's picture

The US is the number 6 natural gas importer in the world... 

Behind Germany, Japan, Italy, UK, S Korea and France...

http://en.wikipedia.org/wiki/List_of_countries_by_natural_gas_imports

and... these figures were updated Mar 3, 2014

Another problem is how quickly many of these shale plays decline... lots of expensive infastructure and poof, it's gone.

Tue, 04/08/2014 - 21:29 | 4637723 CrashisOptimistic
CrashisOptimistic's picture

Not bad, Snidley.  You're up to speed. 

Behold why the Bakken flares.  It's not because "there is no infrastructure to collect it".  It's because there can't be any infrastructure to collect it, cuz once it's built, the well is dead.

Tue, 04/08/2014 - 23:13 | 4638074 Snidley Whipsnae
Snidley Whipsnae's picture

CrashOptimistic...

Why can't people do a simple check before they make comments like 'The US is not a large importer of nat gas'...  

Or, 'The US is going to send natural gas to Western Europe if the Russians cut off supplies'... 

???

Are the pols, msm, et al, too ignorant or lazy to do a simple search? Or do they believe they can say any damn thing and the world will believe it?

The fact is that Western Europe will need either Russian convential gas or gas from another country (Iran, the Stans, etc, with the needed pipelines) with large proven reserves... better that Europe has conventional gas reserves to rely on than fracking. To think that the US can provide W Europe with it's gas needs in the near future is wishful thinking.  

Tue, 04/08/2014 - 23:54 | 4638098 Flakmeister
Flakmeister's picture

Yes, the idea the that the US can play any role in the European gas market is wishful thinking....

However, countries like France have LNG import facilities that have strong seasonal use patterns, there are underutilized LNG facilities that could be serviced by the Qataris....

In the event of a NG-war, the Europeans will be pinched but it could take almost a year for it to be realized. It will be a bidding war between Asia and Europe for LNG from the Gulf...

Tue, 04/08/2014 - 20:08 | 4637526 Leaping Lizard
Leaping Lizard's picture

Fracking produces shale gas.  The chemicals used in fracking poisons the aquifers beneath the land and make it unfit for plants, animals, and humans,  The purpose of fracking is Agenda 21 - to make it impossible for an independent people to live off the land and to drive them into mega city "habitation zones."  Good luck to the sheeple, they'll need it.

Tue, 04/08/2014 - 21:33 | 4637727 CrashisOptimistic
CrashisOptimistic's picture

No it doesn't.  You're wrong.

I could leave it at that but meh.  You do realize the holes are cased in cement and pipes go through the middle of the cased hole?  And those pipes at their end point, the horizontal point TWO FUCKING MILES DOWN have holes in them for the fracking proppant to expel and the gas/oil to re-enter?  But the pipes coming to the surface DON'T have holes and if they did all that the stuff would escape to is a cement casing.

To get out and hit the aquifers you have to smash the pipe at just the right depth, and also smash the cement casing at the right depth, and that's not even the depth targeted for fracking.

It's 1.75 MILES higher up.

Tue, 04/08/2014 - 21:49 | 4637785 The_Prisoner
The_Prisoner's picture

It's not like the failure of cement casing are all that common at all, is it?

A 30 second google scholar search with the terms Cement Casing Failure yields over 16000 results. Such as:

Responsive Cementing Material Prevents Annular Leaks in Gas Wells https://www.onepetro.org/conference-paper/SPE-116757-MS

From the abstract: "Once the cement has set, however, the fixed set-cement properties do not address stresses that have not been planned for, and that may ultimately result in cement sheath failure."

If failure of cement casing wasn't a problem there wouldn't be so many papers dicussing new ways to prevent it.

From the begginging everyone knew fracking made no environmental sense, and now it has becoming clear that it does not make economic sense either. Unless you work for Halliburton.

Tue, 04/08/2014 - 22:55 | 4637998 Flakmeister
Flakmeister's picture

Well said....

Internal industry docs show that up to 30% of casings will fail over the operational life of a well...

Look it up...

Wed, 04/09/2014 - 03:40 | 4638469 NoClueSneaker
NoClueSneaker's picture

... me thinks fracking produces new bussines opportunities - like $5 for a bottle of water ....

