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Outspooking The Lehman Apocalypse: Could A Russian Default Be In The Cards?
Via Mint - Blain's Extra Porridge,
“Nazhmite Lyubuyu Stavku...“
Extra Comment – this might be getting serious.
Russia’s markets have been spanked hard despite last night’s hike. 19% currency crash and 13% down stocks in a session. Ouch! Cumulatively, over the past few weeks stocks, oil and the Ruble are off 50% plus, and bonds off 40%. This morning felt like free-fall. Expect more action from the Russians to stave off economic catastrophe... imminent capital controls are rumoured, but markets are demonstrating a massive loss of confidence.
Lots of old market hands are talking about how its similar to the Russia default and crash of ‘98 all over again.. Actually.. its worse.
Much worse.
The scale and speed of the current collapse is a magnitude greater, and the effects are accelerated and magnified by the utter absence of liquidity, and by the political stakes at play. Lots of comments about how a Russian crisis might play out and what cornered Putin may do – or be forced into. Let’s not speculate, but it seems pretty clear that any Western support to calm the crisis and stabilise markets would come at a very high personal cost to Putin. That would be a good point to get selectively involved.
It’s too early. We’ve seen a few cautious buyers get wallpapered with Russian and Ukraine paper – and done decent amount of business, but generally none of the main distressed players feel it’s yet time to get involved. “Don’t expect a V-Shaped recovery – its different and aint going to happen..” said one manager. Hope is not a strategy when it comes to Russia at present.
The big risk is whether the Russian meltdown can be contained within the borders of the Rodina. All kinds of no-see-ems suggest themselves.
What are potential knock-ons into other markets? Perhaps Russians having to unwind London Property, (we understand Russians have been very big buyers in recent weeks prefiguring potential exchange controls), or further ructions in Europe? We’re already concerned European sovereign debt is poised on a knife-edge between brutal reality and over-inflated hopes for QE. A strong nudge from a conflagurating Russia and bang goes Italy?
Or will it come from safe-haven flight triggering sell-offs across every asset class in a replay of 2008? Could a Russia default that will outspook the Lehman apocalypse be on the cards?
So much for dull Christmas markets...
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Putin doesn't have enough gold yet to do that... apx 1200 tons or 10% of their Forex hldings according to Google.
Wiemar inflation headed to Rusiia? Or will worldwide deflation save them?
It depends on the actual amount of gold and not the stated amount. Some supposed insiders are saying that Russia has 30,000 tons and that China has 40,000 tons. No one really knows how close these two countries are to backing their currencies with gold.
Consider the US at the end of WWII became the world reserve currency with 21,000 tons.
AH did not have any gold reserves and faced much more difficult sanctions than Russia today (all those sanctions fell onto Germany only A DAY after he was appointed chancellor, mind you... just for REAL historical perspective) and Germany did NOT experience inflation in the 30's.
Russia just needs to take bold measures, not half-baked reforms. They can't win this game if they play by ZATO's rules.
Sorry, but those who HAVE the gold dictate its real price, not some fictitional paper market in London. They don't need to sell any gold until they get the price they want...
Yeah, you know, I look at this and think that certainly Russia is under pressure, but that they really must be doing something right for the zatonists to unleash this no-holds-barred, scorched-earth campaign against Putin and his government.
Russian CDS - owed to who?
Russia should rightly declare that this is a manipulated circumstance, take necessary defensive action, and assure investors that - when sanity returns - accounts will be equitably settled.
What am I missing?
Oil
Russia big producer
You are missing what you have stated yourself: "When sanity returns"
Lemmings are on the move. Pandora's box is wide open. Do people care if it is a manipulated circumstance when they stand over the pit of abject poverty?
TPTB are playing with fire.
"What am I missing?"
Maybe dump about $50 billion of US Treasuries as well?
Show family and friends you really care this Christmas season- with genuine Dupont Tychem TK HazmatTM.
"The recovery was just starting to gain traction; people were getting back to work, the stock market had fully recovered, and people were becoming optomisitic- That is until Russia imploded on itself and ruined the party. I think it is clear to the world who is to blame for this new recession, and they need to pay dearly for their aggressiveness and de-railing a strong rebounding economy. We need a formal declaration of war- you're either with us or against us."
...or something like that..
I can hear the Obama Administration say some bullshit like that...
It is too bad that at least 5 people are deaf...or cannot read.
I have a very strong feeling that between now and the end of the year, look out below. For everyone that thinks the market is down a lot, remember the S&P is still over 150 points above the October lows. Watch for that October low to be tested over the next few weeks.
How much foreign denominated debt does the Russian govt have and how does it compare to the foreign currency earnings from oil and gas? Hard to believe they can default with reserves and fiscal and trade surpluses. Crazy that somehow they are the ones cratering while the consumer finanicalized USUK economies continue to tell everyone what's what.
You can default any time YOU want, and stop paying your obligations. In this case, the Russians stopped redeeming rubles for dollars. So, who's the fucked one now ?
Zio-nazi cabal showing Putin who's boss... your move Vlad
I hope it hurts Goldman Sachs and the rest of Wall Street more than Russia.
Never too late. Load up on food/water/weps even if they are .22's.
But . . . I asked for Thousand Island
Yellen: "outside of a bit of turmoil offshores, US economic recovery gathering momentum.. and stocks are CHEAP"
Yes Janet, but what SPECIFICALLY is Yellin Capital Management LLC buying? That's where we want to be investing. Which Price-Equity ratios are looking most attractive to you?
