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This Russian Trend Is Not Europe's Friend

Tyler Durden's picture




 

The cold war is on, literally, because it will determine who will survive Europe's upcoming cold winter - a Europe with decreasing Russian gas supplies, or Russia now officially starved of Western sources of funding. The "Plan Bs" - Europe has record gas inventories in storage giving it hope it can last out an entire winter without any incremental Russian gas, while Russia is increasingly reliant and hoping on China-based sources of funding. While it remains to be seen just how Russian corporations will react to the recently imposed credit starvation, the chart below shows the steps Russia is now taking ahead of the European winter. Clearly, the trend in Russian gas supplies into Europe's core distribution hub, Slovakia, is not Europe's friend.

Of course, Gazprom had a politically acceptable excuse for the trend: "technical reasons."And then this:

  • CEO MILLER SAYS GAZPROM SUPPLYING GAS TO EUROPE ACCORDING TO CONTRACTS, COULD NOT SATISFY ADDITIONAL DEMAND FOR NOW

We assume that not even the clueless Eurocrats in Brussels will fall for that one.

In the meantime, keep an eye on the trend: if and when the blue bar hits zero, Europe's coldest war will have officially started.

 

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Wed, 09/17/2014 - 09:16 | 5225828 Horseless Headsman
Horseless Headsman's picture

I suppose when the EU wants a bit more gas, they will need a supply of Rubles or Yuan. The Russians would have no further use for Euros and FRNs.

Wed, 09/17/2014 - 09:16 | 5225831 knukles
knukles's picture

Or Gold

Wed, 09/17/2014 - 09:29 | 5225848 Publicus
Publicus's picture

The USA mines more gold than Russia. While the USA mines no Ruble, but Russia can mine unlimited Ruble at no cost. Same applies to the EU.

Wed, 09/17/2014 - 09:39 | 5225918 game theory
game theory's picture

China's production numbers are way too low.  But most governments are lying about their economies to prevent general unhappiness...or maybe civil war.

Wed, 09/17/2014 - 09:52 | 5225979 CHX
CHX's picture

But not a single ounce of Russian or Chinese produced gold leaves these 2 countries. By the numbers I read, China, India and Russia alone gobble up all mined gold (and probably more) outside of these countries lately. In the end - or rather the beginning - it will be as always: Who has the gold makes the rules. 

Wed, 09/17/2014 - 09:59 | 5226006 game theory
game theory's picture

China is happily selling gold to the world. It should be fun once the world discovers true production volumes from there.

 

Wed, 09/17/2014 - 16:14 | 5227531 MeelionDollerBogus
MeelionDollerBogus's picture

Clearly making up nonsense. No reports from anywhere, any source, indicate truth to your assertion.

Wed, 09/17/2014 - 10:06 | 5226024 Grouchy-Bear
Grouchy-Bear's picture

Russia has produced more gold than the United States for the first time in 25 years. It’s now the world’s third biggest producer after China and Australia, Minister of Natural Resources and Environment of Russia Sergey Donskoy said.

http://rt.com/business/171840-russia-gold-production-increase/

Wed, 09/17/2014 - 10:32 | 5226083 Volkodav
Volkodav's picture

You think you know how much Russia mines yearly in real?

Or how much in physical reserves?

Russia now passed US production.

With less than half the population.

While adding to reserves by purchases of physical.

 

 

 

Wed, 09/17/2014 - 11:32 | 5226340 Freddie
Freddie's picture

LOL!  Wonder which US govt bots down voted you.

The US leads in selfies and fat asses like Kim Kardashian.

I would guess there are places in Russia that no one has even looked for gold.  Russia has endless resources which is why the West/NWO wants to steal those resources.

Wed, 09/17/2014 - 16:12 | 5227520 MeelionDollerBogus
MeelionDollerBogus's picture

Duckface rhymes with...

Wed, 09/17/2014 - 12:13 | 5226522 luckylongshot
luckylongshot's picture

Good comment. What the Russia sceptics seem to be ignoring is who benefits from keeping the price of gold low. The only group gold suppression benefits are US petrodollar supporters. As Russia is clearly focused on getting rid of the petrodollar there is absolutely no chance theyy have reduced their gold reserves. That there are people on here arguing otherwise is embarrassing.