Tue, 04/08/2014 - 18:59 | 4637347 prains
prains's picture

nobody is listening to Pharry, he's flushed what little credibility uSSA/nSSA had left after the Iraq war crimes against brown people debacle, everyone wants to get as far away from americans as possible, their only remaining plan is to start WOAR 3.0 and pin it on somebody else...

 

boo ya

Tue, 04/08/2014 - 19:43 | 4637461 UselessEater
UselessEater's picture

better hurry looks like the 'allies' are turning.

Tue, 04/08/2014 - 19:12 | 4637368 Ms No
Ms No's picture

I can already see the CNN headline... "US dollar and way of life attacked and destroyed by China and Russia"

Tue, 04/08/2014 - 19:17 | 4637379 Uncle Remus
Uncle Remus's picture

"To cheering crowds world-wide."

Wed, 04/09/2014 - 00:18 | 4638205 813kml
813kml's picture

FOX's headline will have the same hyperbole, just more spelling errors.

Tue, 04/08/2014 - 19:15 | 4637375 ebworthen
ebworthen's picture

Hopium gas will solve everything.

Heats homes, cooks food, runs cars; or so I hear.

Tue, 04/08/2014 - 19:19 | 4637383 yogibear
yogibear's picture

All Putin has to do is charge  triple and demand payment in gold.

Force Europe to plead with the US to stop antagonizing.

Tue, 04/08/2014 - 21:36 | 4637743 CrashisOptimistic
CrashisOptimistic's picture

Oh for GOD'S SAKE -- Will you gold wackos just STOP.

No one is going to make you God of your community because you went out an bought some ancient coins.  It's Not Going To Happen.

Gold serves no function in Russian society.  None.  If they are going to get paid in anything other than rubles, it will be in calories.  They'll take payment in food.  Or labor.  Or pretty much ANYTHING other than shiny metal that has no use for them AT ALL.

Just forget it and talk about this stuff on the gold threads where the other wackos gather.

Tue, 04/08/2014 - 22:58 | 4638022 Flakmeister
Flakmeister's picture

Psst...

Given the flow of funds, there would be just as much gold being sold to finance the imports and the flow of funds from the looting by the kleptocrats... 

Putin likes his Euros and his Dollars, much more pratical... 

BTW, the Chinese Yuan exchange deal is peanuts in the grand scheme of things... 

Tue, 04/08/2014 - 19:24 | 4637393 falconflight
falconflight's picture

The US doesn't have the reserves to supply a Continent of consumers with a population even more than here.  It's ludicrous unless Europe broadens their energy mix returning market share to coal...and that's not likely with their headlong rush into the unsustainable "renewables" policy.  Me thinks they'll easily mold themselves to accommodate the Russians.  

Tue, 04/08/2014 - 19:25 | 4637396 NOTaREALmerican
NOTaREALmerican's picture

Re:  When the head of the most influential state in the world talks about manipulating market prices to punish recalcitrant players, what kind of “global free market” and fair play are we really talking about?

Reality.

If you can manipulate the glorious financial markets why not the gas market?

 

Tue, 04/08/2014 - 19:26 | 4637399 Gaurden
Gaurden's picture

This whole thing stinks.

Prepare yourselves for the biggest fucking backstab ever.

 

Tue, 04/08/2014 - 19:29 | 4637413 Save_America1st
Save_America1st's picture

"The Obama administration acts as if it is guided by a chapter out of an old Soviet textbook on political economy."

well....he and his crew of corrupt fucking traitors are all a bunch of Marxist dirtbags, so yeah...that makes sense...

Tue, 04/08/2014 - 19:34 | 4637429 NOTaREALmerican
NOTaREALmerican's picture

I think they are just preparing the Merican population to be ready to sacrifice for the coming war.   It's going to be tough, but when - like last time - when Mericans are asked to shop, they are willing do what it takes to make Merica great!

Tue, 04/08/2014 - 19:49 | 4637475 WTFUD
WTFUD's picture

I'm backing Barry and putting my money where my mouth is. Can I place my first order for 10 barrels? Bah.

Tue, 04/08/2014 - 19:53 | 4637483 are we there yet
are we there yet's picture

When powerful events appear irrational to your point of view, then look for the point of view that would make them rational, and the person that would have that point of view is the one driving the events.

