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The First Domino Falls: Slovakia WILL Pay for Russian Gas in Rubles
Slovakia will pay for Russian natural gas in rubles if that’s what it takes to keep the commodity flowing, Slovak Economy Minister Richard Sulik has said on national television.
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Russian President Vladimir Putin’s presidential decree on new payment terms for energy products, predictably, was misunderstood by the collective west. The Russian government is not exactly demanding straightforward payment for gas in rubles. What Moscow wants is to be paid at Gazprombank in Russia, in its currency of choice dollars or Euro, and not at a Gazprom account in any banking institution in western capitals.
That’s the essence of less-is-more sophistication. Gazprombank will sell the foreign currency – dollars or euros – deposited by their customers on the Moscow Stock Exchange and credit it to different accounts in rubles within Gazprombank.
What this means in practice is that foreign currency should be sent directly to Russia, and not accumulated in a foreign bank – where it can easily be held hostage, or frozen, for that matter.
5,000 Rb× 31.1g = 155,500 Rb /1 gold oz.
In paper markets an ounce of gold priced in $USD is about $1950, so
$1950÷31.1= $62.7/ gram
So
5,000Rb÷ $62.7= about an 80Rb /$1
Why is this important, well stay with me, if the price of gold in $USD went from $1950 to say $155,500/ oz of Gold, then the the Ruble would be at an exchange rate of 1 to 1 to the $USD.
" 'Ludicrous' you say. That won't happen. The price of gold would never rise that high." I say its only an eighty times (80x's) move. You say, "thats an 80x's move, it would take forever for a move in gold price like that."
Wrong again. In a hyperinflationary currency, it could move that quick in mere months. Example in history, August 1921- January 1923, in 16 months, gold went from 1,000 German Marks to over 100,000 German Marks (that is higher than 80x's move).
Silver took less time, it only took silver 14 months to move over 80x's.
Unless $USD becomes gold "backed", the Ruble will gain on the dollar, strengthening alliances with other counties that choose to limit their exposure to less valuable $USD.
And a great opinion it is, in my opinion !
What you just described is how gold or any other commodity takes the place of a fiat currency. There is always enough of whatever physical entity we choose, to replace a fiat currency - it simply becomes a matter of pricing the fiat currency in such a way as to quickly approach parity with the supply of the physical replacement.
This process is facilitated by arbitragers - people who trade on the exchange rate differences among three or more value holders in order to end up with a gain. As soon as the army of arbitragers is convinced this gold peg will stick, they will run among gold, Rubles, and Dollars and make a fortune, as well as drive up the price of gold in Dollars to where the supply of gold is at parity with the money stock in Dollars. This could very well be in the neighborhood of $155K, and I thank you for your quantitative analysis to get to a very feasible value.
Moondog, what you said will happen if Russia holds their line. Arbitragers are the unseen hand of the foreign exchange market balance, and they are aggressive tigers.
They have 15 days to make payment details - ie open Russian bank accounts.
So how does it work in reality ?
My guess - for illustrative purposes.
BEFORE the buyer agrees a volume and dollar price per unit for a year. Payment for deliveries are made to Gazprom monthly based on actual delivery, which varies by season. 60% of imports are paid in euros, and the rest in dollars.
The dollar or euro is worth maybe 10% less at years end.
AFTER the buyer gives dollars, euros to the Russian bank. The Central Bank gives roubles to Gazprom at the gold backed 3 month rate., The CB can use the euros, dollars to buy gold because it is half price ( kept down by paper gold manipulation).
The official explanation is below.
https://news.yahoo.com/explainer-paying-natural-gas-rubles-123131080.html
Wouldn't the Russian gas have to flow through pipelines in unfriendly nations to Russia?
Killing the dollar and Euro, implication of the US with everything from biohazard research to child sex trafficking, and now having NATO members having to choose between survival and team player. I figured it would be one of the bigger members that would crack first, but sometimes, all it takes is one to crack to bring the dam down
We’ll see how long pride holds this group together. Funny (ironic) how the US out spent the USSR back in the 80s & 90s to bring them down and now Russia is causing the downfall of the dollar because of western arrogance.
Wait and see,
Over 80,000 Dominoes - "Around the World" (10 minutes)
Flags and more.
https://www.youtube.com/watch?v=kqCE066fNpU
I am curious about the rate of exchange. Does
anyone know if the exchange rate has been
altered to increase the amount of Euro's it
takes to purchase Rubles?
The gold link shored up the ruble last week, the RUS currency will further appreciate with GOLD as the paper GOLD and derivative markets evaporate.
This is a BIG thing
That has nothing to do with my question.
You mess with the bear, you get the horns.
.
The moves and drama have all been scripted and each time NATO makes a move the RUSSIAN RESPONSE fits as neatly as a hand in a glove.
The conflict, the build up, the release, the Russian perfect response.
Wash, rinse, rewind, replay.
Russia and China are skipping along the yellow brick road while the man behind the curtain pulls the levers and all the wicked witch characters attack the sweet doofs, causing chaos, suspense, and terror.
Kind of like COVID drama.
Putin is playing his role. His responses are SCRIPTED TO STARVE THE WEST AND HELP THEM FREEZE TO DEATH…….JUST AS BIDEN IS DOING. THIS IS THE BIG SQUEEZE.
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