Vladimir Putin and the rise of the petro-ruble

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Vladimir Putin and the rise of the petro-ruble

Postby JD » Tue May 23, 2006 6:16 pm

By Mike Whitney <br><br>05/22/06 "Information Clearing House" -- -- “If one day the world’s largest oil producers demanded euros for their barrels, it would be the financial equivalent of a nuclear strike”. Bill O’ Grady, A.G. Edwards <br><br>On May 10, Russian President Vladimir Putin ignited a firestorm that is bound to sweep across the global economy. In his State of the Nation speech to parliament,, he announced that Russia was planning to make the ruble “internationally convertible” so that it could be used in oil and natural gas transactions. Presently, oil is denominated exclusively in dollars and sold through the New York Mercantile Exchange (NYMX) or the London Petroleum Exchange (LPE) both owned by American investors. If Russia proceeds with its plan, the ruble will go nose to nose with the dollar on the open market sending several billions of surplus greenbacks back to the United States. This could potentially send the American economy into freefall; triggering a deep recession and an extended period of hyper-inflation. <br><br>Read the rest at:<br><br><!--EZCODE AUTOLINK START--><a href="http://www.informationclearinghouse.info/article13141.htm">www.informationclearingho...e13141.htm</a><!--EZCODE AUTOLINK END--><br> <p></p><i></i>
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Question

Postby antiaristo » Wed May 24, 2006 6:44 am

Here's what I don't understand about this topic.<br><br>OPEC output is of the order of 25 million bbl per day.<br><br>At $70 per bbl that's $1.75 Billion per day<br><br>$640 Billion per year<br><br>That's less than the US trade deficit<br><br>How does that translate into all of those trillions of dollars sloshing around in the world? How does the tail wag the dog?<br><br>Is it all about money, or is it possibly about jurisdiction?<br><br>Both NYMX a nd LPE are common law based. <p></p><i></i>
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Economic Nuclear War

Postby JD » Thu May 25, 2006 2:44 am

Non-US American oil consumption is about 60mmbbls per day. This means that people outside the US need 1.5 trillion US $ per year to participate in the "oil economy".<br><br>These US dollars are obtained by foreign nations through selling items of value to the US. In return, the US rolls its digital printing presses and gives the nations it trades with fiat US dollars.<br><br>This is a remarkable achievement for America. Getting useful real goods in exchange for US dollars which have notional value only. What a deal for America!<br><br>If this comes to an end, look out. The premium standard of living enjoyed by Americans will no longer exist.<br><br>I circulated this article to oil patch and finance industry friends and got a "holy shit" response. I'm surprised people here didn't take more interest in this topic.<br><br>It is interesting that as other countries see the US military occupation stumbling badly in Iraq, that they are quite openly starting to "rebel". The most recent example is Ecuador's nationalization of Occidental Petroleum's Block 15 assets, and to add insult to injury, the OCP transmission pipeline to boot.<br><br>Some rumblings about Nigeria nationalizing Shell's assets.<br><br>And of course Chavez continues to stick his finger in W's eye every chance he gets.<br><br>The American Empire is suddenly looking very vulnerable and not able to project power to its vassal states.<br><br>Remember the old adage about those who don't know history are bound to repeat it? I have to wonder if there is any linkage between OPEC flexing its muscles subsequent to America's failure in Vietnam.<br><br>I'm really concerned this very issue may be the one that really upsets our (relatively) happy little world. It will take some very skilled efforts to forestall disaster. Anyone want to comment as to whether W and his team are up to the job?<br> <p></p><i></i>
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Re: Question,my attempt at a answer..

Postby hmm » Thu May 25, 2006 7:01 am

<!--EZCODE AUTOLINK START--><a href="http://p216.ezboard.com/frigorousintuitionfrm17.showMessage?topicID=104.topic">p216.ezboard.com/frigorou...=104.topic</a><!--EZCODE AUTOLINK END--><br><br>in the first two posts on that thread i attempted a answer to this question using only mainstream sources (excerpts from 7 articles), its a bit long so i wont repost it completely here..<br><br><!--EZCODE QUOTE START--><blockquote><strong><em>Quote:</em></strong><hr>Europe imports about a third of middle-eastern oil and had been paying for this in dollars before the Euro was created.<br>If you understand the concept discussed in the piece from the economist and add up what one third of Iraki and Iranian oil revenues are for 1 year you get ballpark figures that dwarf any potential oil-profits.<br>Rough estimate for Irak:1/3 x 20 million x 365 = 7,300,000,000 dollars a year.<br>Rough estimate for Iran:1/3 x 16 billion = 5.3 billion dollars a year.<br><br><!--EZCODE BOLD START--><strong>This is money the USA doesnt get to print for free anymore.</strong><!--EZCODE BOLD END--><br><hr></blockquote><!--EZCODE QUOTE END--> <p></p><i></i>
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Re: Question,my attempt at a answer..

