by Jorge Vilches for the Saker Blog
What ? Payment in Rubles ?? Unthinkable, don´t even mention the word say EU officials and authorities.
Instead, Europe has formally demanded to pay for Russian imports with Schrödinger euros as explained below.
So it´s high time for psychiatrists to step in as the livelihood of 800 million Europeans depends on whatever this incredible set of un-elected delusional EU leaders decide. Let´s get this straight folks: the EU does not want to pay in Rubles – or gold — because it is playing cutie by pretending to “pay” for Russian imports for free. Be it natural gas, or oil, or coal or whatever Russian, instead of really “paying” the EU pretends to pull a “print & deposit + freeze & hide” wise-up gimmick. To make it clear for any audience, the above would be the equivalent of you pretending to “pay” at the check-out counter of any store with a photo of a fully sealed box that you say contains “money” that you will keep hidden at your home – unopened — as long as you want. Please allow me to explain the EU trickery in layman´s terms
the “print & deposit + freeze & hide” seizure trick
In the past, Russian imports were paid through run-of-the-mill bank transfers made to accounts of Russian exporters at EU banks. Now the EU leadership has mandated for such transfers to be instantly frozen as soon as received so that Russia – or anybody else for that matter – can´t use those euros.
So, the European Central Bank would now “print” euros with a keyboard 100% for free and then transfer such euros over to the Russian exporters bank accounts in the EU albeit now under “frozen” status. So Russia never gets to use such euros – which actually never see the light of day – and accordingly are not inflationary in any and every sense of the term as nobody else can use them either. Thus, by not entering into any economy at all in no way, shape, or form the EU outsmarts Heaven and Earth and gets to import Russian produce for free. Easy see ?
It´d be a “print & deposit + freeze & hide” seizure and expect-the-Russians-to-fall-for-it trick…as if they were K6 kids.
Now of course I can hear the maniacs in charge arguing that this would only be “temporary” – of course — and that as soon as Russia gets out of Ukraine under “acceptable” terms – of course, yet again — everything will get back to yankee doodle normal. Enter then the “Schrödinger´s euros” whereby the hypothetical ´money´ should be considered to be simultaneously existent and non-existent… a-la-EU.
the Schrödinger euros
In today´s commercial environment only a fool would accept a Schrödinger payment for anything — not even bubble gum – and should be considered the most childish proposal ever made in the history of trade. It´s both naïve and yet a visible insult from immature wishful thinkers attempting to defy the Law of Financial Gravity by sinking ever deeper into their self-made mud pit. Please very briefly do visit Ref #1 https://en.wikipedia.org/wiki/Schr%C3%B6dinger%27s_cat
In the first place, Schrödinger euros should have never been created by the EU and only to be really defined as “theft”.
Actually, with these S-euros the EU would be “buying” itself serious future problems for which there is no solution. For example, if the EU´s proposal were taken seriously and adopted, exactly WHO and HOW would define what are “acceptable terms” for Russia´s withdrawal from Ukraine so as to make the Schrödinger euros usable. From the get-go even millennials can realize that the Russian Federation will never leave certain areas and/or the newly recognized Donetsk People’s Republic and Luhansk People’s Republic plus Crimea. Accordingly, would the S-euros exist or not ?
Schrödinger euros also should not have been suggested for other reasons, including counterintuitive superposition states and disambiguation paradox problems which for lack of space cannot be explained nor fully foreseen into a very uncertain future. Still, you get the picture. The idea being that such “hypothetical” money may be considered simultaneously both existent and/or non-existent and/or in the process of becoming existent or non-existent at a particular point in time or window as a result of events that may or may not occur but which in view of the enormity of the situation could be the basis for “casus belli” which Europe should not be exposed to, let alone actively promote.
In a nutshell: Schrödinger euros are a no-no-no, period. And the EU should have never proposed such nonsense.
Now, as the EU refuses to pay in Rubles – or gold bullion — and insists on paying with their new “funny Schrödinger money”, the Polish Prime Minister Mateusz Morawiecki has admitted the obvious, namely that sanctions imposed by the EU + US and their allies so far have had the opposite effect on Russia. “Look at the ruble exchange rate; what is happening with the Russian economy. Nothing special is happening there. Crushing sanctions are now needed”.
Ref # 2 https://www.rt.com/business/554625-eu-russia-sanctions-dont-work/
Ref # 3 https://www.rt.com/russia/554398-poland-stop-russia-billboard-campaign/
So unbelievably European Commission President Ursula von der Leyen, while accusing Russia of “blackmail” just added that “We are mapping out our coordinated EU response, so Europeans can trust that we stand united and in solidarity…” both of which are simply not true. Liar liar pants on fire my grandson would scream with irritating pitch.
The EU today has no coordination and no solidarity. It´s everyone for himself now, including ´neutral´ Sweden wanting to join NATO while claiming payment for weapons sent to Ukraine. But Auntie Ursula playing the female version of Elmer Fudd still announced that the EU was working “intensively” on a new plan to hit Moscow. “The sixth package of sanctions will come in due time. We’re working intensively on it” said Ursula von der Leyen as Russia halts gas supplies to Bulgaria and Poland while Finland will not agree to ruble payments.
Ref # 4 https://www.rt.com/russia/554614-eu-accuses-energy-blackmail/
Ref # 5 https://www.rt.com/news/554638-sweden-eu-ukraine-compensation/
Ref # 6 https://www.rt.com/business/554624-eu-state-russia-gas/
Ref # 7 https://www.rt.com/business/554587-gazprom-gas-bulgaria-poland/
The fact of the matter is that Europeans at large and most especially the EU leadership are now most fragmented and erratic. As France´s recently re-elected President would put it, “brain dead” NATO resembles a bunch of beheaded chickens running around without the slightest idea of what´s really going on. Meanwhile, back on planet Earth, four EU buyers made gas payments in Rubles and at least 10 countries have set up Russian bank accounts in Rubles.
Ref # 8 https://www.rt.com/business/554612-eu-buyers-russian-gas-ruble/
Ref # 9 https://www.rt.com/news/554638-sweden-eu-ukraine-compensation/
So while the EU is supplying all sorts of weapons to Ukraine every single day, now the EU´s top diplomat wants to make friends with Russia. But only yesterday Josep Borrell said “This matter has to be resolved in the battlefield” . A day later he says: “The EU and Russia should rebuild relations”. Which is it ?
“Rebuilding the relationship between the EU and Russia will be a very difficult and lengthy process, but it must be done”.
Sure, yes, let´s start by implementing the Minsk Accords that Europeans brokered and endorsed very recently, remember?
Ref # 10 https://www.rt.com/news/554576-eu-reorganize-relationship-russia-borrell/
So Ursula von der Leyen´s process of “ mapping out our coordinated EU response “ does not seem to be running very smoothly
And in view of proposed additional gimmicks the Russians, clearly never lagging and always ahead of events, warn :
” … the unauthorised withdrawal of gas volumes transiting through Poland and Bulgaria to other European countries such as Germany would result in a reduction of transit supplies….” Clearly meaning guys don´t play games with us or you all will freeze and starve to death hand in hand sorta like right now, understand?
Ref # 11 https://www.zerohedge.com/markets/four-european-gas-buyers-fold-russian-demands-pay-gas-rubles
German Economy Minister Robert Habeck was very concerned in that cutting off Russian imports would cause “mass unemployment, poverty, people who can’t heat their homes, etc.” Austria openly admitted that it simply cannot afford to ban imports of Russian gas while others want to shut down Russian gas pipes altogether. Again, which is it? And last we checked, something for nothing is impossible. So Russian imports have to be paid for either in Rubles or gold bullion, with no charity available. Schrödinger euros are a joke, and a bad one at that. As John Connally would say, “It´s Russian commodities, but it´s your problem.”
