The Biden, Obama, Soros Cabal, May Be Smart, But Not as Smart as Putin

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Doka
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The Biden, Obama, Soros Cabal, May Be Smart, But Not as Smart as Putin

Post by Doka » 04-09-2022 11:50 AM

The More Russia is Sanctioned the stronger it gets!


Today's Top Stories From the Breitbart News Desk

So what was the world's best performing currency of the past month?

You guessed it: the Russian ruble. After plunging to 139 rubles to the dollar on March 7, the ruble staged a dramatic comeback to around 80 rubles to the dollar. That's only slightly weaker than where it was for almost all of last year. The recovery is equally impressive when compared with the euro. At the end of February, it took 89 rubles to buy a euro. In early March, that climbed to around 145 rubles. Now it is down to 87.32.

On Friday, the joke among foreign exchange traders was that the Russian central bank was going to have to cut interest rates to keep the ruble from getting too strong and making its exports too expensive. That's unlikely, but the point is important: the sanctions on Russia were intended to cripple its currency on the global market in order to weaken Vladimir Putin's economy. The recovery indicates that the sanctions, even as they have been strengthened both by official measures and private companies renouncing business ties with Russia, are not working as advertised.

The biggest reason for this, of course, is natural gas. Russia began to demand recently that Europe pay for natural gas in rubles instead of euros. So far, only Hungary has announced its intent to comply with this, but it's far from clear that the rest of Europe will be able to hold out. That would create a demand for rubles, especially from places where most of the saving is in euros. So the euro will fall against the ruble. Since markets are anticipation engines, that has already begun in advance of European capitulation on the currency issue.

Russia is likely to demand ruble payments not only for natural gas sent to Europe but also for oil and food commodities, such as wheat and corn. This will increase global demand for the ruble. In fact, it will strengthen both the hands of Russian financial institutions and, ultimately, Putin's government. Those buying commodities in rubles will have to turn to Russian banks for financing (as Russian bank loans are the source of rubles) and will seek to export more to Russia to obtain rubles. This will create an alternative to the eurodollar system for countries that either must be—or decide to be—closer to Russia and away from what we're calling the West again.

That is likely to ultimately lead to strengthening demand for Russian government bonds from Russian banks and exporting countries. China, in particular, may find this especially helpful. It could even decide it wants to foster a ruble-backed alternative global currency system as part of a long-term strategy to supplant the United States. Certainly, China might decide to hold Russian bonds to diversify away from its U.S. Treasury holdings.

This will not just be about financial flows. This will change real flows of goods and commodities. Shifting natural gas and oil flows from west to east, from Europe to China, will create competition for ships and likely drive up the price of shipping globally. Europe will be more reliant on oil from Saudi Arabia—the U.S. has almost no mechanism to ship oil to our east coast ports for export to Europe—which will mean shipping through the Suez Canal. As Credit Suisse's Zoltan Poszar recently pointed out, the world is likely facing "a severe shortage of vessels capable of moving oil cargo on long distances." As a choke point, Egypt could raise canal fees or even demand to be paid in rubles so that it can buy Russian wheat.

What we have described here is the destruction of globalization and the fragmentation of the global economy into competitive but somewhat isolated trading groups. This will likely be uncomfortable for those who benefitted the most from the system that had been in place, particularly western financial elites and corporations who became dependent on Chinese manufacturing. If China refocuses on either exports to Russia or its internal market, its demand for dollars and supply of goods to the U.S. will weaken. Jobs will have to be reshored, domestic factory production restarted, and domestic investment grown. So this could turn out to be a great time for American workers.

Much of this has been brewing beneath the surface of world events for some time. The Russian invasion of Ukraine may turn out to be the catalyst that gets the engines of change running at higher gear.
KARMA RULES

Those Who Can Make You Believe Absurdities, Can Make You Commit Atrocities': Voltaire

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Re: The Biden, Obama, Soros Cabal, May Be Smart, But Not as Smart as Putin

Post by Doka » 04-09-2022 12:16 PM

With the help of our great mind disolving leaders, Economically they have put Russia in a postion of great economic power. Of which not even, the sex changing, skin color, obsessed, mind killing, fear mongering Cabal won't even be able to survive. When you can't get rid of a life threatening mind eating fungus, you have to find a way to deal with it that gets it's "Attention" And believe you me "Economics" is an "Universal Attention getter.
KARMA RULES

Those Who Can Make You Believe Absurdities, Can Make You Commit Atrocities': Voltaire

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When (If Ever?!) Will The West Wake Up & Smell The Coffee?

Post by Riddick » 04-09-2022 01:24 PM

Image
A mind should not be so open that the brains fall out; however, it should not be so closed that whatever gray matter which does reside may not be reached. ART BELL

Everything Woke turns to Image
-Donald Trump Image

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