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Is Russia Being Driven Into the Arms of China?
Is Russia Being Driven Into the Arms of China?
The “isolation of Russia” idea is one which has been receiving a lot of traction of late. Russia’s recent economic woes have sometimes been covered with barely contained glee despite the hardships that average Russians may have to endure if the rouble continues to collapse … not to mention the inevitable geopolitical backlash.
Reuters image of the over 50% drop in the Rouble against the U.S. dollar
Russia has become isolated from its western neighbours on account of the putsch in Ukraine which led to the predominantly ethnically Russian Crimea seceding from Kiev through a democratic process.
European governments slavishly adhere to U.S. imposed sanctions. So from a western elite point of view, Russia is indeed isolated.
Whether antagonising Russia is damaging to Russia is a moot point. Certainly in Russia’s current straits the bankrupt west is in no position to help. European farmers are suffering from a loss of export markets while Europe is still dependent on Russian natural gas.
So how “isolated” is Russia in reality?
Firstly, it is worth pointing out the obvious fact that countries do not have “friends”, just “interests”. Representatives of countries may have good relationships but these are built on expediency – not friendship.
So while there may be a great deal of distrust between the major powers of Asia, these issues are being overlooked for now because it is expedient. Standards of living across the board have been rising in Asia for twenty years. It is in no country's interest to enter into conflict.
By contrast, the west – led by the U.S. – has seen a remarkable fall in living standards over the same period. The bubble, prior to the 2008 crash, was not a golden-age for families as increasingly both parents were forced to work to just afford a roof over their heads.
Premier Li Keqiang at Moscow’s Tomb of the Unknown Soldier during his Russian trip in October
The relationship between Russia and China has morphed with these changes. Russia supplies China with hi-tech military hardware. Russia has negotiated two major natural gas deals with China in the last year. China expects to double it’s gas usage by 2030. So from a Chinese point of view it is certainly expedient to keep Russia on its side.
China may soon come to Russia’s aid and provide liquidity according to the South China Morning Post:
“Russia could fall back on its 150 billion yuan (HK$189.8 billion) currency swap agreement with China if the rouble continues to plunge”.
If the swap deal is activated for this purpose, it would mark the first time China is called upon to use its currency to bail out another currency in crisis. The deal was signed by the two central banks in October, when Premier Li Keqiang visited Russia.
“Russia badly needs liquidity support and the swap line could be an ideal tool,” said Bank of Communications chief economist, Lian Ping.
The swap allows the central banks to directly buy yuan and rouble in the two currencies, rather than via the U.S .dollar.
This highlights the long-term error of the west – pushing Russia into China’s sphere of influence.
For the first time in fifty years a country may be bailed out using a currency other than the dollar.
This, possibly, paves the way for the Chinese yuan to assume the role of a global reserve currency.
Also, it is worth noting that a weak Russia is not in China’s military interest at this time of simmering geopolitical tensions.
In the event of problems in the international monetary system, sellers of tangible wealth will want payment in a currency with some intrinsic value.
GoldCore Insight: Currency Wars: Bye, Bye Petrodollar – Buy, Buy Gold
MARKET UPDATE
Today’s AM fix was USD 1,210.75, EUR 982.03 and GBP 773.64 per ounce.
Yesterday’s AM fix was USD 1,199.00, EUR 962.36 and GBP 763.16 per ounce.
Spot gold fell $7.40 or 0.62% to $1,188.90 per ounce yesterday and silver rose $0.03 or 0.19% to $15.77 per ounce.
Spot gold in London rose over 2% after the Federal Reserve stated yesterday that it would take a patient approach towards increasing interest rates. This led to rising stock and commodities markets and hurt the U.S. dollar.
Gold in Singapore rose nearly 1% to $1,202.08 an ounce, and traded at $1,201.11 at 2:49 p.m. in Singapore, noted Bloomberg.
U.S. Fed chief, Janet Yellen, said the Fed was not likely to raise rates for “at least a couple of meetings”, this has market participants focused on April 2015.
In London, spot gold climbed 1.8% to $1,209.46 an ounce after 1040 GMT.
Comex U.S. February gold was up 1.3% at $1,209.90 an ounce. Spot silver gained 3.2% to $16.19 an ounce.
Spot platinum was up 2.2% at $1,212.60 an ounce, while spot palladium rose 1.8% to $789.63 an ounce.
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http://www.zerohedge.com/news/2014-12-18/russia-has-begun-selling-its-go...
