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[QUOTE=SmoothOpz;2795950]Several of the facts you mentioned are false. It's no wonder why you're confused when things are working out like you imagine.[/QUOTE]Members of the jury, I present Exhibit One:
"It's no wonder why you're confused when things are working out like you imagine".
I rest my case. Any questions?
[URL]https://charter97.org/en/news/2023/3/6/538876/[/URL]
"Kremlin companies have a new headache.
Having increased trade with India by hundreds of percent and abandoned the dollar at the request of the Kremlin, Russian companies are facing a problem: it turned out they have nowhere to put the rupees received for the sale of goods to Indian counterparties.
"Oil in exchange for "candy wrappers". Russian companies do not know what to do with the rupees received from India," notes the Russian economic publication Finanz.
Exporters have accumulated Indian currency, but the Indian regulator does not allow it to be traded on the Moscow Exchange and converted into rubles, Kirill Pestov, managing director for business development of the exchange, said in an interview with Reuters".
Those who believed this was the beginning of the end of dollar dominance might want to reconsider. But hey, India is certainly happy as they're definitely getting the better end of the deal. In fact, it's my guess they're laughing all the way to the gas pump!
[QUOTE=Jmsuttr;2796172][URL]https://charter97.org/en/news/2023/3/6/538876/[/URL]
"Kremlin companies have a new headache.
Having increased trade with India by hundreds of percent and abandoned the dollar at the request of the Kremlin, Russian companies are facing a problem: it turned out they have nowhere to put the rupees received for the sale of goods to Indian counterparties.
"Oil in exchange for "candy wrappers". Russian companies do not know what to do with the rupees received from India," notes the Russian economic publication Finanz.
Exporters have accumulated Indian currency, but the Indian regulator does not allow it to be traded on the Moscow Exchange and converted into rubles, Kirill Pestov, managing director for business development of the exchange, said in an interview with Reuters".
Those who believed this was the beginning of the end of dollar dominance might want to reconsider. But hey, India is certainly happy as they're definitely getting the better end of the deal. In fact, it's my guess they're laughing all the way to the gas pump![/QUOTE]We have seen the end of dollar dominance predicted for a few decades now. This refrain is now particularly popular with Sinophiles and Russophiles.
This is a perfect example of the currency dilemma. Russia now has Rupees. There are normally only two choices. Buy goods from India. India doesn't produce enough of what Russia wants or needs. The second one is convert it into a currency that is useful. A currency that is freely floated and widely-held. Bingo! Dollars! That ain't going to work for the Russians.
I highly doubt the Russians could easily dump the Rupees if the Indian currency regulators would allow it. Chinese Yuan doesn't work for the same reason. The Yuan has too many capital controls.
People will hurt their heads trying to come up with some scheme like currency for gold. The gold seller still has to hold that currency in a bank or treasury bond or find something to buy in that currency's home market.
[QUOTE=WyattEarp;2796373]We have seen the end of dollar dominance predicted for a few decades now. This refrain is now particularly popular with Sinophiles and Russophiles.
This is a perfect example of the currency dilemma. Russia now has Rupees. There are normally only two choices. Buy goods from India. India doesn't produce enough of what Russia wants or needs. The second one is convert it into a currency that is useful. A currency that is freely floated and widely-held. Bingo! Dollars! That ain't going to work for the Russians.
I highly doubt the Russians could easily dump the Rupees if the Indian currency regulators would allow it. Chinese Yuan doesn't work for the same reason. The Yuan has too many capital controls.
People will hurt their heads trying to come up with some scheme like currency for gold. The gold seller still has to hold that currency in a bank or treasury bond or find something to buy in that currency's home market.[/QUOTE]Yep, spot on! Also, with respect to China, I would offer a couple of additional observations.
First, capital controls wouldn't impact Russia as much if they simply used Yuan to purchase Chinese goods and services, and China has more to offer than India. So, at least at first glance, that would seem to offer a solution to Russia's problem. The main issue here is what goods and services would Chinese businesses be willing to sell, since they'd be concerned about the possibility of sanctions impacting their business with Europe and the West.
