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Gazprom Boosts Ukraine Overdue Invoice To $3.5 Billion After Kiev Forgot To Pay April Bill

Tyler Durden's picture


Looks like Ukraine won't be buying that gold with IMF loan proceeds after all.

Moments ago, in what has become a monthly tradition, Gazprom reported that Ukraine has once again forgotten to pay its latest monthly, April, gas bill. As a result, the total amount of money now due rises from $2.2 billion which was the invoice through the end of April, to $3.5 billion. As RT reminds us, and as was reported previously, this means that in June Ukraine might receive Russian gas only on the condition of advanced payment.

From RT:

"The deadline has passed, no payment has been received," said Sergey Kupriyanov, the company's representative. Earlier the company said that if the deadline was not met, Gazprom would issue an advance bill for June gas supplies on May 16.


Naftogaz, Ukraine’ state-owned oil and gas company, has a long record of late payments and unpaid bills to Gazprom, a problem which has only gotten worse as Ukraine has slipped into revolution and civil unrest.


The debt as of May 7, 2014 stands at $3.508 billion, Gazprom said Wednesday, which is up from $2.2 at the end of April.

This latest number is notable because as was reported overnight, Ukraine said that it had gotten the first IMF bailout tranche of some $3.2 billion. Naturally, since the Gazprom receivable is greater than this amount, and since Ukraine will further have to prepay future gas deliveries, it means that all of the money funded by US taxpayers among others and then some, will go straight into the pockets of the Kremlin.

Additionally, we also learned what the terms of the indirect US payment to Gazprom will be:


The IMF clarified that out of the $3.2 billion amount, Naftogaz may be eligible to use up just $2.16 billion to pay off its debts to Gazprom, according to documents prepared by the fund. In other words, not nearly enough to cover the due bill.

Furthermore, Ukraine is hoping that it will get another $13.7 billion from the IMF which however is in doubt if indeed this Sunday's referendum is not postponed and if the republic of Donetsk votes to effectively split Ukraine in two.

As for future payments...

Ukraine says it is ready to pay its gas debt to Russia’s Gazprom as long as the company lowers prices from $485 per 1,000 cubic meters down to $268.50, the price the country enjoyed under ousted President Viktor Yanukovich. Moscow ended the discount in April, raising gas prices nearly 50 percent.


The second $100 gas hike came in April when Russia canceled its Black Sea Fleet host agreement with Ukraine after Crimea voted to join Russia. Moscow said Kiev owes $11.4 billion for all the discounts it received since the 2010 deal.


Russian Energy Minister Aleksandr Novak warned over the weekend that the situation with gas transit through Ukraine had reached a “very critical point” as the gas supplies in underground storage facilities have dropped to a point where they can’t guarantee supplies from Russia to Europe.

The implicit threat as always remains that should the Ukraine be unable to fulfill its obligations to Russia, not just Ukraine's gas needs will be compromised: Gazprom supplies Europe with 30 percent of the continent’s natural gas. Half of these Russian supplies are shipped through Ukraine.

Said otherwise if Ukraine uses even a dime from the IMF funding for any other purpose: say to refuel its helicopters and/or tanks currently used to keep the "separatists" at various eastern cities at bay, Europe too will suffer a cut in its deliveries.

And now back to random headlines proclaiming some mythical, imminent "de-escalation" in the Ukraine.


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Wed, 05/07/2014 - 12:40 | 4736418 knukles
knukles's picture

Even if I forgot to pay my gas bill and I still couldn't buy a billion in shiny
Fact, it's not like I have any choice
O poor Ukraine, decadent problems... a billion gold here and a billion gold there and pretty soon you've filled the Fed's vault.

Wed, 05/07/2014 - 12:47 | 4736462 ParkAveFlasher
ParkAveFlasher's picture

Ukraine better watch out, or it will have to pay the $1.37 late fee.  Those things rack up, you know.

Wed, 05/07/2014 - 12:51 | 4736476 813kml
813kml's picture

I would add at least eight zeroes to that estimate.

Wed, 05/07/2014 - 12:58 | 4736483 Latina Lover
Latina Lover's picture

So this was Putins secret strategy,allow the  Ukraine to push itself to the brink of financial meltdown, and  then get the IMF to pay out Gazprom. Afterwards, he can pick up the pieces.  Sounds like he learned a few things watching the western banksters, LOL.


Wed, 05/07/2014 - 13:01 | 4736503 813kml
813kml's picture

Putin is just toying with the West at this point.  Dollars won't mean a whole lot in the very near future, but he might as well get some arrears in the meantime.  I bet whatever gets paid will immediately be used to buy gold.

Wed, 05/07/2014 - 13:05 | 4736513 ParkAveFlasher
ParkAveFlasher's picture

The IMF has those zeroes covered. 

Wed, 05/07/2014 - 13:42 | 4736664 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Western companies shut customers off after that long. Sounds like Gazprom is more than generous.

Wed, 05/07/2014 - 13:57 | 4736737 bonin006
bonin006's picture

Putin was willing to overlook seriously late gas payments, and give a steep discount, as long he was getting southern port access via Crimea. Now that he gets that access for free, the gas will soon need to be paid for in full.

Wed, 05/07/2014 - 14:12 | 4736792 John Wilmot
Wed, 05/07/2014 - 14:38 | 4736886 Anusocracy
Anusocracy's picture

Ukraine can spend money killing people but they can't pay their bills.

Normal for government.

