Wednesday, April 16, 2025

Global Economics - Now Here's Something completely unexpected > Russian Ruble top currency - outperforms gold; China cancels 179 Boeing jetliners - ouch!!!

Ruble is this year’s best-performer

– Bloomberg

The Russian currency has posted strong gains against the US dollar and has outshined gold, data shows

The Russian ruble has emerged as the world’s top-performing currency this year, outpacing even gold, Bloomberg reported on Tuesday, citing calculations based on over-the-counter market data.

The ruble has surged 38% against the US dollar, marking the strongest gains of any currency so far this year. It has also outperformed gold – long seen as a safe-haven asset – which has risen 23% to record highs since January.

Analysts cited a combination of geopolitical developments and monetary policy decisions by the Bank of Russia as key drivers of the ruble’s performance.

“Unlike many emerging-market currencies, the ruble is not facing pressure from capital outflow, caused by global investors’ retreat from riskier assets,” Sofya Donets, an economist at T-Investments, told Bloomberg, noting that capital controls “have largely shielded Russia from this.”

Other economists pointed to high borrowing costs. In October, the Bank of Russia hiked its benchmark interest rate to a record 21% to curb inflation and has held it steady since. Experts said the move dampened demand for imports, and by extension, foreign currency. Meanwhile, regulations requiring exporters to convert a portion of their foreign earnings into rubles, a measure introduced in response to Western sanctions, have further strengthened the currency, they noted.

White House explains Russia’s absence from tariff list

Analysts also cited improved US-Russia relations, spurred by joint efforts to resolve the Ukraine conflict, as boosting foreign investor interest in Russian markets and the ruble. Iskander Lutsko, the head of research at Istar Capital, said international investors are increasingly turning to countries that maintain ties with Moscow to access high-yielding ruble assets. He also predicted that the conditions currently boosting the ruble are likely to persist for some time.

“There are no clear drivers for the ruble’s weakening at this stage with a rate cut off the table for the upcoming quarter,” Lutsko said.

The ruble rally comes amid a weakening of the US dollar, which hit a six-month low on Monday following tariff hikes announced by Washington. Earlier this month, US President Donald Trump introduced “reciprocal” tariffs on nearly 90 trade partners, citing unfair trade practices.

While Trump paused most of the new tariffs for 90 days, except on China, global financial markets have taken a beating as a result. Economists say the US president’s actions have shaken investor faith in US assets and cast doubt on the dollar and Treasuries as reliable safe havens. The ruble, however, has been relatively immune to the tariff war, as Russia has not been targeted.

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Now this really has to hurt!

China orders its airlines to dump Boeing

– Bloomberg

The trade war with the US has led to the cost of jets and parts from the aerospace giant to more than double for Chinese carriers

China has ordered its airlines to stop accepting Boeing jets as the trade war with the US continues to escalate, Bloomberg wrote on Tuesday, citing anonymous sources familiar with the matter.

This development follows a series of reciprocal tariff hikes between the two nations. Last week, Washington increased tariffs on Chinese imports to a total of 145%. In response, Beijing imposed 125% tariffs on American imports and restricted exports of minerals essential for high-tech manufacturing.

Beijing has also asked Chinese airlines to stop any purchases of parts or aircraft-related equipment from US companies, according to Bloomberg.

The reported order came after China’s announcement of retaliatory tariffs, which have more than doubled the cost of American aircraft and parts, making their continued use impractical for Chinese companies, Bloomberg cited its sources as saying.

In addition, the Chinese government is exploring measures to support airlines leasing Boeing jets that are now facing increased costs, the sources told the outlet.

China halts exports of critical materials amid trade war with US – NYT

China’s top three airlines – Air China, China Eastern Airlines and China Southern Airlines – had plans to receive 45, 53 and 81 planes from the US aerospace giant, respectively, over the next two years, according to Reuters

China is one of the biggest markets for aircraft, and has in the past accounted for up to a quarter of Boeing’s output.

US President Donald Trump seemingly slammed the decision in a Truth Social post on Tuesday. Beijing “just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed to aircraft,” the president wrote.

Trump gives advice to nations displeased with US tariffs

Earlier in April, Trump announced a sweeping wave of tariffs on nations with whom he claimed the US had an unfair trade deficit with. The tariffs prompted retaliation from a number of countries.

Beijing has slammed the US tariffs as “unilateral bullying.”

“China will insist on shaking hands rather than shaking fists, tearing down walls instead of building barriers, connecting instead of decoupling,” a Foreign Ministry spokesperson told a press briefing on Tuesday. It comes a day after Chinese President Xi Jinping began a set of visits to build ties with neighboring Asian countries similarly facing massive US tariffs.

