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Russia's Monetary Solution

Tyler Durden's picture




 

Submitted by Alasdair Macleod via GoldMoney.com,

The hypothesis that follows, if carried through, is certain to have a significant effect on gold and the relationship between gold and all government-issued currencies.

The successful remonetisation of gold by a major power such as Russia would draw attention to the fault-lines between fiat currencies issued by governments unable or unwilling to do the same and those that can follow in due course. It would be a schism in the world's dollar-based monetary order.

Russia has made plain her overriding monetary objective: to do away with the US dollar for all her trade, an ambition she shares with China and their Asian partners. Furthermore, in the short-term the rouble's weakness is undermining the Russian economy by forcing the Central Bank of Russia (CBR) to impose high interest rates to defend the currency and by increasing the burden of foreign currency debt. There is little doubt that one objective of NATO's economic sanctions is to harm the Russian economy by undermining the currency, and this policy is working with the rouble having fallen 30% against the US dollar this year so far with the prospect of further falls to come.

Russia faces the reality that pricing the rouble in US dollars through the foreign exchanges leaves her a certain loser in a currency war against America and her NATO allies. There is a solution which was suggested in a recent paper by John Butler of Atom Capital, and that is for Russia to link the rouble to gold, or more correctly put it on a gold exchange standard*. The proposal at first sight is so left-field that it takes a lateral thinker such as Butler to think of it. Separately, Professor Steve Hanke of John Hopkins University has alternatively proposed that Russia sets up a currency board to stabilise the rouble. Professor Hanke points out that Northern Russia tied the rouble to the British pound with great success in 1918 after the Bolshevik revolution when Britain and other allied nations invaded and briefly controlled the region. What he didn't say is that sterling would most likely have been accepted as a gold substitute in the region at that time, so running a currency board was the equivalent of putting the rouble in Russia's occupied lands onto a gold exchange standard.

Professor Hanke has successfully advised several governments to introduce currency boards over the years, but we can probably rule it out as an option for Russia because of her desire to ditch US dollar relationships. However, on further examination Butler's idea of fixing the rouble to gold is certainly feasible. Russia's public sector external debt is the equivalent of only $378bn in a $2 trillion economy, her foreign exchange reserves total $429bn of which over $45bn is in physical gold, and the budget deficit this year is likely to be roughly $10bn, considerably less than 1% of GDP. These relationships suggest that a rouble to gold exchange standard could work so long as fiscal discipline is maintained and credit expansion moderated.

Once a rate is set, the Russians would not be restricted to just buying and selling gold to maintain the rate of gold exchange. The CBR has the power to manage rouble liquidity as well, and as John Butler points out, it can issue coupon-bearing bonds to the public which would be attractive compared with holding cash roubles. By issuing these bonds, the public is in effect offered a yield linked to gold, but higher than gold's interest rate indicated by the gold lease rates in the London market. Therefore, as the sound-money environment becomes established the public will adjust its financial affairs around a considerably lower interest rate than the current 9.5%-10% level, but in the context of sound money it must always be repaid. Obviously the CBR would have to monitor bank credit expansion to ensure that lower interest rates do not result in a dangerous increase in bank lending and jeopardise the arrangement.

In short, the central bank could easily counter any tendency for roubles to be cashed in for gold by withdrawing roubles from circulation and by restricting credit. Consideration would also have to be given to roubles in foreign ownership, but the current situation for foreign-owned roubles is favourable as well. Speculators in foreign exchange markets are likely to have sold the rouble against dollars and euros, because of the Ukrainian situation and as a play on lower oil prices. The announcement of a gold exchange standard can therefore be expected to lead to foreign demand for the rouble from foreign exchange markets because these positions would almost certainly be closed. Since there is currently a low appetite for physical gold in western capital markets, longer-term foreign holders of roubles are unlikely to swap them for gold, preferring to sell them for other fiat currencies. So now could be a good time to introduce a gold-exchange standard.

The greatest threat to a rouble-gold parity would probably arise from bullion banks in London and New York buying roubles to submit to the CBR in return for bullion to cover their short positions in the gold market. This would be eliminated by regulations restricting gold for rouble exchanges to legitimate import-export business, but also permitting the issue of roubles against bullion for non-trade related deals and not the other way round.

So we can see that the management of a gold-exchange standard is certainly possible. That being the case, the rate of exchange could be set at close to current prices, say 60,000 roubles per ounce. Instead of intervention in currency markets, the CBR should use its foreign currency reserves to build and maintain sufficient gold to comfortably manage the rouble-gold exchange rate.

As the rate becomes established, it is likely that the gold price itself will stabilise against other currencies, and probably rise as it becomes remonetised. After all, Russia has some $380bn in foreign currency reserves, the bulk of which can be deployed by buying gold. This equates to almost 10,000 tonnes of gold at current prices, to which can be added future foreign exchange revenues from energy exports. And if other countries begin to follow Russia by setting up their own gold exchange standards they likewise will be sellers of dollars for gold.

The rate of increase in the cost of living for the Russian population should begin to drop as the rouble stabilises, particularly for life's essentials. This has powerfully positive political implications compared with the current pain of food price inflation of 11.5%. Over time domestic savings would grow, spurred on by low welfare provision by the state, long-term monetary stability and low taxes. This is the ideal environment for developing a strong manufacturing base, as Germany's post-war experience clearly demonstrated, but without her high welfare costs and associated taxation.

Western economists schooled in demand management will think it madness for the central bank to impose a gold exchange standard and to give up the facility to expand the quantity of fiat currency at will, but they are ignoring the empirical evidence of a highly successful Britain which similarly imposed a gold standard in 1844. They simply don't understand that monetary inflation creates uncertainty for capital investment, and destroys the genuine savings necessary to fund it. Instead they have bought into the fallacy that economic progress can be managed by debauching the currency and ignoring the destruction of savings.

They commonly assume that Russia needs to devalue her costs to make energy and mineral extraction profitable. Again, this is a fallacy exposed by the experience of the 1800s, when all British overseas interests, which supplied the Empire's raw materials, operated under a gold-based sterling regime. Instead, by not being burdened with unmanageable debt and welfare costs, by maintaining lightly-regulated and flexible labour markets, and by running a balanced budget, Russia can easily lay the foundation for a lasting Eurasian empire by embracing a gold exchange standard, because like Britain after the Napoleonic Wars Russia's future is about new opportunities and not preserving legacy industries and institutions.

That in a nutshell is the domestic case for Russia to consider such a step; but if Russia takes this window of opportunity to establish a gold exchange standard there will be ramifications for her economic relationships with the rest of the world, as well as geopolitical considerations to take into account.

An important advantage of adopting a gold exchange standard is that it will be difficult for western nations to accuse Russia of a desire to undermine the dollar-based global monetary system. After all, President Putin was more or less told at the Brisbane G20 meeting, from which he departed early, that Russia was not welcome as a participant in international affairs, and the official Fed line is that gold no longer plays a role in monetary policy.

However, by adopting a gold exchange standard Russia is almost certain to raise fundamental questions about the other G20 nations' approach to gold, and to set back western central banks' long-standing attempts to demonetise it. It could mark the beginning of the end of the dollar-based international monetary system by driving currencies into two camps: those that can follow Russia onto a gold standard and those that cannot or will not. The likely determinant would be the level of government spending and long-term welfare liabilities, because governments that leech too much wealth from their populations and face escalating welfare costs will be unable to meet the conditions required to anchor their currencies to gold. Into this category we can put nearly all the advanced nations, whose currencies are predominantly the dollar, yen, euro and pound. Other nations without these burdens and enjoying low tax rates have the flexibility to set their own gold exchange standards should they wish to insulate themselves from a future fiat currency crisis.

It is beyond the scope of this article to examine the case for other countries, but likely candidates would include China, which is working towards a similar objective. Of course, Russia might not be actively contemplating a gold standard, but Vladimir Putin is showing every sign of rapidly consolidating Russia's political and economic control over the Eurasian region, while turning away from America and Western Europe. The fast-track establishment of the Eurasian Economic Union, domination of Asia in partnership with China through the Shanghai Cooperation Organisation, and plans to set up an alternative to the SWIFT banking payments network are all testaments to this. It would therefore be negligent to rule out the one step that would put a stop to foreign attempts to undermine the rouble and the Russian economy: by moving the currency war away from the foreign exchanges and into the physical gold market were Russia and China hold all the aces.