Great explanation of the situation. The Europeons are truly a lost and confused cause. The inevitable result of being occupied satrap nations.
EU leaders are just betraying their own citizens for the gains of bankers. I know its not simple as that, but these EU traitors in charge should and probably very well know what is coming, but simply do not give rats a f&%# about it. There is no easy solution in EU to this problem, we should be looking into the past how to solve this one. French revolution perhaps? Its coming, no sooner than fall, when people will start freezing their asses off, enough empty bellies fed with fake christian moral energy, all for the sake of divine solidarity with Ukraine. All total bollocks. The EU is one filthy rotten rigged and fake democracy, just letting people breathe enough and that they don’t revolt.
I think it IS as simple as your concise first sentence!
Europe and the U.S. have been turned into enslaved nations by the Rothchilds. Russia WAS enslaved by them as well (The Rothchilds paid for the Russian revolution and the operating expenses of the Red Army during the Civil War), until Yeltsin figured out how to pull the rug out from under them. For that one act alone, Yeltsin should be praised as a hero by anyone, anywhere on this planet who loves liberty.
Thank Russia for being so generous until now and continues to be so. If the EU/Anglo Saxon criminals would have been in Russia’s place, they would have shut off Supplies right on day one, hour one, minute one, the day the EU-US cabal announced sanctions on Russia.
Even I wouldn’t have shown the generosity and leniency that Russia had shown till now to her enemies and used oil and gas supplies to full leverage.
@ Zayi Een. Russia is not smart, not clever, not anything of such latitude of euphemism. Russia is currently far more than that, there is no word for it, someone should invent one. Russia knows, that they still to some extent need Europe to be calm, peaceful, satisfied enough that it does’t go berserk. Who in his sane mind would want an angry and indoctrinized mob (again) at its borders. Yes, Russia has enough weapons to deal even with such threat, but Russia today, by acting as it is, is showing far deeper respect to the people of EU (as maybe it truly should). It shows, that Russia is still walking an extra mile unlike rabid leaders of EU, being led by smart, sane people, that do care for their neighbors as human beings and that they know its not the peoples of EU fault what is going on, but bastards in charge of the whole shit-show (sorry my language). By stating this, I do want to believe that these EU leaders will get to the disclosure, that only they them selves are painting them selves with cross hairs for our dear brothers like Khinzal, Zircon and so on… I just want to move to Russia or China, EU went rotten – kaput, while my family is laughing at me (for now).
Speak softly and carry a big stick.
Where have I heard that before?
Slightly tangential, but it must be said:
The whole Roosevelt clan were plutocrats. Yes, even Teddy. There’s no way that he could have possibly NOT known that the sinking of the Maine was a false flag, given how close the Roosevelts have always been with the U.S. Navy (Yes, Teddy went to Cuba as a cavalryman, and FDR’s son was in the Navy, but those are exceptions to the rule).
The problem in the world today is that our plutocrats aren’t just greedy jerks, they’re EVIL, greedy, STUPID jerks.
I doubt that it is generosity or leniency. By enforcing payment in rubles Russia is establishing the market value of the ruble with one vital commodity. The next step, per Sergei Glazvey, is to establish a method of pricing that does not involve dollars.
The brilliance of the Russian strategy will not be appreciated in full until some time in the future.
It is allowing the already existing fault lines within the barely cobbled together nations of Europe to widen and deepen.
Their own internal contradictions are fracturing their own unity, WITHOUT being able to directly blame Russia for suddenly cutting off the energy supplies.
They have been trying for months now to blame Russia for all their problems, but this slow method has allowed to yeast to rise slowly and rip apart their fake unity without an immediate emotional response to get Russia for revenge on the part of the common person.
The elites are furious that their schemes to defraud their own populations are in great danger of exposure and being halted.
An immediate cut-off in February would have caused widespread deaths by hypothermia, and immediate calls from the German public to send their army in.
Russia can handle the current number of Ukie combatants. It CAN’T handle another full army coming in from the West to rescue the UFA. If the UFA is rescued, then Zelinsky is saved.
The point is to destroy the current Ukie government. Not just Zelinsky, but ALL of the oligarchs who not only directly fund, but for all intents and purposes, actually OWN (*) the infamous Azov Regiment and the Aidar and Right Sector battalions.
(*) Because from 2014~2019, they literally DID own those units.
Once again, the mission is to destroy the Nazi units in the UFA, and de-nazify the Ukrainian government — not take on the UFA + The Polish military + The German military + …
The quicker Russia turns off the Gas & Oil to Europe the bettter. I know Russia can use the revenue but the damage it would cause should be worth the price. Go Russia !
PS — Nice to first -I’m usually last :) ( Time difference is to blame )
All those EU weapons wouldn’t have been dared to be shipped to Ukraine had Russia thrown out a threat of immediate halt to supplies. If all is fair in war for the Western crooks, why not for Russia. And don’t talk about rules and agreements when they violated them all.
Yes, but by letting all those weapons be shipped there’s been a second advantage: Europe (and the U.S.) have severely drawn down their own supply of weapons. It’s like they’ve voluntarily surrendered them to Russia to be destroyed. Win-win.
They are getting rid of their old junk.
Stingers are what we gave to Al Qaeda back in the good ole days when they were Ronnie Reagan’s Freedom Fighters. And, I couldn’t stop laughing when I saw what the Germans are sending. That sounds more like a subtle secret plot to kill more Ukrainians by getting them to climb into old, obsolete ‘tanks’ to go forth and duel with the Russians.
The fine print in the background is that there are promises to restock. Which means billions of tax payer dollars flowing to the weapon countries to produce new junk to replace the old obsolete junk. For instance, I think somebody’s S-300 is to be ‘replaced’ by Patriots from the US forces, which then creates a new order for the Merchants of Death to supply a new system to the US.
In capitalism, always follow the money, and see who is getting rich(er) from the deal. And if you are American, be prepared for both higher taxes and more inflation, because you are the one that pays for this, one way or the other. You surely don’t expect the oligarchs to pay the bill … they’ve got it rigged so they pay much lower tax rates than you do, and much of the time nothing at all.
Promises to restock are one thing. The ability to do it is another.
Critical parts manufacturing was outsourced long ago. With supply chain broken, it will be harder to rebuild than many realize.
“Stingers are what we gave to Al Qaeda back in the good ole days when they were Ronnie Reagan’s Freedom Fighters.”
Without revealing any classified information, I can tell you that there has been ZERO improvement in aircraft performance or countermeasures that will hinder the use of even a late 1980’s-built Stinger from hitting even the latest 5th-generation fighters if they decide to engage in ground-support or tactical bombing. And it’s reliable and the skill to fire it is non-perishible enough that EVERY Stinger battalion in the U.S. Army is either National Guard, or the training cadre at Fort Bliss (and the cadre of a training battalion amounts to about one company), with the rest of the battalion being the trainees.
There is a weakness to a 20-year old stockpile of Stingers, but I can’t reveal that here, and it most definitely isn’t what you might think, and it’s easily remedied.
Great analysis! Well put.
What you are suggesting is a knee jerk reaction to the crazies in US/EU/UK axis which is precisely the trap they are trying to lay.
Fortunately, Russia is being run by sane and smart people. I have to second the commenter “the end” to your last comment. He described Russia very well and its motives.
Cutting gas/oil could be considered an act of war. That was the premise of Japanese attack in Pearl Harbor and they fell for the trap. Didn’t end well for them.
Russia is going forward methodically and intelligently. They are happy to sell their resources but only on their terms. This way no one can accuse them of an embargo.
Sending weapons to Ukraine could also be viewed as an act of war. Not getting the gas you won’t pay for is mostly a commercial matter. However the current situation with only some paying in rubles creating mayhem in the EU ranks so best let it continue, at least for now.