"Well young man, I'm glad that you asked that question. Would you mind massaging my feet while I dispense some wisdom? I could remove the pantyhose if you like."
They know what's coming. Best you wake up too.
U.S. Special Forces Conducts Urban Training in North Texas
http://www.nbcdfw.com/news/local/US-Special-Forces-Conducts-Urban-Traini...
Whatever they are going to do they need to do it already they look weak, very, very, weak... play a card already Vlad you're country's being destroyed from within and you're just sitting there taking it.
When strong, feign weakness.
When weak, feign strength.
What is a Dollar?
Morpheus to Neo: "You think that's air you're breathing?"
How does Russia halt this warfare?
Will Spetznaz wet teams be working overtime in Mayfair district, Old Alexandria, Bel-Air, Knob HIll,
River Oaks, Grosse Pointe, Highland Park, Malibu & LaJolla? Got beefed up security there in your building?
Seal Team alums on the door and roamer teams making the rounds???
Where is the global destruction originating and who is carrying-out the orders (fill as well as execute)?
Do actions have consequences? Traders/Traitors may just soon find out...
How does Russia halt this warfare?
One suggestion. Putin gets the KGB (current version) to start whacking some of the offenders' leaders. A few top banksters, Saudis, Ziocons would do nicely. Pour encourager les autres, you understand.
Yes. Hit them where they live...Whack a few partners, senior traders, torpedo a luxury yacht or two, maybe take out a luxury barge on the Thames, Seine or Rhine... Maybe whack a few neighborhoods near T-1 or Backbone hubs.
Every jew a soldier the mantra went... Maybe every trader an enemy?
Just good, clean money-making fun. Taking down a nuclear nation more prepped than our own. Who anticipates Untintended Consequences; but are the goals really unintended... How much more complete could the take-down of America be if TPTB could goad Russia and some buddies into doing their dirty work?
You're not paranoid if they really are out to get you...
Re. Wet Work involving NWO-types.
http://www.telegraph.co.uk/news/uknews/crime/11289403/Man-who-introduced...
In the 1950s and 60s during the Cold War it was quite popular for people to build bomb shelters in their back yard stocked with food and water. Maybe something for todays preppers to consider.
Worth having a download of Nuclear War Survival Skills on your hard drive. By Cresson Kearny of Oakridge National Laboratory. Free Download at KI4u.com
Lots of quick info easy to understand and means to make your own shelter with only a day or two of warning.
Saw something earlier about Putin advising if Barry signs the latest sanctions, we ought call our ambassador home... There was a book published back in the mid-80s Thinking About The Unthinkable...
Don't need to think about this, just need to be able to respond. Get the download, read about the expedient sheltering, some other good info at ki4u.com as well. You can do a lot in just a few hours.
Unsolicited endorsement for KI4U.com.
Good people. Fast and reliable. I used them to calibrate one of my 715s a while back.
It really doesn't matter...if there is any strike that takes down the power grid, then we are all toast anyways. Nuclear reactors do not cool down in days.....especially if the water isn't flowing. Think people. This will be our end if it happens.
Interesting link. Did not know about that Rosneft bailout.
Have I read this exact story on ZH before? I am not kidding, the bottom half of the story has be thinking deja vu...
HyperInflation and a vindictive leader with 10000 nukes and a huge military could be a problem.
Take away the nukes and you could also be talking about Germany in the 30's. Not a comparison I am looking forward to.
Putin will not hyperinflate...he will keep raising rates if need be/back the currenct in a metal or commodity basket....Now retaliating against nations who are trying to bully him and still believe they run the world amongst themselves and full of their own belief in US/Angle Hegemony...yeah..I would be worried about the man with the most nukes on the planet...especially when is allied with out amusement park of slave labor known as China who we owe hundreds of billions to who also has been upping their military capabilities in the past decade...
That would worry me...No worries..these idiots think funny money and threats and blackmail will save them all..The bully has been getting punched in the mouth by Russia..wait till it lands the knockout and the citizens run rampant here when the free govt checks stop coming in...
Right now it looks like a 100% interrest rate might not be enough.
Too few people understand that a inflation is about printing-press abuse, but hyper inflation is about a vote of no-confidence.
The CB has no vote in a hyperinflation. The rest of the holder's of the CB's currency do.
When they'd rather carry their savings in Sanyo and Sony TV's than in any amount of the CB's currency, you have a hyper-inflation.
Meanwhile Ukraine UHA is not sliding at all. why? Because there is no market in UHA - you can't buy dollars with it. Kiev now enjoys a thriving black market in currency
Meanwhile Ukraine UHA is not sliding at all. why? Because there is no market in UHA - you can't buy dollars with it. Kiev now enjoys a thriving black market in currency
Techs caving past -1.3% may be leading the way down for equities:
http://www.investing.com/indices/nq-100-futures-advanced-chart
From my point of view, i think that it looks like Thai´s crisis in 1997.
Thailand was and is a small economy in the world,although it could drag other Asian economies.
Can you imagine what a Russian´s crack could do in the world? It will be a world crack
Nyet - Large military, small world wide economic impact.
This is not like 1998, Nor is it worse than 1998. What would Russia default on? It doesn't have any sovereign debt problem. Sounds like panicked BULLSHIT to me.
