A Russian Explanation

Mon, Dec 22, 2014 - 12:55pm

Over the weekend, an original Turdite sent me a link to this very interesting video. You should take time to watch it.

This was posted to YouTube in late November. It's a discussion (lecture) featuring Evgeny Fedorov, who is a Deputy of the State Duma in Russia and chairman of the Committee on Economic Policy and Entrepreneurship. More on Mr. Federov can be found here: https://en.wikipedia.org/wiki/Yevgeny_Alexeyevich_Fyodorov. Apparently, he's a pretty stout Russian nationalist and supporter of President Putin.

It should be noted that this isn't the first time that Mr. Fedorov has gone on record stating that the bankers of The West will soon be coming after Putin and Russia. However, given the recent course of events, including a crashing ruble and sudden Russian interest rate hike, it seems that Mr. Fedorov's ideas merit some discussion. Thus this thread.

Please take a look at this video. It requires about 20 minutes of your time but, if events begin to spin wildly out of control over the next few months, I think you'll be glad that took the time today to consider this perspective.


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J Siefert
Dec 26, 2014 - 12:13am

Another Reason for the Ruble Drop

This explanation from the Dollar Vigilante seems to be more convincing than most I have read to date. What say you?

Is the Devaluation of the Ruble a Disaster?

The media commentaries seem to be in almost universal agreement. The 50% drop in the value of the ruble is a disaster for the Russian economy. The Russian government is completely dependent on sales of oil, we are told, and now risks being unable to pay its bills. Moreover, in combination with the 50% drop in the oil price and the EU sanctions, the Russian economy is in danger of collapse. Russians are scrambling to find a way to get a hold of US dollars, and the Russian government is scrambling to find a way to stop the run on the ruble.

Some commentators think this just serves Russia and/or its government right; others opine that the fall in the oil price and/or ruble value represents some sort of economic warfare on the part of the United States. Either way however, almost all seem to be in agreement that it is something both bad and unplanned (at least by the Russian government).

But is it true? Is it actually a disaster? If the Russian central bank is actually panicking, why did it buy 600,000 more ounces of gold in November? Is there any evidence at all that the Russian government considers the devaluation to be a disaster? Or is there evidence that something else entirely is going on here?

More>> https://www.dollarvigilante.com/blog/2014/12/24/ruble-ruckus.html

Dec 24, 2014 - 7:29am

BTW - Federov's 6 month time

BTW - Federov's 6 month time frame gives us a defined window for stacking. Note that gold's cap seems to have been moved down to $1180.

Dec 24, 2014 - 7:04am

Russia, 4-Ex-Soviet Nations

Russia, 4-Ex-Soviet Nations Finalize New Alliance

MOSCOW (AP) — Russia and four other ex-Soviet nations on Tuesday completed the creation of a new economic alliance intended to bolster their integration, but the ambitious grouping immediately showed signs of fracture as the leader of Belarus sharply criticized Moscow.

The Eurasian Economic Union, which includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, comes to existence on Jan. 1. In addition to free trade, it's to coordinate the members' financial systems and regulate their industrial and agricultural policies along with labor markets and transportation networks.

Russia had tried to encourage Ukraine to join, but its former pro-Moscow president was ousted in February following months of protests. Russia then annexed Ukraine's Black Sea Crimean Peninsula, and a pro-Russia mutiny has engulfed eastern Ukraine.

Russian President Vladimir Putin said that the new union will have a combined economic output of $4.5 trillion and bring together 170 million people.


But Belarus' President Alexander Lukashenko cracked the ceremonial veneer of the meeting by launching a harsh attack on Moscow for damaging Belarus' economic interests with moves to restrict its exports to Russia.

Belarus, sandwiched between Russia and European Union members Poland and Lithuania, has profited handsomely from Moscow's ban on imports of EU food in retaliation to Western sanctions against Russia by boosting imports of food from the EU nations and reselling it to Russia.

The Russian authorities have retaliated by halting imports of Belarus' own milk and meat, citing alleged sanitary reasons, and banning transit of Belarusian food bound for Kazakhstan through its territory on suspicion that much of it ended up in Russia.