*Technically a gold standard is a commodity money standard in which the commodity is gold, deposits and notes are fully backed by gold and gold coins circulate. A gold exchange standard permits other metals to be used in coins and for currency and credit to be issued without the full backing of gold, so long as they can be redeemed for gold from the central bank on demand.

 

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Wed, 12/03/2014 - 19:33 | 5514713 SilverIsMoney
SilverIsMoney's picture

So what is Putin waiting for?

Wed, 12/03/2014 - 19:40 | 5514748 NuckingFuts
NuckingFuts's picture

Gold Bitches.

Wed, 12/03/2014 - 19:42 | 5514752 Incubus
Incubus's picture

I don't think I can find myself attracted to a gold bitch.

Wed, 12/03/2014 - 19:43 | 5514761 Publicus
Publicus's picture

Russia will never go for gold, they'll go for petro-ruble instead.

Wed, 12/03/2014 - 20:07 | 5514839 BandGap
BandGap's picture

No, they won't want to go to a model perfected by the US. With gold they would be able to run a model they themselves resurrect/develop, or maybe in conjunction with say....China? China adds muscle to this scenario.

Watch

Wed, 12/03/2014 - 20:11 | 5514847 Looney
Looney's picture

Andrey Kostin, the head of the VTB (Foreign Trade Bank) has announced that excluding the Russian Federation from the SWIFT System will be treated as a declaration of war. “Russia, if that happens”, - he added, “has the Plan Bee in place”.

I can hear the voice of Nigel Farage screaming his hemorrhoids off into Cameron’s left ear, “Are you happy now, you, fucking bloody cunt?” ;-)

Looney

Wed, 12/03/2014 - 20:53 | 5514857 Pinto Currency
Pinto Currency's picture

 

With the LBMA gold rigging enterprise in collapse (and the NY Comex sure to follow), the world is in a rush to accumulate physical gold because of the mispricing of gold in these manipulated markets.

Trying to peg your currency to an exploding gold price is impossible to do in this scenario.

Further relying on a group of central planners to maintain your gold exchange currency value against other currencies in a world where central planners of these other currencies are desperately debasing to try to float their economies (wrongly using the 'cure' of monetary inflation) against a debt bubble collapse is sure to fail - if that is indeed one of their goals (further clarity needed).

pp 10, 11 and 12 of 20 show how the UK pound varied in value in the 1800s

http://www.parliament.uk/documents/commons/lib/research/rp99/rp99-020.pdf

Finally, debt-based money systems and centrally controlled money systems with 'gold backing' have always failed because they are abused.  A 'gold standard' paper money system will thus fail leaving gold money, without central planners involved, as the utimate solution.

 

Wed, 12/03/2014 - 20:53 | 5514981 Bindar Dundat
Bindar Dundat's picture

I have never seen a strong country with a weak cuurency.

Wed, 12/03/2014 - 22:25 | 5515250 0b1knob
0b1knob's picture

"a rouble to gold exchange standard could work so long as fiscal discipline is maintained and credit expansion moderated."


Simultaneously explains:
1.)  How it could happen.

 2.)  Why it will NEVER happen.

A country with honest rulers who have fiscal discipline would never need a gold standard to start with.

 

Wed, 12/03/2014 - 22:34 | 5515291 johngaltfla
johngaltfla's picture

Russia has bigger issues now with havey fighting in Grozny and all kinds of wild rumors swirling about the internet:

 

12.03 2055 ET BREAKING NEWS – Rumors of Martial Law in Russia, Fighter Jets over Moscow, Islamist Attack
Wed, 12/03/2014 - 23:24 | 5515424 trulz4lulz
trulz4lulz's picture

This is confirmed on RT, havent checked anywhere else yet. THey arent making a big deal aout it yet. The fighting seems to be pretty heavy though for just 3 or 4 "illegal gunman".

THe timing seems pretty spot on, going to finish my bourbon and head to bed soon. Just reading mostly today.

Wed, 12/03/2014 - 23:28 | 5515438 johngaltfla
johngaltfla's picture

It appears some degree of martial law is underway in all of Chechnya, Moscow, and St. Petersburg. Troops are massing for a major assault in Grozny at first light (shortly) and the fighting has been ongoing all night. Numbers range from 15 to 300 Islamist fighters so who knows. I've posted more videos and updates at the link above. It's a nasty affair and rumors are that a "right sector" fighter was killed in Grozny. Take that with a grain of salt however.

Wed, 12/03/2014 - 23:30 | 5515452 trulz4lulz
trulz4lulz's picture

Well hot damn! May have to pour me another! Well, if Putin really did get spirited away and there really are 15-300 fighters, up from the 3 or 4, I would imagine this could be a cause for war. Just seems a little too well timed at this point. Thanks for the updates. Keeping a watchiful eye on this.

Thu, 12/04/2014 - 01:28 | 5515702 Lore
Lore's picture

....Just a couple days after the Merkins announce placmeent of a couple hundred tanks on the Russian border.  Anyone else 'Color Revolution'-type BS and involvement of the usual players?  The psychopaths want to stage a war so bad they can taste it, so they're going to stir up Eastern Europe with a few false flags.

After watching a few of the latest vids, it looks to me like all the heavy fire is concentrated in one direction, i.e., the publishing house where the purported Mooj are reportedly holed up, in which case they are not long for this world.  Good on Putin for bringing down the thunder. 

Thu, 12/04/2014 - 01:30 | 5515712 Four chan
Four chan's picture

nothing will have a significant effect on gold.

Thu, 12/04/2014 - 07:19 | 5515981 Squid-puppets a...
Squid-puppets a-go-go's picture

we know russia is pivoting east, but some of the wherewithall is not posted on ZH.

heres an article that i found somewhere between insightful and profound 

http://www.informationclearinghouse.info/article40381.htm

 

Thu, 12/04/2014 - 10:37 | 5516379 PrayingMantis
PrayingMantis's picture

... a very fine article indeed, Squid ... thanks for the link, much appreciated ...

... now we'd know the root cause of the EU's looming energy and/or economic collapse in the very near future ... the cancellation of the South Stream ...

... the article sums it up ... >>> "Regardless, by cancelling South Stream, Russia has imposed upon Europe the most effective of the sanctions we have seen this year ..."

...  just another brilliant checkmate move by Putin against western sanctions ...

Thu, 12/04/2014 - 13:34 | 5517089 Pinto Currency
Pinto Currency's picture

 

 

Notionally, the Turkish pipeline will lead on to Greece and southern Europe.

Note the gold  holdings of Spain, France, Italy, Greece.

Gas for gold perhaps to those who can pay.

Thu, 12/04/2014 - 08:19 | 5515984 economics9698
economics9698's picture

Really good read ^^^^ thanks squid.

Thu, 12/04/2014 - 07:25 | 5515985 economics9698
economics9698's picture

Putin is sabre rattling.  If he did this the tribe would figure out a way to wipe out his gold reserves before he could blink.  When China announces a link to gold the world changes. 

Putin is shoving his finger in the face of the tribe.  China has the baseball bat that will crush their skull in two.

Wed, 12/03/2014 - 23:30 | 5515454 angel_of_joy
angel_of_joy's picture

Those guys are aching to have their asses kicked... again.

Wed, 12/03/2014 - 23:49 | 5515524 Seize Mars
Seize Mars's picture

Wow, did all those "Islamists" have Israeli passports, like the um, "freedom fighters" in Kiev?

Thu, 12/04/2014 - 00:20 | 5515594 August
August's picture

The history of co-operation between Ukrainian Right Sector and Chechen militants is real enough, whether or not Right Sector corpses turn up in Grozny.

Wed, 12/03/2014 - 23:27 | 5515440 SilverIsMoney
SilverIsMoney's picture

Holy shit

Wed, 12/03/2014 - 23:33 | 5515462 trulz4lulz
trulz4lulz's picture

Holy shit indeed. That looks like grounds for war if the tail can be pinned on the donkey.

Thu, 12/04/2014 - 00:15 | 5515591 Seize Mars
Seize Mars's picture

This is serious. No doubt the attackers were CIA/Mossad funded, inspired/trained/employees, so Russia's response may be a very sharp and unexpected counterpunch

Thu, 12/04/2014 - 07:16 | 5515976 winchester
winchester's picture

on their own inner  land ? be definitivly sure about it, he will overkill in response.

any mercenary will know they will never go home to spend what they paid for.

Thu, 12/04/2014 - 05:28 | 5515916 Sirius Wonderblast
Sirius Wonderblast's picture

Link unavailable - how peculiar.

