Mar 6, 2014

Follow the ruble

In the great counting house of Moscow, the accountants are breaking out the vodka. Boss Putin's economic enhancement plan is working.

--Russia announced it would charge Ukraine more for natural gas.

--Secretary of State Kerry immediately went to Kiev with a billion dollars in hand to help the peasants pay Russia for higher priced gas. (He added a promise of "technical assistance," price tag unspecified.) So if you want to think of the Ukraine as a big pipeline for whooshing your money to Russia, I will not argue with you.

--The European Union then announced it would add $15 billion to the Ukraine kitty if the IMF also kicks in, which it will. It is useful to recall from time to time that the United States provides at least 17 per cent of  IMF money.

--President Obama is not to be outdone in personally saving Ukraine. He is moving heaven and earth to ramp up exports of  America's new natural gas. It is better, he decides, that the U.S energy bonanza be directed to the benefit of central European peasant hovels. Cold hovels in Minnesota are of less concern. For one thing, he believes, warm American homes are largely responsible for global warming and the concomitant damage to snail darters and spotted owls.

Short the greenback. Go long rubles. Get yourself a wood burner.


--The citations are here and here and here.

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