Second, transacting in Yuan could increase Russia's vulnerability as volume increases in a currency that's really only efficient for China-Russia trade. While China might be more lenient in allowing Russia to exchange Yuan for other currencies, there would be additional friction and costs as third-parties would probably be needed. Therefore, whatever Russia decided to do with excess Yuan, they'd still be the lesser partner since China retains control of rules governing that currency.
To make a long story short, more trade with China in Yuan = more dependency on China. Hard to see any good options for Russia, as all roads lead to either a dead end or a slippery slope.
[QUOTE=WyattEarp;2796373]People will hurt their heads trying to come up with some scheme like currency for gold.[/QUOTE]Doesn't India have a few rich bullion dealers? They'll figure it out.
[QUOTE=Riina;2796514]Doesn't India have a few rich bullion dealers? They'll figure it out.[/QUOTE]India has nothing to figure out. They're quite happy paying in rupees. It's Russia that has a problem.
Oh, and if you think India will ever pay in gold, rather than rupees, I've got a slightly broken Kerch Strait bridge for sale.
Wyatt Earp's main point, as I understood it, is that there's a perfectly good mechanism for intl trade, namely the US dollar. And there have been a plethora of schemes to de-dollarize, using gold and other mechanisms, but all have fallen short.
Russia has plenty of clever financial types such as Elvira Nabiullina, yet they still find themselves receiving (essentially worthless) "candy wrappers" in exchange for valuable oil.
[QUOTE=Jmsuttr;2796707]India has nothing to figure out. They're quite happy paying in rupees. It's Russia that has a problem.
Oh, and if you think India will ever pay in gold, rather than rupees, I've got a slightly broken Kerch Strait bridge for sale.
Wyatt Earp's main point, as I understood it, is that there's a perfectly good mechanism for intl trade, namely the US dollar. And there have been a plethora of schemes to de-dollarize, using gold and other mechanisms, but all have fallen short.
Russia has plenty of clever financial types such as Elvira Nabiullina, yet they still find themselves receiving (essentially worthless) "candy wrappers" in exchange for valuable oil.[/QUOTE]China is the ideal trading partner for Russia. China needs energy and other commodities. China relies on imported foodstuffs. Clearly, they also make a lot of things the world wants. It's just hard to say how much China is willing to sell to Russia.
[QUOTE=Jmsuttr;2796707]India has nothing to figure out. They're quite happy paying in rupees. It's Russia that has a problem.
[/QUOTE]I guess Russians and Indians are too dumb to create a mutually beneficial exchange.
[QUOTE=Riina;2796783]I guess Russians and Indians are too dumb to create a mutually beneficial exchange.[/QUOTE]The Indian buyers aren't dumb. They're fucking smart and they're getting exactly what they want, which is oil at bargain prices. They have zero incentive to change a thing.
And the Russian sellers aren't dumb. They're fucking desperate because their markets have dried up. Apart from India and China they don't have many options.
So, for India, zero issues and no reason to change. For Russia, LOTS of issues but no good ways to resolve them. Also, you seem to think this is something more than a business relationship. It's not. India wants oil at the lowest possible price and they don't give a shit if their rupees are a problem for Russia. Mutually beneficial doesn't enter into a transaction when one party knows they have the other (pun intended) over a barrel.
[URL]https://www.theamericanconservative.com/death-of-a-myth/[/URL]
[QUOTE=Questner;2796860][URL]https://www.theamericanconservative.com/death-of-a-myth/[/URL][/QUOTE]It's an opinion piece, so the author is entitled to his views. But writing to trash what he believes to be myths, while uncritically leaning on myths that support his narrative, is lame in the extreme. In fact, his preferred mythology is so easily debunked that it's evidence he doesn't really care about his reputation. Rather he's preaching to the choir of those who are riding in the same narrative-wagon with him.
Debunked Myth #1: That promises about NATO expansion were made to Russia.
First, and most obvious, Russia did not exist as a country at the time the myth-mongers allege the promises were made. The USSR, headed by Gorbachev, was the relevant entity and that's where the appropriate focus should be.
Second, no less of an authority than the leader of the USSR, Gorbachev himself, unequivocally stated that no such promises were made.