Wed, 09/17/2014 - 14:25 | 5227042 quadratic_equation
quadratic_equation's picture

And the US mines unlimited FRN (Dollar or debt) and spread it around the world so what's your point?  Look if Russia sells their gas only in Ruble they don't have debt; meanwhile, the US is piled higher and deeper (Phd) because we buy most of our energy and trinkets with unlimited FRN.

Wed, 09/17/2014 - 09:19 | 5225843 BlindMonkey
BlindMonkey's picture

If they don't have FRNs, how will they buy the whale penis leather for the SUVs?

Wed, 09/17/2014 - 14:39 | 5227152 quadratic_equation
quadratic_equation's picture

They will buy it from anyone who will take their oil or gas or Ruble (Russia's debt certificate).  Which debt would you rather trust nowadays?  The Dollar or the Ruble?  Yes, the Dollar is accepted around the world but everyone knows it's non redeemable.  You can argue so as the Ruble but the Russians can back their Ruble with oil and natural gas and even gold.  While the US oil production is not even enough for US consumption and US natural gas we have plenty of, also coal but the environmentalist and Obama and the Demonrats wouldn't want to use them because of percieve pollution.  So what to do?

Wed, 09/17/2014 - 09:28 | 5225873 Winston of Oceania
Winston of Oceania's picture

Then why are they doing swaps for them?

Wed, 09/17/2014 - 09:31 | 5225881 Ghordius
Ghordius's picture

"The Russians would have no further use for Euros"

so? trade statistics say something completely different. your theory would only hold if Putin goes on with forbidding further imports from the eurozone

you forget that the eurozone produces things, and it's the most varied exporter of wares, and a net exporter to boot

Wed, 09/17/2014 - 11:08 | 5226261 petkovplamen
petkovplamen's picture

yeah but YOU forget: those things EU produces must be sold to somebody. And selling them to Russia is good. If Rusia dont wanna buy them then the Eu got a problem. BIG problem.

Wed, 09/17/2014 - 11:38 | 5226358 Freddie
Freddie's picture

Europe/Germany's big thing is cars.  They are playing a dangerous game.  Russia is a great and growing market for cars.  The EU/Germany are going to screw this up.  China is a good market but they will steal and copy your technology.

As China becomes closer friends with Russia, look for more Chinese cars in Russia.  It will take some time but not that long for China to build decent cars.

Look at S Korea.  Their cars were junk and now they are quite good now.  China can eventually get there.  

Thu, 09/18/2014 - 12:02 | 5230349 Winston of Oceania
Winston of Oceania's picture

They will sell them to America since our unions are only interested in establishing some form of socialist utopia and we dare not drive what slithers off the line these days.

Wed, 09/17/2014 - 12:54 | 5226623 free_lunch
free_lunch's picture

you forget that the eurozone produces things

Yep, thanks to their debt based EURO currency that replaced the debtfree national currencies, the EU produces €22835 DEBT PER CAPITA

http://www.eudebtclock.org/


Wed, 09/17/2014 - 14:57 | 5227235 quadratic_equation
quadratic_equation's picture

Yes, but what happens if they don't have the oil or natural gas to fuel their industry?  Their "produced things" will stop being produced in other words they starve.  Yes, they can increase their supply from the middle east or others but those supplies are already allocated so the price of oil will skyrocket.  Meanwhile the Russians can sit it out because they have oil and gas for their farm machineries and cooking and heating their homes.  They don't need the trinkits made by the west such as BMW, Mecedes Benz, etc..  Energy is the most impotant commodity in the world.  Without it you are at the mercy of the one's who has even if you are the only one who has the manufacturing industrial capability.  You need energy to make things.  That's also the reason why China is expanding their claim on the South Pacific Islands because of oil.  Without it China will never be a world superpower because they'll remain dependent on oil producers.  But if Russia and China became partners, the USA and Europe will have the run for their debt (money)

Wed, 09/17/2014 - 09:35 | 5225903 LostandFound
LostandFound's picture

Move to the Middle East bitches! The weather in winter is 25 degrees, who needs gas!

