PARADIGM SHIFT: Precursors To The End Of The Petrodollar, The United States Corporation And The White Supremacy Paradigm - Iran Abandons The U.S. Dollar, Wants Euro Payment For New And Outstanding Oil Sales!

A general view shows a unit of South Pars Gas field in Asalouyeh Seaport, north of Persian Gulf, Iran November 19, 2015.

Reuters/Raheb Homavandi/TIMA

February 7, 2016 - IRAN - Iran wants to recover tens of billions of dollars it is owed by India and other buyers of its oil in euros and is billing new crude sales in euros, too, looking to reduce its dependence on the U.S. dollar following last month's sanctions relief.

A source at state-owned National Iranian Oil Co (NIOC) told Reuters that Iran will charge in euros for its recently signed oil contracts with firms including French oil and gas major Total, Spanish refiner Cepsa and Litasco, the trading arm of Russia's Lukoil.

"In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery," the NIOC source said.

Lukoil and Total declined to comment, while Cepsa did not respond to a request for comment.

Iran has also told its trading partners who owe it billions of dollars that it wants to be paid in euros rather than U.S. dollars, said the person, who has direct knowledge of the matter.

Iran was allowed to recover some of the funds frozen under U.S.-led sanctions in currencies other than dollars, such as the Omani rial and UAE dhiram.

Switching oil sales to euros makes sense as Europe is now one of Iran's biggest trading partners.

"Many European companies are rushing to Iran for business opportunities, so it makes sense to have revenue in euros," said Robin Mills, chief executive of Dubai-based Qamar Energy.

Iran has pushed for years to have the euro replace the dollar as the currency for international oil trade. In 2007, Tehran failed to persuade OPEC members to switch away from the dollar, which its then President Mahmoud Ahmadinejad called a "worthless piece of paper".

The NIOC source said Iran's central bank instituted a policy while the country was under sanctions over its disputed nuclear program to carry out foreign trade in euros.

"Iran shifted to the euro and canceled trade in dollars because of political reasons," the source said.

BOOST FOR EURO TRADE

Iran has the world's fourth-largest proved reserves of crude oil, and expects to quickly increase production, which could lead to tens of billions of euros worth of new oil trade.

Iran's insistence on being paid in euros rather than dollars is also a sign of an uneasy truce between Tehran and Washington even after last month's lifting of most sanctions.

U.S. officials estimate about $100 billion (69 billion pound) of Iranian assets were frozen abroad, around half of which Tehran could access as a result of sanctions relief.

It is not clear how much of those funds are oil dues that Iran would want back in euros.

India owes Tehran about $6 billion for oil delivered during the sanctions years.

Last month, NIOC's director general for international affairs told Reuters that Iran "would prefer to receive (oil money owed) in some foreign currency, which for the time being is going to be euro."

Indian government sources confirmed Iran is looking to be paid in euros.

Tehran has asked to be paid using the exchange rates at the time the oil was delivered, along with interest for those payment delays, Indian and Iranian sources said.

Indian officials are working on a mechanism that could involve local banks United Commercial Bank (UCO) and IDBI Bank for handling payments to Iran, one Indian government source said.

UCO CEO R.K. Takkar said the bank is involved in payments to Iran, but did not say if there were any plans to change the payment mechanism. IDBI CEO Kishor Kharat could not be reached for comment.

India could also try to resume payments through Turkey's Halkbank, a channel it stopped using in 2012, or by direct transfer to Iranian banks through the global SWIFT transaction network.

With Iran now again linking to international lenders through SWIFT, the NIOC source said it was easy for Tehran to be paid in any currency it wants, adding: "And we want euros." - Reuters.

GLOBAL ECONOMIC MELTDOWN: Precursors To End Of The Petrodollar And The United States Corporation - U.S. Dollar Substitute Set To Go Public On October 20th In Global Currency Reset!

April 27, 2015 - UNITED STATES - The International Monetary Fund is one of the most secretive and powerful organizations in the world.

They monitor the financial health of more than 185 countries… they establish global money rules… and provide “bail-out” assistance to bankrupt nations.

And on Oct 20th of this year, the IMF is expected to announce a reserve currency alternative to the U.S. dollar, which will send hundreds of billions of dollars moving around the world, literally overnight.

According to Juan Zarate, who helped implement financial sanctions while serving in George W. Bush’s Treasury department, “Once the [other currency] becomes an alternative to the dollar, rules of the game begin to change.”