Selling weapons to a belligerent isn’t just “could be considered” an act of war.
It flat out IS an act of war.
Damage for the sake of damage, is not part of Russian political thinking …
Russians think about the consequences of the consequences …
Russians think about consequences of consequence of consequences of consequences of consequences…..
Because they are a nation of chess-players. And that’s how you win in chess.
I agree, but there is also a political game there, that has been going on for awhile.
What Putin appears to be playing for is getting the Europeans to turn the gas off themselves. That way, it is not the evil Putin who throws the switch that causes the factories to close and the immigrants to freeze … its their own leaders. They will of course try to blame Putin anyways, as that is the manner of the Empire of Lies, but there is a far better chance that the European people will see the truth if Putin lets the European elites turn off the gas themselves. There’s a political gain in having it happen in that manner, and that appears to be what Putin is maneuvering for.
If the modern European elites want to repeat an energy version of ‘let them eat cake’, don’t get in their way.
I respect Mr. Putin for that. If it was me, I’d have gotten mad and hit the ‘off switch’ and said “freeze $%@#$$ing @$$@#*&s” long ago. But, Putin is again showing off his martial artist skills of waiting for the best timing and maximum impact.
Maybe, come fall, the freezing immigrants will even think about returning to their warm home countries.
If they have marketable skills they might think about emigrating to Russia to work and live in heated quarters.
Russia has no use for 3rd world savages, regardless of how well educated they are.
Pushkin’s grandfather was a fluke, and everyone in Russia knows it.
The entire public keep a VERY close eye on the behavior of foreign exchange students from the dark continent.
The Russians are also quite leery of those who come from southwest asia — despite their money, even the prostitutes avoid them, or demand a LOT of money to spend any time with them, because the men from that region are downright abusive…. and a prostitute will price in potential hospital bills and other costs to mend her psyche afterwards.
The information from the preceding paragraph comes from a conversation in a night club after a hooker unsuccessfully tried to pick me up, and apparently didn’t see anyone else she wanted to target, but for whatever reason, didn’t want to go home right then, and so we talked while I drew a portrait of her (…yes, her evening ended with her giving me money….)
«there is a far better chance that the European people will see the truth if Putin lets the European elites turn off the gas themselves»
There is zero chance of that happening: the messaging will all be “mad monster Putin wants to kill european old ladies with cold by cutting off their heating”. Just as well over a century ago:
“The dogs of war are loose, and the ragged Russian Bear,
Full bent on blood and robbery, has crawl’d out of his lair;
It seems a thrashing now and then, will never help to tame
That brute, and so he’s out upon the “same old game.”
The Lion did his best to find him some excuse
To crawl back to his den again, all efforts were no use;
He hunger’d for his victim, he’s pleased when blood is shed,
But let us hope his crimes may all recoil on his own head.
We don’t want to fight but by jingo if we do,
We’ve got the ships, we’ve got the men, and got the money too!
We’ve fought the Bear before and while we’re Britons true
The Russians shall not have Constantinople!”
or Donbas or Odessa or Crimea etc. etc. etc. etc. etc. etc.
Dear Blissex: Recent events in the media/culture war support your argument, principally, the collapse of the western peace movement and, worse, the critical faculties of the left and liberal parties and organisations..I’m writing from Britain where the “Jingoism” you parody has fallen to depths below even the highpoint of British imperialisml, when Britannia “ruled the seas.”
«the European people will see the truth if Putin lets the European elites turn off the gas themselves»
This is how “Washington Consensus” media denounce Putin’s latest “aggression” (no mention of the refusal to pay for the gas):
“Russia’s state energy company Gazprom halted gas supplies to two EU member states – Poland and Bulgaria – on Wednesday and warned that more countries could be similarly targeted. Poland, with good reason, described this as a “direct attack”.”
Usually, you propose a bs deal (S. euros), when you don’t want a deal in the first place.
Don’t discount this possibility.
The economic weapons used by the West have caused significant “collateral damage” and are now formenting civil unrest.
There are many reports of the early signs of Civil unrest being seen in several western nations as a result of the “Sanctions from Hell”. The Euro nations governments ability to keep shooting themselves in both feet and legs in order to look strong seems without limit, with calls by several governments to shut down certain “non-essential” (sound familiar?) industries to conserve energy.
People are now speeking out.
I recently stumbled upon this video report from Lithuania, with English subtitles. I cant believe it is still on Youtube as to use a western term “he nails it” (the Lithuanians are not happy):
Respectfully, I don’t comprehend Lithuania at all. The government appears to be hate driven and bizarre in its policies. I can understand they hate and fear Russia but they appear to be fanatical. They pick fights with China, they fight with Belarus and cut off vital shipments that other nations need.
They have dropped from almost 4 million population to about 2.6. Their fertility rate is 1.2. Every year, their population dies off or leaves. Fighting with Russia and its allies seems more important then their survival.
Eighthman, are the Lithuania politicians WEF trained and financed the same as all western WEF nazi infested swamps? If so, that would explain their hatred of Russia….many US, Canadian, Apartheid Occupiers, and maybe Brit politicians have deep Tribal family ties that trace back to the Soviet portion of the land called 404. Their hatred of Russia has festered their brain to the point that they act like Rabid dogs…..beginning to look like them too. You have to admit, on a good day Bojo fits the bill, auld brit dog, too long in the sun.
It’s not the people of the west (the MSM braindead aside) that hate Russia, it’s the hand placed WEF elite politicians that are pushing their agendas and have control over the majority of world governments. How in the f do we denazify our governments without hypersonic help?
Denazifying our own government requires steel tubes dispensing justice in small, 50-cent, copper jacketed packets… if you get my drift.
Nazi-ism = hate-driven government.
Its the nature of fascism. The system is always a corrupt combination of corporations and state, and to hide the theft from ordinary people, they are distracted with hatred at both internal and external enemies.
In this case, the new Eastern-European version uses ‘Russians’ as both internal and external enemy.
There must be an enemy to distract the people from the fact that the rich are getting even richer with this combination of corporation and state, and that ordinary people are the ones paying for it. Thus, the ordinary people have to be misdirected into hating others, and not having the common sense to hate the people who are shafting them every day.
Money! They get paid in CIA dollares and IMF loans in Euro. So why be concerned about a shipments and other trivialities.
Well said. Schroedinger cat is an exellent description of this EU payment fantasy
Spartak, thanks !
I hope my analysis allows to understand the situation a bit better despite the fact that, striclty from the physics standpoint, the “Schroedinger´s cat” phenomenon is definetly a highly COMPLEX conundrum.
Still, my idea is to help out those that may not know exactly why the Russophobia is wrong and unwarranted.
Thanks again Spartak
I looked up the Schroedinger’s cat thought experiment on Wiki, and indeed it was pretty much Einstein level, not Taffy level.
But the image is nonetheless striking, and memorable.
Basicallly, one thing cannot be in two places at once, right?
In one Superman comic, Superman had to convince someone, a villain, that there were two of him: he moved so fast between two spaces at Superman superhuman speed that he was able to convincingly create this illusion.
Of course the cartoonist had no problem depicting Superman moving at atomic speed between the two spaces—all he needed was a few light, suggestive pen strokes in the “air” on the paper . . .
Perhaps the EU’s cartoonist leaders can, similarly, fill up some empty gas storage.
Not to mention sketch in bars of pure gold . . .
Remember, (((Bankers))) have been turning $1 on deposit into $10 or even $100 of loans for centuries.
Until 1972, they did it by saying that all of these pieces of paper can be redeemed for X amount of gold (where, in truth, the amount of gold in storage would not have come anywhere close to the nominal value of the pieces of paper they loaned out). Then after 1972, they just decided to abandon the farce that the little pieces of paper are backed up by the pile of gold.
