• Monetary Metals
    05/02/2016 - 01:28
    The price of gold shot up this week, and silver moved proportionally. Headlines are screaming for gold to hit $10,000 or $50,000. Does this alleged new bull market have legs?

Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

Tyler Durden's picture




 

That Russia has been pushing for trade arrangements that minimize the participation (and influence) of the US dollar ever since the onset of the Ukraine crisis (and before) is no secret: this has been covered extensively on these pages before (see Gazprom Prepares "Symbolic" Bond Issue In Chinese Yuan; Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China; Russia And China About To Sign "Holy Grail" Gas Deal; 40 Central Banks Are Betting This Will Be The Next Reserve Currency; From the Petrodollar to the Gas-o-yuan and so on).

But until now much of this was in the realm of hearsay and general wishful thinking. After all, surely it is "ridiculous" that a country can seriously contemplate to exist outside the ideological and religious confines of the Petrodollar... because if one can do it, all can do it, and next thing you know the US has hyperinflation, social collapse, civil war and all those other features prominently featured in other socialist banana republics like Venezuela which alas do not have a global reserve currency to kick around.

Or so the Keynesian economists, aka tenured priests of said Petrodollar religion, would demand that the world believe.

However, as much as it may trouble the statists to read, Russia is actively pushing on with plans to put the US dollar in the rearview mirror and replace it with a dollar-free system. Or, as it is called in Russia, a "de-dollarized" world.

Voice of Russia reports citing Russian press sources that the country's Ministry of Finance is ready to greenlight a plan to radically increase the role of the Russian ruble in export operations while reducing the share of dollar-denominated transactions. Governmental sources believe that the Russian banking sector is "ready to handle the increased number of ruble-denominated transactions".

According to the Prime news agency, on April 24th the government organized a special meeting dedicated to finding a solution for getting rid of the US dollar in Russian export operations. Top level experts from the energy sector, banks and governmental agencies were summoned and a number of measures were proposed as a response for American sanctions against Russia.

Well, if the west wanted Russia's response to ever escalating sanctions against the country, it is about to get it.

The "de-dollarization meeting” was chaired by First Deputy Prime Minister of the Russian Federation Igor Shuvalov, proving that Moscow is very serious in its intention to stop using the dollar. A subsequent meeting was chaired by Deputy Finance Minister Alexey Moiseev who later told the Rossia 24 channel that "the amount of ruble-denominated contracts will be increased”, adding that none of the polled experts and bank representatives found any problems with the government's plan to increase the share of ruble payments.

For the benefit of our Russian-speaking readers, the interview with Moiseev is below and the transcript can be found here:

Further, if you thought that only Obama can reign supreme by executive order alone, you were wrong - the Russians can do it just as effectively. Enter the "currency switch executive order":

It is interesting that in his interview, Moiseev mentioned a legal mechanism that can be described as "currency switch executive order”, telling that the government has the legal power to force Russian companies to trade a percentage of certain goods in rubles. Referring to the case when this level may be set to 100%, the Russian official said that "it's an extreme option and it is hard for me to tell right now how the government will use these powers".

Well, as long as the options exists.

But more importantly, none of what Russia is contemplating would have any practical chance of implementation if it weren't for other nations who would engage in USD-free bilateral trade relations. Such countries, however, do exist and it should come as a surprise to nobody that the two which have already stepped up are none other than China and Iran.

Of course, the success of Moscow's campaign to switch its trading to rubles or other regional currencies will depend on the willingness of its trading partners to get rid of the dollar. Sources cited by Politonline.ru mentioned two countries who would be willing to support Russia: Iran and China. Given that Vladimir Putin will visit Beijing on May 20, it can be speculated that the gas and oil contracts that are going to be signed between Russia and China will be denominated in rubles and yuan, not dollars.

In other words, in one week's time look for not only the announcement of the Russia-China "holy grail" gas agreement described previously here, but its financial terms, which now appears virtually certain will be settled exclusively in RUB and CNY. Not USD.

And as we have explained repeatedly in the past, the further the west antagonizes Russia, and the more economic sanctions it lobs at it, the more Russia will be forced away from a USD-denominated trading system and into one which faces China and India. Which is why next week's announcement, as groundbreaking as it most certainly will be, is just the beginning.

