The world is still hell-bent for hydrocarbon-based energy. Russia is one of the world’s largest producer of energy. Russia has recently announced that in the future she will no longer trade energy in US dollars, but in rubles and currencies of the trading partners. In fact, this rule will apply to all trading. Russia and China are detaching their economies from that of the western financial system. To confirm this decision, in July 2014 Russia’s Gazprom concluded a 400 billion gas deal with China, and in November this year they signed an additional slightly smaller contract – all to be denominated in rubles and renminbi.
By Peter Koenig
The remaining BRICS – Brazil, India and South Africa – plus the members of the Shanghai Cooperation Organization (SCO) – China, Russia, Kazakhstan, Tajikistan, Kirgizstan, Uzbekistan and considered for membership since September 2014 are also India, Pakistan, Afghanistan, Iran and Mongolia, with Turkey also waiting in the wings – will also trade in their local currencies, detached from the dollar-based western casino scheme. A host of other nations increasingly weary of the decay of the western financial system which they are locked into are just waiting for a new monetary scheme to emerge. So far their governments may have been afraid of the emperor’s wrath – but gradually they are seeing the light. They are sensing the sham and weakness behind Obama’s boisterous noise. They don’t want to be sucked into the black hole, when the casino goes down the drain.
To punish Russia for Ukraine, Obama is about to sign into law major new sanctions against Russia, following Congress’s unanimous passing of a recent motion to this effect. – That is what the MSM would like you to believe. It is amazing that ten months after the Washington instigated Maidan slaughter and coup where a Washington selected Nazi Government was put in place, the MSM still lies high about the origins of this government and the massacres it is committing in the eastern Ukraine Donbass area.
Congress’s unanimity – what Congress and what unanimity? – Out of 425 lawmakers, only 3 were present for the vote http://www.informationclearinghouse.info/article40489.htm. The others may have already taken off for their year-end recess, or simply were ‘ashamed’ or rather afraid to object to the bill. As a matter of fact, of the three who were present to vote, two at first objected. Only after a bit of arm-twisting and what not, they were willing to say yes. This is how the ‘unanimous’ vote came to be, as trumpeted by the MSM – unanimous by three votes! The public at large is duped again into believing what is not.
What new sanctions does this repeatedly propagated bill entail? – It addresses mostly Russian energy companies and the defense industry with regard to sales to Syria, as well more anti-Russia propaganda and ‘democratization’ programs in Ukraine – and Russia; all countries with the objective for regime change.
How do these sanctions affect Russia, especially since all Russian energy sales are no longer dollar denominated? – Sheer propaganda. The naked emperor once more is calling an unsubstantiated bluff. To show his western stooges who is in power. It’s an ever weaker showoff.
Now – as a consequence of declining oil prices and of western ‘sanctions’ – of course, what else? – Russia’s economy is suffering and the ruble is in free fall. Since the beginning of the year it lost about 60%; last week alone 20%. As a result and after serious consideration, says MSM, the Russian Central Bank decided a few days ago to increase the interest of reference from 10.5% to 17% to make the ruble more attractive for foreign investors. It worked only for a few hours. Raising the interbank interest was Putin’s reply to Obama’s bluff – feeding at the same time western illusion about Russia’s decline.
The propaganda drums tell you Russia is helpless because the world has lost the last bit of confidence in President Putin – of course. Regime change is on the agenda. Mr. Putin must be blamed as the culprit, hoping to discredit him with his people. He is leading Russia into a deep recession; the worst since the collapse of the Soviet Union. The mainstream media show you interviews with average mainstreet Russians saying they have lost all their savings, their salaries and pensions are worth nothing anymore and they don’t know how to survive this coming calamity.
In reality, at least 80% of the Russian population stands solidly behind Vladimir Putin. He has brought them universal education, health care and fixed infrastructure that was decaying after the fall of the Soviet Union. President Putin is literally revered as a hero by the vast majority of Russians – including the country’s oligarchy.
In fact, nobody in the western economic system these days is dealing in rubles. In short-sighted connivance with Washington, the treasuries of the western vassals are releasing their ruble reserves – which Russia does not buy, thereby flooding the market. Russia not only has large dollar reserves, plus the ruble is backed by gold, a fact consistently omitted in the MSM. For now, Russia prefers to let the ruble plummet.
Under another ‘arrangement’ by bully Obama, Middle Eastern oil producing puppets like Saudi Arabia and the Gulf States are overproducing and flooding the market with petrol and gas, thereby driving the price down to the ostensible detriment of Russia and Venezuela, both countries where Washington vies for regime change. A double whammy thinks Washington, buying kudos with the stooges. The sheiks that control their energy output apparently have been promised enough goodies from Washington to bite the bullet and take their own losses.
Russia needs rubles. That’s her currency. That is the currency Russia needs for future trading – detached from the western monetary system.
When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, euros and other western-allied currencies – and gold. Let’s not forget, the ruble is backed by gold. By now we know what flooding a market with currencies may do to these currencies – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, no by Washington style arm-twisting.
Surely, Russia is not interested to cause the sudden destruction of the dollar-linked financial world. She is not interested in a sudden death of the many countries that are potential new trading partners in a new monetary system. Instead, the fall of the western economy of deceit may be planned as a gradual slide, so that countries have time to switch – switch their reserves to rubles, yuans and other BRICS and SCO currencies. This move is on its way. Only ten years ago, dollar denominated securities constituted 90% of reserves worldwide. Today the rate is 60% and declining.
After all, perhaps as Plan B, there is also a pact of monetary alliance between Russia and China. China holds currently about 1.5 trillion dollars and in total more than 3 trillion dollar equivalent in western currencies – and undefined but huge gold reserves. Chinese, BRICS and SCO solidarity with Russia is a solid security for the ruble. Imagine – the first major action of the new BRICS Development Bank with a current capital base of 100 billion dollars would launch a massive ruble rescue operation. No worries, Russia’s economy is on firm course.
The question begs – is this gigantic ‘engineered’ ruble devaluation scheme another precursor to war? A nuclear confrontation or Cold War II? – Precursor to another western, Washington-driven false flag attempting Moscow to fall into a lethal trap? – Not necessarily. Russia is playing a clever chess game, diplomacy at its best. Instead of sabre rattling – Russia is coin rattling. It might lead to a western financial fiasco early in 2015 for the dollar and euro denominated economies. And the winner is…?
The statements, views, and opinions expressed in this article are solely those of the author and do not necessarily represent those of EMerging Equity.
Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, the Voice of Russia, now Ria Novosti, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.
Courtesy of Global Research
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© Peter Koenig, Global Research, 2014