Its as safe as houses out here, no problems, although there is a terrorist group called ISIS running around earning millions a day selling gas on the black market, but dont worry about that...all is good...... better to be decapitated than freeze to death right?     RIGHT?

Wed, 09/17/2014 - 09:38 | 5225917 Sandmann
Sandmann's picture

ask the California National Guard when Obama deploys them.....

Wed, 09/17/2014 - 11:21 | 5226308 Carl Spackler
Carl Spackler's picture

No thanks, Lost and Found.

 

In the Middle East a "house" is not a home, when it is a lambskin tent in the middle of a desert. 

The Shamal comes and blows your house away.

Or, ISIS/ISIL comes and burns your house down (beats you and robs you), or the U.S. military drones come and bombs your house into smitherines. 

The Middle East is for the fools of tribalism.

Wed, 09/17/2014 - 09:51 | 5225976 robertsgt40
robertsgt40's picture

Hello python treatment.

Wed, 09/17/2014 - 10:51 | 5226203 Kirk2NCC1701
Kirk2NCC1701's picture

Yup.  Surprise ppl don't get your metaphor.  Seems obvious.

Wed, 09/17/2014 - 09:16 | 5225833 Dr. Engali
Dr. Engali's picture

I don't know who the winners will be in this pissing match, but Im certain it won't be the people trying to scratch out a living. Same as it ever was.

Wed, 09/17/2014 - 09:26 | 5225864 Lordflin
Lordflin's picture

The winners.... Ones with the deepest bunkers?

World is marching inexorably to a decision... always means war. You can feel the chaos, tension, and fear mounting... but never so global as now.

Welcome to the NWO...

Wed, 09/17/2014 - 09:31 | 5225885 LawsofPhysics
LawsofPhysics's picture

So, same as it ever was then.

Wed, 09/17/2014 - 10:07 | 5226031 manofthenorth
manofthenorth's picture

Its 3 am , the big boys are pretty drunk and all in. Just waiting on the river in the greatest game of liars poker in the history of the world. Hog legs pointed at each other under the table and no one is figuring to go home empty handed.

I would not bet one ASE on who the "winner" will be but there will be a lot of losers and it will get ugly fast when the whiskey runs out.

Moral of the story ?

Cover Your Asses !!

Wed, 09/17/2014 - 10:05 | 5226020 WorkingFool
WorkingFool's picture

My view - Winner China.  Loser USA.  There is just one world economy with 2 dominate networks - the US and China, much like Microsoft and Apple were in the early 80's.  As the US increases the frictional cost of participating in it's network (due to regulations, protectionist tarrifs and policies or in this case sanctions) nations, corporations and individuals will freely choose the alternative.  With each choice the losing network gets expodentially weaker and the gaining network becomes expodentially stronger.

The reality - in the end Putin will end up with Crimea and a weaked Ukraine.  Europe, and all allies now realize how uncommitted and unwilling the US truly is.  It's not the same country of 75 years ago because the character of the people is not the same as it was 75 years ago.  No character.  No country.

Wed, 09/17/2014 - 10:49 | 5226194 fervent in spirit
fervent in spirit's picture

An astute quote by Alexis de Tocqueville (19th century):

"America is great because she is good. If America ceases to be good, America will cease to be great."

And America has ceased to be good a long time ago.

Wed, 09/17/2014 - 11:11 | 5226266 TahoeBilly2012
TahoeBilly2012's picture

You mean run by war mongering yids hellbent on destroying a resurrected Christian Russia? After all, they didn't use all their best stuff to empty the churches of Europe just to see them get full again in Russia.....oy vey!  

 

Wed, 09/17/2014 - 12:16 | 5226530 Freddie
Freddie's picture

Americans are idiots.  If you watch Obama loving Tv and Hollywood then you support it all 100%.  If you turn on the clicker then you support it all so stop complaining.

Wed, 09/17/2014 - 11:40 | 5226367 Carl Spackler
Carl Spackler's picture

China is a garbage hole of corruption and filth (the air and water) but without sufficient energy or food to cover operating needs.  Have you been?

 

The USA will continue to be the winner because of the capability to be self sufficient.  Food, energy, water, minerals.  The people motivate and unite when they need to do so.  There is an old Reconstruction Era saying which holds within the broader American spirit..."The South will rise again."