Delusional - do your homework - lots of debt - LOTS!
my opinin is that is sheer manipulation designed to get russia to sell its gold. if they do price in gold its the end of the dollar. they will need to be very sneaky to sell the remaining UST issues and be able to convert that to gold.
You can say that again....
my opinin is that is sheer manipulation designed to get russia to sell its gold. if they do price in gold its the end of the dollar. they will need to be very sneaky to sell the remaining UST issues and be able to convert that to gold.
You can say that again....
my opinin is that is sheer manipulation designed to get russia to sell its gold. if they do price in gold its the end of the dollar. they will need to be very sneaky to sell the remaining UST issues and be able to convert that to gold.
You can say that aga...oh wait........
A Russian government default? No.
Some Russian corporate defaults? Sure, happens all the time, including in the US, coming soon to the shale oil industry.
Are we all going to die,,,again?
Everyone dies, it's jut the timing that's different. Don't fret, your day will come as will mine.
In face of a very negative cash environment, I would think Russia would break out the Malaysian playbook and just go autarky on the rest of the financial system for a few years.
http://www.hks.harvard.edu/fs/drodrik/Research%20papers/Malaysia%20contr...
The author tries to make the point that this is 'worse' -- but fails to explain that the REASON it is worse is that the FX markets are just as broken as the Stock Markets (and apparently the VIX too) -- because the TBTF banks and Central Banks are manipulating EVERYTHING!
And it is actually NOT worse in many ways, as Russia had no leader before and was spinning apart as a country -- THAT is not true today.
So which WS TBTF "company" will take over Russia?
Will Russia default -- let's see -- should a Russian company fail to pay its loan back to a big Western Bank? The same kind of big Western Bank that is now sanctioned so that it cannot lend any more money to a Russian company? Or the same kind of big Western Bank that has leveraged those Russian loans and used them as collateral for all kinds of derivatives?
I could easily see Putin declare sanctions against the countries (or actually their banks) - that have placed sanctions on Russia. The Western Financial system is set up to never force anyone or any country from paying off a loan -- rather the system is designed to roll over all debt so that the banks can make money off of that money.
This is war.
A currency attack is one of the most vicious assaults on the most vulnerable of a population.
It's an attack on mothers, children, the unemployed, the poor.
This is the financial equivalent of indescriminately carpet bombing a city.
Only true monsters would find such glee in putting the least able to fend for themselves in such dire straits.
Just to enrich the champagne swilling, chauffered limo, filth.
Dude, do you fucking write commercials for late nite TV? You know, that Feed Us Colored Kids infomercials and such?
Catch up on your reading this holiday, try some Sherman or LeMay or "bomber" Harris memoirs. That's how real wars get won.
Yep the USA wrote the book on dropping bombs on civilians all right.
Dresden, Hiroshima, Nagasaki
Go Weep.
it's because of fucking pansies like you that we're in such a fucking mess right now. That whole compromise, get along, play along, just ignore them fucking limp wrist mantra.
And now how are we going to fucking fix this?
I'll give you a little fucking hint: It's going to involve a lot more killing than would have been necessary if you'd just let real men drive.
>>a lot more killing than would have been necessary if you'd just let real men drive.
Its always been this way. Flinch and it gets worse. The whole concept of warfare is to either get the other side to stop or make it not possible for them to continue.
Please let us do the needful and we can all be the better for it.
So what you are saying is that Putin should nuke US?
WWII fought and won in four years. Afghanistan fought and lost for twelve years. Because we were not willing to win, not willing to do what winning requires. Every conflict since Korea has ended in a truce, and continues to this day. This is our modern day "peace", ongoing multi decade multi generational war.
I hear what you're saying, but I hate the so-called Merikan poor, what should I feel about the Russian peasant?
Almost as bad as say, shutting off the gas on populations.... so it's something you EARN, not deserve.
Payback is indeed a bitch.
I always change the channel when that commmercial comes on TV.
You know, the one that is really long and has lots of abused animals....
GUD!
Maybe that 7.62x54R price will come back down. Need moar Nagant food.
Fuck the Nagant.
My 300 AAC will put 30 rounds on your ass before you can pull the bolt 5 times. If I need to reach out a little further, the .308 AR-10 will do the same.
Good luck with your cheap antique.
There is a tool for every job.
The question is what Putin will do if he feels his grip on power begins to loosen. Will Russia implode as the Soviet Union did in the late 80s/early 90s or will it explode and start a war? Russia is far more depndent on a high price of oil than many hoped. It wasn't even a week ago that we were told that Russia can weather a storm of low oil prices. It turns out that Russia is in an even weaker position than the United States was when Lehman collapsed.
http://www.zerohedge.com/news/2014-12-11/why-russia%E2%80%99s-unfazed-fa...
Putin needs high priced oil only to buy high priced western products.
Today both are gone and equalized. That is reason for Russian sanctions against Europe banning food, fruit and meat products.
One reason countries try to avoid defaults is the fear that they might be locked out of capital markets in the future. But Russia is already locked out of capital markets due to international sanctions. Why shouldn't they default?
I don't disagree, but I do feel somewhat badly about the average Russian that will be skinned alive in the end.
If you do business with Russians or have some regular exposure to their culture, (i.e. literature, movies, music, gray economies) you would understand that Russians actually LOVE US Dollars.... There is even a joke aout a Russian guy who visits America and tells all his friends how much alike the two countries are - they even use the same babki!
