Russia prepares to attack the petrodollar

Discussion in 'Markets & Economies' started by BullionDollarMan, Apr 10, 2014.

  1. BullionDollarMan

    BullionDollarMan Member Silver Stacker

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    http://voiceofrussia.com/2014_04_04/Russia-prepares-to-attack-the-petrodollar-2335/

    Russia prepares to attack the petrodollar


    Read more: http://voiceofrussia.com/2014_04_04/Russia-prepares-to-attack-the-petrodollar-2335/

    Also found the following links:

    http://www.presstv.ir/detail/2014/04/06/357386/china-uses-economy-to-avert-cold-war/

    http://www.informationclearinghouse.info/article38165.htm
     
  2. tolly_67

    tolly_67 Well-Known Member

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    Another sign that the u.s. dollar is going to...........rise.
    For soooooo many years these theories have abounded to what end?
    Be prepared for the fleecing of a lifetime as the U.S. dollar shorts get creamed. More stories...more suckers. Maybe a few more months before it starts...
    As for these shorts...each level will get smashed....set up and smashed again.
     
  3. millededge

    millededge Active Member

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    Russia is totally dependent on the price of oil and gas
     
  4. millededge

    millededge Active Member

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    although, you have to wonder if there is a new Ribbentrop-pact in the offing, with The Ukraine, EU and Russian Federation
     
  5. Earthjade

    Earthjade Member

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    I kind of have to agree with this.
    I don't think the US dollar is going to be in any kind of trouble for the forseeable future.
    If the stock market crashes this year, the US dollar will become a refuge again.
     
  6. House

    House Well-Known Member Silver Stacker

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    This should get the party started

    ZH
     
  7. Mr Medved

    Mr Medved Member

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    The developed world is totally dependent on oil and gas.

    You can't tank prices without tanking global trade (and local economies including ours).
     
  8. millededge

    millededge Active Member

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    Trade tanks first

    Then the dollar rises and hard commodities/energy fall
     
  9. TreasureHunter

    TreasureHunter Well-Known Member

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    Exactly and what if they start selling it exclusively in rubles?
    Then, the buyer will have to buy rubles first in order to be able to buy the commodities.

    Russia is playing a dangerous game, but so is the West.

    If the financial warfare escalates, it'll hurt both sides. I hope things will calm down soon.
     
  10. Goldrush

    Goldrush Member

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    Can't see any of the other major oil producers in the Middle East apart from Iran abandoning their USPetrodollar arrangement, as they all rely on US military protection and have so for a long time now. It is mutually beneficially for both sides to keep the status qua. War is just an extension of economics and Russia is in a vulnerable economic position to start with. Will be interesting to watch it unfold and see how effective it is.
     
  11. Old Codger

    Old Codger Active Member Silver Stacker

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    #3,

    AGREE!
     
  12. Dabloodymess

    Dabloodymess Active Member

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    I have spoken to a few people now who are worried about the Russians and Chinese dumping their US treasuries. In fact, a lot of people here seem to think that is actually the ace in the hole for the two rising powers.

    But what they don't understand is that it is just funny money. As soon as there is any indication of a dump, the fed will add some more zeroes on their screen and scoop the lot up. No crash. You would have to be daft to think that the US has not got contingencies for such a situation given that the large foreign reserves held by these countries are common knowledge.

    I wouldn't want to engage in a financial war with the US, they are cheaters. If I was a betting man, I would put the lot on them to come out ahead.

    Interesting read as well: http://blogs.wsj.com/moneybeat/2014/03/14/did-russia-just-dump-its-treasury-holdings/
     
  13. C.H.

    C.H. Active Member Silver Stacker

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    I think you're missing the other part of the equation here. Yes they can "print" all those 0s to buy the Treasuries, but Russia and China will receive all those 0s in this case.
    So the treasuries will be fine, but US dollar and price of whatever (gold?) Russia and China would buy with those 0s won't be fine.
    And they will buy something, because I don't think they trust US dollars much more than US Treasures.
     