The same anti-U.S. garbage was spewed in the 1980s after the Carter Administration screwed the economy up and cowered to Iran. Obama is the repeat of Carter...but the guy is what awakens the people to the transformation back to the good.

Just as the USA proved in the first Gulf War that it truly was the predominant power in the world, despite the same naysaying. 

It proved it again in Bush's Iraq War...to the mis-calculation of the Jihadist class and bin Laden.

Frack away America !  Energy independence plus food and mineral independence equals strategic advantage.

Wed, 09/17/2014 - 12:26 | 5226570 Freddie
Freddie's picture

The USA is Ferguson, MO.  Police state filled with violent cops and police state and EBT savages.  keep watching TV and Hollywood's shit Spackler.  Smoke some dope like the Bill Murray character.  America is toast.  the propaganda from the media and O love from them is off the charts.

If you watch O loving TV or Hollywood then you support it all.

Wed, 09/17/2014 - 15:08 | 5227282 quadratic_equation
quadratic_equation's picture

Yes, USA will continue to be the winner if we have no debt.  But as it is now US debt is now unpayable.  So yes we can isolate ourselves and survive because we have what we need but beware of the return of Rome because the world ceasars will conquer all the weaker nations and most likely come after the US of A as well.

Wed, 09/17/2014 - 16:05 | 5227500 MeelionDollerBogus
MeelionDollerBogus's picture

Without US oil imports the US is finished. That's not self-sufficiency.

Wed, 09/17/2014 - 22:27 | 5228730 Time for Titus
Time for Titus's picture

Yes, the "South will rise again," but I think it may look a little different than the reaction to Carter in the '80s. 

It may look a iittle more like the 60s. (1860s, that is.)

Wed, 09/17/2014 - 13:07 | 5226676 Monty Burns
Monty Burns's picture

It IS a different country.  The always excellent Fred Reed explains why. http://www.fredoneverything.net/KGReunion.shtml

Wed, 09/17/2014 - 09:19 | 5225838 Seasmoke
Seasmoke's picture

Nice poker match. I wish we had the poker cam already set up....No fun to watch without it. 

Wed, 09/17/2014 - 16:04 | 5227494 MeelionDollerBogus
MeelionDollerBogus's picture

I can picture that. Putin from the Russian seat, some girl from Femen in the Ukrainian seat & sitting in for America, Jennifer Tilley.

Wed, 09/17/2014 - 09:32 | 5225888 tonyw
tonyw's picture

And these are the fantastic democracy loving people we are supporting?

WTF

Wed, 09/17/2014 - 09:23 | 5225850 McCormick No. 9
McCormick No. 9's picture

Winter wars are hard on the furniture. Bulish for IKEA.

Wed, 09/17/2014 - 09:24 | 5225854 NaiLib
NaiLib's picture

EU will pay a lot for Nulands little stunt in Ukraine. EU gladly went straight into the trap set by US

Wed, 09/17/2014 - 09:28 | 5225870 Seasmoke
Seasmoke's picture

Are you saying Fuck The EU ????

Wed, 09/17/2014 - 09:44 | 5225950 CHX
CHX's picture

The EU is clearly in auto-ƒu©k mode.

And as I stated before: They want inflation? Vlad can help out.

Wed, 09/17/2014 - 10:36 | 5226152 felix2
felix2's picture

EU will pay a lot for Nulands little stunt in Ukraine. EU gladly went straight into the trap set by US "Nulands little stunt in Ukraine. EU gladly went straight into the trap set by US" NaiLib Wed, 09/17/2014 - 09:24 | 5225854

Big mousetrap catch US mice too. Nuland goes back to Clinton Kosovo. Nuland clan all making cheese. Think Tank Husband Robert Kagan foreign policy adviser to McCain, Romney campaigns

http://www.nytimes.com/2014/06/16/us/politics/historians-critique-of-oba...'

