Agreed, Putin is no fool, which is why I think he might actually be serious about switching to euro-based oil sales. Think about it...the dollar has lost 20% against the euro in the past several months. That means that the $30 they were getting for a barrel of Rusky crude only has $24 of purchasing power. From the looks of things, the Fed wants to see the dollar weaken even more, maybe twice as much as it has already. That would make that same $30 worth $20. One of two things has to give...either they start demanding more dollars per barrel (a lot more), or they start pricing oil in a currency that isn't being inflated.
In my opinion, the current strength of the euro cannot be maintained. A few years ago one of the leading Danish economists wrote an extensive article in which he predicted that Europe is going to experience a decades-long economic malaise along the lines of what we've seen in Japan. And the roots of this malaise will be the same as Japan's -- stagnant population growth, coupled with enormous government pension liabilities.
As strange as this may seem, the porous southern border of the United States is precisely what is going to keep the U.S. from experiencing a similar spiral.
This "liquidity" increase is the same as inflation, conducted on a world wide basis. The central banks are using the CPI and equally erroneous representations of reality as a surrogate for inflation, and so are hoping the inflation they are causing will not have unbearable political consequences. The idea is to leave no safe investor haven, and so control international cash flows, while inflating like crazy. (You wouldn't believe what is going on in East Asia!!!)
Yes, the Dollar has dropped 20% versus the Euro recently, and yes, the Russians get paid in Dollars for each of their barrels of oil exports, and yes, that Dollar has dropped versus the Euro...but that Dollar still buys the same amount in the U.S.
So the Russians can either use those Dollars to purchase fewer European goods, or else they can use them to purchase the same amount of U.S. goods.
They're smart people over there. They'll figure out how and where to get the most value for their Dollars.