Russia and the Dollar

The imposition of sanctions on Russia appear to be working as the rouble has tumbled. Is this a short term victory of the US & EU over Russia?

The Fed Produces Nothing, Yet Drives the U.S. Economy

Podcast Summary:

Introduction: 0:00-6:18

Russia, Ukraine and The Dollar

6:18-12:40 Discussion of the U.S. use of military force to protect the dollar and the dilemma that Russia presents because they can not be as easily defeated militarily as smaller countries that threaten non dollar use, like Iraq and Libya.

Discussion of the unintended consequences of kicking Russia out of the Swift program or banning EU citizens from buying Russian debt.

Sanctions accelerate the move away from the dollar and U.S. Treasuries.

Review of why the dollar is the world’s reserve currency, Bretton Woods Agreements and the Petro Dollar.

A decline in the dollar’s use would mean a decline in its value and price inflation on imports to the United States.

Russia’s ban on EU produce imports is already causing problems in Europe. In the winter Russia may limit exports of oil and natural gas deliveries to Europe. It doesn’t seem to be in Europe’s best interest to engage in a reciprocal sanctions battle with Russia, other than Europe’s association with the United States who is pressuring for sanctions on Russia to protect the dollar.

Central Bank Involvement in The Futures Markets

12:40-13:13 Discussion of a special Comex program for futures trading for central banks.

The Ruble Falls on Sanctions

A Sign that Sanctions Are Working?

13:13-15:13

The BBC reported that the Russian rouble has taken a hit since the imposition of sanctions. This may be a short lived victory if Russia decides that it will accept only roubles for their oil. This will create demand for roubles and drive the price of the rouble higher than where it was before the sanctions were imposed.

Such a move would also decrease demand for the dollar as countries shift some of their dollar reserves to buy roubles.

Birth of the Petro Rouble

Or a Sign of No Strategy?

15:13-19:00 Discussion of President Obama’s admission of a lack of a strategy regarding ISIS (proclaimed in a fine tan summer suit) and speculating whether there is a strategy regarding Russia. Putin seems to understand how to play the international game.

.@sustain05 There is a reason George HW Bush and Putin get their way internationally -CIA and KGB training, contacts

— Smaulgld (@Smaulgld) September 1, 2014

If ISIS is the problem, the key to solving it lies in better relations with Syria and Iran- countries the US was hostile towards a few months ago and allies of Russia! So the US may need the help of Russia to battle ISIS but the US is battling Russia over Ukraine and Crimea.

Putin has a high approval rating even though the economy is doing poorly.

Is Foreign Policy President Obama’s Strong “Suit”

19:00-26:00 Discussion of the President’s handling and interest in foreign affairs. Discussion of what are viewed as “national issues” by the main stream media. Thoughtful discussions on economics are absent. Divisive stories are hand picked. Events in Ferguson, Mo. are used as an example.

Market & Media Focus is on the Fed and Central Banks – Not Business!

26:00 -28:15 discussion of the incessant attention paid to central bankers’ role in the economy vs on the people who actual create and conduct business. Bankers don’t produce any thing other than speeches and their primary job is to manipulate interest rates and markets.

.@ektrit lacking those you just increase the money supply, boost the stock mkt & encourage ppl to move in & out of used houses

— Smaulgld (@Smaulgld) September 3, 2014

Manipulation of Gold and Silver

28:15- 31:45 Discussion of naked short selling to drive the prices of gold and silver down.

Discussion of the U.S., Russian and Chinese attitudes towards gold and silver.

Everything the U.S. does is designed to promote and protect the dollar. It is the key to the US way of life. The focus is not on increasing our productive capacity, but the capacity to produce dollars. Deflation is demonized as it represents a lower demand for dollar.

Housing Data- New Home Sales

31:45 Housing data is discussed and the spin that is applied to it. Every piece of data is evidence of a housing “recovery”

How to Price and Sell Your Home

34:40 discussion of home sale strategies.

Central Banks Produce Nothing, Yet Drive the World’s Economies