Dec 23, 2014 - 8:04am


Sorry, I wasn't more specific. It was a link to a video interview.

BTW, Ukraine just ended its neutrality and will ask for NATO membership.

As for the South Stream and Turkey, Austria wants to participate in financing a branch pipeline from Turkey to Austria, and this branch would go to Hungary and the former states of Yugoslavia. Austria is thinking about repatriating some of its gold, too, right? ;-) That's interesting, because --

The Nord Stream was financed bu multiple-parties, backed by the German government. There is a debt outstanding, of course, and payments have to be made... Germany wants to repatriate some gold, too.

There was a plan to extend Nord Stream to the Netherlands (there is the main office of Gazprom abroad, the Gazprom International in Amsterdam), and to the U.K. But U.K. is pulling out for now, the BP. It doesn't mean though, that the extension can't go to the Netherlands. They repatriated some gold already, too...

Currently, there is an important company/player in Belgium, the oil and gas distribution in the Western Europe. They just met with Gazprom to finalize their deal; it is in making for several years. The Gazprom, according to this deal, would use their distribution network, backed by the government, I think. Belgium, didn't they mention gold repatriation, too? They did.

On December 4, Slovakia signed "The Deal of the Century" with Russia, oil and gas supply till 2029, the pipeline Druzhba built during the communist era. They are 100% dependent on this Russian gas, and from here it goes to the Czech republic, 70% dependency, and then to Germany. This pipeline could be "reversed" though, from Germany to the Czech republic. Talking about it, the Czech republic exports nuclear energy to Austria and Germany, having two nuclear power stations, six nuclear reactors. Hungary signed a deal with Russia to build some.

Safety Dan
Dec 23, 2014 - 7:18am
Dec 23, 2014 - 5:59am

The Real Reason Russia

The Real Reason Russia Cancelled South Stream

...In order to understand what has happened it is first necessary to go back to the way Russian-European relations were developing in the 1990s.

Briefly, at that period, the assumption was that Russia would become the great supplier of energy and raw materials to Europe. This was the period of Europe’s great “rush for gas” as the Europeans looked forward to unlimited and unending Russian supplies of gas. It was the increase in the role of Russian gas in the European energy mix which made it possible for Europe to run down its coal industry and cut its carbon emissions and bully and lecture everyone else to do the same.

However the Europeans did not envisage that Russia would just supply them with energy. Rather they always supposed this energy would be extracted for them in Russia by Western energy companies. This after all is the pattern in most of the developing world. The EU calls this “energy security” – a euphemism for the extraction of energy in other countries by its own companies under its own control.

It never happened that way. Though the Russian oil industry was privatised it mostly remained in Russian hands. After Putin came to power in 2000 the trend towards privatisation in the oil industry was reversed. One of the major reasons for western anger at the arrest of Khodorkovsky and the closure of Yukos and the transfer of its assets to the state oil company Rosneft was precisely because it reversed this trend of privatisation in the oil industry.

In the gas industry the process of privatisation never really got started. Gas export continued to be controlled by Gazprom, maintaining its position as a state owned monopoly gas exporter. Since Putin came to power Gazprom’s position as a state owned Russian monopoly has been made fully secure.

Much of the anger that exists in the west towards Putin can be explained by European and western resentment at his refusal and that of the Russian government to the break up of Russia’s energy monopolies and to the “opening up” (as it is euphemistically called) of the Russian energy industry to the advantage of western companies. Many of the allegations of corruption that are routinely made against Putin personally are intended to insinuate that he opposes the “opening up” of the Russian energy industry and the break up and privatisation of Gazprom and Rosneft because he has a personal stake in them (in the case of Gazprom, that he is actually its owner). If one examines in detail the specific allegations of corruption made against Putin (as I have done) this quickly becomes obvious.

This agenda of forcing Russia to privatise and break up its energy monopolies has never gone away. This is why Gazprom, despite the vital and reliable service it provides to its European customers, comes in for so much criticism. When Europeans complain about Europe’s energy dependence upon Russia, they express their resentment at having to buy gas from a single Russian state owned company (Gazprom) as opposed to their own western companies operating in Russia.

