Russia has defaulted on its foreign debt, says S&P

London (CNN Business)Russia has defaulted on its foreign debt because it offered bondholders payments in rubles, not dollars, credit ratings agency S&P has said.

Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, S&P said in a note on Friday. The agency said this amounted to a "selective default" because investors are unlikely to be able to convert the rubles into "dollars equivalent to the originally due amounts."

https://www.cnn.com/2022/04/11/investing/russia-default-sp/index.html

How do you think Russia's economy will fare in the next 5-10 years?

MIAMI — Blockstream and Jack Dorsey’s Block, formerly Square, are breaking ground on a solar- and battery-powered bitcoin mine in Texas that uses solar and storage technology from Tesla.

Tesla’s 3.8 megawatt solar PV array and 12 megawatt-hour Megapack will power the facility.

Blockstream co-founder and CEO Adam Back, a British cryptographer and a member of the “cypherpunk” crew, told CNBC on the sidelines of the Bitcoin 2022 conference in Miami that the mining facility is designed to be a proof of concept for 100% renewable energy bitcoin mining at scale.

“People like to debate about the different factors to do with bitcoin mining. We figured, let’s just prove it. Have an open dashboard so people can play along, maybe it can inform other players to participate,” Back said.

The dashboard will be publicly accessible and show real-time metrics of the project’s performance, including power output and total bitcoin mined. The company said a later version of the dashboard will also include solar and storage performance data points.

“This is a step to proving our thesis that bitcoin mining can fund zero-emission power infrastructure and build economic growth for the future,” Back said.

Improving the economics of renewables

West Texas is a mecca of renewable energy in the United States.

“You get this perfect overlap with both sun quality and wind speed in West Texas,” said Shaun Connell, executive vice president of power at Houston-based tech company Lancium.

But a lot of that wind and solar power is concentrated in remote parts of the state. With no financial incentive, there’s little reason to build out renewable infrastructure to harness this energy.

Enter bitcoin miners. When these energy buyers co-locate with renewables, it creates a financial incentive for buildout and improves the core economics of renewable power production, which has been fraught with volatility.

Miners provide demand to these semi-stranded assets and make renewables in Texas economically viable, according to Castle Island Venture’s Nic Carter.

The constraint is that West Texas has roughly 34 gigawatts of power, five gigawatts of demand, and only 12 gigawatts of transmission. You can think of bitcoin miners as temporary buyers who keep the energy assets operational until the grid is able to fully absorb them.

Back said the off-grid mine, expected to be completed later this year, highlights another key tenet of the bitcoin network: Miners are location agnostic and can “do it from anywhere without local infrastructure.”

Should the project prove profitable in its pilot stage, Back said, the companies would add wind power to the mix and scale the entire project.

“You’re making a sort of calculation of the optimal economic mix between solar and battery,” Back said. “There’s 3.8 megawatts of solar and one megawatt of mining, so you can see you have to overprovision, because the peak solar input varies during the day and, of course, it’s not there at night.”

Adding wind to the mix, however, would reduce overall costs and help to balance out the downtime with solar.

Ultimately, Blockstream said, a key goal is to strengthen the bitcoin network by diversifying the cryptocurrency’s energy sources.

“By collaborating on this full-stack, 100% solar-powered bitcoin mining project with Blockstream, using solar and storage technology from Tesla, we aim to further accelerate bitcoin’s synergy with renewables,” said Neil Jorgensen, global ESG lead at Block and project lead for Block’s Bitcoin Clean Energy Initiative.


https://www.cnbc.com/2022/04/08/tesla-block-blockstream-to-mine-bitcoin-off-solar-power-in-texas.html

The dashboard will be publicly accessible and show real-time metrics of the project’s performance, including power output and total bitcoin mined. The company said a later version of the dashboard will also include solar and storage performance data points

Miners provide demand to these semi-stranded assets and make renewables in Texas economically viable, according to Castle Island Venture’s Nic Carter.

The constraint is that West Texas has roughly 34 gigawatts of power, five gigawatts of demand, and only 12 gigawatts of transmission. You can think of bitcoin miners as temporary buyers who keep the energy assets operational until the grid is able to fully absorb them.

