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| Kremlin: If The US Tries To Hurt Russia's Economy, Russia Will Target The Dollar |
| 2014-03-16 |
| h/t Gates of Vienna Another warning shot was fired before an all-out assault on the dollar system begins. This time, an official shot: Alexey Ulyukaev, RussiaÂ’s Minister of Economic Development and former Deputy Chairman of the Central Bank, fired it. It was a major escalation, Valentin Mândrăşescu, editor of The Voice of RussiaÂ’s Reality Check, told me from Moscow. Last time, it was Sergei Glazyev, an advisor to Vladimir Putin whoÂ’d fired the shot. But he wasnÂ’t a government official. “Anonymous sources” at the Kremlin claimed he wasnÂ’t speaking for the government. As Mândrăşescu reported in his excellent article, From Now On, No Compromises Are Possible For Russia: From the economic point of view, everyone should get ready for tough actions from Moscow. Sergei Glazyev, the most hardline of PutinÂ’s advisors, sketched the retaliation strategy: Drop the dollar, sell US Treasuries, encourage Russian companies to default on their dollar-denominated debts, and create an alternative currency system (reference currency) with the BRICS and hydrocarbon producers like Venezuela and Iran. Unlike radical-sounding Glazyev, Ulyukaev is part of Dmitry MedvedevÂ’s Cabinet. And as former Deputy Chairman of the Bank of Russia, he doesnÂ’t take currencies lightly. He told Rossia-24 news channel about possible retaliatory measures if Washington adds economic sanctions to the political sanctions. Moscow wouldnÂ’t worry too much about political sanctions, he said, but if Washington tries to hurt RussiaÂ’s economy, Moscow would retaliate by targeting the US dollar. Some of it is already happening WashingtonÂ’s decision to release a minuscule 5 million barrels of oil from the Strategic Petroleum Reserve caused the price of oil to tank – a direct attack on the main revenue source of the Russian government, and a sign that Washington is willing to hit where it hurts the most [read a traderÂ’s lament.... Commodity Markets Will Be Used As A Weapon Against The Putin Regime, Starting Now]. Russia instantly retaliated, it seems. Suddenly, there was a mysterious mega-plunge of $104.5 billion in US Treasuries held in custody by the Federal Reserve during the reporting week ended March 12. It brought the balance down to $2.86 trillion. These securities are owned by foreign countries. As of the US TreasuryÂ’s December statement, the most recent available, the Fed held $138.6 billion in Treasuries that belonged to Russia – down by $22.9 billion from a year earlier. The mega-plunge of $104.5 billion? No data is available yet to confirm these securities belonged to Russia. And if they did, itÂ’s unlikely that Russia dumped them on the market, but it could have transferred them to another banking center, such as Luxemburg, to get them out of reach of the US government, and be able to dump them at an opportune moment. Getting out from under the dollar Russia has been palavering with other countries about initiating alternatives to the dollar. Formal plans emerged from the Kremlin last May on how Russia wanted the BRICS to dismantle the dollar system. So now it was Ulyukaev, an official heavy-weight, who said that Russia would work on increasing the volume of international trade denominated in national currencies, thus bypassing the dollar (translation by Mândrăşescu): “Why should we have dollar contracts with China, India, Turkey?” he said. “Why do we need this? We must have contracts in national currencies. And this applies to energy and other spheres.” The focus would be on Russian oil and gas companies. “They must be braver in signing contracts in rubles and the currencies of partner-countries,” he said. “I think now there is an additional impetus to finally finish this job.” And the “currency reserve policy” would need some adjustment with maximum focus on “local currencies”; it was the normal way, he said. In MândrăşescuÂ’s analysis, Ulyukaev was outlining an attack on the petrodollar system and the enormous advantages it confers on the US, with the goal of creating parallel petro-currencies. Media blackout in the US The warning, issued officially and publicly by a Cabinet member, to target the dollar, has been vigorously ignored by the mainstream media in the US. ItÂ’s a touchy subject here. The dollar reigns supreme. Its status as the sole world reserve currency, which has provided the US with enormous economic advantages, remains unquestionable forevermore. Or so wishes the Fed, which has done such a wonderful job of managing the dollar for the last 100 years that it has lost most of its value, though itÂ’s still a heck of a lot better than the ruble. “I have a suspicion the Western media don't want to report on this,” Mândrăşescu said. “It could be a bit unpleasant for the S&P 500 and the nanobots trading the US stock market.” Better keep them in the dark. It took a while. But it had to come, the public warning shot – after some ferocious lobbying behind closed doors. No one in Germany is allowed to get in the way of the sacrosanct exporters. Read.... German Exporters Fire Warning Shot About Russia “Sanction-Spiral,” Banks At Risk |
| Posted by:g(r)omgoru |
| #8 Why not threaten something Obama DOESN'T want? They're damned if they do and damned if they don't. |
| Posted by: gorb 2014-03-16 23:14 |
| #7 Yokay, people, time to get a grip - THIS IS SUPPOSED TO OCCUR BEFORE THE MOVIE PREMIERE OF "JACK RYAN: SHADOW RECRUIT" IN THEATERS, NOT AFTER. Is it time for "Lamentations"??? |
| Posted by: JosephMendiola 2014-03-16 22:46 |
| #6 Ah... so its no different than saying Cheddar is a cheese and not a place that makes a type of Cheese. Replace Cheddar with Ethnic Russian and place with Crimea. Ethnic Russian is Russian being in Crimea does not make them Ukrainian nor Crimea part of the Ukraine. The EU has no problem with the above so I guess they can shove their fascist place origin rules on food where the sun don't shine. |
| Posted by: 3dc 2014-03-16 20:21 |
| #5 If Russia sells, someone will buy. So? |
| Posted by: European Conservative 2014-03-16 17:40 |
| #4 ...not to be confused with his ego, which apparently occupies an entire alternate universe. |
| Posted by: Procopius2k 2014-03-16 17:32 |
| #3 Obama has already destroyed US credibility in numerous other areas. Just enhances his narcistic plan to bring the US down to his size. |
| Posted by: Omavising Ebbemp9815 2014-03-16 17:26 |
| #2 Why not threaten something Obama DOESN'T want? |
| Posted by: Thing From Snowy Mountain 2014-03-16 16:37 |
| #1 Hard to think whet they can do that Bernake, et al haven't already done. |
| Posted by: ed in texas 2014-03-16 16:23 |