This resentment exists simultaneously with a belief, very entrenched in Europe, that Russia is somehow dependent upon Europe as a customer for its gas and as a supplier of finance and technology.

This combination of resentment and overconfidence is what lies behind the repeated European attempts to legislate in Europe on energy questions in a way that is intended to force Russia to “open up” its the energy industry there.

The first attempt was the so-called Energy Charter, which Russia signed but ultimately refused to ratify. The latest attempt is the EU’s so-called Third Energy Package.

This is presented as a development of EU anti-competition and anti-monopoly laws. In reality, as everyone knows, it is targeted at Gazprom, which is a monopoly, though obviously not a European one.

This is the background to the conflict over South Stream. The EU authorities have insisted that South Stream must comply with the Third Energy Package even though the Third Energy Package came into existence only after the outline agreements for South Stream had been already reached.

Compliance with the Third Energy Package would have meant that though Gazprom supplied the gas it could not own or control the pipeline through which gas was supplied.

Were Gazprom to agree to this, it would acknowledge the EU’s authority over its operations.
It would in that case undoubtedly face down the line more demands for more changes to its operating methods. Ultimately this would lead to demands for changes in the structure of the energy industry in Russia itself.

What has just happened is that the Russians have said no. Rather than proceed with the project by submitting to European demands, which is what the Europeans expected, the Russians have to everyone’s astonishment instead pulled out of the whole project.


These deals show that Russia had made a strategic decision this year to redirect its energy flow away from Europe. Though it will take time for the full effect to become clear, the consequences of for Europe are grim. Europe is looking at a serious energy shortfall, which it will only be able to make up by buying energy at a much higher price.


By redirecting gas to China, Russia cements economic links with the country that it now considers its key strategic ally and which has (or which soon will have) the world’s biggest and fastest growing economy. By redirecting gas to Turkey, Russia consolidates a burgeoning relationship with Turkey of which it is now the biggest trading partner.

Turkey is a key potential ally for Russia, consolidating Russia’s position in the Caucasus and the Black Sea. It is also a country of 76 million people with a $1.5 trillion rapidly growing economy, which over the last two decades has become increasingly alienated and distanced from the EU and the West.

By contrast, by redirecting gas away from Europe, Russia leaves behind a market for its gas which is economically stagnant and which (as the events of this year have shown) is irremediably hostile. No one should be surprised that Russia has given up on a relationship from which it gets from its erstwhile partner an endless stream of threats and abuse, combined with moralising lectures, political meddling and now sanctions. No relationship, business or otherwise, can work that way and the one between Russia and Europe is no exception.


The reason the Russians decided they could cancel it is because they have decided Russia’s future is in selling its energy to China and Turkey and other states in Asia (more gas deals are pending with Korea and Japan and possibly also with Pakistan and India) than to Europe. Given that this is so, for Russia South Stream has lost its point. That is why in their characteristically direct way, rather than accept the Europeans’ conditions, the Russians pulled the plug on it.

In doing so the Russians have called the Europeans’ bluff. So far from Russia being dependent on Europe as its energy customer, it is Europe which has antagonised, probably irreparably, its key economic partner and energy supplier.



Dec 23, 2014 - 5:42am


Sorry, I don't think that was me who posted that article.

Dyna mo hum
Dec 22, 2014 - 10:49pm

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Fred Hayek
Dec 22, 2014 - 9:10pm

A notary?! Oh, if only it were so simple.

This is a fascinating video. This guy is very sharp. I'm very impressed.

But at the 8:30 mark he says that Putin is a president and that means two things. One is that he's supposed to protect the constitution. And Federov demeans this function by saying it requires a mere notary.

Oh, if only it were so easy. We haven't been able to find a notary in the U.S. for a long, long time.

Dec 22, 2014 - 8:52pm


Some time ago, you've posted a link to an interview with one Russian guy/politician about the 5th column in Russia. I responded that that was a very important one than, but -- I have lost the link and I can't find it now. Do you remember? I would appreciate it very much... Thank you.

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