Russia is selling its gold. Please shut up Goldcore, you've been lying for years to your readers.
There is no shortage of physical gold to complain about, there never has been, and there is a couple hundreds of the 1000 tons (that Russia owns) on offer from Mr Putin at 1200$/oz
If any ZH'ers want to buy any of it, please do, you can do it right here right now in size...@1200$
But, Gold may be going to 700$ as the US will raise interest rates, like it or not... better to be dumb and sell gold than being smart and poor.
buy it back when the FED is done hiking rates. Don't cry when it happens and say you weren't warned.
The Americans have a love affair with China and hate Russia so they over-estimate one and under-estimate the other. They think they are a Pacific power and treat Europe as a holiday camp with Butlins redcoats running most of the facilities across the continent and serving breakfast at one government conference or another - Merkel, Blair, Cameron, Hollande, Renzi, Rajoy, Tusk and any other servile puppets they have kept in place.
War with Russia is where German families lost their own - where Kohl lost his brother, where Schroeder lost his father, where millions of German parents dying in the 1960s had the names of their 'MIA in Russia' sons on their own headstones.
The German public knows who is stirring this pot and who will pay the price. How many Germans this Christmas will lose their jobs as orders dry up, contracts with Russia lapse or subs and agencies in Russia fold. German toolmakers had Russia as No4 market in 2013
http://vineyardsaker.blogspot.com/2014/11/absolutely-crucial-statement-b...
Standard Disclaimer: This business will get out of control. It will get out of control and we'll be lucky to live through it.
' it would mark the first time China is called upon to use its currency to bail out another currency in crisis’
The Chinese currency is pegged to (by?) the dollar.
The Chinese will be the liaison between the ‘West’ and Russia.
Or is the dollar pegged to the Yuan LOL
The current US policy of simultaneously antagonising both China and Russia will likely go down as one of the 21st century's more significant strategic miscalculations. Assuming of course that it is a part of some stratgy and not just bumbling incompetance.
Hey, just following orders apparently.
Israeli Prime Minister, Ariel Sharon, October 3, 2001-
“Every time we do something you tell me America will do this and will do that . . . I want to tell you something very clear: Don’t worry about American pressure on Israel. We, the Jewish people, control America, and the Americans know it.”
Russia going to China for help is no different than a business owner going to Tony Soprano for some assistance. There's no coming back. And in both cases they're asking absolute garbage to do them a favor. The Chinese have some wonderful qualities; benevolence is not one of them.
The "businessman" has more weapons than the "mafia" in this case -- and more territory.
You're implying that Russia (the businessman) could just kick China's (Tony Soprano's) ass if things go sideways? Good luck with that. It's China, dude. Right next door. With nearly 3 Million in the PLA and also backed up with nuclear weapons. Even Putin isn't stupid enough to get too froggy with the Chinese.
Vietnam kicked China's ass after the US was sent packing. It was not even the Vietnamese Army or NVA but their milita.
The Vietnamese army was in Cambodia kicking Pol Pot's ass. China backed Pol Pot.
https://www.youtube.com/watch?v=v_3peM4yoa4
The Vietnamese are a tough bunch like the Russians.
Freddie;
During that short war between China and Vietnam, the borders between Vietnam and China changed in China's favor. To keep it simple, the borders went from the Chinese side of mountains and rivers to the Vietnames side. This was of tactical, but not strategic, importance.
(The Chinese did exactly the same thing along the battle line separating North and South Korea in 1953. Pork Chop Hill was just one of those fierce battles which seemed so unimportant to the Americans, who had complete control of the air. But the Chinese wanted to be able to look into the South in order to be better prepared should war resume. Once they had "the high ground" along the entire front, the truce was signed.)
At the time that China attacked Vietnam, the NVA was on the offensive against the Khmer Rouge. Red China was -still is- the only ally that these crazy fanatics had; and the NVA was really serious about breaking their reign of terror. But it so happened that Vietnam withdrew from Cambodia after China attacked and did not resume their offensive after the war in the North stopped.
Anachronism
That was in 1979. It's almost 2015 now. China would go through Vietnam like shit through a goose if both sides gave it their best today. The worst part is the U.S. is stupid enough to jump into a war like that on Vietnam's side for a whole host of bad reasons. But a person should never put anything past American politicians who love a good war........"because it's good for business". SMH
LBJ and the French probably thought the same thing about Vietnam.
. . . works both ways - a MAD situation is very different from a businessman and Tony Soprano. I would give the strong edge to Russian in a nuke exchange. Also that's a whole lot of Taiga for those 3 million to cross with no supply lines.