Anyways, US Dollars are a de facto legal tender in Russia, from the woman at the kiosk, to middle-sized business transactions... a sovereign default would challenge the monetary sovereignty of Russia, which already is in a precarious situation from the street level on up.
When you have Dollars, Euros, Rubles, and whatever all being treated as legal tender, there is a propensity for economies to become unmeasured and unpredictable.
The PIIGS outlast Russia, wow!
Don't worry. Zerohedge told me that Russia is not losing any money because their oil exports are denominated in dollars, but their costs are paid in Rubles, therefore the 50% oil price drop doesn't matter to them since Ruble denominated costs and revenue stay in balance. Not only that but the currency collapse is boosting their GDP as consumers spend their devaluating currency. Better yet, their banks have greater external assets than liabilities. See Zerohedge proves that Russia is a great country and Putin is a great person, and they are not isolated and US is a dead empire. Russia never loses on Zerohedge.
Priceless
Maybe Tyler's real name is Tylerov Durdenski and he is actually an employee of the Russian government. He (they) certainly seem to have a soft spot for Russia. All news relating to the US/Europe/Japan is spun in the most negative possible way. But it seems that Russia can do no wrong on ZH.
Say, could that possibly explain why there are so many adds for Russian hot chix on ZH?
Why fight with Russians when you can fight Arabs & Chinese? The Europeans are of no consequence
Hillary was sleeping in the White House in 1998 -- just for that reason alone things HAVE to be better for Russia now.
Very dangerous situation potentially. Will Putin put on the knee pads to the IMF/Fed (Zionazis for the average GeoWash ZH'er) to get the handouts and debt restructuring or will Putin's magnetic persona rape the population with abject poverty to prove the point of Russian independence? I wouldn't bet on independence, and Putin just might be finished.
Putin has the choice Yeltsin had in 98. Let it all fall and build it back, or make a hothead move and risk not coming back....
If the choice is currency default vs warfare, Russia will choose currency default. They just are not into the Ruble like you think they are.
I hope and suspect you are correct.
NO! Not too far fetched at all.
http://www.lewrockwell.com/2014/12/stephen-lendman/anti-russian-false-flag/
Wonder if FT Knox is on TPTB's radar for a false flag event. That would wipe out all the "imaginary gold" there and at the same time pop the tops on some nerve gas. All the while blaming it on the Putin and verified by an unnamed fisherman who is pretty sure he saw a Russian submarine stirring up the waters off the Outer Banks while he cut bait.
Plotline for Die Hard 5.
Remember one thing : the anchor today to reaction to Pax Americana plays is China, not Putin...
When the dust settles...we will see.
All along it was Barzini...DOn Corleone.
All sounds a bit alarmist to me, Russian tax revenue is not down by that much becuse it's not denominated in $US, this is all stating to sound like a manipulated attack on the Ruble that's all. Russia is a country with massive resources, low external debt, and lots of highly skilled people. All this will end up doing is to make Russians not buy things from overseas because there are too expensive. Internally life will go on as usually, Russians will not go hungry, and the EU will suffer from reduced trade unless it negotiates in some other currency. I see this as good long term for Russia as it will accellerate the ditching of the petrodoallar. Sure, short term will be a mess, but that time will pass quickly. Russia will laugh when the US shale producers are wiped out, and the oil price rebounds from the removal of shale oil from the markets.
Since 2008, there have been numerous mini global crisises that triggered a flight to safety (i.e., the USD/US Debt) while PMs and emerging markets got hammered. Greece scared everyone once and the move was on. Same for a small country in the middle east (was it UAE which had to be bailed out by Dubai or something like that) as well as Cyprus. Then everyone got nervous with the remaining PIIGS but eventually things settled down. My point is that in order to defend the USD, the crisis is getting larger and larger each time and man do we have a dozy now as unlike the prior events, Russia takes this to an entirely different level with their military resources and relationships throughout Europe and Asia.
Honestly, I'm not sure if this is truly a coordinate attack to defeat the ruthless Comrade Putin (and put him back in his cage) or if this situation is completely spiraling out of control as the collateral damage chain is just getting started. What I do know, however, is that an industry as large as the global energy market will inflict serious damage accross the globe as a result of experiencing a 50% decrease in the price of its primary product. There is simply no way this doesn't start to trigger deflationary pressures as the entire collateral chain unwinds which of course will lead to hyper-inflation in select environments.
What's amazing is the speed of which this is occuring and that Russia went from a deflationary collapse (i.e., the value of oil) to hyper-inflation through the loss of faith in its currency. Remember, hyper-inflation is generally preceeded by a deflationary event that leads to a credit crisis and then a currency crisis. Man did Russia get here in a hurry but this isn't Argentina or Zimbabwae, this is a leading military power with significant resources and global alliances that will not sit by ideally. Wow, World War III started this month and nobody seems to realize it as looks like old St. Nick may want to sit 2014 out as everyone is being naughty.
Thanks for your insightful posts, and as a pedantic aside, it was the other way around re: Dubai – it needed to be bailed out by the UAE.
Thanks for the correction as this makes more sense. Just couldn't remember all of the facts but I'm thinking the total potential debt problem was what, something like $10 to $20 billion. Chump change by today's standards as now the game is in the trillions. Wouldn't be nice to return to the good old days of a simple and small debt default by Dubai or Greece's economy imploding? Things were so simple back then.
