MOSCOW, March 31. /TASS/. If gas buyers from unfriendly states refuse to pay for gas in rubles, Russia will view it as breach of contract, President Vladimir Putin said at the meeting on the situation in the aviation sector.
"If such [ruble] payments are not made, we will consider this to be the buyers’ failure to perform commitments with all ensuing implications," Putin said....
TASS (Russian state media)
Russia will view refusal of paying for gas in rubles as breach of contract — Putin
Russia will view refusal of paying for gas in rubles as breach of contract — Putin
https://tass.com/economy/1430513
Zero Hedge
Putin Signs Decree Ordering Gas Exports To Be Halted If Buyers Don't Pay In Rubles
https://www.zerohedge.com/commodities/putin-signs-decree-ordering-gas-exports-be-halted-if-buyers-dont-pay-rubles
Note: USD/RUB rate now trading back up at pre-war level.
The amount of newsprint this has generated is unbelievable.
ReplyDeleteGazprombank is the only Russian bank able to transact in Euros. Gazprom will now only accept payment into its RUB account at Gazprombank.
Therefore EU buyers will have to send EUR to Gazprombank who will then credit Gazprom with the appropriate amount of RUB.
In other words banks will have to open a correspondent account with Gazprombank rather than whoever they were using as correspondent previously in Russia.
What Gazprom was doing internally (discounting Euros into Roubles within Gazprombank), now everybody has to do. And no doubt Gazprombank will make a tidy turn on each of those transactions.
Everything they have done so far ( apart from interest rates)
ReplyDeleteShows Russia understand MMT.
They probably raised rates to keep the leisure class with capital in Russia onside and happy.
They ALL do and have done for many years. As it is impossible to run a central bank and commercial banking system for that length of time and not know how it works.
The reason They don't follow MMT type policies. Is because they have chosen the colonial, free trade, real resource capture, from which to extract rent model.
That has served them so well and made them so rich.
Most of the mistakes they make when running a central bank. Is made by trying to hide the fact they know how it really works. By following the propaganda script from the financial press to try and hold the green curtain in place. Keep it secret from the public. Keep adding gimmicks to the infrastructure to create confusion.
Buy shares in Gazprombank ?
ReplyDeleteFootsoldier, this would seem to be the "neoliberal conspiracy" theory and counter to Matt's "they're all morons" theory. :)
ReplyDeleteI've been saying it for 2 years.
ReplyDeleteWhere the " we knew all along" mantra started.
I'm not talking about economists here. They are Just a bunch of useful idiots. I'm talking about actual bankers in power. Jan Ha
You can't set up the Euro the way they did without knowing how it works.
You can't create an economic paradigm based on the colonial, free trade, real resource capture, from which to extract rent model. Without knowing how it works.
The French could not create the CFA Franc in Africa the way they did without knowing how things work.
You Just need to read the works on the American Revoloution currency by Farley Grubb to realise they knew fine well how it works.
It is simply impossible not to know how it works if you were responsible for setting up and looking after it afterwards.
The job of politics is to cloud the issue.
Goldman Sachs : Jan Hatzius, Head of Global Economics and Markets Research.
ReplyDeleteCatch him drunk in a bar. He'll tell you how it works.
Ask yourself Why did they do what they did with central banks in the Maastricht treaty. To try and show the BOE was independent.
ReplyDeleteTreasury select commitee submission from 1999
https://publications.parliament.uk/pa/cm199900/cmselect/cmtreasy/154/cor15402.htm
It wasn't because they didn't know what they were doing that's for sure. Art degree of no art degree.
(paragraph 37 onwards), the government simply spent according to direction from Parliament and this was expressed as money injected into the economy via the Bank of England. Then the Bank of England issued gilts (though always a liability of Treasury) solely with an eye on monetary conditions. In cases where not all of the government spending was drained - because the monetary objectives didn't require it - then Ways and Means account simply acted as a balancing item.
The Ways and Means account was therefore basically analogous to an overdraft (as I know other folk in here have always understood it), an IOU of the Treasury. So even in this case, we have Treasury IOUs backing central bank money creation, but as explicit, overt, unequivocal money creation by government spending. And the only concern in this system is the monetary target, i.e. inflation.
Everything else is subsumed into that. All completely consistent with the claims of MMT.
Post-1997 we have the system that we have now. The Treasury (DMO) is now responsible for cash management which means it has to clean up after itself by issuing gilts to neutralise its spending. This leaves the Bank to focus on regulating the economy only with respect to prevailing conditions rather than the additional complication of government cash flows.
So now when the BoE needs to add more money to the economy it cannot use any of the government's direct spending (i.e. only drain part of it off) as before because the DMO has already drained it all. So now it has to buy back some of the gilts that the DMO sold. Again, we have net money added to the economy backed by a Treasury IOU, though this time it is a gilt rather than an entry in the Ways and Means account.
But apart from that, what else is really different? The only thing that stands out for is that there are now two targets in the system:
(1) the Treasury's balanced cash flow target;
(2) the Bank's monetary target. In many cases the Bank will have to undo what the Treasury has done, instead of both simply acting together under one target as they did before.
What this shows me is that the changes in 1997 really did just obfuscate the reality. It is much easier to reconcile the pre-1997 system with MMT, as it is clear to see
1. that the spending happens first following Parliamentary direction
2. that spending creates money via accounts being credited as the central bank
3. that the only concern ultimately is monetary conditions (inflation not budgets)
4. that gilts are a monetary instrument
They did it in a treaty to take complete control of the central bank. Full it with unelected, unaccountable, technocratic pricks that would serve wall street and the City Of London interests.
As finance was going to be used as tools of war during EU and NATO Expansion.
“ Shows Russia understand MMT.”
ReplyDeleteKeep dreaming..,