Thu, 12/04/2014 - 05:53 | 5515930 HowdyDoody
HowdyDoody's picture

6 - 7 terrorist took over an empty printing house and another group entered a school with some pupils already there.

The printing house is on fire (or was) with all the terrorists inside. The school is being dealt with. Ten law officers have been killed and twenty injured so far.

https://www.youtube.com/watch?v=t_tUXL9q0q8

Wed, 12/03/2014 - 23:36 | 5515470 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

0b1knob

+ 1

Who needs to have a Gold Standard?  I agree that it would likely not work.  Too much honesty and discipline would be needed in Russia.

But, Russia is big enough to bring on "Freegold", IMO.  The CRB of Russia could just announce to the world that they will buy gold at an arbitrarily high price (say $5000) for physical gold only, that would become the new floor price of gold.  Gold would then be "free" of notions like monetization and "Gold Standards", and the price could settle into an equilibrium in a cash-only market.

Which means no "paper gold", fishez.

Thu, 12/04/2014 - 05:04 | 5515903 zhandax
zhandax's picture

DC, the Chinese have been and are buying physical gold and at prices rumored here at around $1800/oz in tonne quantities. That hasn't affected the paper price.  How does the announcement by another county make any difference tomorrow?  Eventually all the algo's and CB's will get all their ones stuffed up their asses sideways, and all they will be left with are zeros, but tomorrow, next week, and on Jan 1, it won't make any difference.

Wed, 12/03/2014 - 23:52 | 5515532 Squid-puppets a...
Squid-puppets a-go-go's picture

Ob1knib  

re: A country with honest rulers who have fiscal discipline would never need a gold standard to start with.

 russia would do it in a heartbeat if it dethroned america - and it will. whether Russia then maintains their gold standard over the long term is certainly subject to your scepticism

Thu, 12/04/2014 - 07:22 | 5515982 LikeyMikey
LikeyMikey's picture

This is a good point.  Now carry this forward with naming ONE ruler(s)/government in history that did have fiscal discipline?

 

I will save you the time....  it does NOT exist thus is why there should ALWAYS be a commodity tied to the currency!

Wed, 12/03/2014 - 20:19 | 5514855 Pinto Currency
Pinto Currency's picture

-

Thu, 12/04/2014 - 00:22 | 5515616 Ignatius
Ignatius's picture

"An important advantage of adopting a gold exchange standard is that it will be difficult for western nations to accuse Russia of a desire to undermine the dollar-based global monetary system."

Not true, as we've seen in Ukraine NATO will overthrow an elected government, install neo-nazis, and blame Russia.  The question then, is will they get away with the subtrerfuge one more time?

Thu, 12/04/2014 - 02:00 | 5515754 Lore
Lore's picture

The fact that this is being discussed means it or something similar is already happening as a focal point for all the other 'de-dollarization' measures witnessed recently.  It's high time the debt peddlers were shown the door.

Wed, 12/03/2014 - 22:59 | 5515363 mt paul
mt paul's picture

a currency

backed by a basket of commodities  [ stuff ]

 

gold.. oil... uranium 

 

the death of fiat currency

Thu, 12/04/2014 - 06:01 | 5515937 luckylongshot
luckylongshot's picture

Even better would be to adopt a public banking system backed with productivity. It would make the IMF, BIS, World Bank, Futures, FX and Sharemarkets obsolete and completely stuff the Bankster plans to take control of Russia.

Wed, 12/03/2014 - 20:01 | 5514821 unrulian
unrulian's picture

personally I'd find myself very attracted to a gold bitch

Wed, 12/03/2014 - 22:12 | 5515236 bigdumbnugly
bigdumbnugly's picture

no...    i once was married to a cold bitch.

you wouldn't like her.

 

 

 

edit:  oh,  GOLD bitch. 

yeah, maybe...

Thu, 12/04/2014 - 01:37 | 5515726 pickupthatcan
pickupthatcan's picture

Speaking of cold bitches, my first wife was so frigid, when she would open up her legs a little light would come on.

Thu, 12/04/2014 - 04:10 | 5515876 ILLILLILLI
ILLILLILLI's picture

She has a light in her freezer...??

Thu, 12/04/2014 - 00:28 | 5515623 Bemused Observer
Bemused Observer's picture

You have to be careful. When two gold bugs couple, the tendency is for his and hers gold to become their gold. Several years later, it somehow becomes HER gold, either through outright divorce settlement, or the long, slow grind of the long term marriage when frankly, she can have whatever she WANTS if she'll just shut up and leave you alone...

Thu, 12/04/2014 - 01:33 | 5515718 Four chan
Four chan's picture

truer words were never penned.

Thu, 12/04/2014 - 02:35 | 5515794 Harbanger
Harbanger's picture

Is it any wonder the West gets no respect from the East.

Thu, 12/04/2014 - 01:05 | 5515677 e_goldstein
e_goldstein's picture

I'm not sure about golden bitches, but if someone dunked Blythe Masters in molten silver it might make her more attractive (I said might).

Thu, 12/04/2014 - 08:17 | 5516032 scrappy
scrappy's picture

Would you consider fingering a gold bitch?

With ebola gloves of course.

Wed, 12/03/2014 - 19:52 | 5514787 Greenskeeper_Carl
Greenskeeper_Carl's picture

Come on guys, this article is like a week old ....

Wed, 12/03/2014 - 19:44 | 5514763 kowalli
kowalli's picture

We will create our swist system by may 2015+-. I think this is a key point.

Wed, 12/03/2014 - 23:45 | 5515514 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Bitcoin may not be legal in Russia.  But, maybe they should rethink that.  This transaction for over $80,000,000 just crossed the wires (on the blockchain):

https://blockchain.info/tx/8f1d3a8ef6b2d4a25d2f499279e01518b4770819ccbc3...

Total cost to send the $80,000,000 in Bitcoin?  $0.04.  Four cents.

Thu, 12/04/2014 - 07:56 | 5516009 frenzic
frenzic's picture

Those relative fees will rise like a mf when btc will actually be the officially mandated tool of choice to send money. This whole decentralised setup will be in the past as soon as the btc kingpins take up their place at the table. They will build intitutions that need funds to run, they will come up with "added security" for a price ofc, they will take their cut fitting for a new master of the universe and so on. You ain't seen nothing yet.

Wed, 12/03/2014 - 19:50 | 5514775 BigJim
BigJim's picture

 So what is Putin waiting for?

To acquire more precious at low, low prices?

For his friends at Goldman Sachs to give the nod?

To get his affairs in order because if he does this, it means war?

Wed, 12/03/2014 - 21:08 | 5515041 Things that go bump
Things that go bump's picture

I think its more along the lines of getting all his ducks in a row.

Thu, 12/04/2014 - 05:29 | 5515919 Sirius Wonderblast
Sirius Wonderblast's picture

+1 for the avatar.

Wed, 12/03/2014 - 22:35 | 5515299 SilverIsMoney
SilverIsMoney's picture

So apparently his collapsing currency doesn't matter?

Everyone at ZH wants to talk about the Yen collapsing 15% relative to the dollar since October 15th but the Ruble is down 35% relative to the dollar since July 9th and somehow Putin still has time on his side?

If he's got a gold card to play he should play it.

Wed, 12/03/2014 - 21:07 | 5515037 alrightee_then
alrightee_then's picture

Putin doesn't decide anything just like any other puppet politician

He gets instructions from the same master ALL the politicians work for

http://newworldorderg20.wordpress.com

Thu, 12/04/2014 - 01:18 | 5515695 ebear
ebear's picture

Taking orders?   OK.

I'll have the New World Order Burger with a side of Freedom Fries please.

 

Thu, 12/04/2014 - 02:20 | 5515778 Lore
Lore's picture

alrightee_then (3 weeks, 2 days)

When will you stop spamming?

Thu, 12/04/2014 - 08:51 | 5516072 scrappy
scrappy's picture

I do not understand all the down arrows ZH'rs.

The guy might be right, all the worlds a stage and all of that. But if the NWO wants woar, they will probably get it. Cynicism is healthy in these times.

It could be a setup.

Pray for our guys and the innocent.

Remember the ebola scare?

I got a lot of down arrows.

Apologies anyone?

