Russian Bond Payment in Rubles — Hungary to Pay in Rubles — Ursula Von Der Leyen Challenged — Gazprom Cuts Gas — A Horrible Virus? or Not? – [04-10-2022]
BOOM Finance and Economics posts here: http://boomfinanceandeconomics.com/#/ and https://cmnnews.org/?utm_campaign=paper_sub&utm_medium=email&utm_source=subscription – Hat Tip to my colleague Gerry at BOOM:
BOOM seeks out the very best information from authoritative sources and strives for consistency in its quality and trustworthiness. In evidence of this, BOOM has developed a loyal readership which includes many of the world’s most senior economists, central bankers, fund managers and academics. We strive to always have good relationships with our readers. If you want a real edge in understanding the complex world of finance and economics, subscribe to BOOM as a Follower on LinkedIn or as a Subscriber (Free) to the BOOM Newspaper at http://boomfinanceandeconomics.com/#/
THIS WEEK’S EDITORIAL
RUSSIAN BOND PAYMENT IN RUBLES: Last Tuesday, the Russian government made bond coupon payments worth US$ 650 Million with Rubles after they were effectively blocked from using US Dollars. The bond holders have been asked to accept Rubles as settlement. If they don’t, then there will be a bun fight. Russia will be in technical default but not in practical default.
Two weeks ago, Russia made its bond coupon payments with US Dollars. But that was two weeks ago and a lot of water has flowed under the bridge since then. BOOM is expecting the bond holders to reluctantly accept the Rubles as sufficient settlement. After all, they won’t want to see their Bonds in default as that would effectively reduce their price (and value) to Zero.
The choice for the private investors holding the bonds is this — take the Rubles as full settlement or lose a ton of capital, in fact ALL of your capital. The choice looks like a very easy one to make. BOOM would accept the Rubles.
This is the beginning of the EuroRuble. Rubles will begin to circulate on the ledgers of foreign banks. At first, this would appear to be no big deal. But, if it continues, then the financial world as we know it will be changed forever. And the dominance of the US Dollar in capital settlements will be reduced. Over time, the gates will be open and the flood could ensue.
How long will it be before offshore tax haven banks are offering loans denominated in Rubles? And then in Yuan?
And during the week, the Ruble continued its strong run against the US Dollar, doubling in the last 4 weeks. BOOM is expecting this short term trend to continue. Watch closely.
HUNGARY TO PAY IN RUBLES: Victor Orban has been the Prime Minister of Hungary since 2014. He has just recently won yet another great election victory. The people of Hungary have spoken — they want Victor to continue as their leader. This is called Democracy in action.
However, he has now ruffled the feathers of the non-elected, appointed yet extremely powerful European Commission by announcing that Hungary will pay for its gas supplied by Russia with Rubles. Ursula Von Der Leyen, the unelected, appointed, non-representative President of the European Commission (the most powerful body in the EU) has expressed her intense dislike of Victor’s decision. On Friday, she said that Hungary will be breaking EU sanctions if they make good on their promise to pay for Russian energy with Rubles. She is trying to bully Hungary into paying with Euros or US Dollars. But Russia won’t accept Euros or US Dollars so a stalemate is brewing rapidly because Hungary needs energy and it has no other source readily available.
Orban said on Wednesday that he is opposed to any EU sanctions on Russian energy. He is reported (by Reuters) to have said that Hungary will not yield to pressure and will not support restrictions of oil and gas supplies from Russia because this is a “red line” for Hungary. The country’s Foreign Minister Peter Szijjarto said that gas contracts were a matter between his country and Russia, and that the EU had “no role” to play in the deal. 85% of all gas consumed in Hungary comes from Russia and 85% of Hungarian households use gas. Russia also supplies the oil that Hungary needs.
So what did the European Commission do in response? They threatened to stop access to 7.2 billion Euros earmarked for Hungary to help lift its economy from the COVID slump(!). So, in effect, the unelected, non-representative European Commission is threatening to seize funds that are due to Hungary — funds that have nothing to do with energy payments.
The Canadian government recently locked the bank accounts of citizens who were demonstrating against them. The US government recently seized Russian Government offshore assets and the assets of Russian private citizens. And, now, Ursula Von Der Leyen has decided to seize Hungary’s money due to it. Why? Because they will not follow her orders.
URSULA VON DER LEYEN CHALLENGED: This is not a strategy that will win her friends in the EU. Many nations are already aware of Von Der Leyen’s penchant for dictatorial “government”. They don’t trust her. She also has many enemies inside her own country, Germany. The former President of the European Parliament, Martin Schulz, once said — “Von der Leyen is our weakest minister. That’s apparently enough for her to become European Commission president”. He was clearly suspicious of her unexpected appointment to the top job in the EU. When she was Germany’s Defense Minister, there were frequent calls from the opposition parties for her resignation.
