CHILLY WINTER AHEAD FOR EUROPE

Putin will be in the driver’s seat come Winter. The EU will rue the day they agreed to the U.S. economic sanctions against Russia. When they are freezing their asses off and their economies are a shambles in January, the sanctions will be lifted. Book it Dano.

Europeans can count on Russia to supply all the gas they need to stay warm this winter, according to Vladimir Putin. But the President warned that any action by Ukraine to disrupt the transit of fuel, will be felt across the EU. Read More: http://on.rt.com/sax0ov

Obama-Sanctions & Ukraianian Ceasefire

lagardw-obamaThe economic sanction against Russia are causing serious economic damage in Europe. Farmers are going bankrupt and Finland has lost its triple-A rating thanks to Obama-Sanctions. The sanctions were wrong from the start and they should be removed immediately. The attempt at a permanent ceasefire has come about not because of Obama-Sanctions, but despite the Obama-Sanctions. The one-sided partisanship of the West in the Ukraine conflict ordered the government in Kiev had to engage the East in a military crackdown or the IMF said there would be no loans. Even Obama’s bitch, Christine LaGarde, dictated his terms secretly attached to the IMF that has become anything but independent.

OilRig

Now there are alleged to be several thousand civilian casualties whose blood is on the hands of Obama and LaGarde. The question remains, if the ceasefire holds, then why do we still have Obama-Sanctions? If they are not lifted, one must question if we have Obama and his oligarchs trying to instigate economic ostracization of Russia to increase the market share for American energy companies and the Middle East.

kiev-1

The people of Kiev are caught in the middle. Their government has been taken over by the West – stuffed with politicians the people are told if they revolt against them, they will receive no support. Their government tells them they must have patience for they will see reform after the war. Meanwhile, the people of Kiev are really pawns. The heating system and hot water are old style communist. You do not have a hot water heater in each home. It is provided by the government from a central plant. They have no hot water and have to use stingers (electric rods that heat the water) and the government told the people they would not turn on the heat until there were 3 consecutive days of frigid weather. Now they are turning off electricity for a few hours during the day. This is why the people are moved to revolution. They cannot even get a hot bath.

Those who write about Ukraine assume western basics that do not even exist.

PUTIN PLAYING CHESS, OBAMA PLAYING TIDDLY WINKS

I thought our economic sanctions were destroying Russia. We know they have pushed Germany into recession. Does a country on the verge of economic collapse, as our captured MSM blathers about on a daily basis, pay down $53 billion of debt in one quarter? Our empire adds $200 billion of debt per quarter. 

Russian debt as a percentage of GDP is 13%. U.S. debt as a percentage of GDP is 101%. Who are we fooling. We live in the out of control empire in decline. Russia already experienced their fall. They learned their lesson. Debt leads to decline. Putin will win this economic battle.

Obama’s master plan is to try and bankrupt Russia by driving the price of oil down and making Europe stop trade with Russia. In the short term Russia will be negatively impacted. The Russians are a stoic people. They aren’t spoiled, debt addicted, iGadget distracted morons. They’ll withstand the pain without making a peep. Putin’s popularity is near 80%.

By driving the price of oil downward, Obama will derail his shale oil revolution. His sanctions are already pushing Europe back into recession. He has already pushed Russia and China closer together. His actions will accelerate the move away from the USD as the world’s only currency.

Russia will have Europe by the balls this winter with their natural gas reserves. The oil will still be under Russian soil long after Obama’s idiotic plan goes awry. The Middle East countries need the price to stay above $90 per barrel to sustain their economies. They will not cooperate with Obama for too long.

Putin is playing chess. Obama is playing tiddly-winks.

 

“De-Dollarizing” Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter

Tyler Durden's picture

Despite the reassuring narrative from The West that Russia faces “costs” and is increasingly “isolated” due to sanctions for its actions in Ukraine, the most recent data suggests reality is quite different. First, capital outflows slowed dramatically in Q3 (from $23.7 billion in Q2 to $13 billion in Q3) with September seeing capital inflows for the first time since Sept 2013. Second, Russia’s current account surplus was significantly stronger than expected ($11.4 billion vs $8.8 billion expected) driven by increased trade. Third, and perhaps most crucially, Russia paid down a massive $52.8 billion in foreign debt as Putin “de-dollarizes” at near record pace, reducing external debt to the lowest since 2012.