Postby Byrne » Thu May 25, 2006 8:03 am

<!--EZCODE LINK START--><a href="http://home.austarnet.com.au/davekimble/peakoil/petrodollars.htm" target="top">Published</a><!--EZCODE LINK END--> on 18 May 200g<br><!--EZCODE BOLD START--><strong>Collapse of the petrodollar looming</strong><!--EZCODE BOLD END--><br>by Dave Kimble <br><br>In his annual State of the Nation address to both houses of parliament on 10 May 2006, <!--EZCODE LINK START--><a href="http://en.rian.ru/russia/20060510/47932818.html" target="top">Novosti reports</a><!--EZCODE LINK END--> President Putin said that work on making the Rouble an internationally convertible currency would be completed by 1 July 2006, six months ahead of schedule. To promote the currency, he announced that an oil and gas stock exchange will be created in Russia, that would trade in Roubles.<br><br><!--EZCODE ITALIC START--><em>"The rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in roubles."</em><!--EZCODE ITALIC END--> - Putin <br><br>Russia's oil exports represent 15.2% of the world's export trade in oil, making it a much more significant player than Iran, with 5.8% of export volumes. Russia also produces 25.8% of the world's gas exports, while Iran is still only entering this market as an exporter. <br><br>GlobeAndMail.com is reporting that President Chavez of Venezuela is considering following Iran's move towards pricing oil in Euros. Venezuela has 5.4% of the export market, although since the bulk of his country's exports are of heavy oil to the US, where it needs special facilities to process it, it would be a very brave or foolhardy President that told the US to buy its oil in Euros, or else ... Nevertheless, you can see the attraction for any country wanting to apply some pressure on the world's superpower. And where Venezuela leads, Bolivia may not be far behind. You can see how this could quickly get out of control. <br><br>While the Iranians have been suffering numerous delays in implementing their bourse, Russia could have their oil market up and running almost as soon as their currency market is ready to take on the work load, which might only be a few months away. <br><br>Some commentators on the Iranian proposal have suggested that the impact on the US Dollar would not be so great because the greenback is used for all sorts of trade, not just oil, so 5.8% of the international oil trade is really only a small part of the bigger picture. This argument looks a bit weak if both Russia and Iran will be lowering the demand for Dollars to buy oil and gas. <br><br>In order to counter the reduced demand for US Dollars, the standard control lever available to the Federal Reserve is to increase interest rates, over and above what it was going to be doing. This has the usual unwelcome consequences of dampening the US economy, and squeezing people with mortgages, which in turn leads to rising wages, falling house prices and a slump in the construction industry. <br><br>At the same time, lower demand for Dollars will weaken its conversion rate, making imports more expensive. With rising wages, fuel bills and debt-servicing feeding through into prices for home-produced goods, the stage is set for either an inflationary spiral or a recession. In the short term, the inflationary route always looks to be the less painful, but it can only lead eventually to a crisis of confidence in US Dollars, when traders abandon the paper and rush for the exit. <br><br><!--EZCODE BOLD START--><strong>US-Russian relations slide</strong><!--EZCODE BOLD END--> <br><br>It cannot have escaped the notice of the Russians that this announcement is a poke in the eye for the US. So its timing can hardly be an accident, coming less than a week after US Vice President Dick Cheney's address to a conference in Vilnius, Lithuania, where he attacked Russian energy policy, in front of an audience of European heads of state. <br><br>"No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation, or attempts to monopolise transportation", Cheney said, referring to the Ukrainian gas cut-back (that Ukraine provocatively passed on to the downstream customers in western Europe). The next day Russian Foreign Minister Sergei Lavrov fired back "[the] U.S. vice president should be informed that for the last 40 years neither the U.S.S.R. nor the Russian Federation has ever broken a single contract for oil and gas supplies abroad." <br><br>The antagonism continued to verberate when Lavrov met US Sectretary of State Condoleezza Rice at a foreign ministers' summit in New York on Iran's nuclear programme. As well as criticising Cheney's comments, Lavrov also attacked Rice's number three, Nicholas Burns, for his criticism of Russia's assistance with Iran's Bushehr nuclear facility. "This meeting isn't going anywhere", snarled Rice, perhaps angry that the rebuke of Burns reflected badly on her. <br><br>Burns himself was probably a bit cranky after his trip to Moscow in April, when he publicly asked Russia not to go ahead with the sale of Tor-M1 mobile anti-missile missiles to Iran, only to be bluntly rebuffed by Russian Chief of Staff, General Yury Baluyevsky. <br><br>Meanwhile the world looks on, hoping that the great powers really know what they are doing, and that World War 3 won't start because of a subtle miscalculation in brinkmanship.<br> <p></p><i></i>
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Asia times looks at Russian Gas polotics

Postby friend catcher » Thu May 25, 2006 1:08 pm

<!--EZCODE AUTOLINK START--><a href="http://www.atimes.com/atimes/Central_Asia/HE26Ag01.html">www.atimes.com/atimes/Cen...6Ag01.html</a><!--EZCODE AUTOLINK END--><br><br>Interesting style of journalism at the asia times. Paints with broader strokes than the western press. <p></p><i></i>
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A Story About Oil You NEED To Hear

Postby JD » Thu May 25, 2006 1:57 pm

Article dug up by a colleague:<br><br><!--EZCODE AUTOLINK START--><a href="http://www.dailykos.com/storyonly/2005/12/27/115725/53">www.dailykos.com/storyonl.../115725/53</a><!--EZCODE AUTOLINK END--><br> <p></p><i></i>
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