SOLUTION
therefore what the Federal Government and central Bank of Nigeria should have done is find a way to regulate cryptocurrency and it activities

Linking the currency to gold and energy is a paradigm shift for the global economy, a precious metals analyst tells RT

The Bank of Russia has resumed gold purchases this week, but more importantly, the regulator is doing so at a fixed price of 5,000 rubles ($59) per 1 gram between March 28 and June 30, raising the possibility of Russia returning to the gold standard for the first time in over a century.

If the country takes the next step, as has been proposed this week, to sell its commodities priced in rubles, these combined moves could have huge implications for the ruble, the US dollar, and the global economy.

To get some answers, RT spoke to precious metals analyst Ronan Manly at BullionStar Singapore.

— Why is setting a fixed price for gold in rubles significant?

By offering to buy gold from Russian banks at a fixed price of 5,000 rubles per gram, the Bank of Russia has both linked the ruble to gold and, since gold trades in US dollars, set a floor price for the ruble in terms of the US dollar.

We can see this linkage in action since Friday 25 March when the Bank of Russia made the fixed price announcement. The ruble was trading at around 100 to the US dollar at that time, but has since strengthened and is nearing 80 to the US dollar. Why? Because gold has been trading on international markets at about US$62 per gram which is equivalent to (5,000 / 62) = about 80.5, and markets and arbitrage traders have now taken note, driving the RUB/USD exchange rate higher.

So the ruble now has a floor to the US dollars, in terms of gold. But gold also has a floor, so to speak, because 5,000 rubles per gram is 155,500 rubles per troy ounce of gold, and with a RUB/USD floor of about 80, that’s a gold price of around $1,940. And if the Western paper gold markets of LBMA/COMEX try to drive the US dollar gold price lower, they will have to try to weaken the ruble as well or else the paper manipulations will be out in the open.

Additionally, with the new gold to ruble linkage, if the ruble continues to strengthen (for example due to demand created by obligatory energy payments in rubles), this will also be reflected in a stronger gold price.

— What does it mean for oil?

Russia is the world’s largest natural gas exporter and the world’s third largest oil exporter. We are seeing right now that Putin is demanding that foreign buyers (importers of Russian gas) must pay for this natural gas using rubles. This immediately links the price of natural gas to rubles and (because of the fixed link to gold) to the gold price. So Russian natural gas is now linked via the ruble to gold.

The same can now be done with Russian oil. If Russia begins to demand payment for oil exports with rubles, there will be an immediate indirect peg to gold (via the fixed price ruble – gold connection). Then Russia could begin accepting gold directly in payment for its oil exports. In fact, this can be applied to any commodities, not just oil and natural gas.

— What does that mean for the price of gold?

By playing both sides of the equation, i.e. linking the ruble to gold and then linking energy payments to the ruble, the Bank of Russia and the Kremlin are fundamentally altering the entire working assumptions of the global trade system while accelerating change in the global monetary system. This wall of buyers in search of physical gold to pay for real commodities could certainly torpedo and blow up the paper gold markets of the LBMA and COMEX.        

The fixed peg between the ruble and gold puts a floor on the RUB/USD rate but also a quasi-floor on the US dollar gold price. But beyond this, the linking of gold to energy payments is the main event. While increased demand for rubles should continue to strengthen the RUB/USD rate and show up as a higher gold price, due to the fixed ruble - gold linkage, if Russia begins to accept gold directly as a payment for oil, then this would be a new paradigm shift for the gold price as it would link the oil price directly to the gold price.  

For example, Russia could start by specifying that it will now accept 1 gram of gold per barrel of oil. It doesn’t have to be 1 gram but would have to be a discounted offer to the current crude benchmark price so as to promote take up, e.g. 1.2 grams per barrel. Buyers would then scramble to buy physical gold to pay for Russian oil exports, which in turn would create huge strains in the paper gold markets of London and New York where the entire ‘gold price’ discovery is based on synthetic and fractionally-backed cash-settled unallocated ‘gold’ and gold price ‘derivatives.

— What does it mean for the ruble?