IMF headquarters in Washington D.C. expected to release
huge money announcement Oct 20th

And Leong Sing Chiong, Assistant Managing Director at a major central bank, said this dollar alternative “is likely to transform the financial landscape in the next 5-10 years.”
According to currency expert, Dr. Steve Sjuggerud (recently featured on CNBC, and Bloomberg),

“I’ve been active in the markets for over two decades now… but I’ve never seen anything that could move so much money, so quickly. Hundreds of billions of dollars could change hands in a single day after this announcement is made.”

“The announcement will start a domino effect, that will basically determine who in America gets rich in the years to come… and who struggles.”

Dr. Sjuggerud says if you own any U.S. assets—and that includes stocks, bonds, real estate, or just cash in a bank account–you should be aware of what’s about to happen, and know how to prepare.

Experts say this announcement, expected Oct. 20th, could trigger one of the most profound transfers of wealth in our lifetime.

But as Dr. Sjuggerud explains, if you understand what’s taking place, and can get ahead of this move, you can not only protect your money, but safely make a small fortune in the next few years.

Dr. Steve Sjuggerud and his research team have put together a full analysis on not only what this announcement means for the economy, but also how it could affect you, your money, and your investments, personally. - The Crux.

WATCH: Jim Willie - Global Economic Crisis 2015 - National Default and Dollar Collapse.

GLOBAL ECONOMIC MELTDOWN: Precursors To A Global Financial Collapse - Stocks Plunge, Dow Drops 333 Points, Turns Red For 2015!

A Wall Street sign hangs near the New York Stock Exchange.(Photo: Jin Lee, AP)

March 10, 2015 - WALL STREET, UNITED STATES - U.S. stocks fell hard Tuesday as investors continue to grapple with the prospect of coming Federal Reserve rate hikes, the downside to a strong U.S. dollar and renewed weakness in the hard-hit oil patch.

The Dow Jones industrial average tumbled 333 points, or 1.9%, to close at 17,663, in its worst drop since October 9, 2014. The Standard & Poor's 500 index dropped 35 points, or 1.7%, to 2044. The Dow and S&P 500 are now negative for 2015.

The Nasdaq composite tumbled 82 points, or 1.7%, to 4860. On the 15th anniversary of hitting its all-time high of 5048.62, the Nasdaq is shrinking further from that mark. It is further, too, from the magic 5000 level, surpassed on only three occasions -- twice way back in that March 2000 record run and then just this last Monday.

Weakness in European stock markets, fueled by another sharp drop in the euro currency vs. the dollar, also appears to be weighing on U.S. markets. The CAC 40 of France ended down 1.1% and the German DAX lost 0.7%.

Britain's FTSE 100 got pummeled, closing 2.5% lower.

The euro hit a 12-year low versus the U.S. greenback, dipping to 1.077 euros per dollar. That continued sharp drop in the value of the euro -- spurred by the launch of a government bond-buying program by the European Central Bank yesterday -- and the resulting climb in the dollar is viewed as a negative by Wall Street.

The reason: it makes U.S. multinationals that do a lot of business in Europe less competitive because the price of U.S. goods become more expensive. If large U.S. companies sell fewer goods abroad, it will crimp corporate earnings, another negative for the U.S. stock market.

"Worries about a rising dollar and falling oil depress stocks," money manager Louis Navellier told clients in a pre-market note.

The strong U.S. jobs data on Friday is also still weighing on investor sentiment as Wall Street speculates that the Federal Reserve may push forward its timetable to hike interest rates. Wall Street now expects the Fed to start raising rates as early as June, more than three months earlier than its prior forecast of a November hike. Lower rates, of course, are cited as one of the main driving forces of the bull market that began six years ago in March 2009.

Wall Street is also digesting the fact that the current bull market, which turned 6 on Monday, is entering its latter stages. It has already lasted about two years longer than the average bull market.

January's wholesale sales aren't encouraging. They plunged by their biggest amount in six years -- 3.1% -- the Commerce Department says.

U.S.-based crude is trading lower and back below the key $50 per barrel level. Renewed calls for a drop in crude to $40 a barrel has again unnerved investors. U.S. crude was down 3%. Falling crude prices hurts energy shares, which have been trying to bounce back after a more than 50% drop in crude prices since last summer's peak. - USA Today.

PARADIGM SHIFT: The Rise Of The BRICS And Precursors To The End Of The Petrodollar, The U.S. Corporation And The White Supremacy Paradigm - China May Be Ending U.S. Dollars Hold On Reserve Currency As Early As September; Gets Ready To Launch Its Mega International Payment System!