Now they have dispensed with the idea that the little pieces of paper even have any value, as the only reason someone would accept the EU’s offered terms is if they truly believe that the Euro has zero or so little value that not receiving payment wouldn’t make the slightest difference to Russian economy.
“German Economy Minister Robert Habeck was very concerned in that cutting off Russian imports would cause “mass unemployment, poverty, people who can’t heat their homes, etc.”
That`s not what he is concerned about: He is concerned about being hung up by his neck till dead. Or torn to pieces limb by limb…
That`s what keeps him awake these dayz methinx…
Curiously the EU banned Russian Cat pedigrees straight away.
When Schroedinger published his Cat Paradox, even more famous Albert Einstein at the Solvay Conference in 1927 where all this superposition stuff was being finalized, blurted out “God does not play Dice!”
The EU is both playing Goddess Ursula, and playing dice with 800 million peoples’ livelihoods!
The Gods Ursula and Borrell were never elected, so have usurped a Divine Right, right?
Kadyrov’s battalions recognize the Shaytan they are dealing with. And some think this is a Christian Schism thing?
An even more famous person was asked about the 5 Denar coin inscribed “Caesar Augustus Tiberius, son of the Divine Augustus” to which he replied render unto Caesar what is Caesar’s, render unto God what is God’s. The reverse coin side had Levi, who looks awfully like Ursula….
So we have something far worse going on here – the Divine Euro must be rendered into Rubles – what are the God’s to do?
Well – “What to do,” spoke Zeus, “the gods are drunk, and puking full is Olympus.”
Are they heading for one hell of an Olympian hangover!!!
“The EU is both playing Goddess Ursula, and playing dice with 800 million peoples’ livelihoods!”
Not in their minds.
In their way of thinking, they are playing dice with the lives of 800 million inedible cattle which speak, write, and have opposable thumbs and walk upright. They literally couldn’t care at all of those 800 million die, as long as they themselves don’t wind up the way Mussolini did.
I’m thinking the MSM minions might be getting nervous. They have to push the obviously stupid and painful decisions of their masters ( the politicians ) as those masters grovel to their masters ( US PTB ) while the masses of citizens normally carrying on with noses to the grindstone begin to NOTICE and start mumbling “ WTF” .
«the MSM minions might be getting nervous.»
Because they aren’t getting theirs I guess:
“journalists/columnists of a certain age (meaning ones not much older than me and younger) are coming around to the realization that the economy is screwing them, too.
There was a moment when a lot of them (we’re talking ones at elite outlets, not your random small town paper) thought they’d done everything right, would become celebrities, and get Tom Friedman’s speaking fees. The economy sure was working for them, and screw everybody else.”
«They have to push the obviously stupid and painful decisions of their masters ( the politicians ) as those masters grovel to their masters ( US PTB )»
As long as they are doing so well on real estate and still on stocks, the upper-middle classes are very happy, they are getting theirs, and consider their masters as economic geniuses. The lower-middle and lower classes are getting shafted all the time, but they have been for 40 years, since Reagan and Thatcher, and have learned to bend over.
EU is become as big a farce as NATO. Von der Leyen is an incompetent imbecile, as we all could see when she destroyed the bundswer as its head (with the рungent whiff of corruption following her everywhere) These people are so used to scamming everyone that when they have to deal with a real country that does business correctly they simply cannot cope with it. West is just a massive scam pyramid scheme, all about to collapse. Bravo Eurasia! Bravo Russia!
As the mule said as he was hung up on the fence with only half over I’m damned if I do and damned if I don’t and that’s the EU to run their mouths endlessly about Russia.
Could someone please tell me, are the euros transferred to Gazprom bank actually secure in Putin’s arrangement – or are they just Schrodinger Euros as the rest? Can they be remotely canceled? Or frozen?
I follow many websites about this and no one seems to answer this. (Thanks)
When the S-Euros are rendered into Rubles, it should be an irreversible process.
That is why the Cheshire cat grins from ear to ear :
I think Schroedinger had a big problem with this cat….
The Euros are traded for rubles at the Moscow (stock?) exchange. So someone more or less unknown will have the Euros later. Could be some Chinese financial company, could be anyone (would trades there, probably through an intermediary bank). So if that goes through, the money can not be frozen anymore. That is why this process is used by the Russians. It is kind of money laundry. Maybe some of the Euros stay in Russia, but that might be risky. (If a Russian bank has a Euro account, in effect it is just the European Central bank saying there is this amount. Unless it is paper cash, but that is not practical).
Yes, the euros transferred to Gazprom bank are 100% secure in Russia and beyond.
The difference is the legal monetary jurisdiction.
You are correct, true enough actually nobody has explained the situation simply and clearly.
That´s what prompted me to draft this piece hoping it would clarify “The Saker” audience and the whole wide world regarding
(a) how deceiving the EU S-euro proposal is
(b) how ahead of the game the Russians are in every respect of their PLAN which the West does not have.
(1) S–euros :
The S-euros were to be deposited in EU accounts of Russian exporters meaning under the domain or jurisdiction of the ECB or the European Monetary Authority. So the instant that REAL euros were deposited in an EU account in Europe, the EMA obliged to freeze them.
The REAL euros now transferred and deposited at Gazprombank in Russia would then be under the domain or legal monetary jurisdiction of the Russian Monetary Authority that plays hardball for keeps.
So with Gazprom-euros Russia gets REAL euros (say, in Moscow as an example) that it converts into rubles. This means that all of the EU enormous payments would thus strengthen the ruble enormously
(3) Steffen Bendel (below) explains a very valid and real situation regarding the fate of the REAL euros once converted into Rubles by the Moscow Stock Exchange or wherever INSIDE Russia under Russia´s legal monetary jurisdiction. Good point Steffen, same as your observation regarding the impracticality of euro cash
The Gazprom euros should be dispensed of pronto to a non-Russian/non-sanctioned entity (eg., China), otherwise they run the risk of being frozen just as much. Remember these are not physical euros but liabilities of European banks which can be nullified at will.
John Derpanopoulos, thanks for the input.
I follow your point and it´s well-taken, but…
You are basically positing that — being digital — such effective yet digital Gazprombank euros could be revoked or clawed-back from whomever has them or attempts to use them in payment or investment of whatever wherever
(a) I wouldn´t think that such manouvre — still another EU cheat — could be technically done from the IT perspective no matter how digital those euros might be as the payer would lose domain the instant those digital euros are transferred to a Russian account inside of Russia. It´d be different if them digital euros stayed within the ECB banking system, of course.
(b) if such or other sanctions were ever done or applied the EU would then have a spanking-new adversary to confront such as China or India or Brazil…
I don´t fathom the EU digging itself into an ever deeper pit while having Europeans freezing to death, no food, no fuels, no A/C etc etc
I think the problem here is that you are talking about euros as if they exist. In fact they are simply ledger entries at each respective bank (even the Russian ones).
I don’t think the banks’ books are open, so once a Russian Bank “spends” “its” euros with another party (say, some Chinese entity) then there is no way to track which “euros” came from where.
This raises the question, why can’t a Russian (or any other) bank simply make up its ledgers? How would a central authority like the ECB ever know?
Perhaps the Russian banks are playing by their rules for now and this shows the game which Putin is actually playing.
Dear Jorge, you say:
“(a) I wouldn´t think that such manouvre — still another EU cheat — could be technically done from the IT perspective no matter how digital those euros might be as the payer would lose domain the instant those digital euros are transferred to a Russian account inside of Russia. It´d be different if them digital euros stayed within the ECB banking system, of course”
I have to insist that no domain is lost whether those euros are “inside” Russia or not. They are a distinct liability of a European bank. Think of it as if you wrote a check to John Smith. Wherever that check ends up, you always know that it is your check that in this instance happened to got credited to “China Enterprises Inc..” Hence you can refuse to pay the check. Of course the minute they do this they will not get another oil or gas shipment from Russia. My point being that Russia or whoever ends up with those euros will have to dispose of them quickly. Otherwise they may be added to the $300 Billion of reserves that were “frozen”.