Wed, 12/03/2014 - 21:24 | 5515076 freelearner
freelearner's picture

A Russian economist recently cast doubt on Russia's willingness to separate from the dollar or to sell oil in rubles-- or, rather, he said the Russian central bank refused to move toward such eventualities.  In fact, he claims, the central bank is still beholden to the IMF.  Quote: "This brings us to the hypothesis that the governance of the central bank is in cahoots with Washington with the shared aim of subverting Putin. The hypothesis is already mainstream in the Russian Media." http://bit.ly/15FWxxS

Wed, 12/03/2014 - 22:04 | 5515211 SmokinMonkey
SmokinMonkey's picture

If Putin blows through all his USD reserves during 2015 to prop up the Ruble..he would have to sell his gold to get more...Or just give up and massively devalue the ruble while at the same time pegging it to whatever gold he has left.  

Thu, 12/04/2014 - 03:46 | 5515851 noben
noben's picture

"So what is Putin waiting for?"

Probably for "authority figures" in the USSA (John Butler, Prof. Steve Hanke, etc) to give their approval and advice.  Not!

I find it laughable that the author of this article is citing Butler & Hanke as people who suggested this.  The truth is, the list of people who suggested this is a mile long and goes back decades, when some of these guys were still in diapers.

Given that Russians have so far been on track with Asymmetric responses, I'd expect another such response in this also.  Indexing their currency to Oil sounds more plausible, and backing it with a Basket of Key Assets* sounds rational and a great defense against Western banksterism (FX games, sanctions, boycotts, etc).  The thing about backing it with a Basket, is that it makes Manipulation that much harder -- as all its assets would have to be attacked successfully at the same time, and for a prolonged period, while not self-destructing in the process.  Good luck with that!

* Basket = Mix of PM (Gold, Silver, Platinum, Palladium) + Oil + Gas + Uranium + Titanium + ?

Thu, 12/04/2014 - 03:59 | 5515868 OldPhart
OldPhart's picture

I'm nobody special, don't have any real insight on world politics other that what I read on ZH and online.

But, what if Russia and China have an agreement to max out their purchases of gold to pool into a combined gold-based currency?

Wed, 12/03/2014 - 20:10 | 5514715 zenon
zenon's picture

Better to make the bonds redeemable in rubles at the free market value of gold at the time - not in the metal itself. That way you can keep the bullion bank vultures away.

Wed, 12/03/2014 - 19:34 | 5514721 Al Huxley
Al Huxley's picture

I used to buy these kinds of hypotheses, but now it just seems to me that ALL these guys (Russians, Chinese, Germans, blah, blah, blah) are playing for the same team, and it's NOT us, and that everything's just put out there as theater to keep us preoccupied.  What's Eastasia up to now?  Have we always been at war with Eastasia, or was that Oceania?

Wed, 12/03/2014 - 20:04 | 5514830 kchrisc
kchrisc's picture

"I used to buy these kinds of hypotheses, but now it just seems to me that ALL these guys (Russians, Chinese, Germans, blah, blah, blah) are playing for the same team, and it's NOT us, and that everything's just put out there as theater to keep us preoccupied."

It can appear that way until one becomes informed on the Zionists and Rothschilds, then it all begins to make sense.

After understanding what many had been telling me about Zionism and the Rothschild banksters, so many thing now make sense

No, it is not about hating Jews, as not all Zionists are Jews. Though a healthy dose of suspicion of Jews in power (JoPs), is warranted.

An American, not US subject.

 

"Follow the money. Track the Jews."

So the other day I see that some pol, Troy Singleton, in NJ is proposing a law against "rape by fraud." Pure nonsense, yet I know what the game is. So I start my trace. The pol is black. Black pols are often used by the Zionists to first float the most nonsensical of things so they can gain a little traction before a later big push is made. So then I trace it further and find, ta-da, a Jew, Joyce Short (Actually, Joyce Mincheff, as she changed it just before publishing her book.), who has been espousing and pushing this. Well, that didn't take long. And the only other country pushing this "rape by fraud" idea is, ta-da, Israel.

So expect another sheeple dividing case coming up involving "rape by fraud."

http://newyork.cbslocal.com/2014/11/24/proposed-legislation-would-make-r...

http://www.amazon.com/Carnal-Abuse-Deceit-Predators-Became/dp/0615814557

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

Wed, 12/03/2014 - 20:38 | 5514933 dsty
dsty's picture

It seems too many people here have a Protocols of Zion interpretation of Zionism

This is based on a Russian hoax perpetuated by others groups such John Birchers, KKK Nazis, etc.

https://en.wikipedia.org/wiki/The_Protocols_of_the_Elders_of_Zion

The Protocols of the Elders of Zion or The Protocols of the Meetings of the Learned Elders of Zion is an antisemitic hoax purporting to describe a Jewish plan for global domination.[1] It was first published in Russia in 1903, translated into multiple languages, and disseminated internationally in the early part of the 20th century. Henry Ford funded printing of 500,000 copies that were distributed throughout the US in the 1920s.

The real Zionism has nothing to do with world domination

 

Zionism (Hebrew??????????translit. Tziyonut) is a nationalist and political movement of Jews and Jewish culture that supports the reestablishment of aJewish homeland in the territory defined as the historic Land of Israel.[1][2][3][4] Zionism emerged in the late 19th century in central and eastern Europe as a national revival movement, and soon after this most leaders of the movement associated the main goal with creating the desired state inPalestine, then an area controlled by the Ottoman Empire.[5][6][7] A religious variety of Zionism supports Jews upholding their Jewish identity, opposes the assimilation of Jews into other societies and has advocated the 'return' of Jews to Israel as a means for Jews to be a majority in their own nation, and to be liberated from antisemitic discrimination, exclusion, and persecution that had historically occurred in the diaspora.[1] Since the establishment of the State of Israel, the Zionist movement continues primarily to advocate on behalf of Israel and address threats to its continued existence and security. In a less common usage, the term may also refer to non-political, cultural Zionism, founded and represented most prominently by Ahad Ha'am; and political support for the State of Israel by non-Jews, as in Christian Zionism.

Wed, 12/03/2014 - 21:12 | 5515044 kchrisc
kchrisc's picture

"It seems too many people here have a Protocols of Zion interpretation of Zionism"

I have never read the "Protocols of Zion. (1903)" Though I have seen a bullet-point summary.

My interpretation of Zionism is based on the the behavior of JoPs, the near monopoly of Jews in the top positions of power in government, finance, etc., and how all sheeple dividing topics seem to be sprung and pushed by Jewish backed orgs.

I will say this about the "Protocols," it is pretty interesting that many things mentioned began to be pushed or come about within about 15 or so years of their publication.

The big game changer for me was the discovery that the NAACP (1909) was founded by Jews using a mulatto black, and then they headed and run by Jews for the next 66 years. Fits the "divide and conquer" motif pretty well.

I am also very well versed on the history of the rise of the Nazis, and so then, also know what the German and European peoples' complaints about the Jews before 1933 were. I hear and SEE the same things, and patterns, in the DC US now. Remember, Hitler, and the Nazis, did not create antisemitism, they took advantage of what was already seething within the populations of Germany, and later Europe.

But don't misunderstand, the answer lies in ending fraudulent-reserve banking, and restoring lawful government, not in putting people into cattle cars. Unfortunately, many I know don't exactly feel that way.

An American, not US subject.

Wed, 12/03/2014 - 22:53 | 5515348 TeethVillage88s
TeethVillage88s's picture

As Fascism moved to the USA under Operation Paper Clip and the Rat Lines... the USA adopted Nazi Management, Propaganda, Free Press, Scientific, Weapons, Military, and Whoring Techniques to create "operation honeymoon", mind control, blackmail, operation mocking bird, and other techniques.

But I am just an asshole.

The Idea of America is gone. TV, Cable & Satellite is Fantasy.

So sad that all US Workers are only focused on Building their Resume's, Careers, Sperm Count, Bank accounts, 401Ks, Bonus Money, next Promotion... there is "NO" commitment to building American Youth, American Workers, the Next American Generation... who cares if the young are raped in Tuition Costs for Technical Schools or University College?

- The older Generation sold "US DOWN THE River"
- The olde Generation did not keep an eye on Government & the Banking Trust... what were the biggest RISKS to the USA,... probably the Banking Trust!!!!! @#%#@@

Get a Clue America (USA)

Thu, 12/04/2014 - 09:20 | 5516136 scrappy
scrappy's picture

Speaking of "subject" have you seen this regarding the Constitution?

https://www.youtube.com/playlist?list=PLC11561FA2B6C9583

Constitution: the system of fundamental principles according to which a corporation, or the like, is governed.

