Category Archives: Trade

By Banning Russian Oil, Europe Forgot How It Won the Cold War, by Bas Spliet

There have been times since World War II when Europe has refused to be America’s stooge. Unfortunately, now is not one of them. From Bas Spliet at libertarianinstitute.org:

The European Union is close to reaching an agreement on banning the import of Russian oil. Some Eastern-European member states, particularly Hungary, are trying to obtain exemptions or delays on the implementation of the ban. All in all, however, it seems likely that many if not all EU members will soon agree to ban Russian crude oil completely within the next six months, while refined oil would be phased out by the end of 2022.

The ban is only the latest EU disciplinary economic measure which the bloc has levelled against Russia. On February 24, the starting day of the Russian invasion of Ukraine, European Commission President Ursula von der Leyden announced “massive” sanctions beyond those already implemented after the Russian seizure of Crimea in 2014. If the EU were to reach an agreement on the latest addition, these sanctions will come to target the Russian petroleum industry next to technological transfers, Russian banks, and Russian assets.

The expansion of the EU sanctions follow on the heels of Germany’s surprise move to freeze the approval process of Nord Stream 2 on February 22. This announcement, made even before the invasion had started, further jeopardized the operationalization of the natural gas pipeline between Russia and Germany, construction on which was already finished in the summer of 2021.

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The Swiss Connection: How Russia Is Weathering Tough Sanctions, by Alex Kimani

How is Russia weathering those tough sanctions? Just fine, thank you. From Alex Kimani at oilprice.com (hardly a Russia propaganda outfit):

  • Continued oil and gas exports as well as a propped-up ruble, have allowed Moscow to weather Western sanctions.
  • JPM has backtracked on its earlier forecasts of a 35% contraction in Russian GDP in the second quarter.
  • The lion’s share of Russian raw materials is traded via Switzerland and its nearly 1,000 commodity firms.

A couple of weeks ago, Putin went on record calling the war in Ukraine a “tragedy” and claiming that economic sanctions imposed on his country had “failed.”  Turns out he wasn’t exactly bluffing.

Three months into the most severe and coordinated sanctions by Western governments, Russia’s economy is proving to be a hard nut to crack. Continued oil and gas exports as well as a propped-up ruble, have allowed Moscow to weather the West’s sanctions much better than expected.

In a note to clients dated last week and made public on Monday, JPMorgan Chase says business sentiment surveys from the country “are signaling a not very deep recession in Russia, and therefore imply upside risks to our growth forecasts. The data at hand therefore do not point to an abrupt plunge in activity, at least for now”.

JPM has also backtracked on its earlier forecasts of a 35% contraction in Russian GDP in the second quarter and 7% for all of 2022, now predicting that the recession will be far less severe.

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Can Europe Survive Without Russian Coal and Oil? Here’s What It Means for Skyrocketing Prices…, by Chris MacIntosh

Europe seems hell bent on cutting off energy imports from Russia. Which raises the question: what is Europe going to use for energy? From Chris MacIntosh at internationalman.com:

Russian Coal and Oil

Wait, you mean dirty stinky polluting coal? That coal?

Which brings me to….

EU TO BLOCK RUSSIAN COAL

So the EU, already in the middle of the worst energy crisis since the Arab oil crisis and likely worse, is now pushing to eliminate imports of Russian coal. Just so you understand the importance of Russian coal to Europe…

Some 70% of Europe’s thermal coal comes from Russia. Coal accounts for about 20% of continental Europe’s electricity production (as of 2019; perhaps it is 25% now).

Watching the news is enough to drive a man to drink or to put his drink through the telly.

But fear not, there is a silver lining.

