Eurasia: A Geo-political re-alignment

[Lauren Johnson]

Halford MacIndor's The Geopolitical Pivot of History and the Guido Preparata's Conjuring Hitler should now be brought back to our thoughts. The ultimate catastrophe for the island nations, i.e. England, the US and of course its backyard, Japan, Australia, and New Zealand is that Eurasia should unite and therefore that continuous wars should be fomented and fought on the Eurasian land mass. Hence, we see World Wars I & II.

Seeing the NATO sponsored aggression in the Ukraine and in Syria for what it is -- a message to Russia that you're next -- and considering Obama's pivot to the pacific, which should be seen as a encirclement of China, our attention should be put on alert by this:

Asia Times Online's Spengler coined a formulation: "A specter is haunting Europe, and that is the specter of a Russian-Chinese alliance at the expense of Europe." The alliance is already on - manifested in the G-20, the BRICS and the Shanghai Cooperation Organization. There are military technology synergies on the horizon - the ultra-sophisticated S-500 air defense system is to be unveiled by Moscow, and Beijing would absolutely love to have it. But for the real fireworks, just wait a few weeks, when Putin visits Beijing in May.

That's when he will sign the famous $1 trillion gas deal according to which Gazprom will supply China's CNPC with 3.75 billion cubic feet of gas a day for 30 years, starting in 2018 (China's current daily gas demand is around 16 billion cubic feet).

Gazprom may still collect most of its profits from Europe, but Asia is its privileged future. On the competition front, the hyper-hyped US shale "revolution" is a myth - as much as the notion the US will be suddenly increasing exports of gas to the rest of the world any time soon.

Gazprom will use this mega-deal to boost investment in eastern Siberia - which sooner rather than later will be configured as the privileged hub for gas shipments to both Japan and South Korea. That's the ultimate (substantial) reason why Asia won't "isolate" Russia. ( See Asia will not 'isolate' Russia, Asia Times Online, March 25, 2014.)

Not to mention the much-anticipated "thermonuclear" (for the petrodollar) possibility that Russia and China will agree payment for the Gazprom-CNPC deal may be in yuan or rubles. That will be the dawn of a basket of currencies as the new international reserve currency - a key BRICS objective and the ultimate, incendiary, new (economic) fact on the ground.

I can only imagine that Empire's war gamers, which now in most likely include supercomputers running geo-political simulations, are getting a workout.

[David Guyatt]

You can't keep poking a stick in a nest of wasps without causing them to come out and play, I reckon.

With the events in the Ukraine and the consequences for the prospect of Russia responding to the continuing US and European sanctions gambit by restricting the flow of gas to Europe, my expectation was that gas prices would rocket.

Instead they've dropped.

One supplier has locked down their prices until 2016, and claim this will cost them £100 million - but "that's what their customers want", said a representative. It's complete bollocks of course. They don't usually give a toss what their customers think and usually squeeze them hard at every opportunity. For years, the six big energy suppliers have de facto been running a cartel -- which remains illegal.

But now, if we believe what they are saying, they're suddenly breaking out with a conscience?

Yeah, of course, they are. And snakes don't bite when disturbed...

I can only conclude that real pressure is being applied for this to have happened, because it is counter to the usual market reaction in such situations, where the price is jacked up.

[Lauren Johnson]

the world is to ruled through China. Look at 35:00 min for about 1 minute.



The whole thing is great.

[Paul Rigby]

Halford MacIndor's The Geopolitical Pivot of History and the Guido Preparata's Conjuring Hitler should now be brought back to our thoughts. The ultimate catastrophe for the island nations, i.e. England, the US and of course its backyard, Japan, Australia, and New Zealand is that Eurasia should unite and therefore that continuous wars should be fomented and fought on the Eurasian land mass. Hence, we see World Wars I & II.

Seeing the NATO sponsored aggression in the Ukraine and in Syria for what it is -- a message to Russia that you're next -- and considering Obama's pivot to the pacific, which should be seen as a encirclement of China, our attention should be put on alert by this:

Asia Times Online's Spengler coined a formulation: "A specter is haunting Europe, and that is the specter of a Russian-Chinese alliance at the expense of Europe." The alliance is already on - manifested in the G-20, the BRICS and the Shanghai Cooperation Organization. There are military technology synergies on the horizon - the ultra-sophisticated S-500 air defense system is to be unveiled by Moscow, and Beijing would absolutely love to have it. But for the real fireworks, just wait a few weeks, when Putin visits Beijing in May.