As Goldman explains, Trade and income improved notably…

The current account balance for Q3 came in at a surplus of US$11.4bn, above consensus expectations of US$8.8bn and up sharply from a small deficit of US$0.7bn in Q3 2013.

 

On our estimates, on a seasonally-adjusted basis, this now puts the current account at 3.8% of GDP, up from a low point of 1% in Q2 2013 and 1.6% for the full-year 2013.

 

The improvement in the current account came from both the trade balance, where imports have contracted (due to slowing domestic demand and the weaker Ruble), and from the income balance.

 

In our view, the latter could be due to either cyclical or structural factors, which are difficult for us to pinpoint, but risks to our current account balance forecasts nonetheless remain to the upside.

Meanwhile,

Net private capital outflows stood at US$13bn for the quarter, up slightly from US$10bn in Q3 2013 and similar to the pattern seen in Q2.

 

*RUSSIA 3Q CAPITAL OUTFLOWS SLOW TO $13B VS $23.7B OUTFLOW IN 2Q

 

*RUSSIA HAD $11.6B NET CAPITAL INFLOW IN JUNE: CENTRAL BANK

 

June was first monthly net inflow since Sept. 2013, according to central bank statement. 

 

And finally – “de-dollarization” accelerates as Russia pays down its foreign debt at the fastest pace since Lehman…

 

Source: CBR

*  *  *

“Isolated” Indeed!

MICKEY MOUSE CLUB

Russian Sanctions – Huge Mistake

MickyMouseClub

Politicians just keep making the same mistake over and over again. They perpetually turn to sanctions bankrupting private business with no respect whatsoever as the USA is wiping out farmers in Europe. But worst of all, there is not a single incident where sanctions have EVER worked even once. They often remain in place beyond a decade even as in Iran, but there is no change in politics.

Tomcat

Sanctions only make Putin stronger for they allow him to point to the West as the evil empire that covertly toppled the Soviet Union with a CIA plot. The most popular T-Shirt in Russia says this particular tree, which is also the name of a weapon, is not afraid of sanctions. The one in the middle says don’t make our missiles laugh (Iskander SS-26 Stone). The Mickey Mouse Club would be nice if there were really qualified people instead of questionable lawyers.

EUROPEAN SQUISHY SUPPORT FOR RUSSIAN SANCTIONS

Dozens wearing goggles and shower caps took to the streets of Dam square in central Amsterdam to take part in a massive tomato fight in protest of Russian sanctions, Sunday. The tomato fight was organised to draw attention the Dutch farmers who have fallen victim to the sanctions put in place as a result of growing tensions between EU and Russia. The organizer Joep Verbunt explained that the tomatoes used cannot be eaten because they are over-ripe but after the protest they will be converted to sustainable energy.

Sanctions are ACTS OF WAR … and rarely produce the desired outcome

Here is an article posted today on Drudge, courtesy of Brit shitrag. The Independent.

http://www.independent.co.uk/news/world/europe/ukraine-crisis-russia-bans-food-imports-from-west-in-response-to-sanctions-9655353.html?origin=internalSearch

The article states;

“The sanctions will cost Western farmers billions but could also lead to empty shelves and high food prices in Russia. “

You must be Brain Dead to believe this shit …. that a country with a land mass greater than the surface of Pluto, and only about 150 million … can’t feed itself.

Here … let The Saker explain it to yeew ..

=====================================

YOU WANNA BE UNCLE SAM’S BITCH? PAY THE PRICE!

Dear friends,

I just took a short break from my life in “meatspace” to comment upon the great news of the day: Russia is introducing a full 12 months embargo on the import of beef, pork, fruits and vegetables, poultry, fish, cheese, milk and dairy products from the European Union, the United States, Australia, Canada and the Kingdom of Norway.

Russia is also introducing an airspace ban against European and US airlines that fly over our airspace to Eastern Asia, namely, the Asia-Pacific Region and is considering changing the so-called Russian airspace entry and exit points for European scheduled and charter flights. Furthermore, Russia is ready to revise the rules of using the trans-Siberian routes, and will also discontinue talks with the US air authorities on the use of the trans-Siberian routes.

Finally, starting this winter, we may revoke the additional rights issued by the Russian air authorities beyond the previous agreements. This is such an interesting and major development that it requires a much more subtle analysis than just the crude calculation of how much this might cost the EU or US.