Does this flag look familiar folks???

https://en.wikipedia.org/wiki/East_India_Company

An American - Neither "Subject" or "Citizen"

Just an American.

 

Wed, 12/03/2014 - 22:31 | 5515285 tvdog
tvdog's picture

The Protocols of the Elders of Zion was declared to be a hoax by a Jewish judge in a lawsuit, not by any historian.

It is clear that the Protocols have been carried out in many countries since it first appeared.

Thu, 12/04/2014 - 04:00 | 5515869 noben
noben's picture

dsty, if you do your homework, you'll find that there are different forms of Zionism.

The one that rose to dominance and is assumed as the default form in arguments is the global imperialist version: Revisionist Zionism.

Waving the PoZ flag is therefore not necessary, but does serve as a nice Red Herring, to redirect the discussion into a meaningless alley.  Now let's please get back on topic:  Russian currency and Currency Wars.

Thu, 12/04/2014 - 04:24 | 5515886 ILLILLILLI
ILLILLILLI's picture

"One of the most shattering and shaming indictments of British Foreign policy ever framed has recently come to light in a collection of state documents compiled by Doreen Ingrams and entitled “Palestine Papers 1917-1922, Seeds of Conflict” (John Murray, 1972). As the Foreword very properly reminds us, ‘the (Palestine) conflict began not in 1948 but in 1917? with the publication of the Balfour Declaration, and to understand the intensity of the hatred which exists today between the Arabs and Israel, it is necessary to go back to that crucially important watershed in the history of the Middle East. But Mrs Ingrams does a lot more than merely recall how the eviction of the Arabs of Palestine to make way for the creation of the Israeli state began more than half a century ago. Letting the record speak for itself, she also lays bare the cynicism with which British Ministers at that time committed themselves to the creation of a Jewish state in Palestine, with a total and deliberate disregard for the rights and interests of the Arabs who then numbered 92 per cent of the country’s population.

 

we still have an obligation … to seek a settlement which will finally redeem our honour and vindicate our name.

Until now even those best informed on the history of Palestine since the First World War have been inclined to give Balfour and his colleagues the benefit of the doubt about their ultimate intentions. They have accepted that to the British Government of the day the Balfour Declaration meant no more and no less than it said, when it proclaimed that Britain would help to establish a ‘national home’ for the Jewish people in Palestine without prejudice to the rights of the existing Moslem and Christian Arab population. Consequently there has arisen a widespread idea that Ministers both then and in later years· must have been duped by the wily Zionist Movement, led by Dr Chaim Weizmann, who had intended from the outset that Palestine should become a Jewish state. And the fact that, after twenty years of British rule in Palestine, the ‘national home’ became the Jewish state of the Zionists’ dream, and in so doing dispossessed all but a handful of Arab inhabitants of their homes has been attributed to weakness rather than duplicity on the part of Balfour and his successors.

No longer can anyone be under such an illusion. For the Government of the day stand condemned out of their own mouths and writings of conniving at and furthering every Zionist design from the issue of the Balfour Declaration onwards. In document after document of the State Papers which Mrs Ingrams has brought to light the sordid proof is revealed that Balfour and his colleagues knew exactly what the Zionists were up to and that, with the honourable exceptions of Lord Curzon and Edwin Montagu, they had every intention of helping them to fulfil their aims.

Worse than this,the Government deliberately set out to deceive the Arab majority in Palestine as to their real intentions with promises and guarantees that they had 'nothing to be frightened about'[1]and that Britain would 'never consent' to a Jewish Government being set up to rule their land.[2]

Thu, 12/04/2014 - 04:28 | 5515892 ILLILLILLI
ILLILLILLI's picture

More here:

http://www.balfourproject.org/balfour-and-palestine/

Only two things you need to know:

  • Every word out of the mouth of a Zionist is a lie
  • What the Zionist wants, the Zionist takes
Thu, 12/04/2014 - 05:08 | 5515907 Sandmann
Sandmann's picture

Old hat. Nothing new. Well known to anyone who reads.

 

Weizmann had process fo producing Acetone needed to produce shells after the Shell Crisis of 1916, he did a trade. The British depended upon a Krupp patent for fuses which Vickers reimbursed postwar, and had a significant number of dud shells far in excess of Germany which had moe artillery than the combined allies.

 

Weizmann had know-how and the British Government bought it with someone else's credit

Wed, 12/03/2014 - 22:57 | 5514962 TeethVillage88s
TeethVillage88s's picture

I'm not really up on all this today.

But what are we(USA) going to say when the man comes to take our property away? I get it that we are led into investments, we depend on Pensions & Retirements that never materialize, that we have no Interest on Savings, That Savings is Discouraged, that the young have no education on the value of saving money to gain interest payments... I get there is a war on Fixed income Citizens,... I get that there is no "Free Trade", I get that Private Executives can Defer Wages and therefore defer Taxes on Wages while earning Interest on Wages Deferred, I get that Senior Public Executives have a network to allow them to earn Interest in Special Financial Accounts on their savings...

- USA has become a Debtor Culture, this has deep ramifications for controlling people
- 9 of 10 debtor Employees will stay in employ for 10 years at average wages, systematically enslaved, If you are in Debt you can be manipulated at Wages become flat & Labor Force has Greatly Increased with Women & Immigration, Even Black Market Labor drives down Wages to control your future
- Usury Credit Cards have a big place, Instant Loan services are also a part of this suppression of the poor & Middle Class
- But the big things are the forces against common man, the Inflation, the QE, the Fiscal Stimulus, the Power given by Federal Government to Private Corporations to control industry, labor cost, credit cost, credit ratings, containment of Individual Debt, Control of Credit, Systematic Assault on Individuals- through ads, through legislation, through Omission by Government Watchdog Agencies, Through Omission by the US President, through Omission by US Congress, Through Omission by the FED & Treasury Cartel

Nothing to see HERE.

Wed, 12/03/2014 - 21:05 | 5515030 alrightee_then
alrightee_then's picture

You're getting it they ALL play for the same team

Look for yourself.........http://newworldorderg20.wordpress.com

It's all there

Thu, 12/04/2014 - 03:25 | 5515838 tvdog
tvdog's picture

I checked out your site. Looks to me like you're a disinformation agent trying to discredit friends and allies of the revolution.

Wed, 12/03/2014 - 20:19 | 5514879 SHRAGS
SHRAGS's picture

What's Eastasia up to now?  Have we always been at war with Eastasia, or was that Oceania?

Oh the irony of a comment from Al Huxley, full retard Orwell!  They both saw the control grid, just from opposite directions, pleasure vs pain.

http://www.highexistence.com/amusing-ourselves-to-death-huxley-vs-orwell/

Wed, 12/03/2014 - 21:52 | 5515170 Amerikan Patriot
Amerikan Patriot's picture

You're just a frustrated gold buyer.

Thu, 12/04/2014 - 00:31 | 5515626 IridiumRebel
IridiumRebel's picture

No he is a critical thinker. You're a useful idiot.

dullard

Wed, 12/03/2014 - 19:41 | 5514751 Dapper Dan
Dapper Dan's picture

Obama would need two hands to hold that brick, if he could lift it at all.

 

But I would not trust Putin to give it back either.

 


Wed, 12/03/2014 - 23:56 | 5515551 vulcanraven
vulcanraven's picture

Say, when exactly WAS the last time we saw photo or video of a US president inside of a gold vault?

Wed, 12/03/2014 - 19:43 | 5514755 Yen Cross
Yen Cross's picture

 I can't wait until Russia & China have that new SWIFT co-op setup>

Russia To Have SWIFT Alternative By May | Zero Hedge

Wed, 12/03/2014 - 19:54 | 5514798 Winston Churchill
Winston Churchill's picture

A gold soveregn says its already in beta testing, and will launch in Q1, if not before.

Wed, 12/03/2014 - 20:03 | 5514824 Yen Cross
Yen Cross's picture

 Thanks for the update W/C ;)

Wed, 12/03/2014 - 21:05 | 5515025 Augustus
Augustus's picture

What was it supposed to be?  Some sort of stability of value between Iran, China, and Russia?

So, is there some sort of special exchange rate stabilizer so that the rubles decline in value in the west but the Chinese will still accept them at three month ago conversion rates?

The problem with rising food costs in Russia initially resulted from Putin banning imports from the EU.  It was not a currency problem but a lack of supply and few domestic substitutes.