Wed, 05/07/2014 - 22:38 | 4738419 StychoKiller
Wed, 05/07/2014 - 17:36 | 4737395 crazzziecanuck
crazzziecanuck's picture

If Gazprom were truly "generous", it would be giving gas to the Ukraine for free.  Since that's a stupid idea, and Gazprom exists to sell gas it's simply letting the Ukraine run up it's bill that it will have to come to terms with in the future.  What's the saying about giving someone enough rope?  They'll hang themselves?  Kiev might be stpuid enough to be going full bore in that direction.

Or Ukraine is being a bit smarter and opportunistic.  Extracting more from the West, which is fine for both Kiev *and* Moscow.

Wed, 05/07/2014 - 14:28 | 4736849 franzpick
franzpick's picture

Well actually it's you who has the i.m.f. covered, with part of your annual tax payment financing 17% of this and any other i.m.f. bailout. Feel better now? No?

Wed, 05/07/2014 - 13:06 | 4736518 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

F*ck you IMF. I am tired of footing everyone else's bill. 

Wed, 05/07/2014 - 13:32 | 4736603 _ConanTheLibert...
_ConanTheLibertarian_'s picture

With our goddamned stolen tax payer money!

Wed, 05/07/2014 - 13:44 | 4736675 Oh regional Indian
Oh regional Indian's picture

Which was stolen from the rest of the world's labour via the petrodollar scam....

Give it up man, or recognize the whole circle-jerk.

Repatriations....all around? Zero Sum game.

Wed, 05/07/2014 - 17:55 | 4736681 HardlyZero
HardlyZero's picture

Maybe...AIG can setup a 'super-special' Ukr insurance deal ?   It worked for MBSs in 2008 /.

Maybe do a 3-for-1 and bundle Greece and Cyprus....maybe bring in Turkey to manage it (and the coming EU Club Med re-org).

Wed, 05/07/2014 - 13:12 | 4736533 pods
pods's picture

I don't think so. This bill is getting to the level of being Gazprom's problem, not Ukraine's. 

Putin invades and this 3.5 billion goes by by.

So he has a fine line to walk. Supporting Russians in Ukraine, but not getting involved enough where this becomes a weapon.

If he can avoid direct military intervention, he can turn the screws on the EU because they need his gas.

The US is prolly trying to press here to make him commit and bring this debt into play.


Wed, 05/07/2014 - 13:31 | 4736568 813kml
813kml's picture

Good point, Gazprom should get their dollars as long as Putin holds off invasion plans.  I think that was part of the urgency of the West to get the the civil war started quickly.  I think East Ukraine can hold its own for another week or so with under-the-radar support from Russian special forces.  All bets are off after the vote for secession.

BTW, Gazprom would like to milk the West for the arrears but it's not vital that they get it.  Ukraine has owed them for a long time.

Wed, 05/07/2014 - 14:10 | 4736704 HardlyZero
HardlyZero's picture

I'm sure that is the plan. ... Debt swap for land deal.  Ukraine debt goes away *poof* and Russia gets Ukr (and probably Modava and Belarus too).   Modolva and Belarus won't be 'landlocked' any more...and no future threats to landlock Ukraine.

Time will tell as we enter Summer.

Wed, 05/07/2014 - 14:54 | 4736938 BlindMonkey
BlindMonkey's picture

Moldova is land locked, period. A forced marriage of Moldova and the Ukraine wouldn't work. Moldova is closer to Romainian as a language and people. They aren't Slavs.

The Ukriane is on the coast. Even if they lost Crimea and the East, they still have Odessa.

Wed, 05/07/2014 - 15:11 | 4737001 Continue With This
Continue With This's picture

Moldova is Romanian.


It was part of Romania until WW2, when Stalin stole it from Romania.

Wed, 05/07/2014 - 15:28 | 4737039 MarsInScorpio
MarsInScorpio's picture



Your quote, "they still have Odessa"


Not for  long . . .


Wed, 05/07/2014 - 16:11 | 4737178 downwiththebanks
downwiththebanks's picture


Wed, 05/07/2014 - 14:35 | 4736876 Poundsand
Poundsand's picture

Not really.  The reason the bill is in the billions is because Russia was already delaying, offsetting, and just simply underwriting the gas costs for the Ukraine as part of their ability to maintain influence.  For Russia, Ukraine not making a payment is revenue neutral as had the coup not occurred, the payments would not have been made anyway, nor would they have been demanded. 

The real issue is how in the world does the rest of the continent make up 30% of their gas imports should Russia shut off the flow.  This has far larger consequences than a mere $3.5 billion. 

Putin holds the cards here.  My prediction?  Putin manages the ebb and flow of the movement of the east and south of Ukraine back into the Russian sphere of influence which drags on through the summer.  The fireworks start this fall when the threat of a complete cut off of the gas has a chance to be felt by the populace.

Although I am sure that Obama and his minions have figured out a way to get all that gas from the US to Europe.  They are probably in some back room hitting that 'easy' button they saw on those Staples commericials and crossing their fingers.

Wed, 05/07/2014 - 22:48 | 4738459 StychoKiller
StychoKiller's picture

I've got a couple of garden hoses they could use to hookup NatGas to the EU, but I ain't gonna spring for more than 200 ft of hose!

Wed, 05/07/2014 - 15:42 | 4737082 CrashisOptimistic
CrashisOptimistic's picture


GAZPROM produces gas for less than a dollar per thousand cf.  They don't have anything at risk.  They just have pending revenue.