Von der Leyen has never previously worked for the EU, but she lived in Brussels for much of her childhood. Ernst Albrecht, her father, worked for the European Coal and Steel Community and the European Economic Community, precursors to the EU. Some say that he was arguably the Father of the EU, the man who ensured its early origination, and now his daughter is the most powerful person in the EU. Just coincidence? BOOM does not think that is a coincidence.
GAZPROM CUTS GAS: Last week, Russian gas giant Gazprom officially halted all deliveries to Europe via the Yamal-Europe pipeline, a critical artery for European energy supplies. Instead of flowing toward Germany and the EU, gas supplies on Friday started flowing in the opposite direction, according to Gascade, the network operator.
The Yamal–Europe natural gas pipeline is a 4,107 kilometers (2,552 miles) long pipeline connecting Russian natural gas fields in the Yamal Peninsula and Western Siberia with Poland and Germany, through Belarus. It provides gas to Poland, Germany and Austria.
A HORRIBLE VIRUS? OR NOT? Over 25 countries have less than 15% of their population Covid vaccinated. Most of this group have way below 10 % vaccinated. So the question arises, if the virus is so deadly, where are the millions of dead people amongst the unvaccinated?
These countries have a combined population of over 900 million people and over 90% of them are unvaccinated. So where are the mass graves? Most of them didn’t lockdown or have social distancing or mask mandates. These death rates do not indicate that Covid is caused by a “horrible, deadly” virus.
SUMMARY:
- Approx 50, 000 deaths in total from Covid
- Population 900 Million = 0.0055% Death Rate
- Total Africa Population = 1.4 Billion
- Total Deaths = 252,000 = 0.02 % Death Rate
- Burundi: population 12 million Vaccination rate: 0.1% Total Deaths from Covid = 38
- Congo: population 5 million Vaccination rate: 12% Total Deaths from Covid = 385
- Haiti: Population 11 million Vaccination rate: 1.0% Total Deaths from Covid = 834
- Chad: Population 17 million Vaccination rate: 4.0% Total Deaths from Covid = 192
- Yemen: population 31 million Vaccination rate: 1.3% Total Deaths from Covid = 2,146
- Ethiopia: Population 120 million Vaccination rate: 16% Total Deaths from Covid = 7,508
- South Sudan: Population 11 million Vaccination rate: 4.2% Total Deaths from Covid = 138
- Cameroon: population 27 million: Vaccination rate: 4.0% Total Deaths from Covid = 1,927
- PNG: Population 9 million Vaccination rate: 2.8% Total Deaths from Covid = 643
- Nigeria: Population 215 million Vaccination rate: 4.5% Total Deaths from Covid = 3,142
- Madagascar: Population 29 million. Vaccination rate: 3.7% Total Deaths from Covid = 1,388
- Tanzania: Population 62 million. Vaccination rate: 5.0 % Total Deaths from Covid = 800
- Mali: population: 21 million Vaccination rate: 4.7 % Total Deaths from Covid = 729
- Burkina Faso: population 22 million Vaccination rate: 5.5 % Total Deaths from Covid = 382
- Malawi: population 20 million Vaccination rate: 4.4% Total Deaths from Covid = 2,628
- Niger: population 25 million Vaccination rate: 6.0 % Total Deaths from Covid = 308
- Sudan: Population 45 million Vaccination rate: 7.5% Total Deaths from Covid = 4,907
- Uganda: population 48 million Vaccination rate: 17% Total Deaths from Covid = 3,596
- Senegal: population 17 million Vaccination rate: 6.2% Total Deaths from Covid = 1,965
- Algeria: Population 45 million Vaccination rate: 14% Total Deaths from Covid = 6,874
- Kenya: Population 56 million Vaccination rate: 15% Total Deaths from Covid = 5,648
- Zambia: Population 19 million Vaccination rate: 12% Total Deaths from Covid = 3,967
Data Sources: https://ourworldindata.org/ and Worldometers
In economics, things work until they don’t. Until next week. Make your own conclusions, do your own research. BOOM does not offer investment advice.
SUBSCRIBE – FREE AT BOOM: http://boomfinanceandeconomics.com/#/
CLICK HERE FOR PODCASTS: OUR BRAVE NEW ECONOMIC WORLD
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY: LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans). https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy
Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how global banking systems really work. https://www.youtube.com/watch?v=EnC1UlnFLyI
AND Watch for 4 minutes, this Bank of England explanation: Money is essential to the workings of a modern economy, but its nature has varied substantially over time. This video describes what money is today. https://www.youtube.com/watch?v=ziTE32hiWdk
Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models. EMAIL: gerry {at} boomfinanceandeconomics.com
DISCLAIMER: All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice. The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.
Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any neither securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research. Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.
Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.
Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
This article has been archived for your research. The original version from The Burning Platform can be found here.
