Russian Ruble Rebounds — German Economy Will Collapse — Famine in Africa — The War is Over — India Moves Towards Ruble Payments
RUSSIAN RUBLE REBOUNDS: The Russian currency, the Ruble, continued to appreciate against the US Dollar last week as per BOOM’s forecast. It has now almost regained its level against the US Dollar that prevailed prior to the Russian invasion of Ukraine. The chart is dramatic, showing a huge plunge and a huge V shaped recovery. Russia is continuing to insist on payment in Rubles for gas supplied to “unfriendly” European nations. It is also seeking such agreeable payment from friendly India and India appears to be amenable to the idea.
This is where the rubber meets the road — the road to a decline in US Dollar Dominance in global trade settlements. The end of the US Dollar Dominance Empire has begun but it will be a slow and tortuous path. BOOM expects that it will take 50 – 100 years but it could happen more rapidly, depending upon availability of Rubles and Yuan in large volumes outside Russia and China. The US Dollar Index held steady all week — again, just as BOOM expected.
The Russian President Vladimir Putin reportedly spoke to German Chancellor Olaf Scholz last Wednesday to discuss Ruble settlement for German’s energy requirements from Russia. There will need to be a period of mutual cooperation before this can happen in full. So this matter gets Germany to the negotiation table without the presence of the US .
Germany relies on Russia for more than half of its gas supply, and for a third of its imported oil. Russia’s energy is essential for the survival of Germany’s economy
As well as speaking to Scholz, Putin talked to Italian Prime Minister Mario Draghi on Wednesday and French President Emmanuel Macron the day before.
Meanwhile, the former President of Russia Dmitry Medvedev said that the US and EU had tarnished their reputations by freezing Russia’s central bank reserves. This is undoubtably true. As BOOM said last week, the seizure of private assets is anathema to democratic principles and contrary to all capitalist philosophy as well.
Medvedev said that the world is gradually moving towards a new logic of global economic relations and towards an upgrading of the financial system. He was talking about the need to reduce US Dollar Dominance.
He is reported to have said “It is impossible to trust those who freeze the accounts of other states; steal other people’s business assets and personal possessions, compromising the principles of sanctity of private property. The era of regional currencies is coming.”
In an interview, he described the current situation succinctly in one sentence. “The Americans are no longer the masters of planet Earth”.
On Friday, the current President Vladimir Putin signed a Decree demanding payment in Rubles for Russian gas supplies from April 1. According to the decree, Russia will continue to supply gas at set volumes and prices and it will demand that buyers of gas open accounts in Russian banks. This is exactly what BOOM predicted in last week’s editorial.
Commercial buyers will need Rubles to settle their purchases. Those Rubles will be made available via currency transfers from the Russian banks and via bank loans denominated in Rubles. The decree also stated that Moscow can halt gas contracts if buyers don’t pay in Rubles. Putin is reported to have said that active contracts will be halted if payments are not made and that the move is meant to increase settlements in national currencies.
This is a clear pathway. The energy buyers from “unfriendly” nations in Europe must pay in Rubles or freeze to death and starve. It is a blunt ultimatum but the Russians consistently say that diplomacy has failed over the last 8 years which appears obvious to any observer of what is happening in Ukraine.
GERMAN ECONOMY WILL COLLAPSE – FAMINE COULD OCCUR IN AFRICA: Meanwhile, Martin Bruderwaller, the CEO of Germany’s BASF SE, the world’s largest chemical producer, has warned that curbing or cutting off energy imports from Russia would bring into doubt the continued existence of Germany’s small and medium-sized energy companies. He said this would spiral Germany into its most “catastrophic” economic crisis since World War 2.
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