Tue, 04/08/2014 - 20:02 | 4637508 Atlas Crapped
Atlas Crapped's picture

The most important topic and article I have seen on ZH this year. Very important to understand the role gold will play here. The clock is now ticking.

Tue, 04/08/2014 - 20:20 | 4637555 Youri Carma
Youri Carma's picture

But, but, but I thought … sanctions? The EU had called for Russia to end its blanket ban on the bloc’s pork.

FROM: EU Pig Farmers Miss on Boom as Russian Ban Spurs WTO Case
http://www.bloomberg.com/news/print/2014-04-08/eu-pig-farmers-miss-out-o...

- RWE to Sell $7.1 Billion Dea Division to Fridman’s LetterOne
- German Exporters Fire Warning Shot About Russia “Sanction-Spiral,” Banks At Risk
- UK to start directly buying Russian gas
- Rosneft to Buy Pirelli Stake in Tiremaker Owners’ Revamp
- Rosneft Chief Says Sanctions Won’t Delay Morgan Stanley Deal

FROM: Russia-Ukraine Crisis Threatens Europe & US Economy http://forum.prisonplanet.com/index.php?topic=256898.0

Tue, 04/08/2014 - 21:05 | 4637651 Son of Captain Nemo
Son of Captain Nemo's picture

To go with this "jaw dropping" read another one for your amusement. 

The gang that runs this Country has been out to lunch for the better part of two decades and now for the American peoples lack of interest, self-awareness/ignorance (whatever you wish to call it) we're paying the heaviest of prices for our indifference.

If they all aren't put in jail or disappeared soon, then you can bet your bottom dollar we're going to be seeing a World War here very soon!

http://readersupportednews.org/opinion2/277-75/22758-meet-the-americans-who-put-together-the-coup-in-kiev
Tue, 04/08/2014 - 22:01 | 4637840 Aussiekiwi
Aussiekiwi's picture

Russia is not some third world country that can be pushed around, the Russian people will endure much more hardship than there American counterparts and will not fold. Russia also has a long memory, a dangerous foolish game being pushed to unpredictable extremes by the US.

Tue, 04/08/2014 - 21:58 | 4637825 oncefired
oncefired's picture

Fuck the Chimp!

Tue, 04/08/2014 - 22:30 | 4637919 jonjon831983
jonjon831983's picture

Gazprom looking to price in Euros.

Probably pretty far away, but still.

http://www.ft.com/intl/cms/s/0/7c79f20a-be6e-11e3-b44a-00144feabdc0.html#axzz2yCn87dQO

Tue, 04/08/2014 - 22:30 | 4637920 Sizzurp
Sizzurp's picture

The sanctions are a joke meant for public consumption.  Any real sanctions would cut them off from Russian gas, and then say goodbye to all those German factories and jobs.  The EU is looking for a cheaper alternative to Russian gas.  That's what Syria, Ukraine, Libya and Algeria are all about.  So far the EU strategy isn't working very well.

Tue, 04/08/2014 - 23:26 | 4638103 Snidley Whipsnae
Snidley Whipsnae's picture

Screwing around with Russia isn't going to lower the price of Russian gas to Ukraine, EU, Western Europe, or GB.

The probable result will be more damage to western currencies, Russian ruble and businesses in Russia, Western Europe, multinational corps, etc... and more movement away from dollars.

All this disruption while the world economy is already shaky?

Well, if it's a war that is wanted they might get it.

Tue, 04/08/2014 - 22:34 | 4637938 TeraByte
TeraByte's picture

Sanctions are a shot on own foot. EU and US have not recovered from 2008 and the last thing they need is a trade war against a country, who owns the biggest natural resources and escalating this to a global trade war. The Russian economy is messed, but not the extend of hype finance and .com and companies often posses undervalued  REAL  assets instead. Selling short this rival on the ground of political bias and ignorance does not increase your portfolio.

Tue, 04/08/2014 - 23:43 | 4638135 X_mloclaM
X_mloclaM's picture

ya lost me at: "the free market, from Samuelson to Friedman"

Wed, 04/09/2014 - 01:26 | 4638309 Peter K
Peter K's picture

"The Obama administration acts as if it is guided by a chapter out of an old Soviet textbook on political economy."

I am shocked,...shocked, that the functional Marxists are acting like... well.. Marxists.

Who would have thunk?

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