It was something to behold. Dimitri Medvedev, former Russian president, unrepentant Atlanticist, current vice president of the Russian Security Council, decided to completely disconnect from the West. Interestingly, his statements coincided with the launch of Mr. Khinzal’s hypersonic missile, which caused justified consternation in NATO.
Medvedev said “hellish” Western sanctions have not only failed to cripple Russia, but are “coming back to the West like a boomerang.” Confidence in reserve currencies is “fading like the morning mist”, and abandoning the US dollar and the euro is no longer unrealistic: “The era of regional currencies is coming”.
After all, he added, “whether they like it or not, they will have to negotiate a new financial order (…) And the decisive voice will then be those countries that have a strong and advanced economy, sound public finances and a reliable monetary system.” .
Medvedev released his analysis before the deadline set by President Putin: from this April 1, 2022, “hostile nations” with Russia will have to pay for Russian gas only in rubles.
The G7, unsurprisingly, struck a pose: We won’t pay. 4 of these nations are not major importers of Russian gas, but the remaining 3 are in dire straits, not only do they sustain their economies with Russian gas, but they are also the losers of World War II: Germany, Italy, and Japan, and they are still de facto occupied territories by the US. The story has a habit of playing perverted tricks.
The denial didn’t last long. Germany was the first to crack: Even before industrialists from the Ruhr to Bavaria staged a revolt, Scholz, the petty German chancellor, called Putin, who had to explain the obvious: Payments will be converted to rubles because the EU froze Russia’s foreign exchange reserves, in open violation of international law. [Es para evitar lo que ha estado pasando estas semanas: las empresas que compran gas ruso pagan religiosamente en euros o dólares, pero los gobiernos congelan esos pagos para que no lleguen a Rusia, por lo que en la práctica Rusia ha estado entregando el gas gratis].
With Taoist patience, Putin also expressed his hope that this measure does not represent a deterioration of the contract terms of Europe’s gas importers. Russian and German experts should sit down together and discuss the new terms.
Moscow is working on a set of documents that define the new agreement. Essentially, this is explained like this: No rubles, No gas. Contracts become null and void once trust is breached. The US and the EU broke legally binding agreements with unilateral sanctions and, in addition, confiscated the foreign exchange reserves of a G20 nation: Russia.
Unilateral sanctions made dollars and euros worthless to Russia. Bouts of hysteria solve nothing: this will be resolved, but on Russia’s terms. The Foreign Ministry had already warned that the refusal to pay for gas in rubles would lead to a serious global crisis of defaults and bankruptcies worldwide, a chain reaction of blocked transactions, freezing of collateral assets and closures of lines of credit.
What will happen next is partially predictable. EU companies will receive the new set of rules. They will have time to review the documents and make a decision. Those who say “no” will automatically be excluded from direct shipment of Russian gas.
There will be compromise, of course. For example, quite a few EU nations will agree to use rubles and increase their gas purchases so that they can resell the surplus to their neighbors at a profit. And some may also decide to buy gas on the go at the Energy Exchanges.
So Russia is not imposing an ultimatum on anyone. Everything will take time, in an ongoing process. With some side action too. the Duma [Parlamento] it is contemplating the extension of payment in rubles to other essential products, such as oil, metals, wood, wheat. It will depend on the collective voracity of the EU’s “lap poodles”. Everyone knows that if the hysteria continues, it could result in a colossal breakdown of supply chains across the West.
goodbye oligarchs
While the EU Atlanticist ruling classes have gone berserk and remain focused on fighting every last Ukrainian [animémonos y vayan], Russia is playing it cool. In fact, Moscow has been quite forgiving, brandishing the specter of being out of gas in the spring rather than the winter.
The Central Bank of Russia nationalized the foreign exchange earnings of all major exporters. There was no breach. The ruble continues to rise, and is now back to the same level it was before Operation Z. Russia remains self-sufficient in food. The American hysteria about “isolating” the Russians is laughable. All the actors that matter in Eurasia, the other 4 BRICS and practically the entire Global South, have neither demonized nor sanctioned Russia.
As a further triumph, possibly the last oligarch capable of influencing Moscow, Anatoly Chubais, has left the country. Another historical ruse: Western sanctioning hysteria de facto dismembered the Russian oligarchy, a Putin project since 2000. This implies the strengthening of the Russian state and the consolidation of Russian society.
