Russia Ministry of Finance is ready to greenlight a plan to radically increase the role of the Russian ruble in export operations while reducing the share of dollar-denominated transactions. Governmental sources believe that the Russian banking sector is "ready to handle the increased number of ruble-denominated transactions". According to the Prime news agency, on April 24th the government organized a special meeting dedicated to finding a solution for getting rid of the US dollar in Russian export operations. Top level experts from the energy sector, banks and governmental agencies were summoned and a number of measures were proposed as a response for American sanctions against Russia.
Update: And just to make sure Russia has a catalyst: UKRAINE FORCES ATTACK EASTERN CITY OF SLOVYANSK, INTERFAX SAYS
With the US having voiced its support for Ukraine's "anti-terrorist" operations, and Russia strongly supportive of pro-Russian people's decisions to regional self-determination, the threats coming from the newly independent regions are a concern (that markets clearly do not care about):
*DONETSK ARMY SAYS WILL FIGHT UKRAINE FORCES IF DEADLINE IGNORED
Ukrainian military forces have 48 hours to leave the region or Donetsk own "anti-terrorist" forces will fight. Of course, with the US already saying the referendums are illegal and not recognizing them, we suspect it will be time for more sanctions soon (despite the lessons below).
- Hillary and Me: The 2008 campaign was a nightmare. Will 2016 be as bad? (Politico)
- What Timothy Geithner Really Thinks (NYT)
- Rebels declare victory in east Ukraine self-rule vote (Reuters)
- Race for AIG's Top Job Has Two Favorites (WSJ)
- America on the Move Becomes Stay-at-Home Nation for Millennials (BBG)
- Old, Fired at IBM: Trendsetter Offers Workers Arbitration (BBG)
- Bad luck Jonathan: Pressure Mounts on Nigerian President (WSJ)
- Iran leader slams West's 'stupid' missile stance before talks (Reuters)
- Conchita Wurst of Austria Wins Eurovision Song Contest (WSJ)
- Greek Finance Ministry expects Q1 GDP contraction of less than 1.5 pct (Kathimerini)
One can’t help but look at the situations transpiring around the globe and hope: things are different this time. The problem is being different puts it right back in line with that other caveat: history doesn’t repeat itself, but it does rhyme. And so lies the most troubling aspect facing not only the U.S. economy, but quite possibly the world as whole. For if things rhyme anything inline with past events in history: We’re all in a dung heap of QE based minutia, with Geo-political ramifications the “intellectual” crowd never contemplated as possible – let alone probable.
If We Don’t Learn Our History … We May Very Well Blow Off Our Own Foot
The US approach to the Russia/Ukraine situation reflects a serious misunderstanding of the situation. Russia has little choice but to try to raise the price of products it is selling, any way it can. It needs to cut out those who cannot afford its products, including the Ukraine. If Europe increasingly cannot afford its products, Russia needs to find customers who can afford them. There is little chance that the United States is going to be able to help Europe with its natural gas needs in any reasonable timeframe. Our best chance at keeping the global economy “working” for a little longer is to try to keep globalization working as best we can. This will likely require “making nice” to countries we are unhappy with, and putting up with what looks like aggression. Policymakers like to think that the US has more power than it really does, and like to encourage stories suggesting great power in the press. Unfortunately, these stories are not true; we need policymakers who understand our real situation
...What’s left for the Empire of Chaos is to pray for chaos to keep spreading across Ukraine, thus sapping Moscow’s energy. And all this because the Washington establishment is absolutely terrified of an emerging power in Eurasia. Not one, but two – Russia and China. Worse: strategically aligned. Worse still: bent on integrating Asia and Europe. So feel free to picture a bunch of Washington angry old men hissing like juvenile delinquents: “I don’t like you. I don’t want to talk to you. I want you to die.”
China is already Iran’s largest trading partner and oil customer and Iran is China’s third largest oil provider... and this week Iran and China’s Defense Ministers vowed to boost military ties following a meeting in Beijing on Monday. Chinese officials noted that "common views over many important political-security, regional and international issues, Beijing assumes Tehran as its strategic partner."