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Tue, 05/13/2014 - 17:49 | 4756589 Cattender
Cattender's picture

the u.s. Dollar is the King of the World!!!! HAHAHAHAHA!!!!

Tue, 05/13/2014 - 17:50 | 4756592 THX 1178
THX 1178's picture

"I am INVINCIBLE!!!!"

-That geek from goldeneye shortly before being cryogenically frozen

Tue, 05/13/2014 - 17:53 | 4756609 MeMadMax
MeMadMax's picture

DO IT!

The sooner, THE BETTER!

God damn, this country needs a hardcore kick in the teeth.

Tue, 05/13/2014 - 17:58 | 4756635 kliguy38
kliguy38's picture

They're waiting on nuclear winter

Tue, 05/13/2014 - 18:01 | 4756645 fonestar
fonestar's picture

BTC > dollar, pound, ruble, DM, Krone and all other nationalist shit paper.

Tue, 05/13/2014 - 18:07 | 4756679 maskone909
maskone909's picture

Hook me up with some coin dawg
1LF9pZ3sF2DoLmqAvK4sK9aefydMBnqbLh

Tue, 05/13/2014 - 18:13 | 4756699 Slave
Slave's picture

Death of the Petrodollar is beginning....and everybody in the U.S. is clueless even to its existence...

Words cannot describe how fucked this place is.

Tue, 05/13/2014 - 18:21 | 4756724 GVB
GVB's picture

"Words cannot describe how fucked this place is"

Yes, Jim Willie is Master (!)

I've got to give him that credit.

Tue, 05/13/2014 - 18:27 | 4756745 localsavage
localsavage's picture

They will spin it as good policy.  You can pay off your 150K student loan with that gold from your dead granpa's teeth.

Tue, 05/13/2014 - 18:28 | 4756752 Pinto Currency
Pinto Currency's picture

This is pretty predictable.

Why would Obama and his neocon friends like Nuland/Kagan think it is a good idea to pitch the US over the edge?

Tue, 05/13/2014 - 18:34 | 4756785 NoDebt
NoDebt's picture

Putin's going to do in a year more than the EU accomplished in 20.

Obama.... still trying to figure out why the red checkers don't taste any different than the black checkers.

Tue, 05/13/2014 - 18:38 | 4756800 Latina Lover
Latina Lover's picture

Bring it on Russia, China, Iran. It's time we stick to these fucking money bankster junkies. 

Tue, 05/13/2014 - 18:46 | 4756828 JPM Hater001
JPM Hater001's picture

Let me reiterate...NOTHING IS AS IT SEEMS.

This is about disclosure and the end of the petro system, and thus the petro dollar.

 

Wake up people...and get out of energy.

 

New Paradigm just around the corner.

Tue, 05/13/2014 - 18:49 | 4756838 Bay of Pigs
Bay of Pigs's picture

I agree. The writing is on the wall. Like right fucking NOW.

Tue, 05/13/2014 - 18:52 | 4756844 Pinto Currency
Pinto Currency's picture

 

Check out this Kagan fellow of David Rockefeller's CFR who is Nuland's husband:

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

Tue, 05/13/2014 - 18:55 | 4756857 Bay of Pigs
Bay of Pigs's picture

That guy is a fucking nutcase Pinto. He was McCains foreign policy advisor. LOL...

Tue, 05/13/2014 - 19:01 | 4756879 Looney
Looney's picture

Next step: Mr. Yellen will complete the taper denominated in Rubles and Yuan. Oh, what a hoot it would’ve been! ;-)

Looney

Tue, 05/13/2014 - 19:24 | 4756931 Pinto Currency
Pinto Currency's picture

 

It seems that the circle is closing on these people and they cannot get a war going soon enough.

Another psycho who pre-wrote the 911 Commission report:

http://en.wikipedia.org/wiki/Philip_D._Zelikow

Meanwhile Zelikow wrote a paper "Catastrophic Terrorism" in 1998 contemplating a catastrophic terrorist event after which civil liberties would be suspended in the US.

Tue, 05/13/2014 - 19:31 | 4757001 espirit
espirit's picture

Golden Rule -

Whomever has the gold (and oil) makes the rules.