I take your point, but as this train has been both out of control and accelerating for some time now, I'd rather that the crash comes sooner than later.
If you think this currency crash in the Ruble is about foreign banks and manipulative traders you're wrong.
Russia has a long history of popular politicians, whose popularity is enforced by goons, where neighborhoods compete to sing dear-leader's praise.
A currency is a check written on the Central Bank's collateral. Only some Central Banks exaggerate their collateral. Some (most) outright lie about collateral.
The biggest holders of currency are always the people who save in it, pay bills with it, etc.
So, if you said this is about currency traders, you are right.
Except if you trade stuff for currency - like to buy groceries, furniture, cars, and TV's - in this sense at least you are a currency trader.
So some friends have been renovating their Dacha.
They capped it off with a new TV. They sent their son over to a major retailer in Moscow A FEW HOURS AGO, where they'd bought the TV to pick it up.
He called them back on his mobile. All the TV's are gone.
Dear Leader may be a saint. People may name their children after him, put his picture in their living room, and tatoo his likeness on their private parts.
But when they'd rather put their savings into TVs than Dear Leader's currency, all their effusive praise for Dear Leader rings a bit hollow.
Who cares about a Russian default? We have already declared war which is a big fuck-you to any debt.
The Washington fascist regime (merger of monopoly corporations with government) has successfully launched their dual war offensive against the American People and Russia via the congressional “Christmas” session.
The fascist banksters transferred trillions in debt to the American People via their totally corrupted and criminal puppet Congress without much debate and no fight. American pensions and social services, which all fascist hate, are doomed and Congress has legally signed American People to be debt slaves to the fascist banksters FOREVER.
Amazing isn’t it how EMPIRE fascist work behind the curtain to corrupt democracy, but it is no mystery, their evil criminal methods are always the same, secrecy, militarization, torture, mass murder, extortion, bribery and terrorism. Our Founding Fathers had to deal with this same corporate monopoly bankster fascist group and recognized that fascist are the enemy to democracy and Free Enterprise System of capitalism economy that must be free from corporate monopoly.
The fascist bankster puppet Congress also passed a war with Russia recommendation based on contrived evidence of Russian aggression on the Ukrainian border, then the puppet Congress, passed another war resolution to escalate that war against Russia in the Ukraine: The Ukrainian Freedom Support Act of 2014
https://www.congress.gov/bill/113th-congress/senate-bill/2828
By the actions of their puppet Congress, I would say that the fascist banksters want world war so that they will never be brought to Justice; with war, a total totalitarian state can be declared and decenters can be rounded up and disappeared.
All exceptional and indispensable psychopath fascist dream of EMPIRE and ruling the world by grand tyranny.
Members of Congress are TRAITORS to all Americans and should be arrested and tried for Treason to the American People and our Constitution.
In the case of revolution, Congress critters are going to be on a deck of cards with a bounty on them; think about that Congressman!
Just who do you suggest arrest the agreed upon group of Traitors?
In reply to falconflight: A military coup is about our only hope before revolution. Do you think their oath to defend the American Constitution from aggressors is rendered meaningless?
windcatcher-- something missing: Americans elected every one of their corrupt officials. Our political system doesn't need a reboot-- it needs a full clean install.
Until people are protesting this en masse on the streets, the tune remains "Meet the new Boss, same as the Old Boss".
Everything that would cause people to prefer ANYTHING to Rubles are what precipitated this crisis.
You don't have to have huge debt to have a hyper-inflation.
You don't have to print money like mad to have a hyper-inflation.
You don't have to have lenient credit policies to have a hyper-inflation.
You don't have to have access to alternative currencies to have a hyper-inflation.
SHHHHH!!!!
This is the SECRET.
ALL YOU NEED IS...
...to understand that currencies are backed by nothing but confidence, and then have a lack of it.
The main difference between currencies and money (GOLD) is that such a lack of confidence makes the currencies actually disappear, but Gold, being on the periodic table will still have atomic number 79 no matter what your psychological state, and will spring back.
Russia should just say "Nyet!"
Nyet to the western Zionist banksters, and then start taking only "ounces" for BTUs--that is, ounces of gold.
"Ounces for BTUs bitches!"
An American, not US subject.
The Russians should really call it, "Ounces for BTUs, bitches." It would be funny seeing John Kohn (Kerry) having to say that with a straight, long-face.
Chto?
Vse zdes duraki chto li?
Russia should immediately demand only payment in Rubles for oil. That would strengthen the Ruble.
That'll work. Won't be as much fun, but it'll work.
An American, not US subject.
The other side of the Currency CON-fidence Job is
CON-tagion.
Don't be surprised when this starts taking out dominoes.... which is why I believe it is MASSIVELY more likely a Black Swan than a coordinated attack.
Every time I think, "This is it" - the cue for a systemic collapse of this wreck of an economy built on debts, delusions and bullshit - it magically levitates itself out of an untenable situation and stabilizes in another region of "The new normal" which seemingly appears to be able to last for ages. Look at Japan ffs.
