Unfortunately, the sanctions the US put on Russia do not appear to be harming Russia at all, even as they are furthering the destruction of the economy of the West, and setting the stage for a collapse of the dollar as reserve currency.
Russia has just announced that if Europe wants its oil, they’re going to have to pay in rubles. This will heavily reinforce the ruble, of course. Presumably, it will make up for most or all of the damage that the sanctions have caused.
RT:
Russia will now accept payment for gas exports to “unfriendly countries” in rubles only, President Vladimir Putin said at a meeting with the government on Wednesday.
The president explained that Russia plans to abandon all “compromised” currencies in payment settlements. He added that illegitimate decisions by a number of Western countries to freeze Russia’s assets destroyed all confidence in their currencies.
“I have decided to implement in the shortest possible time a set of measures to change the payments for – yes let’s start with this – for our natural gas supplied to the so-called unfriendly countries in Russian rubles, that is to stop using all compromised currencies for transactions,” the Russian president said.
“It doesn’t make sense to deliver our goods to the EU and the US and get paid in dollars and euros,” he added.
For those who don’t know the details: it is impossible for Europe to shut off Russian gas any time soon. They will literally freeze to death, or have to figure out some kind of wooden steam system.
People were saying Russia might just shut off the gas and let Europe deal with the situation, but this is much better.
The ruble bottomed out on March 7, and has been largely recovering. It’s only down 13% over the month of war.
#1: Pinguinite To: Ada (#0)
Apparently the average ruble price for the 6 months prior to the war was 1.4 cents. It dropped to a low of about 0.75 cents, and right now it's about 1 cent. So it's recovered a lot but is still down about 28% from its pre-war price level. The 13% figure seems to be comparing it to immediately before the invasion at which time it had already begun its slide so that figure seems unfair.
But by pricing Russian energy in rubles, Russia has created the "energy ruble" to compete with the "petro dollar. Putin may yet score a huge "David vs Goliath" victory if these sanctions blow back with such force so as to bring down the mighty dollar. If that happens then Putin will create for himself fame fit for a legend for the next 500 years.
Pinguinite posted on 2022-03-25 01:57:42 Reply Private Reply