Russia-Ukraine war and related tensions Megathread

[2952-0-0]

Well China has always been one for dominating and subjugating its neighbors since time immemorial so supporting Russia, while monstrous, is consistent with its history, if not with its supposed opposition to intervening in the internal affairs of other countries.

And it’s not like Chinese students are going to be taught anything but propaganda, so they will doubtless continue to believe that Russia stronk and all that.

There was a strain of thought among Chinese nationalists in the early 20th century that, since the Qing Dynasty is the domain of the barbarian Manchus, all of its possessions should be free to go their own ways, with the new liberated China itself merely consisting of the core 18 provinces.

It's true that, for centuries, Chinese rulers never understood how to interact with foreign powers in a truly equal fashion: it was either push them from a position of strength, or temporarily accept that the other side was superior. But, obviously, those Chinese whose livelihoods depend on interacting with foreigners quickly learn this skill one way or another.

This picture shows a flag factory in China that figured out that, regardless of Beijing's official stance, it had business to make:
https://twitter.com/bqB9Ml6aFloKS2F/status/1507954062087577607

These propaganda lessons are a clear sign that Xi is nervous that Ukraine has become a lightning rod for disagreement within the Party. The WSJ reports that former Premier Zhu Rongji, who presided over the economic liberalizations of the 1990s, criticized Xi on several points. The gist of the article can be seen here:

https://www.taiwannews.com.tw/en/news/4476606

To be fair, such discontent has been bubbling under the surface throughout Xi's rule. But, the Party Congress this autumn means politics in Beijing is in high season, and by co-incidence, lockdowns and Ukraine are providing a channel to question his leadership.

Going back in history, one thing that rattled the CCP leadership to the core was Desert Storm. The militaries of Iraq and China shared much of the same equipment, doctrine, organization, and training. So, the speed and scale of the US victory horrified Beijing, and indicated that its military needed a complete revamp. Russia's ongoing failures in Ukraine aren't as comparable a disaster, but will certainly force a rethink among the CCP leadership. Xi - just like Putin - made revamping the military one of his priorities, and Putin just learned what he had to show for it. I wonder how much sleep Xi has lost in the past month.

[Middle-aged Europe]

https://twitter.com/staunovo/status/1509073284175994881

[jaichind]

Kremlin spokesman Dmitry Peskov told reporters that the process of switching to rubles payments for Russian gas export deliveries will take time and won’t begin immediately this week despite a 3/31 deadline in a presidential order on the issue.

The core issue, if I understand it correctly, is Russian gas companies have contracts with various European countries to deliver gas.  These contracts clearly state that payments are in USD or EUR. So if Russia demands payment in RUB ASAP then that would be a breach of contract.   My understanding is that when these contacts are up for renewal a few months from now is when Russia will demand that the new contracts will have payment in RUB.  Of course, the war will most likely be over a few months from now.  In the meantime, there will likely be a status quo of Russians supplying gas and getting paid for it in EUR or USD.

When the contract is up for renewal a few months from now will be a game of chicken. Europe clearly will not have enough LNG terminals to bring in enough LNG to replace Russian gas by then.  On the other hand, it is not clear Russia will have enough gas buyers in APAC to make up for the loss of demand in Europe by then either.

In the meantime RUB surges to 84.  It seems there is enough belief in the currency markets that Russia will in the medium run get some of what they want (getting paid in RUB).

[jaichind]

https://www.kitco.com/news/2022-03-28/Russia-sets-fixed-gold-price-as-it-restarts-official-bullion-purchases.html

Russia de facto pegs RUB to Gold. Very interesting. If indeed we are on the road to a possible de-dollarization in the far future there is a case for RUB to be a possible future reserve currency.  Russia is a large natural resource surplus economy with significant gold production and reserve which would make a good case for the RUB being a currency for people in the far future to hold to preserve value.   A similar case can be made for Australia's AUD they perhaps one day peg their currency to gold.

[Antonio the Sixth]

https://twitter.com/staunovo/status/1509073284175994881

Amazing. With this stupid "pay in rubles" stunt (whose economic benefits would be marginal anyway) Russia might actually have forced Europe's hand into shutting off gas imports as it should have done from day 1.

[Middle-aged Europe]

Kremlin spokesman Dmitry Peskov told reporters that the process of switching to rubles payments for Russian gas export deliveries will take time and won’t begin immediately this week despite a 3/31 deadline in a presidential order on the issue.