Their inventory is underground.  They don't have big investment to repay.  The BPs and Totals and ENIs make the investment.  GAZPROM just collects and pays taxes.

What they have is the spigot.  You can say . . . you lose nothing by us not paying you.  You're overpriced.  Their reply is the ultimate one.

They squeeze your throat.

Wed, 05/07/2014 - 16:06 | 4737157 putaipan
putaipan's picture


attention tylers- uncomfirmed from a bitcoin website, but if true ......

Wed, 05/07/2014 - 12:59 | 4736499 Relentless101
Relentless101's picture

Fucking mafia interest rates.

Wed, 05/07/2014 - 16:16 | 4737192 Freddie
Freddie's picture
Goodfellas: F*ck You, Pay Me


Wed, 05/07/2014 - 12:38 | 4736423 BlindMonkey
BlindMonkey's picture

I wonder if they will give a discount if the payment is accompanied by the scalps of the Right Sektor freaks? I would give a few points off for that.

Wed, 05/07/2014 - 12:39 | 4736424 LawsofPhysics
LawsofPhysics's picture

How can we tell this is all politcal theater?  Easy.  The fucking gas is still flowing.  If Putin was serious, he would simply close the fucking tap or demand all payments must be in rubles.

Wed, 05/07/2014 - 12:40 | 4736428 becky quick and...
becky quick and her beautiful mouth's picture


Wed, 05/07/2014 - 12:45 | 4736450 Chupacabra-322
Chupacabra-322's picture

Yup. Dully noted & pointed taken.

See Chupacabra's post below.

Wed, 05/07/2014 - 12:44 | 4736451 1stepcloser
1stepcloser's picture

you sure do have a purdy mouth Becky

Wed, 05/07/2014 - 12:55 | 4736488 becky quick and...
becky quick and her beautiful mouth's picture

silly! uncle warren says the same thing!

Wed, 05/07/2014 - 12:44 | 4736448 Winston Churchill
Winston Churchill's picture

Putin is still getting paid for the gas transiting thru'
Ukraine to Europe remember.
Not black or white at all.

Wed, 05/07/2014 - 12:56 | 4736489 NotApplicable
NotApplicable's picture

Infinite shade o' gray.

Trick is, how does one prevent siphoning in this environment?

Wed, 05/07/2014 - 13:48 | 4736694 Matt
Matt's picture

Just send X amount down the pipes. Germany buys X amount. Ukraine syphons Y amount from the pipe? That's Germany's problem. Oh, I'm sorry Ukraine stole your gas, you should really do something to protect that pipeline.

Wed, 05/07/2014 - 15:35 | 4737062 MarsInScorpio
MarsInScorpio's picture



Protect that pipeline? Like what - send in a couple of Panzer divisions?


No, Putin tells the West that you started this (even the most psychotic know the truth, even if they won't admit it in public), and the Kiev Butchers are your problem now. We send it - they steal it. You discipline your puppets.


And since we (Russians) can't monitor the flows any longer in the west of Ukraine, prove you aren't getting what we send . . .


Here's the bill - pay up. We don't insure against theft.


Wed, 05/07/2014 - 15:00 | 4736965 ebear
ebear's picture

Exactly.  And once you've played that card, then what?


Wed, 05/07/2014 - 15:22 | 4737019 Winston Churchill
Winston Churchill's picture

Better to cut off the oil , but that will piss the Chinese if oil goes to $150 pb.

Wed, 05/07/2014 - 14:15 | 4736806 SmittyinLA
SmittyinLA's picture

He can't Putin is running on contract law, Russia has delivery contracts they will not welsh on, his mission is to NOT welsh and make everybody else eat shit for later legal collection. 

Make no mistake Putin is building a legal case to prosecute and enforce contracts.

Putin's position: "we have a contract, they broke it, they owe us damages plus interest".

This is all going to end up decided in a NY court decades from now like the Argentina bond deal.

This is established contract law hundreds of years old, the only way the EU wins is if Putin is removed and Russia nuclear disarmed, and the alternative could be much, much worse. 

Wed, 05/07/2014 - 15:06 | 4736984 LawsofPhysics
LawsofPhysics's picture

Hundred year old contract laws?  LMFAO!!!!

That's what I said when I asked the bank to "show me the fucking title" during the MBS bullshit.

You are fucking kidding right?

John Corzine, is that you?

Wed, 05/07/2014 - 16:39 | 4737257 Bioscale
Bioscale's picture

The fucking gas is flowing because the pipes in Ukraine deliver gas to customers in Central Europe. google up the event in 2009 when Russia stopped the gas and cut off part of Europe of its supplies because fucking stupid politicians of Ukraine refused to pay for it. Russia is not going to do this now as it would make a lot of people in Central Europe angry.

Wed, 05/07/2014 - 12:41 | 4736431 101 years and c...
101 years and counting's picture

i love it.  the US is giving money to the IMF to give to Ukraine to give to Putin.  All so Putin can keep adding to his territory without ever having to fire a shot.  He's absolutely raking obama.  

Wed, 05/07/2014 - 14:25 | 4736837 pelican
pelican's picture

I don't love it because it is my fucking money going to Russia.  However, Putin has proved himself the better thinker and strategist.   Kerry just call mercy now, stupid sqaush head.





Wed, 05/07/2014 - 12:41 | 4736433 newsguy68
newsguy68's picture

California Rep Calls For $26 Minimun Wage

Wed, 05/07/2014 - 12:47 | 4736461 1stepcloser
1stepcloser's picture

nice and instant qualification for a new home loan... Winning!

