[SnS_12]

Originally Posted by Samurai

Oh, let's not go there. Gold standard belongs in history, just like the horse cart. Just because petrol cars are causing pollution, we don't advocate going back to horse carts, do we?

Fine. Lets consider a hypothetical situation where Russia decides to do something about its falling Ruble due to western sanctions. Putin won’t allow his country to depend on US$ or Euro as an alternate. So what are his options? Suppose he decides to make his energy exports to work in his favour and introduces a Ruble backed by gold and insists Europe if you want my oil and gas this is how you have to pay for it going forward very well knowing they won’t have an alternate solution in the short term at least.

So what will this do to the value of this new Ruble backed by Gold and for Gold value in general? There has to be some logical reason for Russia to increase their gold holdings along with other reserve banks of the world in these last few years. Maybe they know something we are not seeing yet.

[Samurai]

Originally Posted by SnS_12

Suppose he decides to make his energy exports to work in his favour and introduces a Ruble backed by gold and insists Europe if you want my oil and gas this is how you have to pay for it going forward very well knowing they won’t have an alternate solution in the short term at least.

Again, you are talking about gold. It is not necessary.

Ruble needs to be backed by gold only if Russia has nothing valuable to sell. But they have petrol to sell.

Right now $1 is 124 rubles, a crude price is $115.

Now Russia can say they will sell petrol only if the buyer pays in ruble. They could say they will sell crude at 10000 rubles. That is like selling crude at $80 while paying in rubles, while it costs $115 while paying in dollars. If not for the threat of US sanctions, every oil importer will jump at the deal. But to buy oil from Russia, you need rubles now. So they all have to buy rubles first, and everyone starts buying rubles using their dollars. As the demand for rubles rise, now Russia has two options:
1) Do nothing.... then the ruble exchange rate will start rising against the dollar and would erase the crude price difference of $80 vs $115 it started with.
2) Start printing rubles (quantitative easing) to match the demand, so that the exchange rate with dollar remains the same. So effective price of Russian crude remains at $80, effectively killing all petrodollars.

Why do you need gold?

[SnS_12]

Originally Posted by Samurai

As the demand for rubles rise, now Russia has two options:
1) Do nothing.... then the ruble exchange rate will start rising against the dollar and would erase the crude price difference of $80 vs $115 it started with.
2) Start printing rubles (quantitative easing) to match the demand, so that the exchange rate with dollar remains the same. So effective price of Russian crude remains at $80, effectively killing all petrodollars.

Why do you need gold?

Intrinsic value

Gold is known over the years to hold better intrinsic value than anything else.

Oil on the other hand will keep fluctuating in value as always and that doesn’t make economic sense for a country like Russia which depends on high oil export revenue unless the oil price is expected to just continue rising from here on and we have a financial disaster of 2008 all over again. So its currency valuation will take a hit every time the value of Oil goes down if the currency is backed by oil.

Also Russia cannot decide the price of global oil but can definitely decide where the price of gold goes from here by doing this.

[Samurai]

Originally Posted by SnS_12

Oil on the other hand will keep fluctuating in value as always and that doesn’t make economic sense for a country like Russia which depends on high oil export revenue unless the oil price is expected to just continue rising from here on and we have a financial disaster of 2008 all over again. So its currency valuation will take a hit every time the value of Oil goes down if the currency is backed by oil.

When every country is buying rubles, how are they paying for it? In the form Russia prefers, using other foreign currencies, bonds or commodities and even gold. There are numerous ways to hedge against demand going down.

Anyway, I don't want to argue more about gold. In my experience, I have never been able to convince someone who believes in gold standard. It ends up being a philosophical discussion.

[MarutiGuy1977]

Collateral damage of this is also on the F1 scene.
Haas F1 Team Dumps Nikita Mazepin, Ends Deal with Russian Sponsor.

[SnS_12]

Originally Posted by Samurai

When every countries is buying rubles, how they paying for it? In the form Russia prefers, using other foreign currencies, bonds or commodities and even gold. There are numerous ways to hedge against demand going down.

Anyway, I don't want to argue more about gold. In my experience, I have never been able to convince someone who believes in gold standard. It ends up being a philosophical discussion.

😀. It’s enlightening nonetheless to exchange conflicting thoughts which is the reason to have this thread.

I will end the Gold decision with this, Europe depends on Russia more for Gas than Oil. They have alternate for Oil and can buy from other markets but the cheapest way to access is through the piping system already in place. LNG is more expensive to transport and store. So Russia has Europe by their throat at the moment.

Increase of Oil and Gas prices will definitely crash the global economies but increase in price of Gold won’t and the moment Russia does this countries with huge debt to GDP stand to loose the most.

Russians are expert chess players all you know Putin has already planned five steps ahead of the world and for the record the Gold buying started when Crimea was annexed in 2014. Rest the Gold discussion at that.

