Dollar to hit parity with euro in 2017

 

The dollar is likely to hit parity with the euro during 2017 driven by diverging paths for interest rates, according to Goldman Sachs’ chief economist.

The Federal Reserve is likely to hike interest rates three times in 2017, pushing it even further from the rate positioning stance of Europe during the course of the year, Jan Hatzius told CNBC at the Goldman Sachs Strategy Conference in London on Monday. Continue reading

Russian Military Industry Set to Become Driver of Civilian Economy

Russian war preparations have now been shifted into high gear.

As you may recall from a previous post, the Russian lying game is a game the Russians play well, and it’s in play now as they mentioned plans to make the military industrial complex the main driver of the Russian economy.

To put this in simple terms, war will now be the main business for Russia.

 

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Workers of the JSC Uralvagonzavod assemble tanks on the production floor. In addition to its military production, the company is one of the largest scientific and industrial complexes in Russia. © Sputnik/ Sergey Mamontov

 

Economic analyst Dmitri Pskezin comments on the Russian government’s plans to successfully convert cutting-edge developments in Russia’s military sector to the civilian economy.

Last week, Deputy Prime Minister Dmitri Rogozin, responsible for the development of Russia’s defense industry, announced that by 2020, the country’s military-industrial complex would become the driver of the Russian economy.

According to the official, this will become possible “only when every defense enterprise…[is] subject to the logic of parallel development in civilian industry. And not just any production, but high tech products accompanying the production of military products.”

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Saudis Planning For A War Of Attrition In Europe With Russia’s Oil Industry

Russia’s central bank recently warned about the growing financial risks to the Russian economy from Saudi Arabia encroaching upon its traditional export market for crude oil. Russia sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn.

The result is a heavier discount for Russia’s crude oil, the so-called Urals blend. Bloomberg reported that the Urals typically lands in Rotterdam, a major European destination, at a discount to Brent of around $2 or less. But the discount has widened to $3.50 lately due to increased competition from Saudi Arabia. “Oil supplies to Europe from Saudi Arabia are probably adversely affecting Urals prices,” the Russian central bank warned in a recent report.

Russian officials have accused Saudi Arabia of “dumping” its oil in Europe, a move that Rosneft chief Igor Sechin said would “backfire.” Continue reading

To Win the Second Cold War

BERLIN/MOSCOW (Own report) – A fellow of the German Council on Foreign Relations (DGAP) advocates intensifying confrontation with Russia and declaring organizations in EU countries, receiving support of Russian citizens “agents of the aggressor.” In a recent paper, published by the DGAP, Vladislav Inosemzev is calling for “the West to mobilize the necessary resources to win the second cold war.” These include political, but particularly economic measures. The steps proposed by the DGAP fellow, would result in comprehensive economic warfare against Russia and serious measures against “Putin’s apologists.” Meanwhile, the discussion of policy towards Russia continues in Berlin. Business circles insist on ending sanctions because they fear billions in business losses and the loss of a strategic market. The German government is therefore again contemplating concepts à la “transformation through trade,” according to an insider. These concepts aim at profitable business for German companies, in spite of political confrontation – as in the first Cold War.

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Russia Buy Gold Bullion For “Principles Of Diversification” – Central Bank Governor

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– Russia “bought gold” for “diversification” – Russian Central Governor Nabiullina
– Russian central bank prefers gold bullion to euros or dollars
–  Russia points out that other countries have a  “bigger share of gold in their reserves”
– “Can’t imagine a situation where bitcoins would be considered a reserve currency”
– On bitcoin – sees “mobility”, “expediency” and “low cost” but may regulate

The Russian Central Bank Governor told CNBC this morning that Russia has bought and will continue to buy gold bullion for “principles of diversification.”

In an interview with Geoff Cutmore of CNBC, Elvira Nabiullina was asked Continue reading

Putin undeterred by $32 billion in capital flight, continues assault on dollar’s role

Fearing the collapse of the Russian financial system and burdensome Western sanctions in the aftermath of the Ukraine crisis, investors and businesses moved more than $32.6 billion in assets outside of Russia, primarily to offshore accounts, in the first quarter of 2015, according to reports.

Capital flight has several negative effects on the Russian economy, including the loss of tax revenue and the reduction in funding available for investment.

Lack of investment funding also delays attempts to modernize the economy. The Center for Macroeconomic Analysis and short-term forecasts assesses that investment activity is down 20 percent since 2013. Continue reading

Russia’s new Armata tank makes debut

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Moscow: Russia’s new Armata tank appeared in public for the first time on Monday, rumbling down a broad Moscow avenue on its way to Red Square for the final rehearsal of the Victory Day parade.

Russian and some Western military experts say the Armata will surpass all Western versions. The tank is the first to have an internal armoured capsule housing its three-man crew and a remotely controlled turret with an automatic weapons loading system, features that allow for increasing both the level of crew protection and the efficiency of the tank’s weapons. Continue reading

‘Someone Was Expecting Collapse of Russian Economy’- Putin

ST. PETERSBURG (Sputnik) – Russia’s economy has not collapsed over Western sanctions as some wished and the peak of difficulties is in the past, Russian President Vladimir Putin said Monday.