Wed, 05/07/2014 - 13:18 | 4736554 Billy Sol Estes
Billy Sol Estes's picture

With the cost of living sky high and the number of people leaving the state, I thibk $26 is feasible.

Wed, 05/07/2014 - 13:50 | 4736710 Matt
Matt's picture

Raising the minimum wage so much, so fast, will certainly raise living costs. Oh, you like eating food? 100% price increase overnight. $20 for a Big Mac meal, or $50 for your health food. enjoy that. Is he proposing to triple EBT supplements at the same time, to avoid riots from the un- and under- employed?

Wed, 05/07/2014 - 22:55 | 4738476 StychoKiller
StychoKiller's picture

Will Munny trees produce a crop in CA, what with the drought and all?

Lawd, pleeze make stupidity much more painful!

Wed, 05/07/2014 - 12:43 | 4736441 Chupacabra-322
Chupacabra-322's picture

The Criminals, Putin included are at the highest levels very Comparmentalized. Putin like Obama are just frontmen for The Global Crimial Oligarch Cabal Bankster Intelligence Crime Syndicate.

That said,

The real NWO behind the scenes Meglomanicas in charge will start to turn off energy to the UNITED STATES, CORP. INC. Slaves as well as the worlds Slaves off bit by bit.

This is Chess. Not checkers.

Wed, 05/07/2014 - 12:51 | 4736474 Winston Churchill
Winston Churchill's picture

Amongst the oligarch billionaires in my stable of clients
I have a Dane,Greek,South African, and Canadian.
All of them are quite nationalist, and have very different
aims from my American ones.Hell, the American ones often
trade physical punches when they get together.
So I call BS, from personal experience.
What's your source ?

Wed, 05/07/2014 - 12:59 | 4736500 NotApplicable
NotApplicable's picture

I would assume he's talking about trillionaires. Thanks to inflation, billionaires are a little lower in the ranks these days.

Besides, without nationalism, "useful idiots" aren't quite as useful, as divide and conquer will always be the rule.

Wed, 05/07/2014 - 13:05 | 4736514 Winston Churchill
Winston Churchill's picture

"There can only be one".
Imortals,or top dog.

Wed, 05/07/2014 - 13:40 | 4736632 Chupacabra-322
Chupacabra-322's picture


You being part of the problem & not the solution. Your "greed" for lack of a better term just feeds into the Meglomania.

As the great George Carlin one said, "it's a big club & you're not in it."

Oh, & my "personal experience" is experience following tp your Criminal Clients activities throughout history.

Wed, 05/07/2014 - 13:41 | 4736651 ross81
ross81's picture

Oi Churchill, gizza job!

Wed, 05/07/2014 - 15:01 | 4736971 Bananamerican
Bananamerican's picture

Yeah Churchy...Can I ref the amerikan punchups?

Wed, 05/07/2014 - 15:39 | 4737073 Winston Churchill
Winston Churchill's picture

Oldish men in a brawl. Another few years they will be swinging
their walkers.

Wed, 05/07/2014 - 22:59 | 4738489 StychoKiller
StychoKiller's picture

Perhaps you should mount some lances to wheelchairs (a jousting we will go!), someone might pay good munny to watch that!

Wed, 05/07/2014 - 12:45 | 4736456 teslaberry
teslaberry's picture

no , in june russia will demand the entire european union purchase russian gas using rubles. or get none. 


and germany, germany is going to shit itself, while greece has a revolution and heads fly. no. that is ridiculous. they will just print more money.

Wed, 05/07/2014 - 14:32 | 4736824 Continue With This
Continue With This's picture

Wishful thinking.


Russia will not do that.

Germany will also demand euros for all the high tech shit Russia buys from Germany in that hypothetical case of yours.


There is a reason why Germany and Russia are best friends now. Russia provides gas and Germany provides know-how and tech.

Gerhard Schroeder is vice-president of Gazprom and best friends with Putin.

By best friends I mean, Putin went to Schroeder's birthday, the German celebrating his birthday in Sankt Petersburg in Russia.

You don't see Putin inviting Farage, Obama, Cameron, Ron Paul or some other anglo-americano fucktard to celebrate his birthday in Russia, don't you?

Gerhard Schroeder is the ex-chancellor of Germany.


Anglos and Americanos are scared of a EU-RUSSIA-CHINA alliance. That would effectively and easily crush the Anglo-Americano Empire and their Wicca financial wizardry.

What might happen in the next years, is Northern Europe with Germany as the leader (and they are the ones who need Russian gas the most)  starting to distance themselves from British-American vision of how the World should be run and side with Russia.

And since they foot the bill in the EU, I think they will also sway Southern and Eastern Europe away from British-American influence.

The Norse and Teutons  pay the bills in the EU, so the southerners and the easterners know exactly which tune to sing.


To counter that, the Americano FED would have to print them dollazzzz billzz to buy Southern and Eastern Europe like there is no tomorrow.

Eastern Europe might be cheap and not much effort on FED's part, but Spain-Portugal-France-Italy-Greece, damn that's got to hurt.

So I don't think that will happen.


In other words, EU allied with Russia-China, leaving the anglos and americanos to suck Saudi and Qatari cock.

And I think most Europeans, both westerners and easterners would love to see the Americanos pound sand for a change, and go fuck goats like their cousins in Saudi Arabia.

Do you know why most continental europeans don't like you gringos-yankies? You forgot to go home after you won WW2 you fuckers.