Thank me later if we Indians who love our gold make windfall gains from this move if it happens in the future

[dragracer567]

I am taking a small detour from the extensive and very interesting discussion on geopolitics and political economy which has thankfully become much more civil since the first few pages.

Anyway, has anyone else noticed a sharp increase in international air fares in the past few weeks? I was planning to fly into India next month for a cousin’s marriage and the rates have increased by almost 70% in the past one month and further increased by 20% in the past few days. I wonder if the Ukrainian crisis is causing the air fares to soar!

[SnS_12]

Originally Posted by dragracer567

Anyway, has anyone else noticed a sharp increase in international air fares in the past few weeks? I was planning to fly into India next month for a cousin’s marriage and the rates have increased by almost 70% in the past one month and further increased by 20% in the past few days. I wonder if the Ukrainian crisis is causing the air fares to soar!

Inflation does pinch doesn’t it. In India the fuel prices are going to skyrocket once the election drama is over as at the current levels it seems the fuel retailers need a 12 rupee hike just to break even, unless taxes are reduced dramatically.

They said inflation is good and a healthy 2% rise actually benefits us as who doesn’t like a hike in salary every year or to see home price appreciate every few years.

But what has this lead to?

First only the father used to go to work

Then the mother joined in

Then one took out a loan for a good standard of living

Then even the other working member had to take a loan to maintain the standard of living

And the world we are currently living with inflation where it is both father and mother work and take loans just to survive. That’s the sad reality of using Fiat money and not Real money.

This is all thanks to the great invention called ‘Printing Press’ owned by central banks who can print as much money as they want at no cost.

Ever wondered why the US Congress is asked to raise debt limits every now on and then so the government can borrow more money to run the country? Wouldn’t it be wonderful if we can have a new credit card issued to pay off the old credit card dues too and at the same time offered a higher credit limit.. 😃

[shashanka]

Once again I heard (on Aaj Tak Live) a few minutes ago, one of the panellists (Gen. Bakshi again!) stating emphatically that the US, under the DARPA project has been operating 6 bio-weapons labs in Ukraine. He mentioned that this news no one will get from Western media and that this was the reason for its attack on Ukraine.

So its on the table again - US obliterates Iraq under the fig-leaf of non-existant WMDs - a proven fact.

Is Russia using the same ploy (real or imagined is not yet verified) for its attack on Ukraine?

[vishnurp99]

Originally Posted by dragracer567

Anyway, has anyone else noticed a sharp increase in international air fares in the past few weeks? I was planning to fly into India next month for a cousin’s marriage and the rates have increased by almost 70% in the past one month and further increased by 20% in the past few days. I wonder if the Ukrainian crisis is causing the air fares to soar!

Flight paths will become longer on quite a few routes in addition to higher aviation fuel cost because of sanctions.
In case the war expands to other countries, some of the routes to Europe may close down. Where are you flying in from?
https://tass.com/economy/1417497

[condor]

Originally Posted by dragracer567

Anyway, has anyone else noticed a sharp increase in international air fares in the past few weeks?

Apart from this, and the fuel price hike that everyone is bracing for, there is another we need to get ready for. Increase in prices of cooking oil. India imports more than half of it's cooking oil needs. Russia and Ukraine were key exporters of Sunflower oil to the world - and now these will be stuck.

Originally Posted by shashanka

Once again I heard (on Aaj Tak Live) a few minutes ago, one of the panellists (Gen. Bakshi again!) stating emphatically that the US, under the DARPA project has been operating 6 bio-weapons labs in Ukraine.

Have heard this from another source, around the start of the conflict.

* *

And if China turns it's attention on Taiwan, then things are going to get worse.

[Samurai]

Whenever I see our IFS cadre diplomats explain geopolitics on TV, I feel India is in safe hands when it comes to foreign relations. This is despite ignorant TV hosts trying to gaslight them to agree with western narrative.

https://youtu.be/zA8U75dgtMg

[volkman10]

Amid The raging WAR, China Eyes Afghanistan’s $1 Trillion of Minerals With Risky Bet on Taliban.


China Seeking Ways To Access Afghanistan's Lithium & Copper Mines.

Link

[condor]

One other point:
If EU countries do give their fighter planes to Ukraine, who will fly these ? Fighter planes arent guns or rocket launchers to fire and forget.

Originally Posted by volkman10

Amid The raging WAR, China Eyes Afghanistan’s $1 Trillion of Minerals With Risky Bet on Taliban.

They have had their eye on the resources in Afghanistan for quite some time now. US exiting Afghanistan was the chance that China was looking for.

[volkman10]

Originally Posted by condor

One other point:
If EU countries do give their fighter planes to Ukraine, who will fly these ? Fighter planes arent guns or rocket launchers to fire and forget.

--

Poland Look at Providing Soviet-Era Aircraft to Ukraine and not EU Fighter planes as You think!