The economy is an animated corpse so diseased with corruption, the movements of parasites within the body give it the appearance of life. But everyone knows it is dead. So the question remains, when will become official? It will be pronounced when the parasites can find someone else to blame for its demise. When they can safely blame external factors to get away with the biggest theft of wealth in history. That is, I'm sorry to say, not hyperbole. Look at the manipulated markets, look at the rehypothecated (outright stolen) wealth of nations, look at the fictional paper commodities and its shadow financial products known as derivatives, look at the blatant Ponzi of debt insurance with no counterparties able to make good on any of their products, look at ZIRP, look at QE, look at the complete dilution of currency, and the corruption at every level of the civil services stealing from the public purse. It's a jaw dropping fiesta of a gangster culture extrapolated to a national level which unfortunately touches everyone on the globe because of the reserve currency status of this one nation gone rogue.
The trick to magic is simple. It is the art of diverting the audience's attention away. So whether this potential Russian diversion will be used is immaterial. It will be this or some other diversion, most likely war from previous events in history, that will be used to hoodwink the suckers once again so that the parasites can latch onto another host to start the whole process again after the lull. The biggest mistake the American people made was allowing the banksters to charge them interest for the privilege of printing their own money for them. It's not as though the megalomaniacs ever made their intentions a secret, but their old thieving ways never included the nuclear war variable.
"Let me issue and control a nation's money and I care not who writes the laws" - Attributed to M.A.Rothschild
"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world." - Attributed to Henry Kissinger
We don't do this nowadays, but as a kid of the late 80's I remember learning about the consequences of a nuclear exchange between the super powers. The crazies really believe they can "survive" it, but the reality is a long nuclear winter fit only for microbes and cochroaches to thrive in radiation produced by thousands of Fukushimas all over the globe. As provocations to war go, this is as extreme as it gets. Actually threatening to starve the Russian population with sanctions, currency trading halts, and military build ups along its borders will bring an epic response. If we don't stop this now, national interests are the least of our worries. It will be humanity itself at stake.
Sounds like you will be surprised tomorrow morning to discover Deutch Bank is leveraged to the hilt in Russia...
And that Deutsch Bank is one of the primary dealers and owners of the Federal Reserve....meaning this crisis is coming to a theater near you.
It is all fun and games until someone loses an eye... A lot of people needed to re-watch "A Christmas Story'.
But attributing God-like powers to the incompetent Nazi's arrayed against you firstly, is self-contradictory, and secondly presumes failure.
They can't be simultaneously God-Like and incompetent, nor can they be God-Like and beatable.
Hence all that is left is to understand that they are deluded, incompetent and evil, which is much more pathetic, but in the context of what has been entrusted to them, much more terrifying.
It is not war, yet. But it will be contagion by morning.
YHC,
The second paragraph is an EPIC description of current market
This is more dangerous than during Cold War I. The cognitive deficient lever pullers in the West are not forced to be rational by any MAD doctrine. They are oblivious to the danger of a nuclear war. And they have put us all at the mercy of the actions of the fascist nazis they installed in Kiev. Our future is riding a knifes edge which almost no-one in the West has any awareness of, and if the worst happens it will in their minds come out of left field. God help us.
the treacherous have dealt very treacherously
read it in a book somewhere
looking for a bilateral unified suprise attack
gets the message accross, no words needed
this game has gone too far
Just announce a gold backed ruble and problem not only solved, but reversed.
strangely enough, your government losing its credit line is a really good thing creating instant opportunities and removing barriers that would be there otherwise.
A ruble collapse will create instant economic opportunity, the state will have to stop funding negative economic activities (this is a really good thing) like building stupid shit and accumulating massive debt.
The real threat isn't Putin, he is by far the least of the problems, the real threat is a nuclear armed broke Socialist Muslim EU with no way out without bloodshed.
The EU is stuck in a Muslim Socialist immigration trap, they cut social spending and their cities burn in jihad.
The final option is to announce the reformation of the USSR. It's not unthinkable.
Is it too early to connect the dots?
1. The CRomnibus bill blatantly guts Dodd-Frank and commits the US people to bail out Wall Street for its derivatives risks. The amendments were even written by Citi. Congress does not even try to hide its sell-out to the banksters. Wall Street seems to be signalling a collapse.
2. Commodities have been crashing for months-copper, iron ore, coal, and now oil. Wall Street has been trading on its own account, buying huge positions in commodities, metal exchanges, oil tankers, oil storage, etc., but has either lost control or has decided to short oil.
3. QE has not led to recovery, it has only kicked the 2008 meltdown down the road, while piling up even higher uncovered debts.
4. Europe is crashing, while the natives get ever more restless. The ECB has no solution, only a call for a repetition of the failed US QE strategy. Japan is speeding up its QE in a race to the bottom in currency exchange rates. Manufacturing is weakening everywhere.
5. The neo-cons continue their manic drives thinking that they are the salvation of America, pushing us ever closer to major military conflicts.
6. Israel goes all out to ethnically cleanse the Occupied Territories, take over Syria, Jordan, and Iraq, and bomb Iran - while forming an alliance with Saudi Arabia.
7. The Saudi reductions in oil prices commenced immediately after they got a visit from John Kerry, allegedly pushing the Saudis to crash the oil price to hurt Russia and Iran. While focussed on hurting Russia, has the US overplayed its hand and shot itself in the foot?
8. The Saudi/OPEC move to push down oil prices seems destined to crash financial houses of cards all over, not least in Wall Street as the Shale junk bonds collapse and the effects reverberate through the financial system in the US.