John, many thanks for your focus and constructive comments.
I follow your line of thought and just wish to add the following:
(1) by “inside Russia” I meant of course “inside Russia´s technical IT domain and ledger control etc.”
(2) Alex right above your post posits an attendable perspective also. Thanks Alex !
(3) I clearly follow your check example and if that were the case — not my expertise BTW — and you were correct (quite possible) then there´s a future problem to be advised of.
Of course if money can be laundered + ironed out + dewrinkled by whomever however wherever well this time around at least a part of such could be made anonymous or whatever we wish to call it… but not without its possible pending problems given the sheer SIZE of the terrorific sums of euros or dollars or yens or GBP we are talking about here
(4) John, if you were correct, then physical gold bullion would be pretty much the last resort left standing otherwise cold & hunger in Europe.
Re gold bullion payments, I´ve published here in The Saker two most pertinent articles this time within my specific expertise which I strongly suggest reading as a matter of further debate if you wish to, namely
Dear John, above you say:
“Of course the minute they do this nobody would ever get another oil or gas shipment from Russia. My point being that Russia or whoever ends up with those euros will have to dispose of them quickly. Otherwise they may be added to the $300 Billion of reserves that were “frozen”.
(1) Still, if these EU transferred euros were nullifyable or revocable it would actually hurt MUCH more if that happened well into the future as the amount of “poisoned” euros piled up would be monstruous. So the sooner these euros are negatively affected (nullified) the smaller the problem. And, as you say, after doing such revocation nobody would ever get another oil or gas shipment from Russia, but that´s a story for another day.
(2) The system proposed would not be implementable as it´d be like a hot potato tossed around like in a sort of “musical chairs” environment right ? So…
(3) that´d leave GOLD as the only Western money able to pay for Russian imports
I am afraid that there is a lack of understanding as to how banking works (I’m not blaming anybody – it is a dirty business after all). You think that by having the Europe’s in a Russian domain they are exempt from sanctions? That is simply not so. Think of the process like a check that you have sent To Gazprom bank. GB may choose to pass on the check to “China Enterprises Inc.” all the same the European issuer of this check knows that it pertains to the check it issued to Gazprom bank originally. Hence it can cancel it at will. Of course if it does that Gazprom will turn off the gas. My point being that whoever ends up with the euros from gas sales would better spend those euros promptly or run the risk of adding to the $300B pile of “frozen” Russian reserves.
Is it a common procedure in international, or any, business to “pass on” a check to another entity?
In my world, this requires first signing the check oneself, then writing on it, “Pay to the order of [third party]” So, first you have to more or less take possession of the payment or validify that you have a right to the money. (Even so, it is still sitting in the payer’s account.)
But this is not considered a very good practice and I really can’t imagine paying anyone with a check written to me, or allowing myself to be paid by means of such a check, or a promise to pay another person.
One should deposit the money first in one’s own account. Then, when it has cleared and the money is actually there, one has to have enough money in one’s account to cover any check one writes to another party.
This discussion is way over my head, but still: Doesn’t a payee have to actually take possession of money, whatever that means, before drawing on it to make payments to third parties?
Taffy, you say:
” One should deposit the money first in one’s own account. Then, when it has cleared and the money is actually there, one has to have enough money in one’s account to cover any check one writes to another party. ”
Okay, everything is fine with what you describe. As you correctly say Taffy, in this case the euros in question are definetly transferred by an EU bank and are cleared and effectively 100% deposited in Gazprombank, no check, no endorsement, nothing. That´s settled hunky dory. It is a direct credit received by Gazprombank which, by the way, belongs to the Russian Monetary Authority, NOT the ECB or European Money Authority.
So I posit that the transferred euros have changed their legal and technical jurisdictional domain ending up under the perview of the Russian Monetary Authority… something which from my perspective changes the ball game altogether, although John Derpanopoulos cordially disagrees… and he may be right !
So after unequivocally receiving such 100% legal euros, Gazprombank converts them into roubles which thus enter into the Russian economy.
Now then, the problem John Derpanopoulos and I are discussing now is what happens to the euros transferred to and received by Gazprombank from an EU bank under the European Monetary Authority perview… Most specially we are discussing where could these euros possibly end up, under what terms and conditions… and most specially if them euros end up being traceable or not ( just like a check would be ) and if them euros are nullyfiable, revocable or able to be clawed-back for whatever reason or criteria — current or not current, arbitrary or not — by the original payer which was an EU bank under European Monetary Authority regulations and perview.
Hope this brief explanation helps, cordially Jorge
Dear John, thanks for the patience and educational experience to us all, including myself.
In sum, I see two possibilities regarding the European transfer of digital euros to Gazprombank for instant conversion into rubles (true enough) but leaving those euros floating somehow somewhere in the market.
Case (1) such transfer is identical to a check, in which case you´d probably be 100% correct and whomever eventually ends up with such “poisoned” euros is left holding the bag, i.e., very bad news however we may slice it because such transfered euros could still be nullified, revoked or clawed-back from whomever has them or attempts to use them in payment or investment of whatever wherever thus being sanctioned same as Russia would have been.
Case (2) such transfer by being digital is way different to a check, and thus the corresponding digital record within Russia´s technical IT domain and ledger control becomes virtually un-traceable as I originally posited, in which case end of story as such euros would be freely transferable and untraceable to anyone, including “China Enterprises Inc.”
Now then if Case (1) above were correct, then the Gazprombank conversion system would NOT fly well as it´d be next to impossible find some third party willling to be left stuck holding the bag with nullifyable euros same as Russia would have been
So in such Case (1) I firmly insist on the point raised in my previous post regarding physical gold bullion which would be pretty much the last resort left standing, otherwise cold & hunger for 800 million Europeans
I urge you to visit my two articles within my field of expertise namely
Would us two agree that a possible solution to the pending “complications” of the euros transferred — that could potentially be nullified once received by third parties… or even before that — would be for Gazprombank to convert absolutely ALL of such transferred euros instantly into Roubles ?
No euros left alive & kicking, no traces, nothing.
All euros received from the EU converted instantly into Rubles so they would just pufff poetically disappear into the cosmic ether and be left to circulate freely as Roubles within the Russian economy ? You agree ?
Russia could actually also end up paying for imports with such Roubles as per new trade arrangements in rubles-yuans or rubles-rupias or rubles-reais from Brazil ?
If someone who has paid in euros thinks that they can somehow be clawed back just because they are still euros (hard for me to grasp this idea), then, IMHO,
All euros should be changed to rubles immediately.
Whatever that means on the digital terrain.
The new rubles would be “moved” to a different “place,” a ruble fortress, that is surrounded by a digital firewall. At this point the euros are no longer euros but are rubles. Their euro existence is over. (Russia could issue some kind of digital receipt to the payer showing that the euro payment has been transformed into rubles.)
Each euro payment should get a special digital signature/ID, be changed into rubles, and then be put into a folder bearing the same ID with an addition showing that it no longer exists qua euro and only exists qua rubles within the ruble fortress.
And it is behind a firewall that only the Russian state can access.
To be used in the Russian economy each sub-account would have to be terminated and the contents transferred to a separate account that is a kind of disbursement account. Thus each euro payment could be tracked from the time it enters the country to the time it gets past “passport control” and enters an account from which funds are released into the general Russian economy and each batch of money is in just one place and one form at a time.
it would not be possible to get a load of euros and use the same euros to pay China for something. That starts to sound like a weird kind of barter system where some euros never get entered onto Russia’s books. .
