Let’s just assume that Russian lawmakers are 5 steps ahead of Joe Biden shall we, and that the only ones really suffering here are the American people. No gas did not spike because Russia invaded Ukraine. Gas was on the rise long before the Russia/Ukraine war was even a thing – all you had to do was look at a Yahoo finance chart to call B.S. on that one, but thankfully Peter Doocey from Fox News did that for us several times already.
When Biden imposed “sanctions” on Russia, he thought cutting off the Federation from foreign investments including the ability to trade in USD was going to do the trick. Simply banning America from purchasing oil wasn’t going to do the trick. Joe wanted to prevent any country from giving Putin money, and cutting off Putin’s ability to transact in US Dollars seemed like the smartest play. Now we know Joe Biden’s not all with it, but his economic advisors should have known, and probably DO know that it wasn’t going to really do much to scare ol’ Vladimir. And here’s why…
Putin doesn’t really care about the USD as the Ruble is backed by the Gold Standard, and for obvious reasons, he wanted nothing to do with his currency being held hostage by the USD. With the flip of a switch, he can now transact in Ruble without sending the currency through the floor, and seeing that the Ruble has reached 52-week highs in recent weeks, the strategy has paid off.
But Russian lawmakers are now taking things to a whole new level by making it easier for foreign companies to open accounts with Russian banks and pay for Russian gas and other goods in roubles.
Russian President Vladimir Putin last month signed a decree demanding foreign buyers pay for gas in roubles or else have their supplies cut. He said this was needed because if they paid in hard currency, Western sanctions over Ukraine would prevent Moscow from accessing the money. And because the Ruble has done so well over the past year, foreign companies don’t mind switching their base currency to the rouble in order to purchase oil.
In practice, the measure requires foreign gas buyers to open rouble and hard currency accounts at Gazprombank, which will receive their payments in foreign currencies and convert them into roubles via auctions on a Moscow exchange.
Olga Anufrieva, deputy chair of parliament’s budget committee, said the new amendment “greatly simplifies the registration and opening of an account” with a Russian bank.
And because the Ruble has done so well over the past year, foreign companies don’t mind switching their base currency to the rouble because it’s not pegged to the declining US dollar.
Kremlin spokesperson Dmitry Peskov has said that there is still time for so-called “unfriendly” countries to switch to roubles, as payments for gas delivered since Putin’s decree will fall due in May.
So, sorry Joe, once again, the only country you’re hurting is America, because as far as Russia’s concerned they’re doing just fine selling oil to other countries who are paying with Roubles.