As tensions between all parties in Eastern Europe boil over, Chris Martenson provides a brief tour through just some of the antics surrounding the US' involvement in bringing about change (you can believe in!) in Ukraine. We raise these items to counter the usual clutter and complete lack of context being provided in the US press and to illustrate that the US is already in pretty deep and therefore unlikely to back down now. Before we move on, do you not find it at all strange that the US media, usually extremely sensitive to anti-semitism, has given the McCain and Nuland support of the Svoboda party a complete pass? I find it to be like the case of "the dog that did not bark", meaning the silence reveals a very fickle moral compass at the heart of the western press. The demonization of Putin as the bad guy here is near complete in western media. But there’s plenty of mischief all around and, as usual, the US finds itself with some pretty strange bedfellows as it seeks an outcome it likes.
Oil prices have increased recently as tension in Ukraine has escalated and raised concerns about the risks of disruption in Russian energy exports. There is a risk that the security situation in the east Ukraine will worsen even further ahead of the 25 May elections. As Nordea notes, Russia is as important an oil exporter to Europe (of both crude and refined products) as it is a gas exporter, and the consequences of a cut in Russian oil supplies could be as grave since the global oil market has little back-up capacity to lean on. As a result, a halt in the oil deliveries from Russia to Europe will spark a sharp spike in oil prices (potentially to $150/bbl) and in a worst case scenario an oil crisis and European recession (and major slowdown in global growth) and US shale oil or an SPR release will prevent the spike.
Polls: Americans Are Sick of the War On Terror, War On Drugs ... And All of the Other Failed U.S. WarsSubmitted by George Washington on 05/01/2014 20:42 -0400
"Americans In Large Numbers Want the U.S. to Reduce Its Role In World Affairs Even As a Showdown with Russia Over Ukraine Preoccupies Washington …."
This is an impressive, comprehensive analysis of the February 2014 Ukraine coup from the perspective of a senior Russian academic. It details the interests and affiliations of the main Ukrainian domestic players - oligarchical clans many of whose leaders have dual nationality - with some shocking and little known detail. It exposes the glaring hypocrisies and double standards of the western sponsors of the coup and their Russian/Ukrainian '5th Column traitors'. It sees the coup and Russia's successful incorporation of Crimea as major game-changing events in the on-going, US-lead post-WWII machinations of the West to subdue Russia to its own agenda and outlines how Russia should now respond. All-in-all a must-read for westerners needing to understand what is really happening in both the Ukraine and the wider Anglo-US-NATO globalisation drive which it brings into sharp focus
- Headline of the day goes to... Cold weather seen temporarily slowing U.S. economy (Reuters)
- Americans Want to Pull Back From World Stage, Poll Finds (WSJ)
- U.S. Plans to Charge BNP Over Sanctions (WSJ)
- What about Jay Carney: Putin Threat to Retaliate for Sanctions Carries Risks (BBG)
- Fed expected to take further step toward ending bond buying (Reuters)
- A Fed-Watcher’s Guide to FOMC Day: Steady Taper, Green Shoots (BBG)
- Alstom accepts 10 billion euro GE bid for its energy unit (Reuters)
- BOJ projects inflation exceeding 2 percent, keeps bullish view intact (Reuters)
Isolated Russia Makes Friends: To Hold Military Drill With China; Strikes Multi-Billion Deals Qatar And IranSubmitted by Tyler Durden on 04/29/2014 17:24 -0400
The G-8 may be no more as the G-7 throws every possible case of harsh language known to man at the Kremlin, which obstinately refuses to back down, while re-escalating sanctions against a Russia which merely has done what the US does every single time its national interest abroad is threatened, but one thing is becoming ever clearer: while the west isolates Russia with ever stricter measures, Russia has decided to make some new friends.
Silver is undervalued when compared with gold, platinum, palladium, base metals including copper, oil, stocks (S&P, DJIA, Nasdaq etc) bonds and the U.S. dollar ... There are very few, if any assets that remain at the same price levels that they were more than 30 years ago ...