Linking the ruble to gold via the Bank of Russia’s fixed price has now put a floor under the RUB/USD rate, and thereby stabilized and strengthened the ruble. Demanding that natural gas exports are paid for in rubles (and possibly oil and other commodities down the line) will again act as stabilization and support. If a majority of the international trading system begins accepting these rubles for commodity payments arrangements, this could propel the Russian ruble to becoming a major global currency. At the same time, any move by Russia to accept direct gold for oil payments will cause more international gold to flow into Russian reserves, which would also strengthen the balance sheet of the Bank of Russia and in turn strengthen the ruble.

Talk of a formal gold standard for the ruble might be premature, but a gold-backed ruble must be something the Bank of Russia has considered.    

— What does it mean for other currencies?

The global monetary landscape is changing rapidly and central banks around the world are obviously taking note. Western sanctions such as the freezing of the majority of Russia’s foreign exchange reserves while trying to sanction Russian gold have now made it obvious that property rights on FX reserves held abroad may not be respected, and likewise, that foreign central bank gold held in vault locations such as at the Bank of England and the New York Fed, is not beyond confiscation.  

Other non-Western governments and central banks will therefore be taking a keen interest in Russia linking the ruble to gold and linking commodity export payments to the ruble. In other words, if Russia begins to accept payment for oil in gold, then other countries may feel the need to follow suit.

Look at who, apart from the US, are the world’s largest oil and natural gas producers - Iran, China, Saudi Arabia, UAE, Qatar. Obviously, all of the BRICS countries and Eurasian countries are also following all of this very closely. If the demise of the US dollar is nearing, all of these countries will want their currencies to be beneficiaries of a new multi-lateral monetary order.  

— What does this mean for the US dollar?

Since 1971, the global reserve status of the US dollar has been underpinned by oil, and the petrodollar era has only been possible due to both the world’s continued use of US dollars to trade oil and the USA’s ability to prevent any competitor to the US dollar.

But what we are seeing right now looks like the beginning of the end of that 50-year system and the birth of a new gold and commodity backed multi-lateral monetary system. The freezing of Russia’s foreign exchange reserves has been the trigger. The giant commodity strong countries of the world such as China and the oil exporting nations may now feel that now is the time to move to a new more equitable monetary system. It’s not a surprise, they have been discussing it for years.  

While it’s still too early to say how the US dollar will be affected, it will come out of this period weaker and less influential than before.      

— What are the ramifications?

The Bank of Russia’s move to link the ruble to gold and link commodity payments to the ruble is a paradigm shift that the Western media has not really yet grasped. As the dominos fall, these events could reverberate in different ways. Increased demand for physical gold. Blowups in the paper gold markets. A revalued gold price. A shift away from the US dollar. Increased bilateral trade in commodities among non-Western counties in currencies other than the US dollar.



https://www.rt.com/business/553099-gold-backed-ruble-gamechanger-west/

Gold-backed yuan may challenge flagging dollar

 AUGUST 12, 2020

One of President Xi Jinping’s top priorities is increasing the yuan’s role in global trade. That, of course, would mean making the currency fully convertible and foregoing all capital controls – things that aren’t going to happen in 2020.

All this has observers getting creative. Among them is economist Liu Shanen, secretary-general at the Beijing Gold Economic Development Research Center. In a recent interview with news portal Guancha, Liu detailed a plan to “revive the gold standard” as the US dollar loses luster.

https://asiatimes.com/2020/08/gold-backed-yuan-may-challenge-flagging-dollar/

According to the Wikipedia blackjack is described as :

David M. Walker (born October 2, 1951) served as United States Comptroller General from 1998 to 2008, and is founder and CEO of the Comeback America Initiative (CAI) from 2010–2013.

In the national press, Walker has been a vocal critic of profligate spending at the federal level. In Fortune magazine, in 2008 he warned that "from Washington, we'll need leadership rather than laggardship".[11] In another op-ed in the Financial Times, he argued that the credit crunch could portend a far greater fiscal crisis;[12] and on CNN, he said that the United States is "underwater to the tune of $50 trillion" in long-term obligations.[13]

He compared the thrift of Revolutionary-era Americans, who, if excessively in debt, would "merit time in debtors' prison", with modern times, where "we now have something closer to debtors' pardons, and that's not good".[14][15]

In the fall of 2012, the Comeback America Initiative led a campaign called the "$10 Million a Minute" Bus Tour. The tour covered about 10,000 miles and stopped at universities, technical colleges, businesses, and more in over a dozen states. The tour's goal was to bring national attention to the economic and fiscal challenges that face our nation and various nonpartisan solutions that should be able to gain bipartisan support.