 

Wed, 12/03/2014 - 21:25 | 5515080 Yen Cross
Yen Cross's picture

 I'm pretty sure it was meant to be an alternative to Visa & Mastercard?

Thu, 12/04/2014 - 03:30 | 5515841 tvdog
tvdog's picture

Swift is used for interbank fund transfers. Kicking Iran out of Swift meant that it was impossible to transfer funds to Iranian banks to pay for oil or other Iranian products, crippling Iran's trade. Russia and China having their own Swift alternative would mean that funds could still be transferred between them even if the U.S. twisted arms again to get one or both countries kicked out of Swift.

It has nothing to do with exchange rates.

Wed, 12/03/2014 - 19:44 | 5514757 kchrisc
kchrisc's picture

Russia will not link the ruble to gold, as that will limit Russia's central bank's ability to "print." Not that I am an advocate for "printing."

However, Russia will link oil, gas, uranium, and other commodity sales, to gold.

That will make the west, especially gas dependent Europe, and the Russian uranium dependent DC US, scramble to purchase gold, among other things. China will be permitted to pay in rubles, renminbi or gold.

An American, not US subject.

Wed, 12/03/2014 - 20:22 | 5514883 cornflakesdisease
cornflakesdisease's picture

We can only hope.

Wed, 12/03/2014 - 21:16 | 5515054 Augustus
Augustus's picture

Linking oil to gold would have given Russia a 30% price decline, before the recent $$$ price decline of 30% resulting from oil oversupply.

 

Linking one commodity to another makes as much sense as pricing pounds of beef in pounds of corn or pounds of chicken.

Wed, 12/03/2014 - 22:52 | 5515344 post turtle saver
post turtle saver's picture

"... and the Russian uranium dependent DC US"

silence, fool

the US has plenty of its own reserves to meet its needs and, if necessary, can always go to the true king of world uranium reserves - Australia... or to the second largest producer, Canada, whose true reserves are unknown due to lack of exploration...

who are the dumbasses that upvote this shit? this is an easily disproven assertion with very minimal research effort required, and there are still slope headed mouth breathing knuckle dragging idiots on this board that _upvote it_ - what a joke

Thu, 12/04/2014 - 00:10 | 5515542 DoChenRollingBearing
DoChenRollingBearing's picture

And the USA has its own reserves of many of those resources.  They may be more expensive than lower-cost producers in many cases, but like post turtle saver writes, we can buy what we need from MANY willing sellers.

Putin's friends in Venezuela show that having a lot of oil (and a nuclear armed friend in Russia) doesn't mean jack squat in a sleazy country...

Wed, 12/03/2014 - 23:03 | 5515374 mt paul
mt paul's picture

kchrisc

 

agree..

 

a currency backed by stuff...

Thu, 12/04/2014 - 04:20 | 5515878 noben
noben's picture

If Russia really wanted to take Asymmetric responses to another level, they'd add PLATINUM to the list:  Oil priced in Roubles, Gold and Platinum.

Seeing that they mine more Platinum* than anyone else, that would put the West in a real pickle.  Manipulate THIS, CIA/Fed bitchez!

Remind me who owns Barter Town?  Wall St?  CME?  Yeah, right!  Try "BRITICS+"  (BRIICS+Turkey).  If Russia or China buy the S. African Pl mines, or shut them down with "mining accidents", it's Game Over for the West calling the shots in Platinum.

* http://en.wikipedia.org/wiki/List_of_countries_by_platinum_production

Wed, 12/03/2014 - 19:43 | 5514762 Heavy
Heavy's picture

Still it is interesting.  I like more certain valuations!

Wed, 12/03/2014 - 19:44 | 5514765 Bobby Lee
Bobby Lee's picture

I have my own gold exchange standard. No matter what you offer me, I won't sell.

Wed, 12/03/2014 - 23:54 | 5515545 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

The Central Bank of Bobby Lee is now showing its strength.

+ $55,000

Wed, 12/03/2014 - 19:47 | 5514774 Fuku Ben
Fuku Ben's picture

Ron claims 1800-2000 / oz gold prices in some BRICS countries. Still waiting for his email reply with the source(s) to confirm

https://www.youtube.com/watch?v=k6ZM5t1SYdw

Wed, 12/03/2014 - 19:53 | 5514786 Spungo
Spungo's picture

Solution: free breast enlargement surgery

Wed, 12/03/2014 - 19:56 | 5514799 Jack Burton
Jack Burton's picture

Russia holds substantial dollar reserves, rumor on the street is that they are using them where possible to buy gold. They feel American fiat is no longer a store of value, and gold would be better than dollars. I agree, I can yet show how much dollar reserve is going into gold, but I hear it is happening while gold is down and the dollar is up, That only makes sense from Russia's persepective. Dollar is high, gold has taken a hit, every green piece of toilet paper converted to metal has to be a plus. Already a barter deal with Iran has been signed Irianian oil for Russian manufactured goods and other needed raw materials for Iran. The dollar? It is nowhere to be seen in that deal.

China and Russia are both hip to America's power and America's great weakness. The Dollar is both, right now it is a liscense to steal and a club to beat Russia with, stip reserve status, reduce it's role in trade, and America's right to print in return for energy and manufacted goods of the world are over.

Wed, 12/03/2014 - 21:24 | 5515070 Augustus
Augustus's picture

What quantity of pistacheos is is required for a nuclear reactor?

Just because they don't go through an futures exchange for conversion of the trnsaction does not mean that they are not using $$$$prices to value the sides of a transaction.  They are simply using a barter arrangement to avoid sanctions.  So, if they meet at a border to swap goods, does a Russian seller have to take the change back home in a tanker truck?

How do they settle a balance of trde deficit?

Wed, 12/03/2014 - 21:46 | 5515144 Jack Burton
Jack Burton's picture

Price anything in dollars. If dollars are not transfered or converted as part of the trade then what power does the dollar have. I hear the Dollar Advocates always use this "pricing argument". I wish you would look closer into what you said, I don't think it would bear up. Barter has been used before, and it does no harm.

What does the nut have to do with it. Iran transfers Oil, which Russia sells, in exchange machine tools and other manufactured goods of an agreed value go to Iran. Price it in dollars to keep the books if they want, unless Iran or Russia must hold dollars to do the deal, whcih they don't, then dollar has no power, no role.

Honestly, I would think you understand that perfectly well. Rethink the "Dollar Pricing Argument" "Pricing is one thing" "Needing to hold dollars to do trade" is another.

Thu, 12/04/2014 - 03:30 | 5515844 Augustus
Augustus's picture

If everything is priced in dollars then traders will hold dollars.

Why would they want to hold rubles?

Unspent credits or profits have to be stored in denomination of something.  Is it chickens or goats, declining value barrels of oil or declining value of silver bars, maybe aged cheese or wine?  IF the credits are stored in credits of something used for valueing the future transactions then that storage unit must be converted to valuation units ($$$$) to make a transaction.  Will the cost construction of an Iranian nuke increase in barrels of oil since the $$$$ price of oil is down?

Wed, 12/03/2014 - 19:59 | 5514808 Jack Burton
Jack Burton's picture

I sometimes think that before the US Dollar officially was stripped of reserve status thus ending the world wide Dollar power, the USA would release Nuclear Weapons on the would be dollar killers.

Compare American wealth creation with it's consumption. Compare USA power with it's real economy GDP - finance and health care- with American world wide purchasing power. Compare the manufacturing and energy output with American global military prowess.

In the end, nothing can justify the US postion EXCEPT, the right to print dollars and the power to enforce their acceptance world wide.

Wed, 12/03/2014 - 20:05 | 5514833 Bankster Kibble
Bankster Kibble's picture

Russia could also go for commodity swaps and calculate the value with each shipment.  It appears that is what Russia and Iran are doing now: oil for grain.  No currency need change hands, even if it is used to determine value of weights.

Wed, 12/03/2014 - 20:11 | 5514853 kowalli
kowalli's picture

it's not that bad here like you think, it's just harder to get more money, but it's not like we can't buy food and we don't need this much crap like in USA.

Wed, 12/03/2014 - 22:46 | 5515329 Miketheterrible
Miketheterrible's picture

It isn't necessarily harder to get more money either, it is just capital growth of wages have dropped significantly so average wage increase so far in 10 months may have amounted for maybe 2 - 4% in Russia. What is happening is that businesses so far in Russia seem to be clamping down and keeping thier current workforce and banking on them, rather than hiring new people every month.