His brother Fred think tank neocon married to Kimberly Kagan who in 2007 founded Institute for the Study of War, funded by defense contractors. Fred and Kinberly were BFF's of Petraeus

 

http://www.rightweb.irc-online.org/profile/kagan_frederick

WSJ OP-ED by an Institute for Study of War employee with a bogus PhD in arab women's studies was cited by McCain and Kerry on need to act in Syria.

http://rightweb.irc-online.org/profile/institute_for_the_study_of_war

They create think tanks on the fly and staff them with Harvard grads with degrees in classical civilization who then are promoted by the press as the ones who know. This week I turned on the radio, there's Larry Kudlow, pushing the need to take down Assad. He was shooting down callers. One guy says its all about Oil. Another says ISIS was created by the US. Kudlow blows them off then announces - Next hour my guest will be someone who really knows .... from the Institute for the Study of War

It is one big fake propaganda machine being used on us too

Wed, 09/17/2014 - 12:23 | 5226561 gcjohns1971
gcjohns1971's picture

ISIS, (and Al Qaeda) is Saudi Arabia's child and not the US's.

ISIS exists because the Gulf Oil Cartel members will need a new enforcer when the US no longer has the financial means to protect them.

ISIS is the wedge driven into the PetroDollar, the payback for ramping domestic production and becoming a global competitor (albeit temporarily), and the gambit to establish new and greater markets in Europe.   Any new nation established through ISIS will be the Saudi Empire.  And it will be (and already is according to articles on European energy purchases from ISIS) a DIRECT COMPETITOR to Russia in the European energy market.

Wed, 09/17/2014 - 16:00 | 5227479 MeelionDollerBogus
MeelionDollerBogus's picture

Except for ISIS emerging directly from the Syrian rebels given guns & training from the CIA.

Wed, 09/17/2014 - 10:54 | 5226214 Kirk2NCC1701
Kirk2NCC1701's picture

<--- EU:  Fuck Nuland and NATO/ZATO

<--- Nuland:  "Fuck the EU!"  (on record)

Who will be proven right?

Wed, 09/17/2014 - 13:18 | 5226728 free_lunch
free_lunch's picture

It is becoming more and more obvious that Brussels is run by 100% controlled puppets/dictators against the interest of the common people.

The "leaders" do all they possibly can to destroy the EU economy to impoverish and enslave the population as fast as they can. They are very successful at transferring wealth and power to the international bankers/corporations.

Cutting wages, pensions and jobs for the people while arranging Bail-ins, bail-outs, banking union, ESM and privatisations for the banksters.

If there are Europeans who wonder how their near future will look, just look to what is happening in Greece now. Soon to come to your country as well..

 

Wed, 09/17/2014 - 09:24 | 5225857 q99x2
q99x2's picture

Good jogging weather ahead.

Wed, 09/17/2014 - 09:25 | 5225866 smacker
smacker's picture

"If and when the blue bar hits zero, the cold war will officially have resumed."

I think Eboma and the EU slimeball crats would have to make some very serious miscalculations for Russia to turn the taps off completely.

I therefore expect it to happen anytime soon ;-)

Wed, 09/17/2014 - 09:29 | 5225876 observer007
observer007's picture
MH17 Who shot down MH17? 30 Million Dollar refward for information

The GERMAN fraud investigation company Wifka has been charged with investigating the shoot down of Malaysian Airlines flight MH17. Their client is providing 30 million dollars as a reward for information and evidence.

(srcroll down)

http://www.mmnews.de/index.php/politik/20710-mh17-30-mio-kopfgeld-fuer-taeter

Wed, 09/17/2014 - 11:55 | 5226434 smacker
smacker's picture

People in Wifka need to take some very serious security precautions...

Wed, 09/17/2014 - 18:27 | 5228008 Nassim
Nassim's picture

That is really great news. All these buys in thrall to their pension promises - which will never be kept - need some cash to tide them through.

Wed, 09/17/2014 - 09:35 | 5225883 WVO Biker
WVO Biker's picture

Europe's fate is determined by liars, dumbfucks, warmongers, murderers, who ruin our economy.

Poors russian leaders have to deal with aggressive idiots.

Attending mondays "Mahnwache" and spreading the truth in everyday life is all I can do now. Besides chopping wood in public forest.

 

 

Wed, 09/17/2014 - 09:46 | 5225965 Calmyourself
Calmyourself's picture

Chopping wood is a very smart idea, leave some of it 8' long tougher to steal...  Warmth is a good thing, attracts the post-apocalyptic babes for much coupling..