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Monday, April 14, 2025

Global Economics > How badly does EU industry need Russian gas? Reuters; Something worse than recession quite likely - Dalio

EU industry bosses want Russian gas supplies restored – Reuters

German chemical companies and French utility firms have both suggested the necessity of importing cheap Russian energy

Germany’s chemical industry is in a “severe crisis” and in dire need of a return to cheap Russian gas, Reuters reported on Monday, citing executives in the sector. French energy majors Engie and Total have also told the agency that they could see a restart of imports of hydrocarbon from Russia.

With a turnover of €225.5 billion in 2023, chemicals and pharmaceuticals are Germany’s third-largest industry, behind automotive and machinery and equipment, according to the European Chemical Industry Council.

Is automotive and machinery and equipment another name for War Industry? Does the War Industry hide it's inventories among the cars, tractors, and various types of machinery?

The EU committed to eliminating Russian gas imports by 2027, following the escalation of conflict between Kiev and Moscow three years ago. Brussels aimed to replace them with more expensive liquefied natural gas (LNG) from Qatar and the United States.

And if you are looking for a reason for the proxy war in Ukraine, that is one of the major reasons. The top reason, however, is to keep that War Industry inventory moving and that filthy money rolling into War Industry Oligarchs' Swiss bank accounts.

Talks with Qatar have stalled however, and Washington’s shift away from the EU under US President Donald Trump, along with his tariff campaign, have left bloc chiefs concerned about the reliability of American supplies.

“We are in a severe crisis and can’t wait,” Christof Guenther, managing director of InfraLeuna told Reuters. InfraLeuna hosts Dow Chemical and Shell plants and is one of Germany’s biggest chemical manufacturing clusters.

US wants control of key gas pipeline in Ukraine — Reuters

“It’s a taboo topic,” Guenther added, saying that many of his colleagues have agreed on the need to go back to Russian gas.

Before 2022, Russia met up to 60% of Germany’s demand for natural gas. The loss of an affordable supply has led to increased energy costs, resulting in production cuts and job losses across the country’s industrial sector.

“We need Russian gas, we need cheap energy - no matter where it comes from,” said Klaus Paur, managing director of Leuna-Harze, a petrochemical maker at Leuna Park.

French energy firms Engie and Total have also spoken out in favor of resuming gas purchases from Russia.

“If there is a reasonable peace in Ukraine, we could go back to flows of 60 billion cubic meters (bcm), maybe 70, annually…” Didier Holleaux, executive vice-president at Engie, told Reuters.

The EU used to import 150 bcm of pipeline gas from Russia every year, which covered 40% of its needs. After the Ukraine conflict is settled, the country could account for 20-25%, Holleaux said.

”Europe will never go back to importing 150 bcm…but I would bet maybe 70 bcm,” Total CEO Patrick Pouyanne suggested.

Russia has long reiterated that it is a reliable energy supplier, with the Kremlin saying in January that Moscow would resume gas deliveries to the EU, provided that there are buyers.

Russian gas reached Germany and on to the wider EU via the Nord Stream undersea pipelines, which were damaged in a sabotage attack in 2022. However, one string of Nord Stream 2, remains intact.

Is a Russia-US Nord Stream revival really possible?

The EU still receives Russian gas via the TurkStream pipeline, which runs through Turkey and the Balkans.

A key pipeline that delivered gas to Italy, Slovakia and Hungary via Ukraine was closed after Kiev refused to extend a transit agreement in January, and blew up a gas metering station on the border.

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Head of world’s largest hedge fund fears global financial system collapse

Ray Dalio warns that US President Trump’s tariff strategy could trigger something much “worse than a recession”

Billionaire investor Ray Dalio has warned that the United States is facing economic risks far greater than a typical recession, arguing that US President Donald Trump’s aggressive tariff policies and ballooning debt could trigger a breakdown of the global financial system.

Speaking on NBC’s Meet the Press on Sunday, the founder of Bridgewater Associates said the world is at a critical juncture, marked by profound changes in the political, economic, and geopolitical order – factors which he says have historically led to severe crises.

“I think that right now we are at a decision-making point and very close to a recession,” Dalio said. “And I’m worried about something worse than a recession if this isn’t handled well.”

Dalio explained that the US economy is confronting several overlapping challenges: rising debt, internal political divisions, growing geopolitical tensions, and shifts in global power.

‘Economic heart attack’: Ray Dalio sounds alarm on US debt

“Such times are very much like the 1930s,” he warned. “If you take tariffs, if you take debt, if you take the rising power challenging the existing power – those changes in the orders, the systems, are very, very disruptive.”

Asked about the worst-case scenario, Dalio pointed to a potential breakdown of the dollar’s role as a store of wealth, combined with internal conflict beyond the norms of democratic politics and escalating international tensions – potentially even military conflict.

“That could be like the breakdown of the monetary system in ‘71. It could be like 2008. It’s going to be very severe,” Dalio said. “I think it could be more severe than those if these other matters simultaneously occur.”