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Europe´s mad ban on Russian oil, by Jorge Vilches

Has anyone in Europe really thought through what a ban on Russian oil would mean for Europe? From Jorge Vilches at thesaker.is:

Ursula von der Leyen

Cognitive scientists would concur in that the current performance of European leadership could be diagnosed as either myopic ignorance or — most probably — full intellectual blindness. In the case of so far happy-go-lucky Ursula von der Leyen there is no doubt it´d be the latter… but only if we first dismiss her warm on-the-record support for Bundeswehr colonial policies and military involvement… plus her praise of Third Reich famous general Field Marshall Erwin Rommel, Commander of the Führer Headquarters. But leaving that possible Nazi whiff aside, full ´intellectual blockage´ is the only kind way to dare explain a most strategic project as foolish and doomed to fail as banning Russian oil sales worldwide. Why so you may ask ? Ref #1 https://www.wsws.org/en/articles/2017/06/20/vond-j20.html

asymmetrical retaliation

The short answer is massive — ´Russian´ massive – unmitigated “asymmetrical non-military retaliation” through surgical and divisive optional sales of natural gas – and other key commodities – just leaving EU sanctioned Russian oil for sale to and re-sale by third parties. And, oh yes, weaponization is not limited to any particular means as various European war schools should have internalized already. War means war and pretty much anything is fair game. But apparently, it´d be as if through the centuries, uppity European leaders – most especially German, French, Swedish, British and Poles — have not learned a single thing despite the über-high costs already paid for by their nations large-caliber warfare experiences most especially with Russia. By the way, the UK also has the additional ( unsolvable? ) burden of its current Brexit ballast… Ref # 2 https://www.zerohedge.com/energy/eu-proposes-ban-russian-oil-imports

 

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Financial war takes a nasty turn, by Alasdair Macleod

The real was is monetary and financial, and Russia and China are winning. From Alasdair Macleod at goldmoney.com:

The chasm between Eurasia and the Western defence groupings (NATO, Five-eyes, AUKUS etc.) is widening rapidly. While media commentary focuses on the visible side of the conflict in Ukraine, the economic and financial aspects are what really matter.

There is an increasing inevitability about it all. China has been riding the inflationist Western tiger for the last forty years and now that it sees the dollar’s debasement accelerating wonders how to get off. Russia perhaps is more advanced in its plans to do without dollars and other Western currencies, hastened by sanctions. Meanwhile, the West is increasingly vulnerable with no apparent alternative to the dollar’s hegemony.

By imposing sanctions on Russia, the West has effectively lined up its geopolitical opponents into a common cause against an American dollar-dominated faction. Russia happens to be the world’s largest exporters of energy, commodities, and raw materials. And China is the supplier of semi-manufactured and consumer goods to the world. The consequences of the West’s sanctions ignore this vital point.

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Decentralized and Neutral, by Hans-Hermann Hoppe

The EU is a cartel based on theft by its least productive members against its most productive members. From Hans-Hermann Hoppe at mises.org:

States, regardless of their constitution, are not economic enterprises. In contrast to the latter, states do not finance themselves by selling products and services to customers who voluntarily pay, but by compulsory levies: taxes collected through the threat and use of violence (and through the paper money they literally create out of thin air). Significantly, economists have therefore referred to governments—i.e., the holders of state power—as stationary bandits. Governments and everyone on their payroll live off the loot stolen from other people. They lead a parasitic existence at the expense of a subdued and “host” populace.

A number of further insights emerge from this.

Naturally, stationary bandits prefer larger loot to smaller loot. This means that states will always try to increase their tax revenue and further increase their spending by issuing more paper money. The larger the loot, the more favors they can do for themselves, their employees, and their supporters. But there are natural limits to this activity.

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On Ukraine, the World Majority Sides with Russia Over U.S., by John V. Walsh

Most of the world has grown disgusted by the pointless war and regime-change antics of the U.S. government. From John V. Walsh at unz.com:

Russia pivots to the dynamic East and fast developing Global South

2014 saw two pivotal events that led to the current conflict in Ukraine.

The first, familiar to all, was the coup in Ukraine in which a democratically elected government was overthrown at the direction of the United States and with the assistance of neo-Nazi elements which Ukraine has long harbored.

Shortly thereafter the first shots in the present war were fired on the Russian-sympathetic Donbass region by the newly installed Ukrainian government. The shelling of the Donbass which claimed 14,000 lives has continued for 8 years, despite attempts at a cease-fire under the Minsk accords which Russia, France and Germany agreed upon but Ukraine backed by the US refused to implement. On February 24, 2022, Russia finally responded to the slaughter in Donbass and the threat of NATO on its doorstep.

