Russia (China) officially dropping the dollar

[Cold Front]

Gazprom needs the equivalent of about $13.50 per million British thermal units to profitably finance the pipeline and the development of Siberian gas fields to feed it, a total outlay of $90 billion, Maxim Moshkov, an energy analyst at UBS AG in Moscow, said by e-mail. CNPC won

 

[PainIsLIfe]

There seems more speculation in that article about ongoing negotiations than a clear agreement of contractual terms.

No contract on commodities will lock in prices over thirty years, and if the Russians agree to one for geopolitical reasons, they're stupider than I thought. According to the article, that doesn't appear to be the case yet.

The Chinese, on the other hand, also need to secure more future gas supplies, so they would seem to have a reason to agree to the Russians' higher price. That's usually how these things work. In a world market for an important fungible good where prices are set globally, not locally, no one should have anyone over a barrel.

In this instance though, Russia is over a barrel if it wants to prove it's point and thumb it's nose at the west.

As for speculation, it's no more speculative than the OP assertion that China is dropping the dollar.

 

[Cold Front]

In this instance though, Russia is over a barrel if it wants to prove it's point and thumb it's nose at the west.

In which case, the Russians are cutting off their noses to spite our face. Plainly, that's very stupid behavior.

So stupid, in fact, that's it's not believable to me.

As for speculation, it's no more speculative than the OP assertion that China is dropping the dollar.

Reporting on these global economic issues is usually very rudimentary and not well informed. So I'm skeptical of any article which suggests that the Russians hate the West so much that they're willing to pay China to take Russian gas.

 

[trainharder]

it gets even better who helps russian drill for their oil? A huge amount of technology is needed from the us for russia to be successful at drilling for oil. Up in siberia where many russian drilling platforms are located many of these american experts help with the operation of these controversial wells.

exxon head and president putin. Rex was at my nieces graduation.

wpi ftw!!

 

[Jukai]

Misleading thread title. China have absolutely nothing to do with dropping the dollar.

You do realise that the Yuan is pegged to the dollar right TS?

Nor do they realize that China is continuing to buy US debt, not drop it. Russia does seem to be moving away from the dollar but that won't hurt us for jack shit. China isnt' doing anything of the sort.

But, you know, WMD makes Zero Hedge look credible.

 

[Jukai]

Dude...Putin has won. He CHOSE all of this and it was orchestrated BY HIM. He has been shitting on the U.S. starting with Snowden and his revelations and the U.S. has lost a lot of prestige on the world stage lately. He has been wanting to cement the Eurasian Union for quite some time and he has been making a lot of moves in that region, most importantly the energy deal with China, to make that happen. Dude said that the fall of the S.U. was the worst geopolitical tragedy of the 20th century. The whole point of ALL of this is to destabilize the U.S., get revenge, and establish Eastern dominance over Western. This shit isn't that hard to comprehend.

I originally liked you before you went batshit crazy over Putin's balls.

You do realize that the Russian economy has hit the shitter ever since Putin invaded Crimea, right? That the Rouble is at an all time low and the Russian economy still has not regained the investors they lost during the first round of sanctions? You do realize that the gas deal with China is less money than Europe with Russia paying about 75% of the startup costs, with a 30-year lock-in deal that prevents Russia from making money if natural gas costs go up. You do realize that China has NO INTENTION of joining an Euroeasian Union, and that the country that was SUPPOSED to join it to bring it to new heights was the Ukraine... and uh, that ain't happening anymore.

Russia is in a bad spot right now economically. Putin is doing a lot of PR to recover. You are buying into his propaganda hook, line and sinker. And it is sad.

 

[7437]

I originally liked you before you went batshit crazy over Putin's balls.

You do realize that the Russian economy has hit the shitter ever since Putin invaded Crimea, right? That the Rouble is at an all time low and the Russian economy still has not regained the investors they lost during the first round of sanctions? You do realize that the gas deal with China is less money than Europe with Russia paying about 75% of the startup costs, with a 30-year lock-in deal that prevents Russia from making money if natural gas costs go up. You do realize that China has NO INTENTION of joining an Euroeasian Union, and that the country that was SUPPOSED to join it to bring it to new heights was the Ukraine... and uh, that ain't happening anymore.

Russia is in a bad spot right now economically. Putin is doing a lot of PR to recover. You are buying into his propaganda hook, line and sinker. And it is sad.

This is Gazprom stock prices for the last few years. It looks like shit.

There P/E ratio is 2.5. So it is either the greatest moment imaginable to invest in this company today, or it is going to tank like the hindenburg. Depends on if this deal makes a lot of money.

 

[Tseren**]

I originally liked you before you went batshit crazy over Putin's balls.

You do realize that the Russian economy has hit the shitter ever since Putin invaded Crimea, right? That the Rouble is at an all time low and the Russian economy still has not regained the investors they lost during the first round of sanctions? You do realize that the gas deal with China is less money than Europe with Russia paying about 75% of the startup costs, with a 30-year lock-in deal that prevents Russia from making money if natural gas costs go up. You do realize that China has NO INTENTION of joining an Euroeasian Union, and that the country that was SUPPOSED to join it to bring it to new heights was the Ukraine... and uh, that ain't happening anymore.

Russia is in a bad spot right now economically. Putin is doing a lot of PR to recover. You are buying into his propaganda hook, line and sinker. And it is sad.

Your assessment reflects the intuition I had following recent events in Eastern Europe, that by accepting Crimea into the Federation, Russia has crossed a point of no return.

It is evident that Putin has geared Russia towards severe economic challenges that would be painful to bare for the whole nation.

With that accepted, I continue to support the notion that Russia's long-term national security concerns outweigh the short-term economic damages the state has invited onto itself.

