Free Republic

With oil barely holding on to the $80s, the Kremlin's current leadership faces the same problem they did in the (19)80s: budget revenue half-derived from oil exports, and their backwards, inefficient economy still doesn't produce anything that anybody outside of Mother Russia is willing to spend money on- except perhaps mediocre vodka... And when the self-deluded Russians start babbling about 'greatness' while bullying poor, semi-defenseless countries on the borders of their shabby empire, they tend to get a little caught-up in things... and put the pedal-to-the-medal until they are defeated -i.e. Afghanistan- or simply go-broke, i.e. 1991. Yes, compared...

While it is beyond a doubt that the primary catalyst for Europe's triple-dip recession has been the nearly two quarters and counting of escalating Russian sanctions that were supposed to solely harm Putin (because who could have possibly foreseen that plunging German exports to Russia would have a far greater impact on the export-driven German economy), the truth is that the Kremlin itself is starting to hurt, if not so much as a result of the European trade embargo but mostly due to crashing oil prices, which have been driven lower almost exclusively by Saudi Arabia as part of its...

A drop in global oil prices, driven in part by a boom in U.S. shale oil production, is threatening to hit the economies of energy-exporting Russia and Iran harder than Western economic sanctions have done.

The sudden slump in oil prices, which have fallen 15% in the past three months, has sent tremors through the capitals of the world’s great oil powers, many of whom could face testing budget crunches if the tendency persists. Higher output coupled with weaker demand from China and Europe has driven the price of crude down to $85 – its lowest for four years. The US also now produces 65% more oil than it did five years ago following the boom in shale production. The rise has contributed to the global glut of crude and allowed the US to import...

The collapse in oil prices is already a major cause of concern for countries heavily reliant on exports of the commodity. For some, it could be a matter of avoiding a severe recession. Here's why: For governments in oil-exporting countries to meet their spending commitments they need oil to remain above a certain price. With oil prices under $87 a barrel, countries that rely on high oil prices, including Venezuela, Russia, and Saudi Arabia, may have a reason to be concerned. This chart shows the price per barrel that the six most exposed countries need to meet their national budgets....

Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation...

What happens next may look like Greece during its financial collapse – meaning Turkey’s economy could shrink by 10%-20% The Turkish central bank managed to halt the free-fall of the country’s currency last week with a sharp rise in interest rates. But the move failed to stop the free-fall of Turkey’s equity market and – far more dangerous – the collapse of the credit quality of Turkey’s banks. Only last October, the euro-denominated 10-year bond of Turkey’s largest private lender, Garanti Bank, yielded just 3%. Now it yields more than 7%, and the dollar value of the bond has fallen...

There is almost no chance that China will become the world's hegemonic superpower, or that the Chinese yuan will dislodge the US dollar as the key reserve currency in our life-times. It is ageing faster than any nation in history. Indeed, there is a risk that China’s demographic structure will implode long before the great mass of China’s interior ever become rich. This was more or less the conclusion of a closed-door session of Chinese experts at the Davos gathering, regrettably on “Chatham House” rules so none can be named. Those who fret about Chinese chauvinist-militarism certainly have a point....

By Lawrence Kudlow, Arthur B. Laffer, and Stephen MooreThe Trump Administration and the Republicans in Congress have passed one of the best pro-growth tax bills ever. The Tax Cuts and Jobs Act ranks in the all-time hall of fame along with Reagan's 1981 and 1986 Tax Acts and President Kennedy’s posthumous tax cuts of 1964. The announcements by Apple, FedEx, ATT, Fiat Chrysler and over 300 companies with multi-billion dollar investments in the United States are early lead indicators of good things to come from the tax rate cuts. When this is combined with Trump's deregulation agenda, we see no...

... As relations with the West continue to deteriorate — and the potential for crushing sanctions remains tangible — President Vladimir Putin has begun preparing to release Russia from the crushing grip of the international banking system completely, by moving to a nationalist model based and conducting transactions with allies in gold. In short, Russia has plans to abandon central banks and the dollar — if, indeed, shit hits the fan. Russia isn’t alone — the move away from the much-maligned, Western-centric international banking cartels toward a system less dependent on massive banks comprises a new plan for BRICS nations...