Wed, 09/17/2014 - 09:33 | 5225887 mitchl
mitchl's picture

allready there

Wed, 09/17/2014 - 09:38 | 5225912 Sandmann
Sandmann's picture

Europe has a friend, Uncle Sam. Uncle Sam will make Europe warm and feed Ukraine. Uncle Sam can do anything because Uncle Sam has good children who will send gas and food and coal to his friends in Europe and make Christmas extra special this year. Uncle Sam is St Nicholas in some cultures but Santa to most Europeans who await gifts of energy and food and oil from their favourite uncle..............and he certainly won't want to disappoint

Wed, 09/17/2014 - 11:52 | 5226420 BingoBoggins
BingoBoggins's picture

I sense a William Banzai moment.

 

Wed, 09/17/2014 - 09:39 | 5225924 NoWayJose
NoWayJose's picture

Hmmmm, me make pittance here in Ukraine working for special police, and have to guard those airtraffic controller tapes....  30 million....  Maybe a copy of those tapes might let me rub elbows with Warren Buffetski....

Wed, 09/17/2014 - 09:40 | 5225928 jughead
jughead's picture

Put Russia into a corner and we're gonna have a real war to deal with.

Wed, 09/17/2014 - 09:41 | 5225933 Schmuck Raker
Schmuck Raker's picture

There seems to be something missing.

Russian supplies into Slovakia are ALWAYS 100%, by definition.

To get a chart that looks like that there should/must be another data set, but it isn't mentioned, or shown. I'm sure the chart is accurate, but poorly explained. Is it me?

Wed, 09/17/2014 - 10:02 | 5226013 Ghordius
Ghordius's picture

I understand it that September 2014 is taken as a base, and so 100%

Wed, 09/17/2014 - 13:23 | 5226744 Schmuck Raker
Schmuck Raker's picture

OK, that sounds right. Especially as it's daily figures(which I hadn't immediatly noticed, my bad).

100 percent use of capacity seems unlikely too. Thanks Ghordius.

Wed, 09/17/2014 - 13:01 | 5226653 Monty Burns
Monty Burns's picture

Where's Boris when you need him?

Wed, 09/17/2014 - 09:59 | 5225992 RaceToTheBottom
RaceToTheBottom's picture

You don't Reverse Flow Russia, Russia Reverse Flows You....

Wed, 09/17/2014 - 09:55 | 5225995 blueRidgeBoy
blueRidgeBoy's picture

I'm sure wind power will keep them warm

Wed, 09/17/2014 - 15:57 | 5227461 MeelionDollerBogus
MeelionDollerBogus's picture

You laugh but a windmill will each be put in front of Bernanke, Bush Jr. & Obama. You wait & see!

Wed, 09/17/2014 - 10:02 | 5226017 Perimetr
Perimetr's picture

Turn off the f*cking gas!
They can burn dollar bills to keep warm, after all they have trillions of them.

Wed, 09/17/2014 - 11:04 | 5226246 Kirk2NCC1701
Kirk2NCC1701's picture

No, you do what the Saudis did in the 70s:  Reduce Supply, Raise Prices.

If you want to add real pain, you make them pay COD in Rubles+Yuan+Gold.  You use all three as a package, to prevent the West from playing FX Currency Games/Wars.  Watch the bass-turds raise the price of Gold in a jiffy, so they can pay for gas.  And, I gather, we all want the price of AU to go way, way up.  Right?  Presto:  Price Discovery.  Russian style.

p.s. Hitting someone with a Combo of punches is more effective than looking for just one punch.  But that (single variable) thinking is typical of our culture, that brainwashes us every day (like Pavlov's dogs) with the myths of the Magic Bullet, and the Lone Hero.

Wed, 09/17/2014 - 12:15 | 5226521 gcjohns1971
gcjohns1971's picture

The OPEC strategy only works if the producers are united in a Cartel.

The gas suppliers highly available to Europe are as follows:

- Russia

- Caspian Basin (Kazahkstan, Azerbaijan, Georgia)

- Gulf Producers (Saudi Arabia, Qatar)

- Iran

- Out of Africa (West Africa through Libyan and Algerian pipelines)

 

These producers are not in a cartel.  In point of fact they are in a war with one another. 