  14. Dabloodymess

    Dabloodymess Active Member

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    But if you believe the rhetoric that China and Russia will do a dollar dump to crash the treasuries, then they would have to flood the market with treasuries at well below the going rate. This means the money they receive will be much less than the posted value of their treasuries.

    i.e. China has 1 trillion of treasuries, which they dump at 10cents in the dollar in an attempt to create a crash. The Fed prints up 100 billion (10% of 1 trillion) and buys the lot. China has 100 billion dollars, the US has 1 trillion of treasuries back in its hands. 100 billion is nothing... basically chump change for a large nation in this day and age.

    That's assuming that the Fed would have to do all the work on its own. Its pretty likely that institutional investors would also get in on it and absorb a lot of the cut price treasuries. There could be a momentary dip, but it would recover pretty quickly IMO. Basically I don't think the threat of BRICS crashing the dollar is that big.
     
  15. tolly_67

    tolly_67 Well-Known Member

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    Uncertainty in Europe is putting enormous pressure on the Rouble such that Russian treasury notes will go down the toilet. Regardless of what you think, an impending European war will drive enormous amounts of capital back to......wait for it.......drum roll........U.S. treasuries and they will move up rapidly.
    Why on earth would the Russians and the Chinese dump a sure thing? As sure as the sun comes up tomorrow the Chinese know this fact. They are not swayed by debt, q.e., petro dollar..blah,blah,blah.
    This is just more tripe. You only have to look at the rouble over the last few months and Russian interest rates and you will see reality.
     
  16. tolly_67

    tolly_67 Well-Known Member

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    And moreover, which country is located furtherest from the problems and has the worlds foremost weaponry industry.....ummmmmm...good for the economy don't you think.
     
  17. Pirocco

    Pirocco Well-Known Member

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    If the BRICS countries are so called against the dollar, why do they then buy US Treasuries?
    BRICS totals US Treasuries (billion dollars):
    Jan 2007: 422.4
    Jan 2008: 684.1
    Jan 2009: 1025.2
    Jan 2010: 1215
    Jan 2011: 1532.2
    Jan 2012: 1587.7
    Jan 2013: 1702.7
    Jan 2014: 1732.5
    Look at how the crisis made these BRICS countries support the dollar.
    Whoever that 'VoiceOfRussia' is, apparently it's not those that decide about dollar Treasuries.
     
  18. Lovey80

    Lovey80 Well-Known Member

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    So what happens when China and Russia are only prepared to take no USD denominated assets for their US Treasuries. Ie

    Sure the Fed can add zero's and buy Euro, pounds etc, but that causes the same problem...... The USD cash actually hits the pavement.

    ATM with all the printing since 2007 we haven't seen the hyperinflation gremin. Why? Because the banking system and the US government via bonds issued are soaking up all that extra cash. The US has been exporting all it's inflation and China has been happy to do it in order to continue their needs for massive growth targets.

    They know its funny money and they'll have to dump it sooner or later. What if the Russia situation forces their hands before the inevitable Japanese situation unfolds slowly?

    Even better, what if they created a mini-basket with Russia as a second reserve currency simultaneously? Yuan-o-rouble anyone?

    IF both China and Russia were completely on board to sink the USD, together they could do it over night.
     
  19. lucky luke

    lucky luke Well-Known Member Silver Stacker

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    I wonder where the IMF (and who-ever controls it) and the central banks (who-ever controls them) come into play with all this? Serious question. My brain is starting to hurt with all this non transparent maneuvering
     
  20. Pirocco

    Pirocco Well-Known Member

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    Why? Because most of that 'printing' wasn't printing, electronic money, and so far never spent, only an intrest rate based part on it.
    The ECB already destroyed that 'funny money'.
    http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=123.ILM.M.U2.C.LT01.Z5.EUR
    2008-10 921021 E
    2009-10 1093090 E
    2010-10 1096072 E
    2011-10 1232234 E
    2012-10 1736211 E <- peak
    2013-10 1245577 E
    2014-04 1162843 E
     

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