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The Rouble Regains 100% of Its Loss 

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  •  When Russia invaded Ukraine on February 24, 84 roubles bought one US dollar. The ruble has returned to where it began on February 24. On March 7, 131.2 rubles were required to purchase one US dollar, representing a 36% decline in the ruble’s value relative to the US dollar. Putin has recently pressed for rouble payments. Mario Draghi, Italy’s Prime Minister, and Putin have talked about paying for gas in Russian rubles. 
  • Europe sells Euros to Russia’s central bank in order to obtain rubles to purchase oil. Europe immediately returned the rubles it received to Russia to pay for the oil. 
  • Russia’s central bank accumulates euros; Russia sells oil in exchange for euros.
  • Russia’s central bank accumulates the same amount of Euros as in case number one, and the currency exchange occurs in seconds.
  • Europe does not need to hold roubles in order to purchase oil. This is just more “oil priced in euros” nonsense. No one will be required to hold rubles in order to purchase Russian oil. Alternatively, gas. The Russian rouble does not become a reserve currency. There may be some psychological impact, but there will be no real impact unless Europe holds ruble reserves, and here’s a hint: Europe won’t.

European Sanctions

  • According to Biden, “Ruble has been reduced to Rubble as a result of sanctions.” 
  • Sanctions are ineffective. Here are a few examples, such as the Parallel Credit Card Payment System. 
  • Visa and Mastercard have stopped accepting credit cards in Russia. However, following the 2014 war, in which Visa and Mastercard did the same, Russia took precautions to prevent this from happening again. 
  • Instead, Putin established the National Payment Card System, abbreviated NSPK in Russian. Visa and Mastercard agreed to it. 
  • Russia then mandated the use of Mir cards based on NSPK in 2015. 
  • Those cards do not use the payment system in the United States.
  • One irony is that instead of Visa and Mastercard receiving the fees, Russia’s central bank made a net profit of 8.2 billion rubles, or about $94 million at current exchange rates. 
  • Russia benefited from the Visa and Mastercard sanctions. 
  • The price of oil and natural gas skyrocketed following the invasion; the US banned Russian oil, which influenced the price. However, trading was never completely halted. Instead, Russia traded oil to China at a discount, but at a higher price than before the war. 
  • Those Tweets are complete nonsense. There is no such thing as a gold-backed ruble. Russia is offering to buy gold at a reduced price. It is not, without a doubt, selling gold at a discount.
  • Russia also imposed currency restrictions. People who wanted to get out of the ruble were unable to do so. 
  • Furthermore, Russia has prohibited foreigners from selling Russia stocks. 
  • Russia’s true power is the ability to cut off supplies of natural gas, oil, fertiliser, and grain. 
  • There is a long list of US companies that continue to do business in Russia. We’ve all heard of meaningless reactions. 
  • France, on the other hand, would not go along with it at all. “We are not at war with Russia,” France’s President Emanuel Macron stated.

Eight Reasons For Ruble Rebound

  1. Russia escaped Visa and Mastercard
  2. Russia still trades oil and gas with Europe
  3. Russia halted currency trades
  4. Russia enacted stock market restrictions
  5. Of Russian exporters, Russia demanded 80% of euros and dollars be traded for rubles.
  6. Russia threatens to stop exporting key commodities including aluminum, natural gas, fertilizer, rare earth minerals, etc., driving up prices and the need to stockpile.
  7. Sanctions cannot take away Russia’s natural resources. 
  8. The Fed can print dollars, it cannot print commodities. Likewise, the ECB can print euros, it cannot print commodities

Two False Reasons People Key On

  1. Russia demands payment in rubles
  2. Gold-backed ruble

Weaponizing the US dollar has totally backfired on the US. War views aside, we should all cheer that aspect. Yet, misguided souls want to escalate what is proven not to work. 

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