Like guard dogs in a fenced compound, the US throws them steaks over the fence (across the sea) whenever they move in the desired direction (toward expanding supplies to Europe)...except Russia, of course. 

Wed, 09/17/2014 - 13:39 | 5226815 Idaho potato head
Idaho potato head's picture

Just to clarify, 3 of the four you mention are in fact in a cartel, and it wouldn't be that hard to get the fourth to follow.

Wed, 09/17/2014 - 10:08 | 5226029 geno-econ
geno-econ's picture

Russia's problem is the same as it has been for centuries----while possesing huge natural resources, it can not master efficient industrial production and added value to natural resources. Therefore Russia must change their economic/political model or be relegated to exporting natural resources to Western economies. As we have seen, changing the economic/political model is not easy for Russia because it pits global oligarchs with political nationalism, a dilemma not prevelant in the West. If Western economies falter, mainly due to debt financing and leveraging of all sorts, they are forced to seek lower energy prices to maintain industrial efficiency as well as consumer demand, especially as it relates to transportation, heating  and electricity. This explains what is going on in Ukraine and Middle East.

However , now China pesents an alternative opportunity for Russia as an export market for natural resources with the added benefit of a Chinese currency close to achieving a reserve trading  status. Meanwhile the Fed knows it has to keep the printing presses at full speed along with ZIRP, or the whole system goes into a cyclical depression in the West. Ultimatly something has to give in this economic/cultural clash which unfortunatly in the past meant War to preserve one system or another.  Place your bets

Wed, 09/17/2014 - 11:16 | 5226287 Kirk2NCC1701
Kirk2NCC1701's picture

Russia is diversifying its economics model.  It is leveraging its natural resources with technology.

E.g.,They are innovating in Nuclear Tech for energy production: http://rt.com/news/188332-mox-nuclear-fuel-production/.

If they simply change the Biz Model (not the Economics Model), they could license these reactors to other countries, and get paid Ongoing (lease+royalty) fees.  It's what TPTB do:  Rentier Class, living off others.  One way to ensure their biz model is sustainable, is to sell the Pellets.  That would be the same as the biz models for printers and cell phones:  The Device is the hook for perpetual Consumables.  3M's biz model can be summarized thus: "Make it by the mile, sell it by the Inch (cm)".  / And we all know what the Fed's biz model is. /sarc

Sometimes, HOW you see the problem IS the problem.  And looking at a problem from one single discipline always limits your Vista of solutions.

Wed, 09/17/2014 - 13:22 | 5226736 geno-econ
geno-econ's picture

To be sure Russia has some industries they excel in such as nuclear, arms production and aircraft, but hardly world leaders. Also Russia good at basic scientific research but poor in application technology and commercialization of basic research.  Old Russian sayihg---Behind every piece of mavhinery in Russia stands a German. In other words much machinery as well as application technology had to be imported in the past. Perhaps it is changing slowly but I will believe it when " Made in Russia" replaces " Made in China" at Walmarts or Home Depot in any of the stores world wide. On the other hand, whaever advatages Russia has in technology and natural resources could be better commercialized with China where cost of production and application technology is now world class thanks Mr Kissinger and Pres. Nixon

Wed, 09/17/2014 - 13:47 | 5226860 Idaho potato head
Idaho potato head's picture

They also excel at keeping warm....

Thu, 09/18/2014 - 02:07 | 5229105 talisman
talisman's picture

Old Russian saying---Behind every piece of machinery in Russia stands a German
Old Silicon Valley saying--Behind every piece of internet technology in US stands two Indians and a Chinese,
with H1-B visas

Wed, 09/17/2014 - 10:47 | 5226191 fervent in spirit
fervent in spirit's picture

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Wed, 09/17/2014 - 11:26 | 5226284 Hannibal
Hannibal's picture
Neo-Fascist Mercenaries From Europe Fill the Ranks of Ukraine's Army Azov Battalion

https://www.youtube.com/watch?v=zsXEzYOO5Zs

https://www.youtube.com/watch?v=Gr5Nm4vcYmk&index=14&list=UUdnB82ob_V7EX...