Tue, 05/13/2014 - 19:36 | 4757018 Pinto Currency
Pinto Currency's picture

 

And so the BIS, central banks, the IMF, bullion bnaks, etc. coordinate the leasing (diappearance) of gold holdings from the West.

That's a good plan to either blow a massive financial bubble and loot the West or, or,  Hmmm can't think of anything else.

Tue, 05/13/2014 - 19:38 | 4757031 Manthong
Manthong's picture

This might be the muzlim-in-chief’s way of amping his Cloward-Piven strategy.

Tue, 05/13/2014 - 19:56 | 4757094 chumbawamba
chumbawamba's picture

LET'S GET READY TO RUBLE!!!!!!!!!!!!!!!!!!!

I am Chumbawamba.

Tue, 05/13/2014 - 20:02 | 4757109 SWRichmond
SWRichmond's picture

So in response to our using our trade clearing system to punish you, you're going to exit our trade clearing system?

Shiiiiiiiiit!!!  We never thought of that!

Tue, 05/13/2014 - 20:09 | 4757118 Pinto Currency
Pinto Currency's picture

 

Except Iran did exactly that in 2012 in setting up their petrogold trade with India when financial sanctions by the West prevented them from receiving dollar payments through the financial system.

This is entirely predictable.

The Samson option is being exercised.

Tue, 05/13/2014 - 20:18 | 4757166 chumbawamba
chumbawamba's picture

It ain't over until there's blood in the street...even if it ends up being a hundred menstruating ladies squatting in Times Square.

I am Chumbawamba.

Tue, 05/13/2014 - 21:41 | 4757432 Rusty Shorts
Rusty Shorts's picture
Senior Obama (KGB)Official Says "We Are Going To Kill The Dollar"

https://www.youtube.com/watch?v=ILKolTI1s50

 


Tue, 05/13/2014 - 21:56 | 4757480 Mistress Raindrop
Mistress Raindrop's picture

Killing the dollar is no easy feat.  Better people than Putin have tried. Bitches.

Tue, 05/13/2014 - 22:33 | 4757583 BorisTheBlade
BorisTheBlade's picture

Pieces fall together when there is an active cooperation by a dude in the White House.

Wed, 05/14/2014 - 00:24 | 4757843 old naughty
old naughty's picture

Russia and China (plus Iran, really?) got together, and petrodollar is dismantled...

Can it be that simple, really, no?

Wed, 05/14/2014 - 07:10 | 4758161 ilion
ilion's picture

This move is not only against the US dollar but also will not benefit the Euro. Euro has already dropped more than 2% over tha past days and it will most likely continue to drop. Chart here:http://armadamarkets.blogspot.com/2014/05/euro-sell-off-is-over-after-30...

Tue, 05/13/2014 - 22:43 | 4757617 tmosley
tmosley's picture

Great empires are destroyed from within, not without.

Putin has little to do with it.  He is merely one of a millions of potential pins that the dollar bubble finds itself surrounded by.

Wed, 05/14/2014 - 06:23 | 4758118 YBNguy
YBNguy's picture

WAR TIME BITCHEZ

Wed, 05/14/2014 - 02:05 | 4757978 Kirk2NCC1701
Kirk2NCC1701's picture

Given the very nature of the Fed's fiat system + FRB, exponential growth is baked into its DNA.  Booms and Busts are inevitable.  As is its insatiable appetite for global assets to be controlled and leveraged.  As such, the Petro-Dollar must either grow to include all other forms of energy and become the Energy-Dollar, and thus truly be the "One Coin To Rule Them All".

If it fails in this endeavor of global hegemony, it must reach its limit and collapse and return as a Regional Reserve Currency (RRC), if it's lucky.  To prevent this from happening, its opponents (the BRICS and most of the world) must not only prevent the Dollar's metamorphesis into the Energy Dollar, but must dethrone its GRC status by getting major powers to stop using it for purchases/sales of Oil.

I have spelled this out last year, in my post on Wed, 09/04/2013 - 19:56 | 3923336 Kirk2NCC1701, re-posted here...

-------

"It's MOAR than "protecting" the petro-dollar.  It's about saving the Petro-dollar from collapse.

And the best course of action TPTB have chosen for its defense is a "Good Offense":  The Petro-Dollar needs, indeed MUST also become the NatGas-Dollar.  And, in so doing, it would become the ENERGY-Dollar.