9. Sovereign debt levels everywhere are far beyond any hope of payment, let alone payment of interest on them if interest rates "normalize".
10. Russia, the BRICS and Shanghai Cooperation Organization countries have been working to de-dollarize and de-NATO-ize themselves for several years now, and their replacement for SWIFT is now in beta testing.
11. Russia refused to play along in Ukraine, Russia has been cut off from the Western capital markets, and attempts have been made to cut off Russia's sales of oil and gas to Europe, or at least impair their profitability. Russia countered by accelerating the move away from the dollar and moving the South Stream Pipeline to Turkey.
12. NATO is busy moving troops and equipment into Ukraine and countries on Russia's western border. Russia is on high alert.
13. China, Russia, and India have been buying gold, while paper gold is used by the West to keep the price down. If the paper market loses control of the price, China and Russia could use their gold to great effect in exchange markets. Do China and Russia have enough financial resources to buy up all the naked shorts and demand physical delivery? Russia probably cannot as long as access to Western capital markets is denied. China holds enough US-denominated assets to deter China from forcing itself to take a loss - and China is still making $billions selling manufactured goods to the US. If, however, the US and EU deflate seriously, what will China do?
14. Putin has, so far, refused to respond in overt military moves to the provocations in Ukraine, the Middle East, and Chechnya, and to the financial moves against Russia. Putin must suspect, if not believe, that the shooting down of MH17 was a misidentification of MH17 for the airliner carrying Putin, and that the "accidental" killing of the Total oil group's chief at Moscow, and the very recent terrorist attack in Chechnya were arranged by the CIA.
15. Putin is under no illusions - the West has declared all-out war on Russia. So far, the war is mostly financial with only limited military action in Ukraine, Chechnya, Syria and Iraq. Putin sees no advantage in an all-out military war. Russia is trying to play a long game, waiting for the Western financial system to crash completely, while Russia absorbs some considerable pain but tries to position itself to come out better in the end.
16. Questions: (a) Can a crash of the Western financial markets be avoided? They look very shaky. Will the Fed resist the call for more QE to rescue the situation? Or is the Fed already frantically buying up equities and bonds in an attempt to stabilize markets?
(b) How low will the price of oil go, and how long will it stay down? After shale and the Canadian oil sands are crushed, will OPEC push up the price, or is OPEC so fractured and the world economy so weak that the oil price cannot be forced up again for a long time? If prices stay way down for 2 years or more, there will be massive financial wreckage everywhere, as even strong companies will run out of capital reserves as operating losses mount.
(c) How long can the US dollar and other fiat currencies hold value? At the moment, their best hope is that the race to the bottom and QE will not lead to their utter collapse.
(d) How much pain can Russia absorb? Russia seems well positioned for the long run, with relatively low debt, large currency and gold reserves, massive natural resources, willing energy markets at its borders, and China increasingly allied to it. China has the financial muscle to bail out Russia if need be, but will China resist the temptation to pick the carcass clean?
Good job, mate.
I think two key dots are the derivatives bailout and the PM circuit breakers. The circuit breakers are there to slow paper's attempt to recouple with physical price once it breaks. The bailout is there to help soak up the blood. The banks were smarter this time to get the bailout approved in advance.
The West knows that overt military conflict with Russia has too great a chance to spiral out of control, and the loss of power and control is what is feared the most by any authority. The West cannot do to Russia what it did to Iraq and Libya when they tried to shake off the shackles of the petrodollar. It must try to accomplish through currency destablization and sanctions what it cannot safely do through brute force - stopping Russia from establishing a viable alternative to the USD for global trade settlement, particularly in energy. The West is squeezing Putin's balls hard and fast to see if he will tap out. He may yet. I hope he doesn't.
re: 13: I think China is smart enough to have positioned itself to minimize the damage that would come from a selloff in USTs. I think they've pledged a lot of their USTs to third parties in exchange for hard assets in Africa and elsewhere. I also wouldn't be surprised if China was using their USTs in support of suppressing paper gold, thereby seemingly helping out the good ol' Fed, whilst simultaneously buying up physical. Once the corks pops globally, the world will reflexively flee into USTs and other USD denominated assets, thereby slowing USD's fall. China can then sell USTs into the panic. So I think it is a safe bet that China would be able to offset its UST losses, if not actually come out on top, though appreciation in physical gold price.
What China is most afraid of is civil unrest, and that any rapid shift away from the current order poses a meaningful risk of internal destabilization. A symptom of this are the ghost cities and massive infrastrcuture projects. They keep people busy, and even if they're not an efficient use of capital in terms from a traditional standpoint, they help channel the steam. I think
I think Russia, China and India are stockpiling gold hand over fist because it will be used as collateral to increase confidence and settle trade amongst themselves (and increasingly others) whilst they work out the kinks and ride out the volatility that will occur at first. Even if any of them have aspirations towards it, which I doubt, Russia and China are not going to try to establish their currencies as the/a new global reserve currency. Russia wants to sell oil and gas in a stable environment that shears the sheep but doesn't skin them. Russia is often portrayed as a thugocracy. Maybe so. But history tells us that the mafia and organized crime syndicates can run markets very efficiently and fairly. (See http://www.newyorker.com/magazine/2014/08/11/crooked-ladder and read down about the Private Sanitation Industry Association and Fulton Fish Market).