Wed, 05/07/2014 - 15:07 | 4736991 BrocilyBeef
BrocilyBeef's picture

Ya... everybody is scared of The Mighty European Miltary.

I'd say Uncle Sam needs to pull out. The load been shot.

Wed, 05/07/2014 - 15:09 | 4736994 LawsofPhysics
LawsofPhysics's picture

You think Russia and China will accept euros in exchange for their commodities or technology?

Good luck with that.

Wed, 05/07/2014 - 15:37 | 4737016 Continue With This
Continue With This's picture

Let me guess, you are gold stacker right?

There isn't much gold on this planet to account for all the trade that takes place between 7 billion people.


I'm not defending fiat money. I'm just saying that the Chinese and Russians know that something neutral would be needed to be used as 'money' for trade to take place.

There is not enough gold to account for all the cube meters of nat gas that Russia has and is willing to trade.


You gold people are lying to yourselves if you think that gold will somehow save you from the SHTF scenarios.


I quote from the Bosnian:

About gold and silver, yes, me personally gave all my gold for ammunition in that time, but it did not worth too much.

About small family, hmm, not good, usualy few smaller families get together in biggest house and stay together, all relatives (my case)

Small family or single man, not good for survive in town SHTF, maybe in wilderness (i don t have expirience in that) Even if you stay low profile, hidden in your house with lot of food etc, sooner or later mob will come, and you have maybe have one or two guns, very hard. I agree with low profile policy, it is very important not to attract people with anything, but when they come, you need to have numbers, people and guns, best people is your family.


If you read his story, you will find out that skills, trusted family members, being steathy, lots of knowlege was far more important that gold.

Barter was the name of the game. Not gold.

I think you gold people, are old white Americano people, in your 50-60, concerned about wealth preservation too much.

This tells me, that up until 2000 you were very much a part of your financial system and believed in it because you gained a lot of 'wealth' from it. Now, when the system is about to be dismatled, you are soo fucking scared that you might lose your 'wealth'.

Wed, 05/07/2014 - 15:38 | 4737069 Chump
Chump's picture

There are some delusional gold stackers here, but LoP is not one of them.  Most folks here understand that there's no single 'key' to surviving an economic collapse (i.e. have many eggs, and don't put them all in the same basket).

Admittedly, that's becoming less true since ZH has repeatedly made Drudge's top headlines and the site has become inundated with newbies* you.


*This is not to discredit newbies per se, but when someone who's been here all of three weeks decides to show their ass and lecture to others about their intelligence, assumed demographics, survival plans, etc., well, if the shoe fits...

Wed, 05/07/2014 - 15:43 | 4737085 Continue With This
Continue With This's picture

I only  comment for about 2 weeks. I'm a regular reader of ZH from 2009-2010. 

The amount of "Stack AU bitzchezzz" imbeciles on this forum was unbelievable for a time.

Now, it's not even hilarious. It's just sad to see so many blind people in the US thinking that gold will actually mean something in the days of SHTF.

Wed, 05/07/2014 - 15:48 | 4737104 Chump
Chump's picture

If you've read comments here that long then you understand the 'AU bitchez' comments are a meaningless blip in the sea of comments espousing exactly what you just did: community and family support, means of defense, stealth, tangible assets like farming equipment and the like, and so on.

But sure, if someone thinks a couple gold coins are going to give them the keys to the castle then they have a rude awakening in store for them.  No argument from me there.  Filter out that noise and there's a lot of wisdom here, it's just that the filtering is taking more effort as of late.

Wed, 05/07/2014 - 15:39 | 4737074 Continue With This
Continue With This's picture

The link to the SHTF story of the Bosnian is

Wed, 05/07/2014 - 23:02 | 4738500 StychoKiller
StychoKiller's picture

[quote] The Norse and Teutons  pay the bills in the EU, so the southerners and the easterners know exactly which tune to sing. [/quote]

Um, "Deutschland Uber Alles?"

Wed, 05/07/2014 - 12:46 | 4736460 shovelhead
shovelhead's picture

Russia demands payment in gold...

Oh snap.

That's gonna hurt.

Wed, 05/07/2014 - 12:50 | 4736470 CrashisOptimistic
CrashisOptimistic's picture

Gold has no function in Russian society so this will never happen.

They may demand labor, however, or food shipments.

Things of value, and maybe dismantling any alternative energy research programs.

Wed, 05/07/2014 - 13:00 | 4736501 NotApplicable
NotApplicable's picture

Lenin, is that you?

Wed, 05/07/2014 - 13:01 | 4736504 Winston Churchill
Winston Churchill's picture

Apart from the fact you're wrong about Russia, the only thing that matters is what the Asians think of gold,not your opinion
of it.

Wed, 05/07/2014 - 13:23 | 4736559 CrashisOptimistic
CrashisOptimistic's picture

I don't have any opinions of it.

I do have confidence that underneath the counter that holds cash registers in Moscow you will not find any gold assay kits to see if someone is trying to pay in tungsten.  Go ahead.  Travel to Moscow.  Count how many grocery stores have gold assay kits at the cash registers and have trained their check out bar code scanner people in how to do gold assays.  Come back and tell us what % of stores have this.

So it has no function in Russian society.  You can't buy food with it there.  You can't buy gasoline with it there.  Russian society doesn't in any way whatsoever depend on it.

Do you really think that is opinion?