Prices of food has gone up, but it is average 10% and people think that is killing prices, because they look at prices of such products in their respective countries.  But Milk in Russia averages out about $1/L and that is cheaper than here by at least a couple of cents.  Same thing with bread, where the contrast is even more stark.  Prices for fish though has gone up quite a bit.

Cost of products of individual goods like gadgets and what not has not really increased a whole lot, simply because Russia still purchases majority of it from China anyway.  TV's, phones, etc, all come from China (with some exceptions where they are made in Russia, but not the extent that is in China) and Turkey.

Doom and gloom is a story that people love to say.  But as average wages are starting to kinda slow down in growth, average wages are a massive difference from now since about even a few years ago.

If you want work, I heard Crimea is now looking for more workers.  It is now a Special Economic zone and many businesses (from Turkey, Russia, China, etc) are looking to, to actually opening shops.

Wed, 12/03/2014 - 20:14 | 5514863 TheGreatRecovery
TheGreatRecovery's picture

If the western bankers really felt that Russia was so evil, and that Russia's power came from its oil, they could counter by encouraging, instead of discouraging, the development of solar energy by their citizens.

Wed, 12/03/2014 - 20:29 | 5514899 Yen Cross
Yen Cross's picture

 When Russia and China have control over the South China Sea and energy reserves from Africa &China the petrodollar dies.

 Putin isn't a tin pot dictator. Russia is Russia. Rich in beautiful ornate history. 

  The United States wants to cede control. This is about a centralized global monetary system.

  What a shame that another "civil war" is going to be fought on the shores of America before the year 2030.

   The war will be fought for the wrong reasons.  Listen well, you as individuals, control your destiny.

  Every decision you make in life, has an exonerable reflex on those you love.

Thu, 12/04/2014 - 04:14 | 5515880 tvdog
tvdog's picture

"Russia is Russia. Rich in beautiful ornate history." Very beautiful. Check out St. Basil's Cathedral:

https://upload.wikimedia.org/wikipedia/commons/e/ec/Moscow_July_2011-4a.jpg

Wed, 12/03/2014 - 20:27 | 5514904 franciscopendergrass
franciscopendergrass's picture

It must be nice to be an autocrat like Putin.  He doesnt need to play the Free Shit Army game.  He doesn't need to be PC.  He doesnt overtly need to pander to minorities.  He realizes it is the economy (stupid).  As long as the economy is stable the people will not revolt.  Despite a rapidly depreciating currency and sanctions, Putin is doing the right thing by cutting deficits and buying gold instead of what the US is doing which is the complete opposite. The best thing the US has got going is the World Currency Reserve status.  Without that we would be at the mercy of other nations trying to sink the dollar.

Wed, 12/03/2014 - 21:06 | 5515036 besnook
besnook's picture

benevolent dictators always made the best .govs as far as the people were concerned.

Wed, 12/03/2014 - 22:47 | 5515332 Miketheterrible
Miketheterrible's picture

Well, while Iraq was not some shining example of a wonderful country, it is quite a difference now than it was before.  My brother in law worked in Libya prior to getting rid of Gadaffi.. Now it isn't safe to work there as a foreigner.

Wed, 12/03/2014 - 22:04 | 5515209 Amerikan Patriot
Amerikan Patriot's picture

"It would be nice to be an autocrat like Putin."

What an idiotic statement! 

Putin's aim - as he has personally stated - is to restore the 'glory' of the Soviet Union.  In other words, restore the gulag, restore the state-controlled media and all the rest.

This is the beauty of Zero Hedge.  Folks here put their head in the sand.  They're disgruntled over the US' dismal leadership, and so make the mistake of an allergic reaction to it by turning to just the wrong example.  Whatever Putin declares is dutifully rubber-stamped by the Duma.  It's certainly not a government I wish to live under.

When are you moving your family to Mother Russia?

Wed, 12/03/2014 - 23:03 | 5515376 Maxter
Maxter's picture

"Putin's aim - as he has personally stated - is to restore the 'glory' of the Soviet Union.  In other words, restore the gulag, restore the state-controlled media and all the rest."

There is absolutly NO logical connection between your first sentence and your last.

Wed, 12/03/2014 - 23:59 | 5515554 Amerikan Patriot
Amerikan Patriot's picture

Oh, but there is, Bob.  You're just not bright enough to figure it out.

Thu, 12/04/2014 - 00:47 | 5515654 Titus
Titus's picture

Sure shill, just ask Edward Snowden, currently escaping the USSA gulag in Moscow.

your logic is so cleverly incomplete it's scary.

amerikan patriot = USSA/Hasabra troll

Thu, 12/04/2014 - 00:54 | 5515666 Amerikan Patriot
Amerikan Patriot's picture

Bob, rejoice. 

I'm the only non-conspiratorial voice you get in a given day.

Remember, only 'conspiracies' can explain the 'illogical' price action of gold, the actions of governments, etc.

Thu, 12/04/2014 - 04:03 | 5515870 Titus
Titus's picture

Bob, rejoice! See American taxpayers and Zionist interest's dollars at work with every one of Amerikan Patriot's comments.

He never fails to put out factually incorrect information and label everyone who questions his facts as either Russian KGB/gulag lover's or conspiracy theorists.

I'm going to keep pointing out your bullshit until you send me a job application, I wanna get paid per comment too!

Amerikan Patriot History
Member for
16 weeks 3 days
Thu, 12/04/2014 - 00:17 | 5515600 IridiumRebel
IridiumRebel's picture

"This has powerfully positive political implications compared with the current pain of food price inflation of 11.5%. Over time domestic savings would grow, spurred on by low welfare provision by the state, long-term monetary stability and low taxes. This is the ideal environment for developing a strong manufacturing base, as Germany's post-war experience clearly demonstrated, but without her high welfare costs and associated taxation."

I wanna live in this country wherever it may be.
BTW, your moniker should be Amerikan Parrot. You're a dullard who repeats the same lines of shit, incessantly, day in and day out.

Thu, 12/04/2014 - 03:33 | 5515849 bid the soldier...
bid the soldiers shoot's picture

bologna

Putin's aim - as he has personally stated - is to restore the 'glory' of the Soviet Union

Put up a link where Putin personally states he wants not only to restore the 'glory' of USSR, but to increase Russia's borders.

George W Bush wanted to restore the Portnoyesque glory of beating off with a slice calves liver wrapped around his pee pee.   

Both Bush and you have glory confused with glory hole, which I can't go into now.

Thu, 12/04/2014 - 04:55 | 5515906 dreadnaught
dreadnaught's picture

idiotic?! SPEAK FOR YOURSELF,  Putin knows full well what he is doing..Checkmate

Wed, 12/03/2014 - 20:29 | 5514911 Karaio
Karaio's picture

If it was Putin sell the papers that were given in exchange for products - I think that's what he and China are doing.

Mainly US Treasuries.

The surplus profit of $ chela provided QE and profit the fall in the price of physical gold handled by EDF.

It is a left arm jab that direct hits on the chin leaving the opponent unconscious.

Slavs not threaten, Slavs has the patience of Job (the Prophet) but, when they give a bunch ...

After many penalties and, after many months, Putin lost his temper and fucked European agriculture.

After many months he ended the South pipeline, many metallurgical fucked with that attitude.

More wait a few months and you will watch the waterfall.

Economics is simple and empirical thing, is not "science" as they try to instill economists.

Three things are basic: agriculture, industry and energy.

That's it!

Putin attacked the first two.

The next is to close the power taps, something that is starting to make ...

hehe.

Wed, 12/03/2014 - 20:36 | 5514926 Karaio
Karaio's picture

As around the gold, but this is fact, not to be used in corrupt pot that exists between US-EU.

Gold is a sublime currency to be used between honest people.

BRICS.

Fuck those who like paper.

hehe.

Wed, 12/03/2014 - 20:35 | 5514925 will ling
will ling's picture

with virtually no debt and the planet's largest and most advanced arsenal of nuke tech, i don't see why vlad shouldn't go for it. most people in the world want to whack the banksters-pols.

Wed, 12/03/2014 - 22:13 | 5515243 Amerikan Patriot
Amerikan Patriot's picture

Russia hs "virtually no debt" because it's recently defaulted (it discharged much of its debt that way), it's a bad credit risk and no one wants to lend to it, except at punitive rates of interest. 

That's why Russia is forced to pay nearly 11% yield when it does borrow. 

Pull that head out of your butt - it'll make a resounding "thunk" when you're seeing daylight!