That's when he will sign the famous $1 trillion gas deal according to which Gazprom will supply China's CNPC with 3.75 billion cubic feet of gas a day for 30 years, starting in 2018 (China's current daily gas demand is around 16 billion cubic feet).

Gazprom may still collect most of its profits from Europe, but Asia is its privileged future. On the competition front, the hyper-hyped US shale "revolution" is a myth - as much as the notion the US will be suddenly increasing exports of gas to the rest of the world any time soon.

Gazprom will use this mega-deal to boost investment in eastern Siberia - which sooner rather than later will be configured as the privileged hub for gas shipments to both Japan and South Korea. That's the ultimate (substantial) reason why Asia won't "isolate" Russia. ( See Asia will not 'isolate' Russia, Asia Times Online, March 25, 2014.)

Not to mention the much-anticipated "thermonuclear" (for the petrodollar) possibility that Russia and China will agree payment for the Gazprom-CNPC deal may be in yuan or rubles. That will be the dawn of a basket of currencies as the new international reserve currency - a key BRICS objective and the ultimate, incendiary, new (economic) fact on the ground.

I can only imagine that Empire's war gamers, which now in most likely include supercomputers running geo-political simulations, are getting a workout.

I think it's a triangular relationship that most worries Washington: Moscow-Berlin-Peking. If this triangle continues to flourish and expand, the sea powers are sunk without trace.

China, Germany establish comprehensive strategic partnership

English.news.cn | 2014-03-29 03:56:53 | Editor: Mu Xuequan

http://news.xinhuanet.com/english/china/...330414.htm

BERLIN, March 28 (Xinhua) -- Visiting Chinese President Xi Jinping and German Chancellor Angela Merkel decided Friday to lift bilateral relations to a comprehensive strategic partnership.

In talks with Merkel in the afternoon, Xi said the coming years will be a crucial period for both China's and Germany's reform and development, and for the two countries to grow and achieve progress together.

China and Germany are not only economic partners but also political partners and strategic cooperation partners, Xi said, adding that it is a step of great significance that the two sides establish a comprehensive strategic partnership and start mapping out medium- to long-term action plans for developing bilateral ties.

China, he said, is willing to work with Germany to plan and design bilateral cooperation in various fields and build a bright future for China-Germany ties.

To that end, Xi suggested the two sides to be politically trustworthy friends, maintain regular high-level exchanges, strengthen communication on major issues and enhance strategic mutual trust.

Both sides should make full use of the some 60 cooperation mechanisms between them, including the strategic dialogue mechanism, while enhancing contacts between governments, political parties, parliaments, as well as think tanks of the two countries, Xi said, adding that efforts are also needed to intensify cooperation in such areas as diplomacy, law enforcement and counter-terrorism.

The two countries can also conduct dialogue on issues including human rights on the basis of equality and mutual respect, Xi said.

On economic cooperation, Xi suggested both sides to achieve a qualitative leap.

As the timing and condition for deepening strategic cooperation have been ripe, he urged both countries to expand two-way investment and trade, carry out more strategic projects of large scale, and undertake joint development and production.

More endeavors can be put on cooperation of smart manufacturing, internet of things, and the new generation of information technology, as well as collaboration on aeronautics and astronautics, maritime and polar matters, the Chinese leader said.

According to Xi, China supports the construction of a China-Germany agricultural center, and the two sides can hold regular high-level fiscal and financial dialogues.

Xi also pointed out that China welcomes the establishment of an RMB clearing and settlement mechanism in Frankfurt, as well as Germany's active participation in building the Silk Road economic belt.

Meanwhile, Xi suggested the two countries to strengthen cultural exchanges, continue to hold major cultural events in each other's country and establish a high-level mechanism for bilateral cultural exchanges.

Both sides should also strengthen education, tourism cooperation and collaboration between local governments, promote people-to-people exchanges and facilitate the exchange of personnel between the two countries, Xi noted.

At the same time, Xi suggested China and Germany to maintain effective communication in international affairs, jointly promote diplomatic solutions to regional hotspot issues.

Both sides should strengthen coordination and cooperation within the United Nations, the Group of 20 and other multilateral mechanisms so as to jointly cope with global challenges, promote the reform of the international system and improve global governance.

Meanwhile, both countries should commit themselves to deepening the China-European Union (EU) comprehensive strategic partnership, safeguarding and promoting a free trade system, and pushing for an early harvest of the negotiations on EU-China investment pact, Xi said, adding that the two countries should work for an early launch of joint feasibility study of the China-EU free trade zone, and settlement of China-EU trade and investment disputes through dialogue and consultation.