Wed, 05/07/2014 - 13:40 | 4736619 socalbeach
socalbeach's picture

Gold has a store of value function in society, and I thought we were talking about whether or not Russia would require gold for their energy exports, not whether or not it would be used as a medium of exchange in Russia proper.

But if you modified your initial statement to "unlikely to happen (< 50% chance)" vs "never happen" I would agree.

Wed, 05/07/2014 - 13:51 | 4736690 CrashisOptimistic
CrashisOptimistic's picture

Shrug.  Russia probably, call it 30-60%, is the reason Draghi hasn't done QE.  Russia has told them if you print Euros, we'll change oil and gas pricing.  We don't want paper for life dependent things.

Gold has no use to Russia.  But they would accept France subsidized French toilet washers.  Or Germany subsidized German sewer workers.  Work Russians are above, you understand.

And with the deal would be a requirement of no research on alternative energy funded by the relevant country.

If you're going to play, play hard.  Gold does nothing for this.


Wed, 05/07/2014 - 14:16 | 4736808 Volkodav
Volkodav's picture


silly reasoning...same applies US

gold is there seriously but not in open..




Wed, 05/07/2014 - 13:14 | 4736532 socalbeach
socalbeach's picture


Wed, 05/07/2014 - 12:51 | 4736473 williambanzai7
williambanzai7's picture

Don't you just love it when a plan comes together...

Wed, 05/07/2014 - 12:56 | 4736487 ObamaDepression
ObamaDepression's picture

Why bother paying a country that may be your overlord in another 2 weeks??

Wed, 05/07/2014 - 17:59 | 4736732 HardlyZero
HardlyZero's picture

Exactly.  2 days.  2 weeks. 2 months...but definitely settled by October 2014.

If Gazprom shuts it off on June 1st 3 weeks due to non-advanced-payment....


Wed, 05/07/2014 - 13:02 | 4736506 NEOSERF
NEOSERF's picture

Buy sterno bitchez!!

Wed, 05/07/2014 - 13:14 | 4736536 Billy Sol Estes
Billy Sol Estes's picture

Want to help the Environment?

Then sign up for online bill pay with the IMF and stop hassling with paper bills every month from Russia.

Wed, 05/07/2014 - 13:14 | 4736538 Global Hunter
Global Hunter's picture

Gazprom should show some sensitivity to the Vichy government of yats and his fascist thugs.  Ukraine needs that money to pay for pogroms to burn and kill demonstrators getting in their way.  Neo-Nazi football hooligans don't come cheap with inflation and all.

Wed, 05/07/2014 - 13:26 | 4736577 JuliaS
JuliaS's picture

When IMF issues loans, they don't care if the money goes straight to Russia. Even better if it does, because then the country will default on the loans much sooner, transferring control over assets to the EU. Funny paper, IOU's, whatever you call'em are printed at will and are almost irrelevant. What counts is the territory and an army of desperate people willing to do anything for a handout.

What worries me is that Putin who expressed a natural interest in Cimea (naval port and a good access point to the Black Sea), but when it comes to Donetsk, he's hesitant. Obviously, annexation of the Eastern Ukraine was to be expected.

8 million Russians, Timoshenko wanted to nuke know they'll have to bunch up together to withstand the Western threat. No better place to gather than in the East, while re-drawing the borders. Russia has a good bid for lands directly adjacent to Crimea and if they successfully detach, it's game over for the rest of the country. It will have lost its best strategic positions, manufacturing centers and even some natural resources. All that's left is agricultural plots along the Western border to be paved over in time for new NATO radars and missile silos.

What makes Putin hesitant? Perhaps he's fearful of spreading his forces thin, or maybe things are going according to plan, but not in the sequence anticipated. The events in Odessa weren't enough to prompt an immediate action and that might be perceived as a blow to those hoping Kremlin comes to immediate rescue.

Wed, 05/07/2014 - 13:35 | 4736621 CrashisOptimistic
CrashisOptimistic's picture

20th century thinking.

Armies and territory.

No longer.  Now it is oil and gas.  Russia's military is sufficient to deter any grab of theirs, and truly, thoroughly, profoundly, nothing else matters but oil and gas.

This is what 7 billion people creates.  They have to eat and be kept warm.  Territory and armies don't accomplish that.

Wed, 05/07/2014 - 15:56 | 4737125 ThisIsBob
ThisIsBob's picture

"He who laughs last laughs best."  ( Malthus)

Wed, 05/07/2014 - 16:04 | 4737148 MarsInScorpio
MarsInScorpio's picture



Your quote: "Territory and armies don't accomplish that."




1) You need the territory that has the energy resources;


2) You need the army that keeps others from stealing it from you.


Respectfully, your thinking - which I generally admire - is half-baked in this circumstance.


Time to re-think your conclusion.


Wed, 05/07/2014 - 16:00 | 4737136 ebear
ebear's picture

"What makes Putin hesitant? Perhaps he's fearful of spreading his forces thin, or maybe things are going according to plan, but not in the sequence anticipated."

Analogies to chess get a lot of ink around here, so here's one more to consider.

I played chess at an amateur level for many years until I grew tired of winning and gave it up.  My technique was simplicity itself, and nearly won me a game with a Spanish national champion (my ex-wife's uncle) much to his wife's delight. [*]

I simply played as if I knew nothing beyond the basic text book strategies until a certain point, after which I pounced.  Every amateurish move up to that point was calculated to lose enough minor pieces to free up board space, while moving the more powerful ones into strategic position - not in a calculated move by move fashion, but as an abstract relationship from which a variety of moves - too many to anticipate except for an advance player - could be executed.  Worked every time, except in the above case where I was up against a true pro who caught on to what I was doing, but even then I made him sweat.

