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|The evolution of the energy war
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|Author:||Luckyspin [ 02 Dec 2014 10:50 ]|
|Post subject:||The evolution of the energy war|
The US persist in the strategy of destroying the Russian president, sacrificing if necessary their
own oil companies while putting many other countries at risk, with unpredictable consequences!
"If one studies the information correctly, you will see that the most likely of all, is the deliberate reduction of the oil price by the U.S., (with the help of Saudi Arabia) – alongside also deliberate keeps high the dollar exchange rate, thus supporting the income of the oil production countries, so not to be reduced dramatically, because they sell the black gold in dollars
( petrodollars agreement ).
Especially Saudi Arabia that has taken in exchange the military aid support by the US for the rearrangements occurring in the region and also help to prevent the strengthening of ISIS - which finances its activities by selling in the black market stolen oil from Iraq, with the help of Turkey.
At the same time the US prevent the creation of " petro-gouan"- the effort namely by China, with the help of Russian, for global oil transactions carried out with its own currency. The cost here is paid by Russia, which has agreed to sell natural gas and oil to China in rubbles or Yuan, instead of dollars - thus Russia loses in both cases, because both currencies have depreciated relatively to the dollar (the Yuan recently, after the reduction of interest rates by China).
Of course China is the big winner - as it has significant reserves in dollars, which spends on the purchase of energy – because, quite rightly, want to reduce its holdings as it does not trust the greenback.
Russia also pays the consolidation efforts of Japan - through the currency devaluation, with means of increasing the liquidity by the central bank. More particularly, until recently Japan failed to escape the crisis, mainly because the undervalued Yen was increasing its exports, while also increasing and the imports due to the energy dependence. With the rapid drop in oil prices (over 30%), the cost of energy imports from Japan will significantly be reduced - so it may be able to recover.
Russia also pays the Eurozone’s efforts to escape from the crisis by reducing the rate of the euro - which helps to increase exports. If the oil price had remain at the previous levels, the reduced rate of the euro would have increase the cost of the energy imports for the countries in the Eurozone and especially Germany, reducing their international competitiveness - something that has now been avoided.
Of course, the fall in energy prices intensified deflationary pressures in Europe - but which can be treated with the greatest increase in liquidity.
Finally, the US does not export oil and essentially is not affected by the fall in the price of oil, while the appreciated dollar make cheaper its imports - so there is no risk of inflation due to the massive printing of dollars in recent years. Since their debts are dollars, redeeming them by simply printing – it’s something that is not negative, despite the considerable side effects that naturally exist (increase in the trade deficit, etc..).
In conclusion, the Russian efforts to attack the dollar by selling the products it produce in rubbles, especially energy, will lead Russia to the limits of desperation - given the huge drop in the exchange rate of the rubble (40%), which of course can not be exploited as in the Euro zone area, Japan and China, increasing its exports of industrial products (since produces neither sufficient quantities or quality, nor in competition).
Something similar will happen in the other enemy superpower - in Brazil, which also relies on energy exports, it suffers from inflation and rapidly depreciates the currency.
In any case, this is a "race" between U.S. and Russia, where the loser will be the one who will get tired faster - in economic terms, of course, because the US register losses (trade deficits by the appreciation of the dollar risk stock market crash, etc.). "
The meeting of the OPEC countries, the last weekend, did not produce the expected - ie reducing the amount of oil they produce, so to increase the price. It was therefore reasonable the collapse in prices that followed, as shown by the chart below.
Oil - the evolution of the price of crude oil, after the announcement that OPEC will not reduce
production (supply), to increase the price of the goods.
It appears that the USA persist in their strategy, to the annihilation of Russia, sacrificing, if necessary, their own mining companies that produce oil by using the Fracking methode - who will face huge financial problems
For their survival. Nevertheless, the result of the decision, imposed by Saudi Arabia, among others, is the collapse of the exchange rate of the rubble - and will create problems to many other countries.
This will undoubtedly cause a chain reaction in the world economy - a shock better, since the already bankrupt countries like Venezuela, will face enormous problems of survival.
This also brings a step closer the possibility of conflict with Russia, which the US. seek to provoke - Although we believe that Mr. Putin has the patience required and will not fall into the trap. The point is, how will react the Russian citizens, who will see their living standards significantly limited and short - because of the continuing decline of the market value of the rubble.
In simple words, would they show patience or the right conditions will be created for the change of their political leadership – the overthrow of Mr Putin may no longer be as awesome as it sounds.
Especially after the collapse of the value of the rubble (graph), one of the results will be the rise in inflation caused by the sharp decline in living standards of its citizens.
As seen from the above graph, the fall of the currency peg to the dollar shows equivalent reduction in the price of oil - which should increase the despair of Russians, sparking probably internal revolts.
The country, according to its chairman, is on the verge of a third world war. The Citizens certainly seem familiar with the idea, after already experiencing war circumstances as regards their living level.
Specifically, the currency collapses, having depreciated by 48% in the current year, inflation soared 19.8% in the previous month - while the cost of imported goods, from gasoline to fruits and medicines, has skyrocketed. In this context, the population of Ukraine is in a state of panic, while the central bank warns of further fall in the purchasing value of the currency.
Citizens, unable to buy medicines, try to use herbs, which brings back past memories - especially those of 1993, when the Soviet economy dissolved after previously inflation reached 10.256%.
The energy war then, between Russia and the USA, has many collateral victims as just as with conventional wars. The biggest of all is undoubtedly Ukraine, and the main culprit is Germany - after it caused the electoral coup of Kiev, which forced the Russians to invade Crimea, while partition a substantial population, sparking unrest in eastern side.
The country that literally plagued the EU, fed by the crisis and sucking dry the victims (Greece, Italy, Spain, Portugal etc.), works towards Russia just the same, as before the second world war - ignoring one more time the peace in Europe and the rest of the planet.
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