For her part, Merkel lauded the continuing high-level development of bilateral ties, the positive exchanges in all areas and facets, as well as the strong economic cooperation between the two countries.

Germany understands the many challenges that China faces, and supports China's stability and development, she said, adding that her country is willing to promote political dialogues and people-to-people exchanges with China, and deepen mutual understanding and mutual trust.

Merkel noted that Germany is also ready to expand cooperation with China in such areas as economy and trade, investment, finance, energy and environmental protection.

Earlier Friday, Xi arrived in Germany for a state visit. It is the third leg of his ongoing four-nation European trip, which also includes the Netherlands, France and Belgium.

Related:

China, Germany vow to push for open world economy

BERLIN, March 28 (Xinhua) -- China and Germany on Friday affirmed their shared commitment to building an open world economy and promoting global trade and investment liberalization.

The two sides underscored their stand in a joint statement issued during Chinese President Xi Jinping's state visit to Germany, which proclaimed the establishment of the China-Germany comprehensive strategic partnership. Full story

China, Germany underscore peaceful coexistence, common development

BERLIN, March 28 (Xinhua) -- China and Germany on Friday emphasized the great significance of peaceful coexistence of, mutual understanding between and common development of different peoples around the world.

The two countries highlighted the shared standpoint in a joint statement released during Chinese President Xi Jinping's state visit to Germany, which proclaimed the establishment of the China-Germany comprehensive strategic partnership. Full story

Chinese, German presidents meet on ties

BERLIN, March 28 (Xinhua) -- Chinese President Xi Jinping met here Friday with his German counterpart, Joachim Gauck, for discussions on bilateral ties and issues of common concern.

During the meeting, Xi said leaders of the two countries have kept the development of bilateral relations in the right direction since the establishment of diplomatic ties between China and Germany. Full story

China, Germany eye RMB hub in Frankfurt

BERLIN, March 28 (Xinhua) -- China and Germany on Friday signed a memorandum of understating (MoU) on establishing an RMB clearing and settlement mechanism in Frankfurt, moving the German city closer to becoming an offshore RMB center.

The document was inked here by China's central bank, or the People's Bank of China, and its German counterpart, the Deutsche Bundesbank, in the presence of visiting Chinese President Xi Jinping and German Chancellor Angela Merkel.

[Paul Rigby]

Why WWIII will begin in Syria

http://intellihub.com/wwiii-will-begin-syria/

It is possible to make a reasonable prediction about where World War III will break out based upon historical Russian military strategy?

By Dave Hodges

(INTELLIHUB) Putin is following a very predictable pattern that dates back to over a 100 years of Russian military history coupled with the present set of events.

The Present Situation

Russia is bleeding the Petrodollar dry by leading the BRIC nations in the purchase of Iranian oil for gold. The same situation is emerging in Europe as Russia is on the verge, either by invasion or by proxy control of Ukraine, of controlling a good portion of energy needs to Europe and being able to bypass the Petrodollar as a means of payment for Russian energy shipments into Europe. Further, Russia has just completed a deal which brings China into theRussian energy sphere of influence. This will eventually culminate in the weakening of NATO and the isolation of the United States both economically and militarily. What does Russia want and what will be its eventual goal? Some believe that Russia wants to occupy the United States and perhaps Putin eventually does, but it is not practical at this particular point of time. Economic attrition and military isolation are Putin's best friends at this time. After all, the US is in possession of over 2,000 nuclear weapons and 72 nuclear armed submarines which are virtually undetectable. Despite the presence of these American deterrents, do not be lulled into a false sense of security, this cold war will soon turn hot.

Putin's Military Strategy

Putin is pursuing a military strategy that most Americans have never heard of and even fewer understand and it has to do with Russia's geographic makeup and this holds the key to Russian military strategy Although Russia possesses one of the largest land masses in the world, they possess an abhorrent lack of useable coastline. Historically, Russian economic growth has been severely impeded because of the lack of usable ports. Russia rues the day that they sold Alaska to the United States. It also helps to explain why Syria has jumped to the forefront of world affairs. Russia is sitting on vast energy deposits and they are threatening to expand their energy based and mineral world dominance by exploiting the newly discovered riches at theNorth Pole and they have invested significant resources in beefing up their Arctic fighting forces towards this end. Russia may be able to acquire vast mineral resources, but without significant ports from which to trade, the Russian economy will always run in second gear. One does not need to have access to Putin's war plans to understand what is going on, one needs to only be a student of history in order to predict where this coming conflict is headed.