As an ENERGY-Dollar, all international energy sources in the world will have to be priced and traded in USDs on the FX market.  Electicity and even GreenElectricity from renewable sources and NatGas between countries would have to be traded in USDs. 

Russia, China and a disarmed & wrecked Iran would have to buy USDs (US paper Notes, i.e. Out-of-thin-air-fiat-Notes).  The financial system of the whole world will have fallen under the ENERGY-DOLLAR, and its small cadre of elite, hidden Shareholders who own the private cartel of Central Banks.

Think gold & silver alone will save you?  Wrong!  Owning PM (Gold, Silver, Platinum) will NOT matter to Russia, China or anyone else at this point, because it is ENERGY that moves the world, not PM.

Therefore... Russia, China, Iran and indeed the whole world has NO choice but to stand against the NWO Elite, or it's... Feudalism 2.0.

I would suggest to Russia, China and Iran to make an Energy treaty, to create an EPEC (Energy Producing Exporting Countries), which treats Electricity, Oil, NatGas, Wood and Coal as ENERGY units that are bought and sold on the global market, in ANY solvent fiat currency or gold-backed currency.  Anything short of this is, IMHO, the financial and economic suicide of nations.  

The G-20 summit meeting this Thursday & Friday in Moscow is the PERFECT time and place to initiate this process.  In spite of best attempts by the US to sidetrack or delay such efforts.  Best wishes. Kirk out."

-------

Going back even further to 2012, I have jokingly suggested to the ZH blogger "Paul Krugman" that he aim for a second Nobel Prize, by creating a new currency system that mimics money from Kirk's futuristic timeline, i.e. currency backed by Precious Energy (Dilithium Crystals) and Precious Metal (Latinum).  Alas, I got no bites/replies from Krugman, even I after I jokingly offered to "collaborate" on an Opus Denari.

Wed, 05/14/2014 - 05:54 | 4758105 new game
new game's picture

that cash may be "worth not as much as you thought"

shit be happening, time for some stealth? dust off those skills, find a small pack, shot to kill, remorselessly...

calm in the countryside, hear and there. carefully tread as movement could seal your fate.

Tue, 05/13/2014 - 19:33 | 4757010 Seer
Seer's picture

"It seems that the circle is closing on these people and they cannot get a war going soon enough."

In a way it would present itself with a pretty good opportunity to "close the books" before it totally comes undone, in the eyes of the US and the West that is.

I do not, however, think that it'll be a bombs and bullets war.  It'll be a financial war in which everyone writes everyone else off and thus forces (as it is shaping up now) into trade sanctions (discontinuance of trade) and changes in trading partners (more regional and less global- say goodbye to the NWO [it'll be yet one more prediction that I end up being right about]).

Tue, 05/13/2014 - 19:56 | 4757092 centerline
centerline's picture

I tend to agree.  WWIII has been raging for some time behind the scenes anyhow.  It is just moving into another phase now where Russia can turn up the heat... more or less speed up the processes of debt destruction that are already in motion.  The ultimate irony here is that all that is needed (besides a little nudging) is to let greed, corruption, incompetence, etc. do thier thing.

Bombs and bullets will be more for peripheral nations... proxy wars per se (nudging).  Strategic moves towards the primary goal of currency destruction.  Either consolidation or destablization.  Well, at least until the primary goal is realized and loosing nations turn into zombie police states.  Really no need for nukes to fly... this is all about unleashing the free shit army in your opponents country first without crashing your own in the process.  Realignment of trade, debt wipeout, etc.

Tue, 05/13/2014 - 18:55 | 4756853 sushi
sushi's picture

next thing you know the US has hyperinflation, social collapse, civil war and all those other features prominently featured in other socialist banana republics 

 

I know where the USSA can get some cheap mercs to handle the above unrest. Speak slavik, respect nazi authority, happy to shoot the civilian population, already cleared to work for the State Dept.

Tue, 05/13/2014 - 19:28 | 4756984 Wild tree
Wild tree's picture

JPM,

The people won't wake until their teeth are swallowed as Madmax implies. The dollar default will occur on a Friday. Your first hint will be when your credit card won't work. Banks will not reopen on Monday, all SNAP, social security, government retirement, medicaid, and medicare credits will stop. As the panic begins to spread, we will have a Katrina event nationwide. SDR in the wings, new world order begins.