Chinese Yuan and U.S. Dollars

March 10, 2015 - CHINA - On March 9, sources within China provided new information that validates that the Far Eastern economy is now ready to compete with, or even supplant, the dollar as the sole global reserve currency as early as September of this year. Having already completed a message interchange system that mirrors the same one in the West, the Chinese equivalent of SWIFT is now ready and is expected to be fully operational by the 3rd quarter of 2015, which will allow other nations to transact with the world's largest economy without the need to purchase dollars as a medium of exchange.

Additionally, there has been a great deal of speculation over the past two years that China might back their currency with gold once they are fully ready to float it as a global reserve, with strong indications showing that at the very least, China will be calling for the use of international letters of credit or trade notes that are backed by gold to help stabilize transactions using this historical form of sound money.

Today, we got proof that it is the second outcome that is about to prevail following a Reuters report that China's international payment system, known simply enough as China International Payment System (CIPS), which serves to process cross-border yuan transactions is ready, and may be launched as early as September or October.

According to Reuters, the launch of the will remove one of the biggest hurdles to internationalizing the yuan and should greatly increase global usage of the Chinese currency by cutting transaction costs and processing times.

It will also put the yuan on a more even footing with other major global currencies like the U.S. dollar, as CIPS is expected to use the same messaging format as other international payment systems, making transactions smoother.

CIPS, which would be a worldwide payments superhighway for the yuan, will replace a patchwork of existing networks that make processing renminbi payments a more cumbersome process. – Zerohedge

Less than a month ago, China's close partner in Eurasia, Russia, implemented and brought online their own SWIFT alternative after economic sanctions by the U.S. continued into their second year, and information was discovered that pointed towards the NSA monitoring all messages going through the Western controlled SWIFT system.

Even without a complete global float of the Yuan through their own message interchange, China has grown over the past few years to achieve 9% of all global transactions using their national currency. And with dozens of swap lines already in place in banking systems around the world, as well as London banking centers now able to issue Yuan denominated bonds, nearly everything in the global financial system has been mirrored by China to allow them to compete with, or replace, the dollar's function as the reserve currency.

The average lifespan for any purely fiat currency is around 30 years, with the dollar surpassing this by more than a decade due to its place as the global standard for trade and oil purchases. However, now that the world's financial system has become saturated with overwhelming debt, and most economies solidly entrenched in currency wars, the world is about ready for a return to sound money and a gold backed currency, which China may be providing to their trading partners within six months. - Examiner.

China's mega international payment system is ready, will launch this year - report

The China International Payment System (CIPS) is due to kick off this year, bringing the yuan a step closer to becoming a global trading currency, as the new system will make payment transfers just as easy as in dollars and euro.

The launch is expected in September or October, depending on how tests go, a source told Reuters. Another person with direct knowledge of the matter said the goal is to start the first phase before December, Reuters reported.

"The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 banks are Chinese banks and the rest are subsidiaries of foreign banks," one of the sources told the agency.

CIPS will use the same coding system as other international payment systems, which will make transactions more fluid and rapid. The super-network will consolidate and replace the existing multiple clearing houses that process yuan payments, and will rival majors like Visa and MasterCard.

The move should help bump the yuan’s presence on the international stage, as the payment system will make it faster and easier to carry out cross-border transactions using the Chinese currency.

It’s the fifth most-used currency in international payments, according to the SWIFT network. In December 2014, about 2.17 percent of payments were made in yuan, up from 0.63 percent in 2013.

For a while China has been exploring methods to cut dependence on the dollar and other hard currencies in international trade, hoping to settle more deals in yuan.

China, the world’s second biggest economy, grew by 7.4 percent in 2014, but has trimmed its 2015 forecast to seven percent, the lowest growth rate in the last 25 years. Despite the slight slowdown, it is still expected to be the fastest growing economy of 2015, according to a poll of economists by Bloomberg. - RT.

PARADIGM SHIFT: The Rise Of The BRICS And Precursors To The End Of The Petrodollar And Ultimate Collapse Of The White Supremacy Paradigm - China Has Announced Plans For A WORLD CURRENCY!

March 5, 2015 - CHINA - The Chinese do not plan to live in a world dominated by the U.S. dollar for much longer.  Chinese leaders have been calling for the U.S. dollar to be replaced as the primary global reserve currency for a long time, but up until now they have never been very specific about what they would put in place of it.  Many have assumed that the Chinese simply wanted some new international currency to be created.  But what if that is not what the Chinese had in mind?  What if they have always wanted their own currency to become the single most dominant currency on the entire planet?  What you are about to see is rather startling, but it shouldn’t be a surprise.  When it comes to economics and finance, the Chinese have always been playing chess while the western world has been playing checkers.  Sadly, we have gotten to the point where checkmate is on the horizon.