All foreign currency would have to go through the ruble mill and enter the ruble fortress.
That’s the nice thing (that most people don’t get) : it doesn’t matter!
What matters, is that rubles come into the Gazprom bank account.
So, indeed, the euros on the euros account could be frozen, or they could be blocked to arrive, or they could have a hard time to be exchanged for rubles (because of an exchange ratio unfavourable to the euro, or because it becomes hard to find willing purchasers for those euros); but it doesn’t matters; those euros may be on a russian bank account, they are still property of the the gas purchasers; so any bad thing that may happen to those euros is the purchaser’s problem, not Gazprom problem.
But if payment in rubles doesn’t appear on Gazprom account at the given time, then there is technically a default of payment, and the delivery of gas is stopped.
In other words: that mechanism switched the burden of the western sanctions into the (western) purchasers.
It is now the EU problem, not Russia’s problem!
For Russia it is very simple: if you pay, we deliver, if you don’t pay, we don’t deliver.
The only thing is that instead of Russia going to the buyer house to get the money (as previously) it is now the buyer that has to come to Russia’s house to give the money.
Pavlo you say
” For Russia it is very simple: if you pay, we deliver, if you don’t pay, we don’t deliver.
The only thing is that instead of Russia going to the buyer house to get the money (as previously) it is now the buyer that has to come to Russia’s house to give the money”
Correct, the same would most probably be for gold delivery if that option were applied as Russia has unequivocally proposed. Under current circumstances I don´t think that Russia would run any delivery risk at all flying over or driving through enemy territory or by train or boat or whatever. I´d guess it´d be the buyer´s responsibility to land physical gold bullion delivered at a pre-arranged airport or location always deep inside Russian territory for many good reasons
I read either on reuters or politico.eu yesterday: Euros are wired to Gazprom Bank Moscow then sold in Russia for rubles and the costumer account is credited with the according amount . So the Eu countries also have to worry about the exchange rate
Stop sending gas, and find a way to live with the consequences. Helping your enemy in a war, seems less than wise.
Except this way Russia rubs Europe’s face in the fact that they’re financing Russia’s military operation. Imagine the frustration of having to continue paying your sworn enemy.
Russian leadership clearly makes a distinction between the people of Europe and the EU leaders. Ditto for the people vs ‘leaders’ of USA. Russia all along is trying to avoid causing the people to suffer. And if the insane Western leaders create situations in which the people must suffer, then Russia will make sure the people can clearly see who is making them suffer.
It’s very impressive.
Personally I wonder if the Russian game-plan decision tree includes eventualities in which a few key buildings in Europe and USA receive visits from Mr Khinzal with maximum effect, while the Elite Union monkeys and Empire of Flies are in session.
They’d be doing the people of the world a big favor.
Incidentally, isn’t it heartwarming to be reminded so clearly that Macron and Biden have something in common besides being two sides of the pedophile coin.
The only way for the EU to make energy purchases in Euros act like Schrödinger’s Cat is for Russia to act like Pavlov’s Dog. In that case we would need to ask Mr. Heisenberg for the exact location of the FIAT money.
Fortunately that is never going to happen under Mr. Putin.
The Euro currency is not truly fiat in origin, it is all created as interest bearing debt ex nihilo by private banks such that no debts = no money.
Even if the Euros held by Gazprombank in Moscow are not spendable due to US sanctions, the debt incurred to create them is still extant. Who will repay the debt to the Euro banks ?
When the principal of a loan is repaid the bank is required to delete it bank out of existence, but now the bank must write them off as bad debt that adversely affects their reserves.
The rubles so conveniently created without incurring debt will be spent into the Russian economy. You may well ask why doesn’t Russia’s central bank just create rubles in the first place, but it may take a constitutional amendment to do this legally under Russian law.
The EU leaders behave the way do as they have not seen their own ever hanging from lamp-posts . Yet , that was a very common way of changing government or getting ones views heard. Hang a few of these stupid and /or scheming EU leaders and you watch how they all develop sense very rapidly.
So tell me , why do you think both the EU and the US’ police-forces have been militarised so much over the last decade or so? Did the these leaders see their major threat coming from the inside or outside, do you think?
von der Leyen and Scholtz are prime candidates for swinging don’t you think?
How would Russia support cost of production with these non existent and non usable euros?
Schrodinger euros-nice coinage.
Xafer, many thanks for your encouragement.
It helps a lot, trust me.
I should have included you with Henry Claud and Casey
Brilliant, but how does this play out now for Poland, et. al.? Maybe they can muddle through the summer with blackouts and rationing, but what happens in the fall?
Checkmate you foolish Poland et al, that´s what happens in the fall… or even before.
Summer does not look good either with probably very little A/C no tourism to speak of probably fuel-short and food-less, etc. etc. etc…
Of course, one ultra-low probability political event would be for Poland et al to see the light bro and wipe the slate clean by getting rid of their current political class altogether including the European Parliament authorities etc etc etc thus reversing course 180 degrees accepting to pay Rubles for Russian imports… and yet more.
Basically it would mean a full-fledged Revolution breaking away from the Anglo-Saxon dominance and continuous meddling both sides of the Atlantic in a “you win Russia, we lost, sorry for all the trouble we caused” situation… so let´s make friends real fast Russia and defend ourselves from our common enemies together. If China joined the project it´d be checkmate for the Rule Britannia Yankee Doodle ideology…
And the BRICS would necessarily follow.
This, of course, would find VERY strong opposition in the current power circles of the Western coalition worldwide basically meaning the Davos crowd, Canada, Australia, New Zealand, Japan, South Korea and (possibly) Taiwan for what it might be worth. But, that ain´t going happen, is it ?
Hmmmm….well, but options are very VERY very limited also right ? Right ??
Russia has been pushed too far for too long no ?
And it´s also very easy to see though that the alternative to the above European-Russian Revolution does not look good either for Poland et al, does it ?
We shall see very soon, one by one the cards are inevitably being played out.
Europe has suddenly become a very dangerous place to be at.
As Newton would say, “everything acts as if” it will soon get much much worse.
Excellent analysis and rib-digging commentary!
Taffy, thanks !
And as we say back home, please accept my humble and respecfull ´bear-hug´ of sorts.
[ donning my face mask maybe ? ahahhah ]
Those crazy Lithuanian lawmakers with their masks on!
Are they afraid of each other’ breath??
While snarling at Russia??
How can one expect such craven boobs to grasp reality and come up with sensible policies?
well done Jorge! Thank you.
This is a very tough and lonely endeavour fully misunderstood by most.
Encouragement means a lot to me.
Thank you both
Hello Jorge, you’re not alone and your wonderful team on Vineyard will become main stream sooner than later. Please, keep doing your great work at this historic moment, words can’t express my gratitude. Thank you!
Step1: Get the Europeans to set up Rouble accounts. But let them still pay in Euros, and let Gazprombank take care of the exchange…. but, the Euro companies have now established Rouble accounts.
Step 2: As contracts expire, eliminate anything about payment in euros or dollars in the new contracts, just deal in roubles. You all already have rouble accounts, so no biggie.
Step 3: Time to pay. “Where do we get roubles from?”. “That’s your problem, you want quality Russian gas and fertilizer, you pay.”
Step 4: The rouble is a reserve currency that is hard money linked to gold.
You can’t sanction a country that has a current account surplus.
JackG, I read you, BUT…
True enough, you touched upon the REAL problem, I agree… but possibly without understanding the consecuences per your Step 3. I am referring to a NEW real, effective, completely UN-expected internal NATO war amongst Europeans… NOT with Russia… as it´d be too powerfull to engage in real war.