In retrospect, this could be the most important economic event of 2017. The oil-rich country of Venezuela has stopped accepting the U.S. Dollar as payment for oil. Last week President Maduro warned that the country would this week ‘free’ itself from the US dollar. “Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar.” Yesterday Venezuela temporarily suspended the sale of U.S. dollars through its Dicom auction system. This (and other moves) was in response to U.S. sanctions put in place by the Trump administration.

I wanted to post this just in case people missed it, a while back the U.S National Debt clock began publishing the real ratio for U.S dollars to gold. At this point it's up over 6,000 per ounce. Keep stacking!

Turkey’s lira weakened beyond the psychologically important level of 4.0 to the US dollar yesterday, bringing it close to a record low, as concerns about double-digit inflation, and politics, continued to weigh on sentiment.

The impending economic collapse is hidden from most. People only see a rising stock market, not the negative underlying factors that will cause the whole system to crash. The weakening of the U.S. dollar is just getting started, warned veteran market forecaster Peter Schiff, CEO of Euro Pacific Capital. “We have just begun a major, long-term bear market in the dollar,” he said, which should cause a spike in oil prices. He thinks oil will reach $80-$100 a barrel in 2018. The commodity currently trades at roughly $63 a barrel. Shiff focuses on oil as just one example of the...

The Iran lobby is digging deep in an effort to drum up support from anyone and anywhere to preserve the Iran nuclear deal including circulating a letter from members of the French, British and German parliaments addressed to the U.S. Congress.The letter is rife with the same common misperceptions that the Iran lobby has worked hard to foist on an unsuspecting world. None have done as much spadework in engineering this plethora of fake news than the National Iranian American Council.Among the common misperceptions in the letter are:“The only reason we were able to achieve this breakthrough is that we stood...

Turkey will face sanctions over its deal to buy the Russian S-400 air defence system, according to Turkish daily Evrensel. The report comes as U.S. Principal Deputy Assistant Secretary Tina Kaidanow, who heads the Bureau of Political-Military Affairs at the State Department, was in Ankara to attend the 5th gathering of Turkey - U.S. Defence Trade Dialogue, following a 2-year hiatus Top of the agenda was an offer to sell Turkey the Patriot missile system as an alternative to the S-400. Previous negotiations over Patriots have stalled over issues such as the price and technology transfer.Turkish Prime Minister Binali Yıldırım said...

Russia is considering replacing the U.S. dollar in crude oil payments on deals with Turkey and Iran, Energy Minister Alexander Novak said as quoted by RT. According to Novak, “There is a common understanding that we need to move towards the use of national currencies in our settlements. There is a need for this, as well as the wish of the parties. This concerns both Turkey and Iran – we are considering an option of payment in national currencies with them. This requires certain adjustments in the financial, economic and banking sectors.” Iran, under threat of returning U.S. sanctions, two...

Turkey is switching to national currencies in trade with Iran and China, ending dependence on the U.S. dollar and the euro for about 20% of its commodity turnover, local media reported on Wednesday. Turkey has already switched to settlements in national currencies with Russia amid weakening confidence in the greenback as the world's major reserve currency. The move was initiated by Turkish President Abdullah Gul during his visit to Moscow in February. Turkey's decision to make settlements with Iran and China in national currencies was announced during a visit to Iran by Turkish Prime Minister Recep Tayyip Erdogan. The Turkish...

Chinese President Xi Jinping will open late Saturday a two-day regional security summit attended by Russia, Iran and other allies confronting rising tensions with the US over trade and Washington’s withdrawal from the Iranian nuclear deal. Armored vans lined the streets of the coastal city of Qingdao as world leaders arrived Friday for the 18th annual summit of the Shanghai Cooperation Organization (SCO), a regional security bloc led by China and Russia. Its member states also include four ex-Soviet Central Asian republics, Pakistan and India. Iran is an observer member. Authorities emptied an entire oceanside swathe of the city —...

China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry. The contract could become the most important Asia-based crude oil benchmark, given that China is the world's biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars. China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold...