Economy: Free falling ruble – a brilliant Russian ploy

Written on January 6th, 2015 in politics Comments Off

Published on Axis of Logic (first on Global Research and on teleSUR english), by Peter Koenig, Jan 3, 2015.

The world is still hell-bent for hydrocarbon-based energy. Russia is the world’s largest producer of energy. Russia has recently announced that in the future she will no longer trade energy in US dollars, but in rubles and currencies of the trading partners. In fact, this rule will apply to all trading.

Russia and China are detaching their economies from that of the western financial system. To confirm this decision, in July 2014 Russia’s Gazprom concluded a 400 billion gas deal with China, and in November this year they signed an additional slightly smaller contract – all to be nominated in rubles and yuans.  

The remaining BRICS – Brazil, India and South Africa – plus the members of the Shanghai Cooperation Organization (SCO) – China, Russia, Kazakhstan, Tajikistan, Kirgizstan, Uzbekistan and considered for membership since September 2014 are also India, Pakistan, Afghanistan, Iran and Mongolia, with Turkey also waiting in the wings – will also trade in their local currencies, detached from the dollar-based western casino scheme … //

… Russia needs rubles. That’s her currency. That is the currency Russia needs for future trading – detached from the western monetary system.

When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, euros and other western-allied currencies – and gold. Let’s not forget, the ruble is backed by gold. By now we know what flooding a market with currencies may do to these currencies – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, not by Washington style arm-twisting.

Surely, Russia is not interested to cause the sudden destruction of the dollar-linked financial world. She is not interested in a sudden death of the many countries that are potential new trading partners in a new monetary system. Instead, the fall of the western economy of deceit may be planned as a gradual slide, so that countries have time to switch – switch their reserves to rubles, yuans and other BRICS and SCO currencies. This move is on its way. Only ten years ago, dollar denominated securities constituted 90% of reserves worldwide. Today the rate is 60% and declining.

After all, perhaps as Plan B, there is also a pact of monetary alliance between Russia and China. China holds currently about 1.5 trillion dollars and in total more than 3 trillion dollar equivalent in western currencies – and undefined but huge gold reserves. Chinese, BRICS and SCO solidarity with Russia is a solid security for the ruble. Imagine – the first major action of the new BRICS Development Bank with a current capital base of 100 billion dollars would launch a massive ruble rescue operation.

The question begs – is this gigantic ‘engineered’ ruble devaluation scheme another precursor to war? A nuclear confrontation or Cold War II? – Precursor to another western, Washington-driven false flag attempting Moscow to fall into a lethal trap? – Not necessarily. Russia is playing a clever chess game, diplomacy at its best. Instead of sabre rattling – Russia is coin rattling. It might lead to a western financial fiasco early in 2015 for the dollar and euro denominated economies.

And the winner is … ?

(full text). – (Source URL).

(Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, the Voice of Russia, now Ria Novosti, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe).

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