To summarize: When playing against a superior opponent, use their overconfidence to your advantage.  It's basic Sun-Tsu.  Appear weak where you are stong and strong where you are weak, etc.


[*] My opponent was a captain in the Republican Army who spent many years in one of Franco's prisons for refusing to renounce his Repubican loyalty, so he had lots of time to practice. Up to that point, all I'd done was knock off some high school geeks and a few guys on the ships I worked on.  At the end, he had four pieces on the board, I had three, so I think I did pretty good.

Wed, 05/07/2014 - 16:21 | 4737213 Freddie
Freddie's picture

So what was the deal with his wife?  Did you give her a Spanish fly?

Wed, 05/07/2014 - 13:30 | 4736593 youngman
youngman's picture

What is the Ukraine charging Russia for water to the Crimea....I would raise that price enough to cover...

Wed, 05/07/2014 - 13:32 | 4736604 CrashisOptimistic
CrashisOptimistic's picture

That would mean they accept that Crimea is not part of Ukraine.

Wed, 05/07/2014 - 13:36 | 4736623 vincenze
vincenze's picture

The Ukraine has shut off water to Crimea. Rice crops in Crimea have been destroyed.

Food prices in the Ukraine will soar up as it got a lot of food from Crimea.



Wed, 05/07/2014 - 14:05 | 4736767 HardlyZero
Wed, 05/07/2014 - 14:34 | 4736866 SDShack
SDShack's picture

Shutting off water to populations centers is a war crime, or absent a war, a crime against humanity. Ukraine shows they are just thugs by that action. 

Wed, 05/07/2014 - 16:08 | 4737164 MarsInScorpio
MarsInScorpio's picture



Nationalists are descended from Death Camp guards; Nazis are descended directly from Hitler.


But when you have a war criminal in the Oval Office, what makes anyone think the MSM is going to point out his fellow butchers in Kiev?


Wed, 05/07/2014 - 13:30 | 4736594 vincenze
vincenze's picture

I'm sure gas consumers in the Ukraine pay their bills in full. But the Ukrainian government steals all their payments.



Wed, 05/07/2014 - 13:34 | 4736613 dizzyfingers
dizzyfingers's picture

Laval students design a car that gets 2,824 mpg

Don't hold your breath for this technology to come to the markets soon. Or ever.


Wed, 05/07/2014 - 13:36 | 4736627 CrashisOptimistic
CrashisOptimistic's picture

True.  Because it is bogus.

Wed, 05/07/2014 - 15:12 | 4736673 Zirpedge
Zirpedge's picture

LOL, could you imagine commuting in LA in one fo those as other cars zipped past you on the freeway. These designs require a who new city planning and highway system.

The WV X1 gets 300MPG in it's diesel hybrid coming to the Geneva auto show this year. They will only produce 10,000 of them this year, but they are willing to take a loss on the production cost at $160,000 and selling them at $60,000 to demonstrate the technology. If they got a plant up and running the cost would be much less. At 300mpg the tank is only 3 gallons because it would get old and stale before you ever burned it. imaginE a 20 gal tank would take you 6000 miles. THis is todays off the shelf technology that even the "liberal media" wont tell you about because they are owned by the "four horsemen" gas companies.

Wed, 05/07/2014 - 13:35 | 4736618 Zirpedge
Zirpedge's picture

The mail is not exactly reliable considering the conditons on the ground. I would write a nice letter to Gasprom explaining that the check was lost in the mail and that we would appreciate that the penalty was stricken due to extenuating circumstances.

Wed, 05/07/2014 - 13:38 | 4736637 CrashisOptimistic
CrashisOptimistic's picture

They can't pay the bill.  Period.  They burn more nat gas than they can pay for.

Russia was carrying them at 1/2 price in return for signing onto the Russian economic bloc.  They reneged on that deal so they lose the 1/2 pricing level.

They can't pay full price.  They are screwed. 

Wed, 05/07/2014 - 13:47 | 4736689 Zirpedge
Zirpedge's picture

Who is they in The Ukraine anymore?


The nationalist "Nazi" Thugs?

The "pro democracy" gay/feminist groups?

The government that was thrown out due to a sniper attack that killed both sides?

The IMF?

The american tax payer?

Wed, 05/07/2014 - 13:49 | 4736702 CrashisOptimistic
CrashisOptimistic's picture

Valid question.

I think it works that there is a UkraineGasNeft organization in Ukraine.  They get gas from Gazprom and distribute it to their Ukraine customers and get paid by them.

They . . . UkraineGasNeft, can't pay the bill to Gazprom.

Wed, 05/07/2014 - 14:46 | 4736907 Zirpedge
Zirpedge's picture

I wonder what kind of collateral Naftogaz (Ukraine's state owned gas company) put up. 

Wed, 05/07/2014 - 15:26 | 4737030 CrashisOptimistic
CrashisOptimistic's picture

Naftogaz, thanks.  Rolls off the tongue better than UkraineGasNeft.

Wed, 05/07/2014 - 16:20 | 4737210 Volkodav
Volkodav's picture

Better Q's

What is Ukraine?

What is a Ukrainian?

Otherwise, Is simple to who "they" running Kyiv is..