No one is ready for this, no one.

Tue, 05/13/2014 - 20:13 | 4757149 logicalman
logicalman's picture

Nobody is totally prepared for the unknown, but some are more prepared than the rest.

Tue, 05/13/2014 - 20:50 | 4757268 Al Huxley
Al Huxley's picture

That's a disturbingly plausible scenario.

Tue, 05/13/2014 - 20:55 | 4757285 BigJim
BigJim's picture

 Your first hint will be when your credit card won't work. Banks will not reopen on Monday, all SNAP, social security, government retirement, medicaid, and medicare credits will stop.

Nah. All that shit will keep being dispensed. But Gasoline will go up %5 a week for several months, as will food, electricity, wood, cement...

Tue, 05/13/2014 - 21:44 | 4757445 Rusty Shorts
Rusty Shorts's picture
We Are Going To Kill The Dollar

https://www.youtube.com/watch?v=ILKolTI1s50

Tue, 05/13/2014 - 21:48 | 4757458 Yes_Questions
Yes_Questions's picture
What Wild tree said.
Tue, 05/13/2014 - 21:51 | 4757465 Seer
Seer's picture

I have always highly doubted that there could ever be any "new world order" (in the context that George H. W. Bush presented to us waaay back when).  It all depended upon large-scale trade, and large-scale trade depends hugely on cheap and widely available energy.  "Scales of economy in reverse" essentially kills global trade to the level necessary to maintain any new world order.

Declaring some big national security emergency, as would a massive disruption in current global trade, allows for govts to institute tighter controls within their populations- many will see the old "raly around the flag" trick work, while others will not.  TPTB in the West realize that the scope of their power is going to shrink drastically, in which case it's a matter of retrenching locally- expect TPTB to wrap themselves tighter in the flag...

Tue, 05/13/2014 - 22:13 | 4757523 centerline
centerline's picture

With lots of ammo and a militarized police.  Welcome to the Hunger Games.  The world is going to get a whole lot more local for most people.  YMMV of course.  Some assembly required.  Batteries not included.

NWO is elitist porn.  In reality, it is all just noise.  Packs of sociopaths all trying to game each other.  In the end, it all boils down to resources.  Food, water, energy.

 

Wed, 05/14/2014 - 00:32 | 4757853 FriendlyStranger
FriendlyStranger's picture

Rise like a phoenix
Out of the ashes
Seeking rather than vengeance
Retribution
You were warned

Tue, 05/13/2014 - 22:17 | 4757534 thecoloredsky
thecoloredsky's picture

or sunday, as when nixon made his ridiculous speech

Tue, 05/13/2014 - 20:46 | 4757259 sessinpo
sessinpo's picture

JPM Hater001    Let me reiterate...NOTHING IS AS IT SEEMS.

This is about disclosure and the end of the petro system, and thus the petro dollar.

 Wake up people...and get out of energy.

 New Paradigm just around the corner.

---

Get out of energy? Energy will still be needed. It is about the US dollar.

We are being a bit premature. We could have a 2016 president with some actual balls and a congress that supports that. And I am anti government. To call it now is a bit early.

Tue, 05/13/2014 - 21:59 | 4757486 Seer
Seer's picture

"To call it now is a bit early."

It's about trajectory.  Just what would any POTUS with balls be able to do?  Holler more loudly that the world MUST continue to use the USD?  It doesn't matter one lick if ALL OF THE WEST COMBINED want this, if Russia, China and Iran don't want to partake in that party then, if they refuse to do trade with the West, just what is the West going to do about it?  As I'd mentioned elsewhere, the West (US) cannot invade Russia, China and Iran and take them over in order to force them to use the USD.

Behind the USD is the petro-dollar, "petrol" being a very important part of the equation here.  Europe has little in the "petrol "department; and the US imports over 40% of what it consumes.  Have you not figured out why PM folks constantly stress PHYSICAL and POSSESSION?  ALL wars are about resources.  This one is no different: it's gotten this far along because there were enough new contestants to the Ponzi game (Brazil, India China); that course has run and now we're staring at each other knowing that collections are coming...

Regionalism.  Less.  You can take that to the "bank."

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