I will attempt no such calculation, but instead I would point out the following elements:

First, this is a typically Russian response. There is a basic rule which every Russian kid learns in school, in street fights, in the military or elsewhere: never promise and never threaten – just act. Unlike western politicians who spent months threatening sanctions, the all the Russians did was to say, rather vaguely, that they reserve the right to reply. And then, BANG!, this wide and far-reaching embargo which, unlike the western sanctions, will have a major impact on the West, but even much more so on Russia (more about that in an instant). This “no words & only action” tactic is designed to maximize deterrence of hostile acts: since the Russians do not clearly spell out what they could do in retaliation, God only knows what they could do next! 🙂 On top of that, to maximize insecurity, the Russians only said that these were the measures agreed upon, but not when they would be introduced, partially or fully, and against whom. They also strongly implied that other measure were under consideration in the pipeline.

Second, the sanctions are wonderfully targeted. The Europeans have acted like spineless and brainless prostitutes in this entire business, they were opposed to sanctions from day 1, but they did not have the courage to tell that to Uncle Sam, so each time they ended up caving in. Russia’s message to the EU is simple: you wanna be Uncle Sam’s bitch? Pay the price! This embargo will especially hurt southern Europe (Spain, France, Italy, Greece) whose agricultural production will greatly suffer from it These countries also happen to be the weakest in the EU. By hitting them, Russia is maximizing the inevitable friction inside the EU over sanctions against Russia.

Third, not only will EU carriers suffer from much higher costs and flight times on the very important Europe to Asia route, but the Asian carriers will not, giving the latter a double competitive advantage. How is that for a way to reward one side while hurting the other? The EU got one Russian airline in trouble over its flights to Crimea (Dobrolet) and for that the entire EU airlines community could end being at a huge disadvantage vis-à-vis its Asian counterparts.

Fourth, Russia used these sanctions to do something vital for the Russian economy. Let me explain: after the collapse of the USSR the Russian agriculture was in disarray, and the Eltsin only made things worse. Russian farmers simply could not compete against advanced western agro-industrial concerns which benefited from huge economies of scale, from expensive and high-tech chemical and biological research, which had a full chain of production (often through large holdings), and a top quality marketing capability. The Russian agricultural sector badly, desperately, needed barriers and tariffs to be protected form the western capitalist giants and, instead, Russia voluntarily abided by the terms of the WTO and then eventually became member. Now Russia is using this total embargo to provide a crucially needed time for the Russian agriculture to invest and take up a much bigger share on the Russian market. Also, keep in mind that Russian products are GMO-free, and that they have much less preservatives, antibiotics, colors, taste enhancers, or pesticides. And since they are local, they don’t need to be brought in by using the kind of refrigeration/preservation techniques which typically make products taste like cardboard. In other words, Russian agricultural products taste much better, but that is not enough to complete. This embargo now gives them a powerful boost to invest, develop and conquer market shares.

Fifth, there are 100 countries which did not vote with the US on Crimea. The Russians have already announced that these are the countries with which Russia will trade to get whatever products it cannot produce indigenously. A nice reward for standing up to Uncle Sam.

Sixth, small but sweet: did you notice that EU sanctions were introduced for 3 months only, “to be reviewed” later? By introducing a 12 months embargo Russia also sends a clear message: who do you think will benefit from this mess?

Seventh, it is plain wrong to calculate that EU country X was exporting for Y million dollars to Russia and to then conclude that the Russian embargo will cost Y million dollars to EU country X. Why is it wrong? Because the non-sale of these product with create a surplus which will then adversely affect the demand or, if the production is decreased, this will affect production costs (economies of scale). Conversely, for a hypothetical non-EU country Z a contract with Russia might mean enough cash to invest, modernize and become more competitive, not only in Russia, but on the world market, including the EU.

Eighth, the Baltic countries have played a particularly nasty role in the entire Ukrainian business and now some of their most profitable industries (such as fisheries), which were 90% dependent on Russia, will have to shut down. These countries are already a mess, but now they will hurt even more. Again, the message to them is simple: you wanna be Uncle Sam’s bitch? Pay the price!

Ninth, and this is really important, what is happening is a gradual decoupling of Russia from the western economies. The West severed some of the financial, military and aerospace ties, Russia severed the monetary, agricultural and industrial ones. Keep in mind that the US/EU market is a sinking one, affected by deep systemic problems and huge social issues. In a way, the perfect comparison is the Titanic whose orchestra continued to play music while the sink was sinking. Well, Russia is like a passenger who is told that the Titanic’s authorities have decided to disembark him at the next port. Well, gee, too bad, right?