Because you ask: “Where do we get roubles from?”
And you add “That’s your problem… etc”
Helluva an UN-solvable problem JackG…(!!!!) which by definition CANNOT be solved, unless…
Because today, for obvious reasons, Roubles are very very scarce outside of Russia.
Not anywhere near enough to go around for everything and everybody as them all would need today.
So, you can´t import Russian fuels and other produce as you badly badly need to do in HUGE quantities… with so miserably few Roubles that can be found…
(1) you either convert euros — or dollars or GBP or yens — to roubles at a Gazprombank account inside of Russia
(2) you “find” your own gold bullion if it´s still exists and sell it for Roubles anywhere, probably to Russia.
And that´s precisely why The Saker published two key articles of mine, namely
The mother of all reality checks is in the mail.
Whattabout EU gold derivatives and EU gold bonds which are as good as physical gold and probably more valuable if Russia keep these financial stock market papers in their coffers for many years?
In reality physical gold bullion has no more value than simpel stone. Warren Buffet has said that and therefore you can trust it. Buffet would never lie about WMD.
Problem resolved, Putin and Russia can get valuable paper gold from EU in exchange for gas and oil and other resources. An offer Putin cant refuse.
Tommy Jensen, I smell the wiff of your probable sarcasm.
BTW, the answer to Warren Buffet´s goldphobia can be easily found only searching into a very little bit of his personal history re his own father.
But just in the very rare case that your proposal were serious, I humbly beg to disagree.
Under current circumstances paper gold is worthless.
He who has the physical gold makes the rules.
So just in case please do see both of these very recent The Saker articles of mine
“In the first place, Schrödinger euros should have never been created by the EU and only to be really defined as “theft”.”
There is an old saying …. “Property is Theft”
If you lived in a communal society, where everything was shared among the group as needed, then a person grabbing something and saying ‘mine, mine, mine’ would be ‘theft’ as they’ve stolen it from the rest of the community. So, the above may sound radical today, but by the norms that human beings lived under for millennia, pre-civilization if you want, it would make perfect sense.
Sorry, couldn’t resist when I read your sentence. :)
The old ‘Popeye’ cartoons used to make your point with a joke, as J. Wellington Wimpy would regularly say “I’ll gladly pay you Tuesday for a hamburger today”. The folks who lived through the Great Depression thought that was funny, and apparently it never got old to them, as the joke was repeated often.
Of course, the old physics student in me can’t help but to point out that in Schrodinger’s mind experiment, some of the paths lead to a case where you open the box and find a deceased cat. That could get pretty smelly if you wait too long to open the box. Then again, if you wait long enough to open the box, all random chance disappears and you will always find a dead cat.
“ Meanwhile, back on planet Earth, four EU buyers made gas payments in Rubles and at least 10 countries have set up Russian bank accounts in Rubles.”
~ The Schrödinger euros by Jorge Vilches for the Saker Blog
Five Stages of Grief by Kübler-Ross:
5. Paying in Rubles
Ha ha ha!
Europe is in no position to “demand” anything. They will come to understand that when the weather get colder & their citizens start looking to affix blame for them freezing their butts off.
Hunger & cold are powerful motivators.
Wild Rose Ranch,
Actually Russia has effectively caught the EU in a rather poetic trap of sorts whereby further sanctions or restrictions of any type will raise prices even further.
As a result, for lower physical deliveries and corresponding energy output, the EU pays ever higher prices and Russia makes ever higher profits. I mean, how can the EU play its cards so badly, it´s sad.
And the US as well. Many of us are amazed at the stupidity of our own government. Our politicians apparently are only interested in what they can skim off of any foreign aid given. They are clueless regarding the consequences of their present agenda… both domestically & internationally. People here are getting fed up.
Will the Euroweenies ever wake up to the fact that Uncle $hmuel doesn’t give a damn about them? What is the hold on Europe that the U$ has that makes them so dependent and willing to sacrifice their sovereignty and dignity? It has to be more than just not having to spend money on defence. How much does the U$ line the pockets of European leaders with?
The kleptocracies running the enterprise have gotten in so deep, that any next step might be over the edge of the ravine.
Basically, what they are looking at is: we either hang together (and hope for an opportunity to kick the can down the road to appear)…or we are sure to hang separately.
If they can break Russia in a long enough timeline – there is wealth beyond imagination, the enterprise can continue on for another few centuries…
The other two alternatives are the pitchfork or suicide. And the suicide option judging their character shall be vindictive.
Ok got it Borrell wants to resolve matters on the battlefield in order to rebuild relationships. So most likely Europe will change master from USA to Russia? Well I think we need to have a vote about it. Fact is that we are screwed but I would still go for an independent democratic Europe living in harmony with its big Neighbor ( Russia) even at the peril of its smaller Neighbor on the island (UK) or the far away uncle (USA) which is trying to screw the niece ( EU) .
Kesnet, thanks for the input.
Actually, it wouldn´t have to be that “Europe will change master from USA to Russia”.
Rather what the Russians have been saying all along which I mention — among many other important aspects — in my recent “The Saker” article at http://thesaker.is/russia-has-a-plan-the-west-does-not/
(1) Please no more unwarranted Russophobia
(2) “We don´t have to be friends if you don´t want to, only arms-length trading partners and business associates. But don´t make us your enemies, we do not want or need to have enemies, and neither should you”. Mind you, under any jurisprudence self-defense is still 100% legitimate.
(3) hint: don´t love them, just do business…
I was being sarcastic but to have a future Europe needs to transition from under the joke of the Anglos to autonomous decision making or it will fall apart into sovereign nations ( in my opinion most likely) with the danger that these nations will be played against each other by the usual suspects (UK and USA) and we will have war in Europe again. The same way as the Anglos played Ukrainia into a war against Russia .
Finns are already paying Russian gas with rubles. Confirmed today by YLE. Finnish politicians hide behind back of German energy company. Big talks of “abandoning Russian gas”, reality total the opposite.
per the very British BBC
obvious unavoidable EU infighting
“Poland – one of the staunchest advocates of tougher sanctions on Russia – said the EU should penalise countries that used roubles to pay for Russian gas.
Climate minister Anna Moskwa singled out Germany, Hungary and Austria as resisting a gas embargo.
“We are counting on there being consequences for these countries [which pay in roubles] and that as a result they will cease paying in roubles,” she said.
Hungary and Slovakia have both said they will use Russia’s conversion payment method.
Many Europeans waiting idly sitting on the fence just frightened to death (literally)
That reminds me of one of my favourite vids:
Guess who is who in this context?
This is similar to a poker game, at the OK corral. The players are all playing with poker chips (currencies), possessing no intrinsic value. Each player also has, behind a banking curtain, unseen by the other players, a counterfeiting machine which can create as many of their own poker chips, as they want, while pretending that they, being gentlemen, will only use the chips they have on the table.
No-one trusts anyone, and the underlying emotional mood is ‘hatred’.
Each player is also assembling, outside the window, a huge store of armaments, and war machines.
The OK corral music rises to a crescendo. Who will turn the table over first, to reveal that they are already pointing guns, at the other players.
The corral music then morphs into the Indian sitar, and the ‘Bhagavad Gita’ scene from the Mahabharata!
The Rhymes of History!
2030 = year TWENTY THIRTY right ?
What does Europe do till 2030 ???
How much and for how long will Europeans take this ????
Panic and division amoc in Europe
“The EU has proposed a plan to make Europe independent from Russian fossil fuels before 2030 – including measures to diversify gas supplies and replace gas in heating and power generation ”
“The UK is to phase out Russian oil by the end of the year and the EU is reducing gas imports by two-thirds”
“Russia has warned banning its oil would lead to “catastrophic consequences for the global market”.