“We were lacking $160 billion and last year our businesses and banks were to extinguish their current loans of a total of $130 billion before their foreign partners this year, plus another $60 billion. It looks like someone was expecting some sort of a collapse,” Putin told upper house lawmakers in St. Petersburg. Continue reading

“De-Dollarization” Deepens: Russia Buys Most Gold In Six Months, Continues Selling US Treasuries

The rumors of Russia selling its gold reserves, it is now clear, were greatly exaggerated as not only did Putin not sell, Russian gold reserves rose by their largest amount in six months in December to just over $46 billion (near the highest since April 2013). It appears all the “Russia is selling” chatter did was lower prices enabling them to gather non-fiat physical assets at a lower cost. On the other hand, there is another trend that continues for the Russians – that of reducing their exposure to US Treasury debt. For the 20th month in a row, Russia’s holdings of US Treasury debt fell year-over-year – selling into the strength.

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Russia Is About To Absorb Part of Another Country

Surely, if this escalates into another war, the propaganda masters behind the last Russian-Georgian war will effectively paint tiny Georgia as the aggressor. The previous, long-planned and pre-determined 2008 Russian invasion of Georgia, that is. The next invasion would likely permanently take away the energy corridor from the Caspian Sea to Europe planned under the Bush/Cheney administration to bring independence. This is also why you see Europe frantically scrambling to find alternatives to Russian resources.

If you haven’t figured it out yet, it was never about an aggressive rogue military in a nation barely larger than Israel. But that’s what the masses believe and it goes to show how effective the propaganda is. You can read more about Georgia under its respective category HERE.

While Moscow continues to be hammered by low oil prices and western-led sanctions, it is doubling down on hard-edged political and financial retribution: Russia is preparing to absorb a province of neighboring Georgia, and delivering an ultimatum to Europe that it could lose much of the Russian gas on which it relies.

Ten months after annexing Crimea and igniting his current standoff with the west, Russian president Vladimir Putin will as early as this week take control of South Ossetia, a breakaway region of Georgia, with which he has a long, sour relationship. He is to sign a little-publicized accord that will hand over foreign policy, border control, and security to Moscow. Continue reading

Russia can switch to payments with India, China in national currencies crushing dollar amid sanctions – experts

Experts believe that the wish of the West to restrict Moscow’s cooperation with Brussels and Washington will play into the hands of the Russian economy. Wisdom and presence of mind are two components that will guarantee success for a new spiral of Russia’s cooperation with eastern countries. Also, this will allow us to counter-balance the risks that the European market is exposed to.

Russia has decided to develop cooperation with Asian countries. India, for example is our partner in issues of the military-industrial complex, in the high-tech segment. Cooperation with China is based on the raw materials sector, engineering, military technology. Recall that the Russian president’s visit is due in May.

Most likely, agreements on natural gas will be signed. Actually, bearing in mind that China will become the world’s largest economy in the near future, the development of the eastern vector will guarantee that a considerable part of extra profits and the growth of the home market will be generated in the South-East Asia. Continue reading

Obama Promises to Increase Russia’s Isolation

U.S. President Barack Obama on Wednesday promised to increase Russia’s isolation, as the United States and the European Union agreed to work together to prepare possible tougher economic sanctions in response to Russia’s behavior in Ukraine.

Speaking after a summit with top EU officials and quoted by Reuters, Obama declared that Russian President Vladimir Putin had miscalculated if he thought he could divide the West or count on its indifference over his annexation of Crimea.

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Ukraine crisis oddities: Tycoon George Soros wants US to crash oil market

The US government already sold 5 million barrels as a subtle hint a little over a week ago.

Selling oil from the strategic oil reserve would hurt the USA more than anything else in the long-run. After that’s gone, what else would America have to fall back on during a crisis? At a time when Russia could trade oil in any other currency but Dollars in retaliation, sending the US economy back into the stone age, would such an action with limited effect be worth it? If the Dollar is dead and there is no strategic reserve, then what? Soros, who nearly killed the British economy overnight, and is a convicted felon in France, does not have the best interests of the country in mind. People like Soros are smarter than this and know the likely outcome(s) for their actions, and given his past record, could most likely sparking an intentional attack on the U.S. from within via provocation with Russia.

For more information on George Soros, see the following:

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The infamous speculator, oligarch and political activist George Soros published a plan designed to “punish” Russia for its actions in Crimea and Ukraine. According to Soros’ plan, Washington has to crash the oil market in order to hurt the Russian economy. Continue reading

Obama Says Putin Must Pull Back on Crimea Annexation

Another day, another ‘line’ drawn in the sand.

President Barack Obama today imposed sanctions on seven top Russian government officials and four others from Ukraine and warned Russia will face more penalties if it doesn’t pull back from Crimea.

“Continued Russian military intervention in Ukraine will only deepen Russia’s diplomatic isolation and exact a greater toll on the Russian economy,” Obama said at the White House. The U.S. can “calibrate our response” based on whether Russia chooses “to escalate or to de-escalate the situation.” Continue reading

Russia gains vast new area twice the size of Crimea with ‘the energy riches of an Ali Baba’s cave’

The Siberian land mass is officially 52,000 square kilometres bigger after an enclave in the Sea of Okhotsk was recognised as part of Russia’s continental shelf. The decision comes from the UN Commission on the Limits of the Continental Shelf.

The underwater area is roughly the size of Holland and Belgium combined. Continue reading