Last, but most definitely not least, this trade-war, combined with the West’s hysterical russophobia, is doing for Putin a better PR campaign than anything the Kremlin could have dreamed of. All his PR people need to tell the Russian population is the truth: “we did everything right, we played it exactly by the book, we did everything we could to deescalate this crisis and all we asked for was to please not allow the genocide of our people in Novorussia – and what was the West’s response to that? An insane hate campaign, sanctions against us and unconditional support for thegenocidal Nazis in Kiev”. Furthermore, as somebody who carefully follows the Russian media, I can tell you that what is taking place today feels a lot like, paraphrasing Clausewitz, the “a continuation of WWII, but by other means”, in other words a struggle to the end between two regimes, two civilizations, which cannot coexist on the same planet and who are locked in struggle to death. In these circumstances, expect the Russian people to support Putin even more.

In other words, in a typical Judo move, Putin has used the momentum of the the West’s Russia-basing and Putin-bashing campaign to his advantage across the board: Russia will benefit from this economically and politically. Far from being threatened by some kind of “nationalistic Maidan” this winter, Putin’s regime is being strengthened by his handling of the crisis (his ratings are higher than ever before).

Yes, of course, the USA have shown they they have a very wide array of capabilities to hurt Russia, especially through a court system (in the US and EU) which is as subservient to the US deep state as the courts in the DPRK are to their own “Dear Leader” in Pyongyang. And the total loss of the Ukrainian market (for both imports and exports) will also hurt Russia. Temporarily. But in the long wrong, this situation is immensely profitable for Russia.

In the meantime, the Maidan is burning again, Andriy Parubiy has resigned, a the Ukies are shelling hospital and churches in Novorussia. What else is knew?

As for Europe, it is shell-shocked and furious. Frankly, my own Schadenfreude knows no bounds this morning. Let these arrogant non-entities like Van Rompuy, Catherine Ashton, Angela Merkel or José Manuel Barroso deal with the shitstorm their stupidity and spinelessness have created.

In the USA, Jen Psaki seems to be under the impression that the Astrakhan region is on the Ukrainian border, while the Russian Defense Ministry plans to “open special accounts in social networks and video hosting resources so that the US State Department and the Pentagon will be able to receive unbiased information about Russian army’s actions”.

Will all that be enough to suggest to the EU leaders that they have put their money on the wrong horse?

The Saker

=======

He followed up the above post with this.

The wave pain for the EU is now slowly turning into a tsunami of mutually reinforcing problems

This is great stuff! RT reports:

“Ukraine ready to impose sanctions against any transit via its territory, including air flights and gas supplies to Europe, Prime Minister Arseniy Yatsenyuk said Friday. Ukraine’s Parliament will vote on the sanctions on Tuesday. Kiev has also prepared a list of 172 Russian citizens and 65 legal enitites to put under sanctions for “sponsoring terrorism, supporting the annexation of Crimea, and violating the territorial integrity of Ukraine,” Yatsenyuk said at a briefing on Friday. Proposed sanctions include asset freezes, bans on certain enterprises, bans on privatizing state property, refusing to issue licenses, and a complete or partial ban on transit- both aviation and gas.”

Let me see if I got this right: the US/EU impose sanctions on Russia because Russia does not stop the Novorussian Resistance. In retaliation, Russia imposes sanctions on the EU and a ban on Ukie overflights over Russia. And in response to that, the Ukies prevent gas which the EU badly needs and which it paid for from reaching the EU. Who will get hurt by that? The EU, of course. So, in fact, these idiots in Kiev, no doubt under US orders again, are now strengthening the Russian sanctions against the EU! We can think of it as “Russia cutting off gas supplies to the EU in a way for which it cannot be blamed”.

Beautiful, no?

The wave pain for the EU is now slowly turning into a tsunami of mutually reinforcing problems.

Well, the sure deserve it. As I said yesterday: you wanna be Uncle Sam’s bitch? Pay the price!