Despite sanctions, since the start of the war Russia has almost doubled its earnings from selling fossil fuels to the EU, according to the Centre for Research on Energy and Clean Air, as oil and gas prices have soared.
One of Germany’s biggest energy firms has said it is preparing to buy Russian gas using a payment system that critics say will undermine EU sanctions. Uniper says it will pay in euros which will be converted into roubles, meeting a Kremlin demand for all transactions to be made in the Russian currency.
Great article, thank you, helped me to ‘flesh out the bones’ of something I read on another site that described the actual arrangements as “Transferring foreign exchange counterparty risk from the seller to the buyer” which kind of sort of made sense to me.
Also thanks for the Schrödingers euro concept; this has the sense of a meme that could be greatly extended. For example – paper gold contracts become Schrödingers gold, or the murky world of financial derivatives generate Schrödingers wealth where everyone declares assets on their balance sheets but nobody dares to try and cash in those assets!
West of England Andy
Nice ideas, excellent project re paper S-gold and S-wealths, which could also give rise to S-profits !
Or even S-verbs with corresponding tenses such as I should Schrödinger, you should Schrödinger, etc… hahaha
And many thanks for your encouragement Andy !
Abandoning fossile fuels even in production of electricity is possible only by building more nuclear energy. Irony here’s that actually European Greens are greatest Russian allies. The main problem with renewable energy is in its random nature. The ratio between windless days and windy days is almost 1 to 100. Germany has capacity of 65 GW wind power. Most of days these mills are able to produce just 5 to 15 GW. There are days when real figure is just 2 GW. And in 2020’s there are tens of thousands of aging windmills Germans have to close. That’s why increasing capacity is now actually much harder than in 2010’s. Price of steel is making wind mills far more expensive than few years ago.
The stability and predictability of European electric prices is now just history. There are now spring days when price are hitting 300 euros per MWh while some windy days price goes down near zero. Quite soon consumers are paying for 1 MWh electricity including taxes and VAT annually more than 500 euros. At the same time Belorussians are paying for 1 MWh natural gas just 5 euros and Russians 8 euros.
“The idea being that such “hypothetical” money may be considered simultaneously both existent and/or non-existent and/or in the process of becoming existent or non-existent at a particular point in time or window as a result of events that may or may not occur …”
Your excellent explanation of the s-euro dilemma seems to me also a metaphor for the bilge of brain-wave flattening, mind-bending pronouncements from media, government and non- governmental entities daily towards a populace increasingly unable to differentiate between what exists and what does not.
Thanks for your kind words Sarah.
I also agree with you in that MSM etc are trying ever harder to train the human brain to underperform real capabilities thus cheating everybody´s perception of what reality is about. Thanks again gal !
No rubles no trade. It simply has to be this way and no power on earth should be able to change that. The EU needs to be brought to heel they are drunk with power that isn’t there. Stealing everything in sight showing their true colors. Germany is sitting at a crossroads with them making mistake after mistake behaving more like Poland than the biggest economy in europe. Scorched earth lite no shooting but bring their own nation to its knees for a lie. Ukraine has nothing to offer Germany but grief and another mouth to feed. The hill they are dying on has no upside just a bottomless pit of oligarchs and their nazi enforcers exporting suicide. The lines are being drawn they will be on the wrong side of them. The EU dream will not last the decade.
The mythical pipe from norway i see all of europe talks about relying on when its operational. Capacity be dammed . Breathing through a straw is a close analogy .
You hope so,but that is not what’s going to happen. I am not knowledgeable about banking, but I do no a lot about reality. All we hear everyday is the threats and bullying from the West. Why does it continue, when it clearly is not working? It is because they have nothing else,and now must pay for gas and other commodities in roubles. Find a way to pay or receive nothing.
Poland, one of the most racist countries in Eastern Europe refuse to pay for gas in roubles. Gazprom said that Poland was receiving gas from Germany, not allowed under existing contracts. If Europe is forced by America,all energy and minerals will go east, and you can burn wood and eat grass.
It is going to be a very hot summer, and even in Canada; we will feel the heat.
Without detracting from the points made in this article, from what I can tell, the real issue is the bank. Gazprom Bank WILL accept Euros or Dollars. But it converts them to rubles when it pays Gazprom energy.
Because western banks have denied Russia access to its own funds, Russia is forcing them to use Gazprom bank for energy transactions. Doing so assures that Russia’s accounts cannot be frozen; it gives them some control over the exchange rate; and it potentially gives Russia the ability to freeze 𝙩𝙝𝙚𝙞𝙧 accounts.
It also encourages consumers to use Rubles instead of Dollars or Euros instead of going through Gazprom Bank to purchase energy. 𝗧𝗵𝗮𝘁 directly threatens the Petrodollar and the Eurodollar (It’s complicated).
The bottom line, as everybody already knows, is that if you don’t pay your utility bill, they shut off the gas. Any proposal that is made will have to deal with that reality.
The buyer has to have two accounts, a $ or Euro account and a Rouble account. The buyer pays $s or euros to his 1st account, Gazprombank would then try to sell the foreign currency in Moscow stock market for roubles. Then those roubles would be placed in buyer’s 2nd account, from which gas will be paid to Gazprom. The keyword here is “try to sell.” As both accounts are buyer’s, it is still his problem to help those $s or euros be sold and roubles bought and placed in his second account. Until gas buy is paid in roubles, the stability of both accounts are buyer’s problem, not the banks.
The buyer is NOT the king anymore, but the seller. And, he’d have to make sure, very sure, that the $s or euros become roubles and stay that way.
Great essay! Many thanks.
Russia’s currency move has exploded Wall Street’s Financialization Myth, that currency is senior to, and controls resources.
Everyone’s entitled to their own currency, of course, but that does not automatically entitle them to own someone else’s resources.
Russia can survive without foreign currency far longer than Europe can survive without energy and food.
Thanks for your favorable comment Robert
Thank you Jorge!
At last, a highly readable write-up that explains to a layman how Russia is — pardon my language — stuffing the West at its own game. Pleasure to read.
Great comments from the Vineyard’s commentariat and your continued engagement IMHO has helped in my understanding of the issue no end. Thanks again.
Your detailed acknowledgement means a lot to me and encourages my continued participation beyond the article itself. Many thanks !!
When trust is lost between countries, and their currencies, then the countries should establish a clearing market, a bartering system, to collectively trade the value of commodities, and services.
The market can be cleared each day, with the difference in accounts, balanced by the transfer of physical gold.
The exchange rate between currencies, can be determined by the value of the currencies, in relation to the international gold price.
If no common ground can be found, then the gas and oil lines are turned off. A sense of fair value, in the exchanges, must be created, until trust returns! Too simple?
The best minds in Russia are working on a commodity backed ruble!
The only astonishing concept here is why these financial dilemmas were not sorted out centuries ago?
OK,so now Russia is forcing the EU to pay for their gas in Rubles,that’s good. But does that mean that all the other commodities Russia is supplying to the EU,oil,coal,electic power,metals,and food,are still being paid for in those frozen Euros? If so that seems crazy,why sell products that you don’t get paid for?
My goodness. Gazprom isnt sanctioned. EU contries or entities pay Gazprom for any energy feom any energy source. Gazprom uses the euros to buy rubles. It then dispenses the rubles to the parties owed money. It was the window left open. What you hear on tv is nonsense to make the people watching tv think things are happening. IF or WHEN Gazprom is sanctioned, EU will have to buy the rubles in thr fx market or not get any energy. So 1 of 2 things. It is all a con. Minsk 1 and Minsk 1 couldnt be implemented because west ukraines military in the east doesnt listen to west ukraine. So most probably all parties involved are ok with the smo. Including eu/us. Neither has done anything worth a damn to stop it from happening or ending it. They are trying their best to provide cover news to juat let it happen.