Russia Turns to the East – China Provides an Alternative Economic Powerhouse.

The second pivotal event of 2014 was less noticed and in fact rarely mentioned in the Western mainstream media. In November of that year according to the IMF, China’s GDP surpassed that of the U.S. in purchasing power parity terms (PPP GDP). (This measure of GDP is calculated and published by the IMF, World Bank and even the CIA. Students of international relations like economics Nobel Laureate, Joseph Stiglitz, Graham Allison and many others consider this metric the best measure of a nation’s comparative economic power.) One person who took note and who often mentions China’s standing in the PPP-GDP ranking is none other than Russia’s President Vladimir Putin.

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The Schrödinger euros, by Jorge Vilches

The EU’s leaders want to pay Russia for its exports with Euros that are deposited in European bank accounts that Russia can’t access. Yes, it really is that stupid. From Jorge Vilches at thesaker.is:

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

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Multipolar Chaos, by Robert Gore

chaos-engineering

Meet the new boss, same as the old boss.

The Russian Central Bank recently announced that until the end of June, it stands ready to buy gold for rubles at the exchange rate of 5000 rubles per gram of gold. The move has been hailed as revolutionary, heralding a regime change from fiat currencies. If only that were true.

It would be revolutionary if the Russian Central Bank made a two-way market in rubles and gold. Sellers of gold to the central bank will get back rubles, but no one can exchange rubles for gold. The ruble will still be a fiat currency. A central bank or government that sold gold for its own currency at a fixed rate would be returning to the gold-exchange standard, which prevailed in many nations during much of the 1800s and early 1900s. Right now, such a move would be so revolutionary it would upend the global financial order.

A reminder: Government and Central Bank-Led Revolutions is a book whose thickness is measured in nanometers. Traditionally, revolutions are directed against them. Under a gold-exchange standard, you don’t need a central bank, which is why monetary bureaucrats hate it. You need a gold repository and someone to print the gold-backed currency. Politicians hate it because they can’t spend currency they and their central-bank flunkies have wished into existence. If they had to spend real money—gold or silver—it would be bye-bye welfare and warfare states, and they would be the inconsequential hacks they’re supposed to be.

Amazon Paperback Link

Kindle Ebook Link

Since the end of the gold-exchange standard, during the reign of central banks and bankers, we’ve had two world wars (and the third may have begun), a massive transfer of resources from the productive to the unproductive, and a proliferation of government promises that will never be kept. Cheap credit has promoted private indebtedness, kept zombies companies alive, blown up asset bubbles, and diverted economic activity from production to finance.

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Communist China Has Thrown Out the Old Rules of War, by Robert Spalding

China is in it for the long-term and they’re in it to win it. From Robert Spalding at realclearbooks.com:

An Excerpt from Retired Air Force Brigadier General Robert Spalding’s “War Without Rules: Inside China’s Playbook for Global Domination”

When I first read the Chinese war manual “Unrestricted Warfare” in 1999, I thought it was wacky. I was flying B-2 Stealth bombers out of Whiteman Air Force Base in western Missouri and reading a lot about war. As an Air Force officer, I thought it was part of my day job to understand the bigger picture – even though the prevailing attitude in the military was “Just fly the planes.” “Unrestricted Warfare” was one of those books that caused a stir among some military folks because it had recently been translated into English. It had that insider whiff of mystery and secrets, a peek into the mind of the Chinese Communist Party.

Despite that mystique, not a lot of people were finishing the book. For one thing, regardless of its title, no one thought we were ever going to be fighting a war with China, so it seemed like a lot of work for very little payoff. For another, the book itself is not a light read. It is a dense compendium of strategy, economics, social theory, and futuristic thoughts about technology. It imparts centuries of military history, particularly as it relates to the United States, but I already knew a lot of that. It seemed vague and also a little sci-fi, not relevant to a U.S. bomber pilot – even one with a fascination for military history. My mistake.

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