I love doomer porn as much, if not more, than the next bloke, but the outcome I see as having amongst the largest probability upon reaching a tipping point of de-dollarization is a skyrocketing cost of oil. I've consistently said on ZH that so long as the US is able to feed itself, we're not going to have uncontrollable, nationwide civil unrest. The nation's largest cities, strategic resource areas, and key industries and infrastructure will be overtly militarized and be subject to martial-style law and repressive control, which will be less prevalent in more rural and less strategic locations. Energy costs will skyrocket and economic activity will crater. Waves of consumer and business bankruptcies. Consolidation of the means of production into fewer and fewer hands, increasingly intertwined with the government.
This crisis will not be wasted. TPTB know the score and can do the math. It will be used to restructure or eliminate countless trillions in unfunded obligations to retirees and pensioners. Much easier to bust the unions and blocks of angry government pensioners and force cuts to their payments when they're wholly reliant upon you for their next meal. The falling price of USTs will facilitate their purchase and cancellation, thereby reducing the national debt back to a more manageable baseline. The goverment will also soak up and remove a large portion of all the excess USD that will be floating around through confiscatory tax rates. Things will stabliize after awhile. At that point, the next iteration of the Matrix can begin. US industry will start producing more and more because the price of Chinese and other imports will make them increasingly unaffordable. Americans' standard of living will have plummeted and become more on parity with that of nations whom Americans previously viewed with self-satisfactory pity and contempt. Within a generation or so, people will tell stories about how hard they had it and how they survived the [insert adjective here] Depression, and how lucky the current generation has it.
And whichever ilk of craven self-appointed geniuses that assume the mantles of Krugman, Bernanke, Greenspan, et al. will assure us from their ivory towers how they have learned from the mistakes of their predecessors and how this time will be different because those mistakes can never again be made.
We talk about Russia and we talk about it being a disaster. But who exactly it is a disaster for?
If you read Russian news and articles by Russian economist, there are many discussions at all angles. But one thing is very clear. The Government know what they doing. Gone are the days of Yeltsin. The new Boss is very clear and makes moves carefully without aggression on his part. Which means none of whats happening is his doing.
The western investors, be they Banks or Corporation or whatever, is pulling their investments out of Russia. Western Banks have also been pulling out the credtis they have been extending to Russian Banks. This is the outflow of US dollars today. Russia would be suffering if it has to find a lot of US dollars. The latest news confirms that Russian Central Bank is not willing to dig into their foreign reserves to "safe" Rubles. The 17% interest rate seems just pretension to care but in effect not.
Western investors are not going back to Russia for 17%. Russian Auhtorities know that. They are only pacifying and rewarding their own oligargs for staying in Russia and not run away.
There is a serious decoupling of Russian economy from western finance, that is in progress. The exchange rates are bad news for western invetsors. not Russia. I have yet to see a clear picture from anyone, on exactly what is bad for Russia in this situation.
News inside Russia points to increase in retail sales. moderate increase in prices leading to again increase in profitability. Increase in local manufacturing running at anywhere between 100% to 400%. My wife in Russia just informed that old factories closed for more than 15 years are being restarted inher region.
What Russia has been hinting hard is that, they are looking for wealthy investors to come and stay in Russia. Not invest and plan for making a killing and bring the wealth back to your own country.
Whatever is happening now, Russisa is fine with it.
The possible after shocks of a Russian default might provide the motive for the sudden change to Dodd-Frank to fully underwrite the TBTF banks.
Russia doesn't appear to be doing too badly relatively.
- a depreciating currency that is apparently stimulating demand at home.
- sure they're locked out of credit markets but Russia doesn't have much debt relatively.
- insulation from the decline in oil because of a crashing currency.
- a leader who is leading and a nation (mostly) unified behind him.
- gold reserves multiplying every year.
The United States on the other hand has:
- a strengthening currency which is killing US exports.
- a massive 18T debt with no plan to handle it and no politician with guts or balls to address the problem.
- a Federal Reserve caught between a rock and a hard place on interest rates... raise rates and the debt becomes unsustainable.. don't raise rates and crash the bond market.
- a major problem with oil sensitivity. The shale folks are toast and getting toastier.
- A leader who does not know how to lead and a nation deeply divisively divided over every major issue that makes a nation stable, prosperous, and great.
- unverifiable gold reserves and a fractional reserve banking system that sees gold as Kryptonite Anathema.
exartio.....I guess it was worth saying twice, I am no friend of Russia, however I don't like seeing peoples lives destroyed because they won't do what the US corporations that run the world want.
Russia doesn't appear to be doing too badly relatively.
- a depreciating currency that is apparently stimulating demand at home.
- sure they're locked out of credit markets but Russia doesn't have much debt relatively.
- insulation from the decline in oil because of a crashing currency.
- a leader who is leading and a nation (mostly) unified behind him.
- gold reserves multiplying every year.
The United States on the other hand has:
- a strengthening currency which is killing US exports.
- a massive 18T debt with no plan to handle it and no politician with guts or balls to address the problem.
- a Federal Reserve caught between a rock and a hard place on interest rates... raise rates and the debt becomes unsustainable.. don't raise rates and crash the bond market.
- a major problem with oil sensitivity. The shale folks are toast and getting toastier.
- A leader who does not know how to lead and a nation deeply divisively divided over every major issue that makes a nation stable, prosperous, and great.
- unverifiable gold reserves and a fractional reserve banking system that sees gold as Kryptonite Anathema.