The Heartland Theory

British geographer and military historian, Sir Halford MacKinder, in 1904, wrote an article that changed how politicians and military men viewed the world. The theory that had so influenced nearly five generations of strategists was called simply, the Heartland Theory. Basically, Mackinder's Heartland Theory views geo-political military history as a struggle between land-based and sea-based powers. Mackinder believed the world had become a "closed" system, with virtually no new lands left for the Europeans powers to discover, to conquer, and to fight over without creating chaos elsewhere. According to the theory, the common denominator for world conflict has been reduced to sea powers vs. land-based powers which would subsequently struggle for dominance of the world, and the ultimate victor would be in a position to set up a world empire. The determining factor in this struggle was physical geography; "Man and not nature initiates, but nature in large measure controls".

From Mackinder's perspective, Soviet Russia had to be contained within the heartland. Mackinder's believed that whosoever controlled Eurasia, controlled the world, so long as the controller had access to useable ports. The problem for Russia is that they have so few usable ports thus impacting commerce and the movement of men and material in a time of war. So long as Russia could be prevented from being a major sea power, the forces of the United States and Western Europe were safe. However, if Russia should become a sea power in conjunction with its massive land-based power, Russia could rule the world. And now, through the release of Russian secret documents we are finding out that Stalin was willing to fight a war with the US over obtaining Alaska seaports as predicted by the Heartland Theory.

Stalin's Secret Plans to Invade Alaska In 1951

In 1999, at a conference held at Yale University, previously secret Russian documents revealed that Russian Dictator Joseph Stalin had undergone extensive planning in preparation to invade North America as early as 1951. The event was one of a series of programs sponsored by the Washington D.C.-based Cold War International History Project (CWIHP), which monitors new documents pertaining to the Cold War. The Yale conference centered on Stalin's relationship with the United States. These documents, from the Cold War, revealed that Stalin had a definitive plan to attack Alaska in 1951-52 and had undergone major military preparations in anticipation of the invasion. Russia has always considered itself to be landlocked and this served as the major motivation for Russia's planned incursion which would have given Russia access to good sea ports. Stalin subsequently died and the plans were abandoned, at least temporarily, mostly due to American dominance in nuclear weapons. In 2014, we see the importance of Heartland Theory in guiding Russian foreign policy with regard to Syria and to some degree, China. The Chinese-Russian energy deal allows Russia access to Chinese ports. Russia is steadfast in its protection of Syria because of the Russian need to use the ports of Tartus and Aleppo. And it is highly likely that once the energy pipelines in Ukraine are secured by Putin, Europe will soon be making seaport concessions to Russia in exchange for Russian based energy shipments. At the beginning of the crisis in Crimea, the first objective of the Russian military was to secure the naval base in Sevastopol. The Russians desire the fleet to grow in support a new Mediterranean task force created by Russia last year as move to counter an increase US naval presence in the Mediterranean. If Ukraine had been allowed to be wooed by Western banksters to join the European Union, Russia's most important naval force would have been effectively neutered because of the potential loss of Sevastopol as a naval base. The G7 nations may view Putin's actions in Crimea as being offensive, Putin, no doubt, views the action as a matter of military survival. Again, the Heartland Theory comes into play. The Heartland Theory also came into play during last year's Syrian crisis as Putin threatened tonuke the United States if it invaded Syria in violation of international law. Syria is critical to the Russians on a number of fronts including the prevalence of Syria's warm water ports. Syria's importance to Russia can be condensed to five essential factors:

1. Russia has a naval installation in Syria. The base is vitally important because it is Russia's last foreign military base outside of the former Soviet Union. Putin is playing a bit of a slight of hand approach by stating they are closing the facility. However, the Russians are maintaining navy technicians and to service their permanent flotilla in the area.
2. Russia utilizes the port at Aleppo and Tartus to facilitate is sea trade.
3. Fortifying Syria provides protection for Iran who is undermining the Petrodollar by selling its oil for gold. This allows Putin to be engaged in an economic war against the dollar the Federal Reserve.
4. Syria is a military satellite of Russia as Assad continues to buy a high quantity of Russian military exports, which aids the Russian economy.

