Editor’s Note: We may update this post over next several days as events evolve.
Vladimir Putin stated clearly that non-friendly importers would have to go to the MOEX and obtain rubles to pay for Russian oil and gas. So why are we seeing endless dismissals being expressed about how and if these transactions will actually take place? The Russians have now added that they would accept bitcoin and gold as well as rubles.
So Putin laid it out clearly with no ambiguity. What part of “no” does the western bloc not understand? Nobody has translated Putin for them? Have Russian interpreters been fired? Who runs Russian policy? Social media or the Kremlin? This is the standard fare “bubble of non-reality” or magical thinking.
Of course, also accepting gold is Russian trolling. Europe has to source gold. This could take weeks. Gold has to be flown to Russia, but flights to Russia are banned. Gold has to be assayed before Russia can accept payment. Euros and dollars are now toxic currencies for Russia due to sanctions. Practically speaking, those who are unfriended MUST pay with rubles.
Bulgaria, Serbia and Hungary have indicated they will buy gas in rubles.
Russia’s decision to demand payment for gas in rubles does not impinge on the current contract with Bulgaria – Bulgarian Ministry of Energy
Who is next?
— The Sirius Report (@thesiriusreport) March 24, 2022
By freezing Russian reserves, the collective West has defaulted on the reliability of its currencies. Now we even see the IMF parroting Russia’s critique of weaponized USD reserves: “IMF Warns Countries May Cut Dollar Reserves In Response To US Sanctions Against Russia.”
Nonetheless, most European countries so far have slammed Russia’s conditions and propose alternatives.
One of the reasons magical thinking rules is that the important details are left out of news reporting. For instance, now Germany has announced they will start importing LNG from Qatar even though 85 to 90 percent of Qatar’s LNG is committed under long-term contracts to Asia — especially China.
Germany gets more than half of its natural gas, half of its coal and roughly a third of its oil from Russia. Additionally, “green” Germany has no LNG import terminals. Qatar is spending almost $30 billion to increase its output capacity by 50 percent, but the project isn’t expected to yield its first gas until the end of 2025.
The U.S. really has limited natural gas to convert to LNG and export to Europe. See the blue line in the chart below. Then today the US and Europe announced a show deal of sending 15 bcm of LNG to Europe in 2022. Even if achievable this drop in the bucket would merely replace 15 of the 155 bcm imported from Russia.
The biggest underground natural gas storage in Northern Europe (run by Gazprom) is now empty.
Surprise surprise! pic.twitter.com/QQpW55xffh
— AndreasStenoLarsen (@AndreasSteno) March 23, 2022
Russia has quickly arranged to redirect to India in lieu of proper payment. In India’s case Russia will accept Euros.
Indian Government is expected to formally announce a INR-RUB payment arrangement next week which would allow the bypassing of US sanctions
— zerohedge (@zerohedge) March 25, 2022
Meanwhile, as Germany waits until 2025 for Qatari product, here is the current depleted distillates supply in Europe (on left) and the U.S. (on right). The U.S. Strategic Petroleum Reserve has been run low via dementia Joe’s expediency.
Refineries are already operating at higher-than-normal rates, and with driving season around the corner, we should brace for more stock-outs.
— OilPrice.com (@OilandEnergy) March 24, 2022
Pajama people still believe there are smart people rather than sub-zeros operating in the west. Does anyone think that rubles for gas is only the start? Putin said it’s only the beginning.
The sub-zeros in the U.S. are also dealing with China. The U.S. Trade Representative’s office stated that it intends to reinstate 352 expired product exclusions from U.S. Section 301 tariffs on Chinese imports. Just adds to the inflation and supply shortages — and this before any Chinese response.
The Great Economic Collapse of 2022 is unfolding right in front of you.
- Food crisis/fertilizer shortage
Chip shortage will continue with shortage of neon gas (70% from Ukraine)
Raw minerals disruption ripple effect (shortage of everything)
Political and economic turmoil follows.
- Inflation out of control
Supply chain disruption and a shortage of everything
Interest rates up followed by massive bankruptcies — 30% of economy propped up by zombie companies
Breaking of social contract
Unemployment and social instability
Revolution and war