Thu, 12/04/2014 - 01:32 | 5515714 JustUsChickensHere
JustUsChickensHere's picture

Ok... so Russia defaulted .... NOW they are a good risk - all those resources and very little debt.

 

Compare that with [insert G7 country here] ..  huge debts, no default - YET - and for a lot of the G7, limited resources.

 

Which is a better long term bet ????

Thu, 12/04/2014 - 02:27 | 5515786 Tall Tom
Tall Tom's picture

Sixteen years ago is not "recent". Russia defaulted in 1998 and caused the collapse of Long Term Capital Management which, coincidentally, almost took out the entire US Economy.

 

You consider yourself enlightened and the only voice which is not "conspiratorial" on this forum? Wow. What a delusion of granduer. You must be fluoridly psychotic to publish that statement.

 

That delusion is symptomatic of schizophrenia. Another is the failure of having a sense of time. You seem confused as to that which is recent compared to that which has happened long ago. Yes the schizophrenic has a distorted reality concerning time. 

 

I am sorry to report this to you. But I must strongly urge that you seek psychological treatment. Now there are somewhat affective medications for the managing your symptoms. You must understand that these meds may only alleviate the symptoms. And while that alleviation manifests in a majority of cases you must understand that in some cases the symptoms are irretractable. Unfortunately there is no cure for your thought disorder currently available.

Wed, 12/03/2014 - 20:45 | 5514953 besnook
besnook's picture

i proposed that idea several montha ago but expanded it to the new brics forex agreements ex dollar forex. gold probably serves as the dollar substitute as the guarantor of account deficits between the brics which allow intrabric trade to have its very own closed forex exchange.

Wed, 12/03/2014 - 20:45 | 5514956 tarabel
tarabel's picture

 

 

Reading the article makes it clear that any country that goes onto the gold standard unilaterally will be drained dry of its specie in short order. The author speculates about this way and that way of making it impossible to actually exchange the rubles for gold except under very controlled circumstances which equate to being an F.O.P. (friend of putin) Anybody other than an oligarch is going to get a slip of paper.

Wed, 12/03/2014 - 20:53 | 5514986 besnook
besnook's picture

all putin would have to do if the ziobankers tried to sink him is insist upon gold or rubles for payment of the euro's oil and gas bill.

Wed, 12/03/2014 - 23:58 | 5515552 ltsgt1
ltsgt1's picture

If Russia exported more oil and gas than whatever they imported, Putin doesn't need any more gold. As the matter of fact, ruble may raise faster than gold due to strong export. If Putin or any Russian still desire gold, they can balance the trade deficits by importing gold. 

Thu, 12/04/2014 - 00:45 | 5515650 Bemused Observer
Bemused Observer's picture

Ha yeah...any country adopting a gold standard as the first of the fiat-crowd will see all their currency sucked right out of their country like it was being Hoover'ed...
It would be cheaper to just go ahead and have your currency minted/printed in all the other countries in the world where it will end up within 48 hours anyway...seriously.

Thu, 12/04/2014 - 04:18 | 5515883 Augustus
Augustus's picture

You have described it correctly, tarabel.

Who would believe that they could possibly exchange a barrow full of rubles for physical gold with a government controlled by Putin?  I doubt that Putin would even enter into oil sale contracts denominated in rubles.

Wed, 12/03/2014 - 20:46 | 5514959 venturen
venturen's picture

russia should only take payment for oil in Gold....that would be classic

Thu, 12/04/2014 - 04:20 | 5515884 Augustus
Augustus's picture

Cheapening oil for cheapening gold does not purchase many Mercedes.

Wed, 12/03/2014 - 20:58 | 5514975 alrightee_then
alrightee_then's picture

Understand the Communist U.S. government doesn't want the dollar to have reserve status either.

It's destroying the dollar every bit as much as anyone

The New World Order wants the SDR and you to have nothing

 

http://www.financialsense.com/contributors/jim-rickards/death-of-money-interview-part-2

Wed, 12/03/2014 - 21:05 | 5515029 besnook
besnook's picture

not so. there is way too big an advantage to own all the gold(dollar).

here is what has happened in past and future forex history. from the time the pound sterling began to lose its reserve currency status post ww1 because of debt(gold standard debt) until the dollar replaced it there was a committed banker effort to segway their interests from the pound to the dollar. it was a process that really wasn't complete until the mid 50s.

the problem the ziobankers face today is the lack of a transition candidate for the dollar that is in friendly ziobankers hand. china has systematically prevented western banks from any influence in the chinese economy preserving the yuan as an "independent" currency. the peg to the dollar is the key as china was/is the first country to peg to the dollar with a stronger currency. that is why western bankers talk about a brand new currency while china talks about a hybrid currency/commodity forex foundation.

the west is about conquest. the east is about harmony.

Wed, 12/03/2014 - 22:28 | 5515275 TeethVillage88s
TeethVillage88s's picture

It is until it isn't. Sorry the East has Mafia and Cartels in it's history.

- There is no new corruption from the West
- Yeah, Opium Wars are about Corruption from the West
- Gun Boat Diplomacy and Coercion of the West to open to Western Trade appear to be about Coercion and Fraud

- Hongs
- Yakusa
- Zaibastsu
- Triads
- Chebols
- Caebals
- Honda
- Hyundai
- Samsung
- Kia
- Mitsubisi
- Toyota

Wed, 12/03/2014 - 22:43 | 5515326 besnook
besnook's picture

the difference is all the asian cartels across all the countries are all based upon cooperation and the rules are pretty closely adhered to to keep the peace.

i know the japanese experience. the yakuza are allowed to operate as long as the rules are followed and no drugs are imported. in fact, the yakuza help enforce the drug importation laws and keep the chinese and other international organized crime out of japan.

even bribery is institutionalized into the new years celebration with money gifts given to all the important people in your life down to your great grandchildren.

honda doesn't really belong on that list because he has always been considered an outsider. honda sales were better in the usa thn japan baack in 1990. it may still be true. that is a case where the system is not welcome to newcomers.

there is a big difference in the way things work in the east. afterall, they have had a coupla more thousand years of "civilized" development than the west. in many ways, as a result of hindu and buddhist teachers the east approahes things from a different angle. there is no history of religious fire and brimstone and all that guilt and sin crap the west comes from.

Thu, 12/04/2014 - 00:13 | 5515570 DoChenRollingBearing
DoChenRollingBearing's picture

If you carefully look at the historical record, you will find that Asia has an impressively brutal history of mistreating not only foreigners it conquered, but their very own peoples.

Exhibit 1: Japan's treatment of Chinese in WWII

Exhibit 2: North Korea's (and China's) mistreatment of American and South Korean POWs during the Korean War

Exhibit 3: North Vietnam's treatment of POWs and S Vietnamese upon conquest

Exhibit 4: Soeharto's Indonesia

Exhibit 5: Myanmar (Burma) mistreating Aung San Suu Chi (sp), Nobel Prize winner, IIRC

Exhibit 6: Chinese deaths in the millions during their "Great Leap Forward"

Etc.

*  *  *

But I understand that reading History is not for everyone...

Thu, 12/04/2014 - 00:14 | 5515585 knukles
knukles's picture

Don't forget the Rape of Nanking, the Battan Death March or Unit 731.
Or the ever so civilized Kamakazi chappies.

some saki, my dear?

 

Ain't nobody ever been civilized on this fucking planet.
Period.

Thu, 12/04/2014 - 00:16 | 5515592 DoChenRollingBearing
DoChenRollingBearing's picture

10-4 !!

Tue, 12/09/2014 - 13:22 | 5533078 TeethVillage88s
TeethVillage88s's picture

And Japan's Bio-weapons in China, manufactured in China, then negotiated for by the USA...

Thu, 12/04/2014 - 00:19 | 5515599 besnook
besnook's picture

all new western history phase. you have to go back to the mongols to see any empire building except within the confines of the natiion as when the chinese and japanese consolidated into nation states.

history is not just what happened recently. asia lived in relative peace for hundreds of years before the west showed up.

Thu, 12/04/2014 - 01:00 | 5515671 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Genghis Khan

 

EDIT: I saw that in your reply.

 

Thu, 12/04/2014 - 04:27 | 5515891 Augustus
Augustus's picture

The problem is that the "consolidators" cannot agree upon who will be the chief.  The incompetent but ruthless Mao vs. Chang resulted in how many dead through internal war?  Japanese generals and Emperor in Manchuria and Indonesia when trying to consolidate some more?

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