[URL]https://www.brookings.edu/blog/up-front/2014/11/06/did-nato-promise-not-to-enlarge-gorbachev-says-no/[/URL]
The article cites an interview of Gorbachev in which he was asked this specific question:
"The interviewer asked why Gorbachev did not "insist that the promises made to you (Gorbachev) particularly USA Secretary of State James Baker's promise that NATO would not expand into the Eastbe legally encoded?" Gorbachev replied: "The topic of 'NATO expansion' was not discussed at all, and it wasn't brought up in those years. . Another issue we brought up was discussed: making sure that NATO's military structures would not advance and that additional armed forces would not be deployed on the territory of the then-GDR after German reunification. Baker's statement was made in that context. Everything that could have been and needed to be done to solidify that political obligation was done. And fulfilled".
Debunked Myth #2: The notion that any country who sought NATO membership did so for reasons other than their own self-interest. And the flip-side of that coin, the notion that an existing member of NATO, each of which have a veto, would ever approve membership for a new candidate for reasons other than self-interest or for what they believe to be in the collective best interests of the group.
NATO is a free association of countries that is difficult to join and easy to leave. With Russia's history and aggressive tendencies, is it any surprise that Poland and the Baltics sought out NATO protection? And, in light of Russia's current aggression, is it any surprise that both Finland and Sweden have turned away from decades of non-aligned status to also seek NATO protection?
Of course, these are inconvenient facts for those who have drunk the pro-Russia Kool-Aid, which made me wonder about the author. Here's his info, taken from the article:
"George O'Neill, Jr. , is a member of the board of directors of the American Ideas Institute, which publishes The American Conservative, and an artist who lives in rural Florida".
Wow, an artist from rural Florida! Them's some impressive credentials, ain't they? I wonder if he wrote this obvious clickbait article because he needed a new set of paintbrushes?
[QUOTE=WyattEarp;2796771]China is the ideal trading partner for Russia. China needs energy and other commodities. China relies on imported foodstuffs. Clearly, they also make a lot of things the world wants. It's just hard to say how much China is willing to sell to Russia.[/QUOTE]While it's hard to know exactly what's in Comrade Xi's brain, it seems relatively uncontroversial to assert that they'd prefer a stable Russia, one that is neither too weak or too strong. A Goldilocks scenario might be one in which Russia is clearly the junior partner in bilateral relations, and dependent on China, while still strong enough to be a thorn in the side of NATO and the West.
And, while Russia is certainly commodity rich, they don't necessarily have the infrastructure in place to easily service China. Oil is an obvious exception, but eastward gas pipeline capacity is lacking and Russia doesn't currently have the ability to supply LNG in any significant quantity. That doesn't mean it can't be built for the future, but it would require significant Chinese investment and would take years before any benefits would be realized.
In the meantime, China is still much more reliant on the West than they are on Russia, which creates another tightrope that needs to be walked. I saw an article recently that mentioned new sanctions on Chinese companies for providing drone components to Iran, which were then used to construct weapons for Russia. When I read that report it struck me that this could be as much (or more) about sending a message to the CCP than it is about Iran or Russia. At a minimum, it establishes a precedent for sanctions that could easily be ramped up.
Over the next few months I'll be most interested to see what kinds of moves China makes with respect to Russia's neighbors, like Belarus, Kazakhstan, and other "stan" countries. Strengthening relations with those could be thought of as cheap insurance against the possibility of a destabilized Russia. It'll also be interesting to see if China starts to apply pressure on Russia to find a negotiated solution. It's pure speculation on my part, but it's my guess they (China) would be just fine with a stalemate or frozen conflict scenario.
[QUOTE=Questner;2796860][URL]https://www.theamericanconservative.com/death-of-a-myth/[/URL][/QUOTE]The clown is back again, honk honk.
[QUOTE=Riina;2796783]I guess Russians and Indians are too dumb to create a mutually beneficial exchange.[/QUOTE]If you have figured out a way for the Russians to use their rupees for Indian merchandise, I would tell them. Somehow you think Indian gold bullion sellers are interested in taking their rupees. Perhaps with another significant haircut, they would.
Haircut in the price of the oil then a haircut to dump the rupees. See how this gets self-defeating very quickly.
[QUOTE=Questner;2796860][URL]https://www.theamericanconservative.com/death-of-a-myth/[/URL][/QUOTE]Thank you for exposing yet another Putin's mouthpiece. Good job!