Myth about gas for rubles

It is astonishing to see people believing that since start of SMO Russia began to sell gas for rubles. Even such prominent analysts like Pepe Escobar possibly believe in this.

Even none economist can see this myth. Indeed.

When Western firm comes to Gasprom bank to buy gas, it brings ... what it brings in the bag? ... dollars or euros. Then firm gets gas. Period.

What happens next inside Gaszporm bank inside Russian economical sphere is irrelevant. Yes Gasprom sells dollars and buys rubles, perhaps by firm instructions. Yes selling dollars affects rubles ratio on Moscow Stock Exchange (MSE). But this already was before, selling dollar's profit did affect rubles ratio possibly for many years. Nothing changed since V. Putin introduces the ruble scheme.

The real sale for rubles is when the Western firm wants to buy rubles own self. And after this firm bought the rubles somewhere, this firm comes to Gasprom with these rubles in the bag and give these rubles to Gazprom.

This is as simple as to shop in the food store.

What are the rubles? They are liabilities. Liabilities of issuer country, Russia. They are not paper money in the chest which firm carries in their bag to Gasprom office in Hamburg or in New York. They are electronic zeros and units in some bank account which is linked to other bank and so on and in the bottom of the liabilities chain in the bank of issuer in the Russia.

Summarily, the entire money loop is inside of Russian liability chain. No matter where banks are located in the World.

Again, the real sale for rubles becomes only when the Western firm wants to become in this liability chain.

Why this is important? Because ratio of ruble / dollar based on demand for the ruble. Demand and supply law. When firm does not need to buy rubles, the demand is zero. So the ratio of ruble is zero. Yes, ruble can have some ratio on MSE and we even can see it in Google, but this is internal Russian business. West does not need rubles and does not even know how they look.

But in "decent" cycle when R. requests to buy gas for currency which is emitted in Russia, rubles, the western firm has no other way except to buy rubles. Either for gold, or from the other Western firm which sold, say computers to Russia for rubles.

But till of today no, say American firm, had any intention to sell computers for rubles. Why? By historical reasons which historical reasons are called "dollar dominance".

And until there is a real ruble currency flow in international trade is established, there that "gas for rubles" rule is a myth, is PR fake.

One of the possible ways to initate rubles circulation is to demand selling rubles for gold or yuans and at the same time selling Russian export only for rubles.
Let's make a mark (G) here and talk this later.

But if current "gas for ruble" scheme is no-game-changer why some countries did/do resist it. Truly speaking, I don't know. Perhaps some deep experts know. This sale looks like mere PR. It is like a wooden unreal sword which these countries and Russia stab each other just making PR noise.

Bulgaria, as I know, did not agree to pay rubles? Why? Perhaps to make ownself obedient to US?
Perhaps the mere idea to say the word "ruble" looks like a heresy in US eyes? Or perhaps, in the future, this scheme builds "banks placeholder machinery" for future real sale?


Russian belief

But the most amazing thing is that Russians themselves believe in this fake. Possibly even Russian government. Why? The only explanation is that this government is too deeply interwoven with oligarchs. Who do not want to lose their ability to syphone gas profits to their offshore or Wall Street accounts. They cannot syphone rubles? So, this is why R. goverment listens to possibly charlatans like Anton Siluanov or Elvira Nabiullina who eloquently paint this rule like a nice dress for the king of Russian finance. Naked king.


G-day of Russian special financial operation

G day is a gold day. Imagine that in some day, Russian government makes the demands we marked (G).
Suddenly all the R export will be available in gold. Only. Perhaps West will deny or silence this. But the pressure of market will force firms to buy or at least to think about buying rubles for gold. So the price for gold no longer would be able to keep low. Suddenly from the commodity, the gold will be transformed to the money.

One perhaps even does not have to buy or sell anything. Just to think about this.

And suddenly, it will be discovered that all these countries who keep their gold in London, have nothing.

And price of gold will uncontrollably grow. It will be 10% more, 40% more, 200%? more. Who knows.

Countries begin to sell dollars. For gold till gold is still low. Which will speed up the gold price raise.

And dollar begins cease to exist.

Then possibly China comes to the scene. With reported 30000? tonns gold reserves. [1]

At this point, we let the reader to unleash their fantasy as they want.

For example, if dollar will crash, the military operation in Ukraine will end. Because US no longer will be able to print dollars, they become worthless.


But

Will this G-day happen? R. is too deep in corruption. We don't know.



[1] https://goldalliance.com/blog/asset-strategy/why-is-china-hoarding-gold/