Xi warns US will isolate itself

While acknowledging that tariffs could serve as a useful tool to bring back manufacturing and generate revenue, Dalio cautioned that the method of implementation matters deeply.

“How that’s done – whether in a practical and stable way, with quality negotiations – or whether that’s done in a chaotic and disruptive way that produces great conflict, makes all the difference in the world,” he said.

Describing Trump’s recent tariff moves as “very disruptive,” Dalio said the real test will come after the current 90-day negotiation period ends. “What was put there is like throwing rocks into the production system,” he said, warning of “enormous” impacts on global efficiency and costs.

Goldman Sachs raised the odds of a US recession within the next 12 months to 45% last week, following Trump’s April 2 announcement of a minimum 10% tariff on all imports – but before he placed a three-month hold on further “reciprocal” duties of 11% to 50% targeting dozens of nations. China, however, was still hit with a 145% import duty – and retaliated with a 125% levy of its own.

Just the other day, I was discussing the apparent madness of Trump's economic plan with a friend, and I came to the conclusion that the plan was basically sound for America, a disaster for the rest of the world, and a disaster for America if he continues to force it at a reckless pace and with the bullying attitude he has displayed so far.

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Politics in Europe > Christian region in Moldova losing autonomous rights; Counter rallies in Vucic's Serbia - Colour Revolution over?

EU candidate curbs autonomy of opposition-dominated region

Moldova’s Gagauzia has been denied the right to select its prosecutor general

The Moldovan government has blocked the right of the autonomous southern region of Gagauzia to select its prosecutor general. The elected leader of the area, a vocal critic of pro-Western Moldovan President Maia Sandu, was arrested last month.

Gagauzia has long been embroiled in a political standoff with the central government in Chisinau. The Gagauzian people are typically Turkish-speaking Orthodox Christians, and the area has constitutional rights to self-governance stemming from its unique demographic makeup.

Kremlin responds to arrested Moldovan governor’s appeal to Putin

On Monday, the Constitutional Court in Chisinau upheld a complaint filed by Prosecutor General Ion Munteanu in January, which stated that a special national body must appoint Gagauzia’s local prosecutor general, rather than considering a candidate submitted by the region’s legislative assembly. The decision is final and binding, according to local media.

The Superior Council of Prosecutors, whose authority was reaffirmed by the ruling, celebrated the outcome as aligning the appointment process in Gagauzia with “the general legal framework applicable to all territorial offices.” Munteanu described the ruling as a restoration of normalcy.

In other words, an annihilation of any autonomous rights for the Turkic-speaking Orthodox Christians.

Last month, Gagauzia Governor Yevgenia Gutsul was arrested amid investigations into alleged irregularities during her 2023 election campaign. She condemned Chisinau’s actions, asserting that the government seeks to undermine the region’s freedoms in retaliation for its support of opposition figures, including herself.

President Sandu, a Romanian citizen aiming to integrate Moldova into the EU, won reelection last year in what critics labeled a rigged election. In the second round, Gagauzia overwhelmingly supported challenger Alexandr Stoianoglo, who lost to Sandu as she secured 55% of the overall vote.

The Sandu administration faced accusations of facilitating voting in areas where her candidacy was favored, including embassies in EU countries, while undermining turnout in regions predicted to support Stoianoglo.

The president had claimed she was fighting against “pro-Russian” actors within the country as she launched a crackdown on opposition parties and media outlets, branding them as criminals.

And she is fighting for anti-Russian actors! Who are they who benefit from anti-Russian hysteria? The Western War Industry and America's LNG industry.

I didn't read the name George Soros anywhere in this article, and yet he seems to be all over it, or is it just me?

Thousands rally for Serbia’s Vucic amid student-led protests

During the rally, the Serbian president declared that “the color revolution is over”

Tens of thousands of people have been gathering in Belgrade since Friday to show support for President Aleksandar Vucic in the face of significant anti-government protests in Serbia.

Student-led demonstrations against alleged corruption and government negligence have been ongoing in the country for months. The protests, sparked by the deadly collapse of a concrete canopy at the railway station in the city of Novy Sad in November 2024, culminated in a massive rally in Belgrade on March 15, which was followed by clashes between dozens of protesters and the police.

During the demonstrations filmed by RT on Saturday Vucic declared that “the color revolution is over,” adding that “they can walk as much as they wish, but nothing will come out of that.”

Hungarian Prime Minister Viktor Orban addressed the rally via video link, stating, “Serbian patriots can count on their Hungarian counterparts.”

The opposition Freedom and Justice Party (SSP) has accused security forces of utilizing a Long Range Acoustic Device (LRAD), crowd-control technology originally designed by the US Navy and which poses a significant risk of hearing damage, at the protests on March 15.

Vucic’s government has alleged that the US “deep state” and European intelligence agencies are inciting the wave of protests in retaliation for Serbia’s refusal to endorse anti-Russian policies.