Wed, 05/07/2014 - 16:16 | 4737193 Volkodav
Volkodav's picture

Da, no problem...we send some guys over and you pay us

Wed, 05/07/2014 - 13:45 | 4736679 kchrisc
kchrisc's picture

Hello Mr. Ukraine,

I'm Ronald and I am calling on behalf of Gazprom. Did you know that you are 4 months behind in payment to Gazprom? Oh, you do. When do you think that you can make a payment? What's an IMF?!...

Wed, 05/07/2014 - 14:08 | 4736777 HardlyZero
HardlyZero's picture



Where is the Ukraine payment plan eventually going...since fiat is losing value and trust.

Wed, 05/07/2014 - 15:30 | 4737043 CrashisOptimistic
CrashisOptimistic's picture

The IMF is trading paper for nat gas.

Russian kids go to western universities.  And their own.  They know what's going on.

Russia can't seperate itself from paper right away because it IS a convenient medium, but they are not going to let another entity define the value of the paper.

Russia's best option is to index the price of oil and nat gas to a Moscow-permitted western money supply.  If more is created, the price goes up.

And they will do their own measure of the money supply -- not use any official quotes.

Wed, 05/07/2014 - 13:47 | 4736691 ross81
ross81's picture

Wish I could go to my gas supplier and say "first give me a 50% discount, then I'll pay".

Wed, 05/07/2014 - 14:06 | 4736773 syntaxterror
syntaxterror's picture

Did S&P downgrade Ukraine too? Or just Russia?

Wed, 05/07/2014 - 14:47 | 4736911 NoTTD
NoTTD's picture

You can't downgrade shit.

Wed, 05/07/2014 - 14:08 | 4736778 Last of the Mid...
Last of the Middle Class's picture

Putin just wants his fucking money. I don't see a problem with that. He's well aware western bankers are jacking with the numbers any way they can to delay the inevitable. Who gets what country because of the debts owed to whom will go on for quite a while I think.

Wed, 05/07/2014 - 14:47 | 4736908 NoTTD
NoTTD's picture

So?  Cut the fuckers off.


Works for the phone company.

Wed, 05/07/2014 - 14:55 | 4736948 Fix-ItSilly
Fix-ItSilly's picture

No reason to pay Gazprom until the Russo-Ukrainian extortion entities, skimming and laundering, implode.  Firsash, Yanukovich, etc. then park this money in the West.

Wed, 05/07/2014 - 15:16 | 4737010 zipit
zipit's picture

Don't hold your breath, Silly.

Wed, 05/07/2014 - 15:20 | 4737015 MeelionDollerBogus
MeelionDollerBogus's picture

This could totally be a Russian repo-man reality TV show.

Any money says it would become a top show on Murrkin TeeVee in 2 weeks flat.

Wed, 05/07/2014 - 16:14 | 4737183 Volkodav
Volkodav's picture

Da Dup,   would be about to go GTA on Kyiv gang and video game coming...

GTU Kyiv    Grand Theft Ukraine

Splean (Splin) "Liniya Zhizni"

Play it Loud...


Wed, 05/07/2014 - 15:47 | 4737097 sinctrader
sinctrader's picture

"Ukraine might receive Russian gas only on the condition of advanced payment"

In what sense would such payments be "advanced," unless you mean Putin's chess-playing skills?

Payments "in advance," are "advance" payments.

Pet peeve.

Wed, 05/07/2014 - 15:53 | 4737117 Phuk u
Phuk u's picture

Fuck Gazprom, give back Crimea then we pay. If not turn off the taps, who gives a shit.

Wed, 05/07/2014 - 16:05 | 4737154 downwiththebanks
downwiththebanks's picture

Don't you mean, "give to unelected fascists"?

Wed, 05/07/2014 - 16:04 | 4737151 downwiththebanks
downwiththebanks's picture

Charge them in gold, not dollars, priced at $2000 an ounce.

Wed, 05/07/2014 - 16:18 | 4737200 MarsInScorpio
MarsInScorpio's picture



Why would Russia charge such a high rate for gold? If you are receiving gold, you want to value it as low as possible so you get more ounces of gold.


I really hope you don't handle anyone's financial affairs.


Wed, 05/07/2014 - 16:41 | 4737261 atthelake
atthelake's picture

No way to heat your home or workplace. Cooking your food becomes an issue unless you have other means. Could be a rough winter in Ukraine. I am concerned for my fellow man but I am worried for Americans and fear all this bs could spill over to America as, frequently, happens in war.


Many make billion$ in war. Haliburton/Xe/whatever it is this week will make billion$ in war. There are about 80? major food issues in the world. Please, if you can, STOCK UP.


You think it can't spill over to America? With the politicians we have? Victoria Nuland works for America. STOCK UP. CYA.

Wed, 05/07/2014 - 18:44 | 4737587 Continue With This
Continue With This's picture

My parents in northern Romania (Bucovina), close to the Ukrainian border, heat their house with wood during winter.

They have a  sort of ceramic stove (in each room) that you heat with wood, and lasts the whole night.

Something like in this video


In the village my parents live, they don't even have gas. To cook they buy some gas containers.

But for heating the house and heating water for shower, they use the ceramic stove.

And before you go all green-nazi on me, the wood they use is mostly dead trees that they buy from the forrest rangers.


And my guess is that the Ukranians, in many villages have the same setup, since we mostly build our houses in similar ways.

If Putin stops deliveries of gas to Ukraine, I believe that many Ukrainians in rural areas will not even notice.


Wed, 05/07/2014 - 17:40 | 4737412 DYS
DYS's picture

Is this what Obama meant by "more flexibility" after the U.S. presidential election?

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