Along with former Fed Vice Chairman Alice Rivlin, Walker danced the Harlem Shake in a video produced by The Can Kicks Back, a nonpartisan group that attempted to organize millennials to pressure lawmakers to address the United States' then $16.4 trillion debt.[16]

https://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)#Campaign_for_fiscal_responsibility

Greek Farmers on Tractors Protest 'Unbearable' Fuel, Fertilizer Costs

March 18, 2022

ATHENS (Reuters) - Hundreds of Greek farmers, some on tractors, protested in Athens on Friday, demanding more tax cuts and subsidies to combat high fuel and fertilizer prices which have soared since Russia's invasion of Ukraine.

The farmers, who staged weeks of protests over high energy prices earlier this year, say their costs are so high they will be forced to produce less and also raise prices for consumers.

The government has so far spent about 3.7 billion euros ($4.08 billion) since September to alleviate pain from soaring energy and fuel costs for farmers, households and businesses.

It cut a sales tax on fertilisers by 46% to 13% and on Thursday announced it would be lowered further, to 6%, and also announced a tax rebate on fuel for agricultural vehicles.

Farmers say the measures do not go far enough and everything has become too expensive, from fuel to animal feed.

https://www.usnews.com/news/world/articles/2022-03-18/greek-farmers-on-tractors-protest-unbearable-fuel-fertilizer-costs

Italian farmers protest against 'sub-quality' imported foods

Tue 6 Jul 2010

Demonstration sparked after imported batches of white mozzarella turned blue because of bacterial contamination

Thousands of Italian farmers and farm activists today gathered at the Italian border with Austria to protest against the importing of what they said were sub-quality foods purporting to be from Italy.

The protest, at the Brenner pass through the Alps, was sparked by the blue mozzarella scandal, in which imported batches of the creamy white cheese – a food Italians consider to be one of their country's hallmarks – turned blue because of bacterial contamination.

https://www.theguardian.com/world/2010/jul/06/italian-farmers-protest-imported-food

It can be said that European sanctions against Russia have failed.

Russia leads the world at nuclear-reactor exports

China is its only real competitor

THE nuclear power industry, which had been in the doldrums since the 1980s, suffered a devastating blow in 2011 when a tsunami engulfed the Fukushima power plant in Japan, ultimately causing a meltdown. The amount of electricity generated by nuclear power worldwide plunged 11% in two years, and has not recovered since. Within this declining industry, one country now dominates the market for design and export of nuclear plants: Russia.

Flat domestic demand for electricity has curtailed construction of new plants at home, so Rosatom, Russia’s state-owned nuclear-power company, has been flogging its wares abroad. It is focused on what some call the “great grand middle”: countries that are close allies of neither the United States nor Russia. In April Russia started building Turkey’s first nuclear plant, worth $20bn. Its first reactor is due for completion in 2023. Rosatom says it has 33 new plants on its order book, worth some $130bn. A dozen are under construction, including in Bangladesh, India and Hungary.

https://www.economist.com/graphic-detail/2018/08/07/russia-leads-the-world-at-nuclear-reactor-exports

Ukraine: The breadbasket of Europe

January 13, 2020

Ukraine increased its grain exports by 34 per cent to 31.1 million tonnes in the 2019-20 July-June season, helped by higher wheat and corn exports, the country’s Ministry for Development of Economy, Trade, and Agriculture has revealed.

Wheat exports rose by 4.5 million tonnes to 14.99 million tonnes, while the country also exported 3.7 million tonnes of barley and 12 million tonnes of corn.

Ukraine harvested a record 74 million tonnes of grain this year compared with 70 million tonnes in 2018.

Figures from the European Commission also suggest that agriculture in Ukraine is booming: the country was the third largest supplier of agricultural produce to the European Union in the period November 2018 – October 2019, exporting 7.26 billion euros worth of produce to the EU during the 12-month period, behind only the US and Brazil.

https://emerging-europe.com/business/ukraine-the-breadbasket-of-europe/

High inflation rates weaken USD dominance for sure but are it really possible to replace USD as a reserve currency or the USA will allow that so easily?