I believe that Russia still has room for recovery in a developmental path that will structure the country to be less dependent on the global economy in the future.

The self-inflicted pains to come are going to be heavy to bare, but preemptive action against NATO's suspicious expansion towards national borders must be taken at the expanse of short-term economic health.

 

[Jukai]

Your assessment reflects the intuition I had following recent events in Eastern Europe, that by accepting Crimea into the Federation, Russia has crossed a point of no return.

It is evident that Putin has geared Russia towards severe economic challenges that would be painful to bare for the whole nation.

With that accepted, I continue to support the notion that Russia's long-term national security concerns outweigh the short-term economic damages the state has invited onto itself.

I believe that Russia still has room for recovery in a developmental path that will structure the country to be less dependent on the global economy in the future.

The self-inflicted pains to come are going to be heavy to bare, but preemptive action against NATO's suspicious expansion towards national borders must be taken at the expanse of short-term economic health.

I don't believe Putin is dumb. Putin weighed all his options and believed he had to take Crimea for the long term security AND economic future of his country. He knew it would hurt the country bad, but he had no choice. NATO was moving close and Crimea is a hub for Russian gas lines. They had no choice.

 

[IDL]

All hail our new Belgian overlords!

Belgium is where the capital of the EU is. the 'mystery buyer' is probably just the European central banks.

 

[UpaLoompa]

Are these troll posters in the W&P?

I'm fairly new to this section.

There are many posters seemingly serious about this nonsense.
Unfortunately this is now the "Civil War Room".

 

[Jack V Savage]

There are many posters seemingly serious about this nonsense.
Unfortunately this is now the "Civil War Room".

I wonder if the new rules have anything to do with the WR's sudden surge in overtly racist threads.

 

[UpaLoompa]

I wonder if the new rules have anything to do with the WR's sudden surge in overtly racist threads.

Has there been one? If so, probably.

 

[Jukai]

I wonder if the new rules have anything to do with the WR's sudden surge in overtly racist threads.

I thought the new rules were BECAUSE of the rise in racist threads. The Sterling issue in itself caused quite a few people to declare that using the n-word was ok because of their misinterpretation of free speech, and boy did they use it.

It's unacceptable that the Sports Bar dealt with the issue better than the war room. The place that came up with the Sherdog meme 'besmirched' had a more reasonable debate about the Sterling issue. Amazing.

 

[ZroC]

New video asking if China could kill the dollar. Makes some points about everything China are doing to drop the dollar. Also explains at the end why such a scenario would be devastating for the US.

 

[D3THRONED]

New video asking if China could kill the dollar. Makes some points about everything China are doing to drop the dollar. Also explains at the end why such a scenario would be devastating for the US.

Wouldn't a weakened dollar make trade cheaper for US? Also wouldn't it hurt china to make their currency stronger? I'm curious because I have no clue.

 

[UpaLoompa]

Wouldn't a weakened dollar make trade cheaper for US? Also wouldn't it hurt china to make their currency stronger? I'm curious because I have no clue.

The whole position makes little since because an undervalued chinese currency works better for their economy. Driving down the dollar would be disastrous for china.

 

[D3THRONED]

The whole position makes little since because an undervalued chinese currency works better for their economy. Driving down the dollar would be disastrous for china.

That's what I'm thinkin. Their cheap labor would be gone and bring more jobs to the US or other SE Asian countries with cheaper labor.

 

[Zankou]

The whole position makes little since because an undervalued chinese currency works better for their economy. Driving down the dollar would be disastrous for china.

China is extremely worried that the dollar will depreciate; that's why it would ideally like to hedge itself more broadly. That's the entire problem it has to deal with, the risk that the dollar might weaken. Suggesting that China is looking to "kill the dollar" is ass-backwards, China is worried that the dollar will be weakened since nobody is more exposed to that financial risk than China is. So it's in an awkward position where the US has every incentive to weaken its currency and fuck China over.

This is particularly true now that the US has recently become the world's dominant oil producer due to fracking, and no longer needs to buy foreign oil (the main import you would want a strong currency for).

There's a common misconception among economic CTs that "strong currency" is what all nations want, because it defines national power. This is where things like fiat currency, fractional reserve banking, the gold standard, and hyperinflation keep getting cited. But it's completely incorrect. Much of the time countries are battling to weaken their currency, and to fight off forces that would strengthen it. LIKE CHINA ITSELF IS DOING by keeping its currency artificially weak, on purpose. As is the US, which prefers a softer dollar. The story of the China v. U.S. currency position is that both are trying to devalue their currency and force the other guy's currency to rise in value. The exact opposite of the currency CT world view.

 

[D3THRONED]

China is extremely worried that the dollar will depreciate; that's why it would ideally like to hedge itself more broadly. That's the entire problem it has to deal with, the risk that the dollar might weaken. Suggesting that China is looking to "kill the dollar" is ass-backwards, China is worried that the dollar will be weakened since nobody is more exposed to that financial risk than China is. So it's in an awkward position where the US has every incentive to weaken its currency and fuck China over.

This is particularly true now that the US has recently become the world's dominant oil producer due to fracking, and no longer needs to buy foreign oil (the main import you would want a strong currency for).

There's a common misconception among economic CTs that "strong currency" is what all nations want, because it defines national power. This is where things like fiat currency, fractional reserve banking, the gold standard, and hyperinflation keep getting cited. But it's completely incorrect. Much of the time countries are battling to weaken their currency, and to fight off forces that would strengthen it. LIKE CHINA ITSELF IS DOING by keeping its currency artificially weak, on purpose. As is the US, which prefers a softer dollar. The story of the China v. U.S. currency position is that both are trying to devalue their currency and force the other guy's currency to rise in value. The exact opposite of the currency CT world view.

Ah good post mate