No one wins in a nuclear exchange. Radioactive isotopes in the upper layers of the atmosphere isn't in anyone's interest. It damages genetic material. Anyone's. The second and third generations will feel the full brunt.
In other words... it is still madness.
The very same people are in charge as back then. In the nineties there was a brief opportunity to get rid of all nuclear weapons in active service.
That chance was ruined, wasted.
Please watch this? It (Dr. Strangelove) was not a fictional movie. It was a very accurate description (with some humor) of very much insane men (that still control the most powerful weapons on the planet. Nuclear football? 00000).
https://www.youtube.com/watch?v=iJ6BiRtGTAk
You're delusional. A nuclear war for what? Ridiculous. Besides, China would deep six Russia financially instead of lobbing missiles. It would be a financial problem with financial pressures brought to bear. You think Putin's ass is in a sling now? Pile China on top of him too and the Russian people and the oligarchs would make sure his ass was gone ASAP.
Let's see
China and Russia are allies in the BRICS agreements
China and Russia have currency swap agreements
China and Russia have an huge oil deal, 2 actually
China and Russia share borders
China and Russia are the object of offensive talk by the USA
China and Russia form the nucleus of many other countries disturbed by US behavior in international relations and manipulation of the monetary system
SOOOO. I guess they are buds, not sure 'driven into the arms of' describes what is happening but like almost every other country on the planet they are both trying to distance themselves from us policy and minimize the damage to themselves in the coming demise of the dollar.....oh..one more thing...they both value gold...but then most CBs besides the Fed do.
This is nothing new, merely a return to what was "normal" 50 years ago. Here's a history lesson for some of you young pups.
There was a time, in the 50's and early 60's, when the communist bloc included China. Russia and China both supported the North Koreans in the Korean war for example, and Russia sold a lot of military hardware to Red China (which China then reverse engineered, thank you very much).
Then they had a falling out in the 60s, and even some border clashes that people feared could ignire World War 3.
These 2 communist powers have been getting steadily closer over the past 20 years, so this is nothing new. What is new is that the West has finally given up on trying to woo Russia closer and decided to exact a price for their treachory. Forget Obama's reset. It's the new cold war, but no one wants to say it.
"What is new is that the West has finally given up on trying to woo Russia closer and decided to exact a price for their treachory. "
Are you out of your f*cking mind? The 'West' has reneged on every post_soviet deal and been provoking Russia non-stop for the last 15 years at least.
What treachery?
Russians have been defending at their borders all this time since WWII - the USA is all over the world as economic mercenaries
China will support the currency and the purchase of oil production
the USA is over
Currently, they both need each other:
"It appears that the SCO formation in 2001 was another tactical win by the Sino-Russian block, against the - occupied with the war on terrorism - West, to be used against future plans by the global neoliberal dictatorship, which would probably include the dissolution of the vast Russian territory and the dangerous isolation of China by land and sea."
http://failedevolution.blogspot.gr/2014/09/cold-war-20-chinas-moves-to-a...
What a nightmare! This stupid policy has to be put on Obama. He doesn't seem to remember history. Many Americans cringe when they think about the billions of dollars of consumer goods we import from China every month, but what makes it even more bizarre is that China is an American make product. Decades ago America started down a perilous path to build China into a world power.
Decades ago a pathological fear of Russia and the Kremlin’s atheism caused America to seek a counter balance in the region. Central to the American effort was offering the prospect of economic incentives to China, we combined this with a hardline military response to communist aggression. Ironically, it was the China’s communist longevity the Washington wise men should have feared more. The article below delves into how and why America made China into the economic giant it is today.
http://brucewilds.blogspot.com/2012/09/china-made-by-america.html
On another note, Obama wants to be Cuba's new best buddy, anyone get the feeling this is about keeping Russian ships and troops out?
So transparent it's laughable.
Actually, who is Venezuela's bestest buddy?
Who would you like neutralized if you wanted to take out Venezuela?
Who has massive offshore gas and oil reserves that one would like to buy into before China does?
Three guesses. Hint: Cigars
The banksters need to repay us.
Why do conflict news writers - mainstream and wannabees - continually, constantly and without let-up - always point to "wars" are not likely because wars are not in the country's "best interest"? Of course not you dimwits! But wars are never determined by a citizenry. They are precipitated by government leaders to BETTER THEMSELVES! Never what's in the best interest of its citizens. Start there knowing this, and go forward.