Wed, 09/17/2014 - 12:40 | 5226338 Kirk2NCC1701
Kirk2NCC1701's picture

Of course they are.  They are a neo-Feudal army, for the rising FEUDALISM 2.0.  After 100 year, they're coming back:  Bigger & Stronger.

And that's how it was for centuries:  Monarchs1 and Aristocrats2 would tax the Serfs3, and raise money (Real Money!) for their Mercenary Armies: "Support Our Troops!"

 

Footnotes:

1. Monarchs = Multi-generational Autocrats/Dictators, whereas Dictator is only for own lifetime.  Also, Monarch = from the Elite, to perpetuate the Elite; whereas Autocrat = from the Masses.  So... Monarch = 'Good' and Autocrat = 'Bad'?  Really?  Unless they're "Our" Autocrat/Dictator, of course.  E.g. Pinochet.  If they turn on us, they're toast.  E.g., Noriega, Saddam Hussein.

2. Modern Aristocrats = Oligarchs, Billionaires

3. Serfs = rent the homes and fields from Nobility.  Same as today:  You don't pay property tax, you lose both home and land.  They just packaged it in nice words and BS:  Home-owner, Mortgage, Equity, Rising House Prices, Short Sale, Credit Rating, Reverse Mortgage... and a ton of Charges, Fees, Taxes and Licenses for Serfs and Merchants (Entrepreneurs) that did not exist back then.

Wed, 09/17/2014 - 13:20 | 5226731 WhyWait
WhyWait's picture

 

New development in Ukraine story, fascinating new twist.  Surprised I haven't seen it on ZeroHedge:

World Economic Forum. Geneva initiative on Ukraine

http://cassad-eng.livejournal.com/98004.html

Wed, 09/17/2014 - 14:24 | 5227039 Jack Burton
Jack Burton's picture

The USA puppets in Eastern Europe are taking turns buying Russian gas and then back selling it to Ukraine. Poland was doing it, SLovakia took over when Russia shut down Poland. Germany was planning to reverse sell till Russia warned them not to. Meanwhile, the Nazis are back on the Maidan demanding the offensive war to rub out East Ukraine continue. The dream of an ethnic pure Ukraine is alive and well. The US media will not report the Nazis on the Maidan, because they are America allied Nazis. Just like ISIS and Al-Qaeda have been, for three years, allies of AMerica and armed and funded by America. Their training camps in Jordan and Turkey cranked out trained terrorists who were supposed to fight the proxy war for America in Syria, but instead invaded Iraq.

Yet the people in Washington who carried out all these failed policies still are in their power positions and AIPAC still pulls their strings. The war on ISIS is a war by AMerican on an American created Muslim Jihad Army. Even now, US money flows to them in Jordan and Syria. And American and European Muslims by several thousands in number are fighting for ISIS and being trained by America in Jordan and Turkey.

Does anyone other than me, refuse to believe the CNN fucking whores who are selling the false lie of an out of control ISIS? AMerica is the agent of ISIS creation. CNN does not mention that.

And Ukraine. Right now, the Oligarchs of Kiev and the Oligarchs of Russia are meeting to try and save their wealth and power from out of control Kiev Nazis and out of control Orthodox Ethnic Russians in Donbass. The fake cease fire is an Oligarch attempt to take back the power from the civil war fighters and assert Oligarch alliance of billionaire Kiev and Russian Oligarchs. It aims to sell out both sides in the fight and resume the dictatorship of Oligarchs in Ukraine. Watch this carefully, it is now ongoing attempt to restore their power. Both Kiev and Moscow are hoping to carry this counter revolution off. The media will not report this, only local sources in Ukraine are pointing out this attempt at a counter revolution favorable to old time Oligarchs.

Wed, 09/17/2014 - 16:27 | 5227575 geno-econ
geno-econ's picture

May be correct, but eventually question is who controls the military and pays their salary. We know who in West as you point out, although uncertain in East. Oligarchs or Putin ?

Wed, 09/17/2014 - 15:51 | 5227436 MeelionDollerBogus
MeelionDollerBogus's picture

Europe is no shake hand with Ivan? Is be OK, Ivan give cold shoulder for until Merkel be "warm up" to "needed friend".
Maybe... you be barter for gaz?

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