The Saker

EU ABOUT TO GET A BAD CASE OF GAS

So let me get this straight. Obama and the nattering nabobs of NATO are threatening Russia with economic sanctions. Meanwhile, Europe is entirely dependent on Russian oil and natural gas to run their societies. Even the U.S. imports 200,000 barrels of oil per day from Russia. The American and European oligarchs can certainly make Russia feel pain by freezing assets and hurting their currency, but at the end of the day, they will still have the oil and gas in the ground.

If I was a betting man, I think our old friend China might just take some of that oil and gas off of Russia’s hands and provide some short term liquidity to old Vlad.

I wonder how the booming American economy will function at $150 per barrel oil? Maybe Obama can ramp up those student loans and subprime auto loans to save the country.

This little political incident has all the makings of a tipping point in the decline of the teetering American Empire. The rise of China/Russia has never been more evident.

But at least we gave out multiple Oscars to slave films and gay films to prove we are progressive. We got that going for us.

 

It Begins: Gazprom Warns European Gas “Supply Disruptions” Possible

Tyler Durden's picture

We had previously warned that Putin’s “trump card” had yet to be played and with Obama (and a quickly dropping list of allies) preparing economic sanctions (given their limited escalation options otherwise), it was only a matter of time before the pressure was once again applied from the Russian side. As ITAR-TASS reports, Russia’s Gazprom warned that not only could it cancel its “supply discount” as Ukraine’s overdue payments reached $1.5 billion but that “simmering political tensions in Ukraine, that are aggravated by inadequate economic conditions, may cause disruptions of gas supplies to Europe.” And with that one sentence, Europe will awaken to grave concerns over Russia’s next steps should sanctions be applied.

 

It would appear this is the most important map in Europe once again…

 

 

Some recent history…

In late January, Ukraine asked Russia for deferral of payments for gas supplied in 2013 and in early 2014. President Vladimir Putin said Ukraine’s debt totalled $2.7 billion then.

and then…

On March 1, Gazprom’s spokesperson Sergai Kupriyanov said the gas holding could cancel its gas supply discount for Ukraine as its overdue debt for gas reached $1.5 billion. This figure includes debts not only for last year’s supplies, but also for the current deliveries.

 

The situation with payments is worrying,” said Andrei Kruglov, Gazprom’s chief financial officer.

Ukraine is paying but not as well as we would like it to. We are still thinking about whether to extend the pricing contract into the next quarter based on current prices.”

And now today…

Russia’s gas giant Gazprom said on Monday it did not rule out possible disruptions of gas supplies to Europe over Ukraine’s political situation.

 

Simmering political tensions in Ukraine, that are aggravated by inadequate economic conditions, may cause disruptions of gas supplies to Europe,” the monopoly said in its materials, adding that it would do its utmost to reduce export risks.

 

“We will further invest into other export-oriented projects such as South Stream and will enhance our LNG (liquefied natural gas) production and export capacity. We also increase our access to underground gas storage facilities in Europe.”

 

Andrei Kruglov, Gazprom’s chief financial officer, said at the moment Russia had been supplying gas to Ukraine according to schedule, although the latter failed to fulfil its debt obligations.

With that last sentence providing exactly the ‘real world’ cover Gazprom needs to cut its supplies “through” Ukraine and thus to Europe…

And, as The Guardian notes, this would…

not the first time Russia has used gas exports to put pressure on its neighbour – and “gas wars” between the two countries tend to be felt far beyond their borders. Russia, after all, still supplies around 30% of Europe’s gas.

 

In late 2005, Gazprom said it planned to hike the price it charged Ukraine for natural gas from $50 per 1,000 cubic metres, to $230. The company, so important to Russia that it used to be a ministry and was once headed by the former president (and current prime minister) Dmitry Medvedev, said it simply wanted a fair market price; the move had nothing to do with Ukraine’s increasingly strong ties with the European Union and Nato. Kiev, unsurprisingly, said it would not pay, and on 1 January 2006 – the two countries having spectacularly failed to reach an agreement – Gazprom turned off the taps.

 

The impact was immediate – and not just in Ukraine. The country is crossed by a network of Soviet-era pipelines that carry Russian natural gas to many European Union member states and beyond; more than a quarter of the EU’s total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.

Short of an actual war, the consensus appeared to be, Europe’s gas supplies are unlikely to be seriously threatened (since Putin relies on those revenues)… that is clearly about to change with Gazprom’s comments.

As the following image from Agence France Presse (created at the end of last year) indicates, things are about to get a lot more problemati for Germany, France, and Italy…