The core issue, if I understand it correctly, is Russian gas companies have contracts with various European countries to deliver gas.  These contracts clearly state that payments are in USD or EUR. So if Russia demands payment in RUB ASAP then that would be a breach of contract.   My understanding is that when these contacts are up for renewal a few months from now is when Russia will demand that the new contracts will have payment in RUB.  Of course, the war will most likely be over a few months from now.  In the meantime, there will likely be a status quo of Russians supplying gas and getting paid for it in EUR or USD.

When the contract is up for renewal a few months from now will be a game of chicken. Europe clearly will not have enough LNG terminals to bring in enough LNG to replace Russian gas by then.  On the other hand, it is not clear Russia will have enough gas buyers in APAC to make up for the loss of demand in Europe by then either.

In the meantime RUB surges to 84.  It seems there is enough belief in the currency markets that Russia will in the medium run get some of what they want (getting paid in RUB).

I think the important part is that Putin had originally demanded payment in rubles starting March 31. Which means the Russians are the ones who have blinked now and all that stuff about payment in rubles starting and/or being "negotiated" at a later date is probably some face-saving bullsh**t to explain why they haven't gone through with their threats.

[jaichind]

https://news.writecaliber.com/financial-services-gulf-russia-proposes-swift-alternative-to-india-for-ruble-payments/

"Russia proposes SWIFT alternative to India for Ruble payments"

Russia wants to use its SWIFT alternative, SPFS, for India to pay for Russian oil which will be in INR using CNY as the reference currency.  Too bad Russia cannot work PRC's credit card alternative UnionPay into this deal or else this deal pretty has all of Russia's counter-sanctions moves into one.

[jaichind]

Germany's YoY CPI surges to 7.3% which is well higher than the expected very high 6.3%.  The war-sanctions inflationary surge in Europe it seems will be worse than expected.

[2952-0-0]

https://www.kitco.com/news/2022-03-28/Russia-sets-fixed-gold-price-as-it-restarts-official-bullion-purchases.html

Russia de facto pegs RUB to Gold. Very interesting. If indeed we are on the road to a possible de-dollarization in the far future there is a case for RUB to be a possible future reserve currency.  Russia is a large natural resource surplus economy with significant gold production and reserve which would make a good case for the RUB being a currency for people in the far future to hold to preserve value.   A similar case can be made for Australia's AUD they perhaps one day peg their currency to gold.

So the Russian state will be buying gold at a fixed rate that's lower than the prevailing market rate even according to the artificial exchange rate.

Okay, is the Russian state freely selling gold at that rate? If not, it's not a market, and no one is fooled.

https://news.writecaliber.com/financial-services-gulf-russia-proposes-swift-alternative-to-india-for-ruble-payments/

"Russia proposes SWIFT alternative to India for Ruble payments"

Russia wants to use its SWIFT alternative, SPFS, for India to pay for Russian oil which will be in INR using CNY as the reference currency.  Too bad Russia cannot work PRC's credit card alternative UnionPay into this deal or else this deal pretty has all of Russia's counter-sanctions moves into one.

https://www.reuters.com/world/india/india-not-considering-buying-crude-russia-rupees-2022-03-28/

India is denying any suggestion that it will use Rupees to import Russian crude.

[jaichind]

https://www.reuters.com/world/india/india-not-considering-buying-crude-russia-rupees-2022-03-28/

India is denying any suggestion that it will use Rupees to import Russian crude.

Interesting.  Did not see that.  Thanks for sharing

[Sir Mohamed]

https://twitter.com/staunovo/status/1509073284175994881

In the aftermath, this seems to be a major stain on Merkel's legacy, who didn't do much in 16 years to reduce Europe's energy dependence from Russia. Indeed, she made it worse.

[Storr]

The Russians need to secure/occupy Izyum in order to attempt cutting off Ukrainian forces in the Donbass.
https://twitter.com/NotWoofers/status/1509140239465558017?s=20&t=SXooCczBl_W...

[Storr]

https://twitter.com/Osinttechnical/status/1509073922523901955?s=20&t=Lu9dgl2...

[Middle-aged Europe]

https://twitter.com/staunovo/status/1509073284175994881

In the aftermath, this seems to be a major stain on Merkel's legacy, who didn't do much in 16 years to reduce Europe's energy dependence from Russia. Indeed, she made it worse.

Um, yes, that's essentially the state of public debate on the issue in Germany right now.

[jaichind]

This whole RUB-for-gas battle is interesting and we will see if Putin is bluffing.  One thing is for sure.  If Putin is hoping to create an economic breakdown in Europe to erode their support for Ukraine then I think that will fail.  Just like the Western sanctions on Russia most likely consolidated support for the regime through shared hardship, economic hardship caused by Russia in Europe over the Russia-Ukraine conflict will tend to consolidate support in Europe against Russia.  The experience of the Iran sanctions seems to show that it is ineffective in promoting political change and more likely allows the current regime to dig in even stronger even as the economy clearly operates in a suboptimal way. 