America's Options

Control of Ukraine and its gas shipments through the country are the key to swinging the balance of power on the planet. If Ukraine comes under the complete control of the Russians, energy blackmail and the eventual disintegration of NATO will occur. If Russia moves to take over Ukraine, what options does the United States have? It is not likely that at this point in time that NATO has the ability to keep Russia out of Ukraine. Where is Russia most vulnerable? The clear answer is in Syria. Syria has both economic and military significance to Russia. If Syria were to fall to the United States, the military and economic loss would be catastrophic, not the least, would be the loss of Syrian ports. Russia's prudent course of action would be to continue to erode the US economy by its relentless attacks upon the Federal Reserve and the Petrodollar. However I do not foresee the Federal Reserve banksters are going to continue to let this happen as the dollar erodes. Subsequently, when Ukraine falls, Syria and possibly Iran will be attacked by the United States. The provocation will likely be a false flag event within the United States in which the Syrians are falsely implicated. Remember the Heartland Theory, it also predict the second front of the coming World War III. Along these lines, Putin will attack Alaska if the United States attacks Syria. This is how a cold war can turn hot in a hurry. If you do not believe me, just ask the Polish as they have begun mobilizing for war. DHS just began a martial law lock down drill yesterday which will last for nearly a month. Ask yourself, what do these people know that you do not? Again, I want to caution people to stock up on supplies. If a false flag event does occur, your ability to resupply could be seriously imperiled.

[Paul Rigby]

The Mackinder factor: On the inconvenience of being Russia

Russia replaces the Mongol empire.
Halford Mackinder (1904)

By Nicolas Bonnal

http://euro-synergies.hautetfort.com/arc...ussia.html

In fact Mackinder initiates the process that defends the Anglo-Saxon right to subjugate the world in any place of the world. Being a democracy or a plutocracy or a messianic state or a maritime power is enough to enunciate or apply any diplomatic barbarity; read Hobson again and his insightful analysis of the British Empire. Mackinder followed the path of Mahan, the first theoretician of modern maritime powers, but went further opening the Russophobe agenda of the century. This is a kind of geopolitical paranoia that easily can be turned into a science: you just have to hire and finance scholars.

[Peter Presland]

I think it's a triangular relationship that most worries Washington: Moscow-Berlin-Peking. If this triangle continues to flourish and expand, the sea powers are sunk without trace.

I agree. And it seems to me that Germany is potentially their biggest headache. It remains an occupied country, docile-ish and outwardly compliant with its occupiers requirements, but nonetheless subjected to incessant surrogate images of itself as the 'Tatervolk' - a none-to-subtle way of demanding compliance or else I guess ???.

Whatever, in light of readily available evidence about the true nature and origins of both wars, it's a wonder to me that they have put up with it and remained complicit with the victor's history versions of both wars for as long as they have.

Can they REALLY not see that they are being lined up for a repeat performance?

[David Guyatt]

China, Germany vow to push for open world economy

And

China, Germany underscore peaceful coexistence, common development

Peaceful coexistence too.

Oh fuck. That does sound ominous doesn't it.

[Lauren Johnson]

from [URL="http://www.zerohedge.com/news/2014-04-04/us-threatens-russia-sanctions-over-petrodollar-busting-deal"]Zero Hedge
[/URL]
On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar

• *U.S. HAS WARNED RUSSIA, IRAN AGAINST POSSIBLE OIL BARTER DEAL
  
• *U.S. SAYS ANY SUCH DEAL WOULD TRIGGER SANCTIONS
  
• *U.S. HAS CONVEYED CONCERNS TO IRANIAN GOVT THROUGH ALL CHANNELS
  

We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.
As we explained earlier in the week,

Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.

...

"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime,"

And here is Voice of Russia, "Russia prepares to attack the Petrodollar":

The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.

The existence of "petrodollars" is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.

Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the "sanctions war" between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .

The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosneft, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.

First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must should ditch the dollar. " They must be braver in signing contracts in rubles and the currencies of partner-countries, " he said.

Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. " I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ", Kostin told the attendees of the annual Russian Bank Association meeting.

Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. " Some hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines," she said.

It seems that Moscow has decided who will be in charge of the "boomerang". Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that " it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies ". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.

Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a "jumbo deal" with Indian companies. In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the "petroruble" and will hurt the petrodollar.

It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency. The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia? During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.

Finally, those curious what may happen next, only not to Iran but to Russia, are encouraged to read "From Petrodollar To Petrogold: The US Is Now Trying To Cut Off Iran's Access To Gold."

[David Guyatt]

What I find really remarkable about the foregoing Zero Hedge story, is that there is nothing whatsoever -- no agreements, no international law (the US doesn't recognise the International Court anyway) to stop Russia and Iran, or any other two or more countries, from entering into private trade barter deals or to make use of other currencies to settle such deals as they wish.

It is their prerogative in fact.

The US is now completely out of sync with the rest of the world in responding to this deal in this way.

But as I said above, if you keep poking a stick in a nest of wasps they will come out and sting you. By which I mean the whole US covert op for regime change in the Ukraine was a dangerous and poorly thought out action that is now rebounding.