We don’t have all the facts yet, but it can be argued that, after years of careful evaluation, Putin chose to go all out and break the West’s back. Behind the immediate “casus belli” in Ukraine were: the imminent invasion of Donbass by neo-Nazis; US biological weapons laboratories, Ukraine’s entry into NATO and the Ukrainian threat to build nuclear weapons
It has not all been clear why the foreign exchange reserve freeze should have been foreseen, especially since the Russian Central Bank had been building up its reserves in US Treasury bonds since November last year. However, there is now the possibility of Moscow accessing “secret” reserves abroad, a complex mechanism built with the help of China.
The sudden change from dollars/euros to rubles has actually been a judo geoeconomic key. Putin goaded the collective West into unleashing a sanctioning attack and turned it on the opponent with a single swift move.
And now we are all trying to understand so many game-changing synchronized developments: the rupee-ruble with India, the petroyuan with the Saudis, the Mir-Union Pay cards with the same badge issued by Russian banks, the Russia-Iran agreements with an alternative SWIFT, the China-Eurasian Economic Union project of an independent monetary/financial system.
All this without mentioning the masterstroke of the Russian Central Bank: it has just linked 1 gram of gold to 5,000 rubles, which is already around $60, and still rising.
Along with “No Rubles, No Gas”, what we have here is the energy linked in fact to gold. The Chihuahuas of the EU and the Japanese colony will need to buy a lot of rubles in gold, or buy a lot of gold, to have their gasoline. And it gets better. Russia may peg the ruble back to gold in the near future. It could reach 2,000 rubles, 1,000 rubles, even 500 rubles for a gram of gold.
time to be sovereign
The Holy Grail in discussions of a multipolar world has always been “how to circumvent dollar hegemony” (since the early 2000s at the BRICS summits with Putin, Hu Jintao and Lula). Now we have the entire Global South, appearing with the perky smile of the Cheshire cat: a golden ruble, or a ruble and other currencies backed by exports of oil, gas, minerals and raw materials.
The Russian Central Bank, unlike the FED, does not practice “quantitative easing” and will not export toxic inflation to the rest of the planet. The Russian Navy not only secures all sea lines, but its nuclear submarines are capable of appearing all over the planet without warning.
Russia is far ahead in implementing the concept of “continental naval power.” The strategic turning point occurred in December 2015, in the Syrian theater. The 4th Submarine Division based in the Black Sea is the star of the show.
Russian naval fleets can now employ Kalibr missiles in a space that encompasses Eastern Europe, Western Asia and Central Asia. The Caspian Sea and the Black Sea, now linked by the Don-Volga Canal, offer a large area of maneuver comparable to the Eastern Mediterranean and the Persian Gulf combined. They are 6,000 km long. Russia does not need access to warm waters to defend itself.
This space covers about 30 nations: the traditional Russian sphere of influence, the historical borders of the Russian empire, and the current spheres of political/energy rivalry.
No wonder the Beltway (the deep state located in the heart of Washington) is insane. Russia is in a position to guarantee the shipment of the products through Asia, the Arctic and Europe, along with the BRI rail network throughout Eurasia.
And last but not least, don’t mess with a nuclear bear.
Medvedev was not boasting when he said that the era of a single reserve currency (the dollar) was over. The advent of a global resource-based reserve currency means, simply put, that 13% of the planet will no longer dominate the other 87%.
It’s NATO vs. enlarged Eurasia. Cold War 3.0, 4.0 and even 5.0. It does not matter. All the nations that were or are participants in the Non-Aligned Movement see which way the geopolitical and geoeconomic winds are blowing: for these nations the time to assert their real sovereignty is near, because the “rules-based international order” bites the dust .
Welcome to the birth of the new world system. Foreign Minister Sergei Lavrov, visiting China after meeting with his Eurasian counterparts, could not have described it better:
“A new reality is forming: the unipolar world is irrevocably becoming a thing of the past, a multipolar one is taking shape. It is an objective process. It is unstoppable. In this new reality more than one power will ‘govern’. It will be necessary to negotiate among all the states that today have influence in the world economy and politics. At the same time, realizing their special situation, these countries will ensure compliance with the basic principles of the UN Charter, including a fundamental notion: the sovereign equality of states. No one on this Earth should be seen as a minor actor. All states are equal and sovereign.”
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