[rc18]

https://twitter.com/staunovo/status/1509073284175994881

In the aftermath, this seems to be a major stain on Merkel's legacy, who didn't do much in 16 years to reduce Europe's energy dependence from Russia. Indeed, she made it worse.

Um, yes, that's essentially the state of public debate on the issue in Germany right now.

She was just carrying on with the rapprochement of the SPD, who initiated Nord Stream in the first place. And in terms of getting rid of nuclear, this was a central plank of the growing Green lobby that Merkel was trying to placate. To blame this all on Merkel is just rank hypocrisy.

German society as a whole wanted this.

[rc18]

So about those Russian planes that violated Swedish airspace near the beginning of the war. There's a claim that they carried nuclear weapons, which the Swedish airforce has not flat out denied.

https://twitter.com/CorporalFrisk/status/1509188870939815941?s=20&t=hX1mkH4J...

[Middle-aged Europe]

Breaking: Putin backs down. Not on Ukraine, but in the Russo-European gas-for-rubles standoff.


https://mobile.twitter.com/ExPJoker/status/1509228664138960896


https://mobile.twitter.com/patrickjdo/status/1509228374710968327

[President Johnson]

So Putin de facto admitted that he heavily depends on gas exports. I'm really conflicted on the issue since an embargo might hurt our economy to a degree that we struggle to keep all the sanctions in place. We can't allow to back down until Russia stops all hostile action.

[jaichind]

DJ reports that independent Russian pollster Levada Center has Putin's approval rating rising from 71% to 83% since the start of the war.  This pollster has Putin's ratings in the 60s last few years and had it jumping from 69% to 83% when Russia took over Crimea back in 2014.

"Levada, which was designated a foreign agent by Russian authorities, also found that the percentage of Russians who believe the country is moving in the right direction increased since the war began: 69% of Russians now believe Russia is headed in the right direction, compared with 52% in February and 50% in January, the poll showed."

I am sure the invasion has Putin's rating going down but the sanctions would drive it back up again.  It is the same thing as Iran.  Shared sacrifice from harm inflicted by an external source tends to consolidate support for the regime.

[Logical]

DJ reports that independent Russian pollster Levada Center has Putin's approval rating rising from 71% to 83% since the start of the war.  This pollster has Putin's ratings in the 60s last few years and had it jumping from 69% to 83% when Russia took over Crimea back in 2014.

"Levada, which was designated a foreign agent by Russian authorities, also found that the percentage of Russians who believe the country is moving in the right direction increased since the war began: 69% of Russians now believe Russia is headed in the right direction, compared with 52% in February and 50% in January, the poll showed."

I am sure the invasion has Putin's rating going down but the sanctions would drive it back up again.  It is the same thing as Iran.  Shared sacrifice from harm inflicted by an external source tends to consolidate support for the regime.

That poll is a joke. When standing in public space with a blank paper is criminalized, people who disapprove of Putin will be lying or simply not answer pollsters.


I'll let you translate this meme yourself.

https://twitter.com/IlyaMatveev_/status/1503150438429954051
https://twitter.com/IlyaMatveev_/status/1503150441634410496

[Middle-aged Europe]

So Putin de facto admitted that he heavily depends on gas exports. I'm really conflicted on the issue since an embargo might hurt our economy to a degree that we struggle to keep all the sanctions in place. We can't allow to back down until Russia stops all hostile action.

If that was a Russian bluff that can be called so easily you know what to think of Little Putin's Medvedev's nuclear threats.

[pppolitics]

https://twitter.com/nytimes/status/1509247054043881485

[President Johnson]

https://twitter.com/nytimes/status/1509247054043881485

I could imagine them being under so much internal pressure that they kept hiding bad news from him since anything else would immediately threaten their positions.

However, this is always what happens with so-called strongmen who are only surrounded by yes-men who only tell them what they want to hear instead of hard truths.

[Middle-aged Europe]

https://twitter.com/nytimes/status/1509247054043881485

I could imagine them being under so much internal pressure that they kept hiding bad news from him since anything else would immediately threaten their positions.

However, this is always what happens with so-called strongmen who are only surrounded by yes-men who only tell them what they want to hear instead of hard truths.

Russian generals know very well from many years of watching Downfall memes what would have happened had they told Putin the full truth.

https://mobile.twitter.com/solamiga/status/1504200059604320257