On Wednesday, I came across an excellent article by Simon Black.  What he had to say in that article just about floored me…

When I arrived to Bangkok the other day, coming down the motorway from the airport I saw a huge billboard—and it floored me.

The billboard was from the Bank of China. It said: “RMB: New Choice; The World Currency”

Given that the Bank of China is more than 70% owned by the government of the People’s Republic of China, I find this very significant.

It means that China is literally advertising its currency overseas,and it’s making sure that everyone landing at one of the world’s busiest airports sees it. They know that the future belongs to them and they’re flaunting it.

The photograph above, of that billboard that he posted with his article…
image: http://theeconomiccollapseblog.com/wp-content/uploads/2015/03/Chinese-World-Currency-425x221.png

Everyone knows that China is rising.

And most everyone has assumed that Chinese currency would soon play a larger role in international trade.
But things have moved so rapidly in recent years that now a very large chunk of the financial world actually expects the renminbi to replace the dollar as the primary reserve currency of the planet someday.  The following comes from CNBC…

The tightly controlled Chinese yuan will eventually supersede the dollar as the top international reserve currency, according to a new poll of institutional investors.

The survey of 200 institutional investors – 100 headquartered in mainland China and 100 outside of it – published by State Street and the Economist Intelligence Unit on Thursday found 53 percent of investors think the renminbi will surpass the U.S. dollar as the world’s major reserve currency.

Optimism was higher within China, where 62 percent said they saw a redback world on the horizon, compared with 43 percent outside China.

And without a doubt we are starting to see the beginnings of a significant shift.
Just consider this excerpt from a recent Reuters report…

China’s yuan broke into the top five as a world payment currency in November, overtaking the Canadian dollar and the Australian dollar, global transaction services organization SWIFT said on Wednesday.

The U.S. dollar won’t be replaced overnight, but things are changing.

Of course the truth is that the Chinese have been preparing for this for a very long time.  The Chinese refuse to tell the rest of the world exactly how much gold they have, but everyone knows that they have been accumulating enormous amounts of it.  And even if they don’t explicitly back the renminbi with gold, the massive gold reserves that China is accumulating will still give the rest of the planet a great deal of confidence in Chinese currency.

But don’t just take my word for it.  Consider what Alan Greenspan has had to say on the matter…

Alan Greenspan, who served at the helm of the Federal Reserve for nearly two decades, recently penned an op-ed for the Council on Foreign Relations discussing gold and its possible role in China, the world’s second-largest economy. He notes that if China converted only a “relatively modest part of its $4 trillion foreign exchange reserves into gold, the country’s currency could take on unexpected strength in today’s international financial system.”

Meanwhile, the Chinese have also been accumulating a tremendous amount of U.S. debt.  At this point, the Chinese own approximately 1.3 trillion dollars worth of our debt, and that gives them a lot of power over our currency and over our financial system.

Someday if the Chinese wanted to undermine confidence in the U.S. dollar and in the U.S. financial system, they have a lot of ammunition at their disposal.

And it isn’t just all of that debt that gives China leverage.  In recent years, the Chinese have been buying up real estate, businesses and energy assets all over the United States at a staggering pace.  For a small taste of what has been taking place, check out the YouTube video posted below…
For much, much more on this trend, please see the following articles…
-“The Chinese Are Acquiring Large Chunks Of Land In Communities All Over America”
-“Meet Your New Boss: Buying Large Employers Will Enable China To Dominate 1000s Of U.S. Communities”
-“Not Just The Largest Economy – Here Are 26 Other Ways China Has Surpassed America”
-“The Chinese Want To Spend Billions Constructing A 600 Acre ‘China City’ In New York State”
-“45 Signs That China Is Colonizing America”
-“Will Detroit Be The First Major Chinese City In The United States?”

On a purchasing power basis, the size of the Chinese economy has already surpassed the size of the U.S. economy.

And there are lots of signs of trouble ahead for the U.S. economy at this point.  I like how Brandon Smith put it in one recent article…

We are only two months into 2015, and it has already proven to be the most volatile year for the economic environment since 2008-2009. We have seen oil markets collapsing by about 50 percent in the span of a few months (just as the Federal Reserve announced the end of QE3, indicating fiat money was used to hide falling demand), the Baltic Dry Index losing 30 percent since the beginning of the year, the Swiss currency surprise, the Greeks threatening EU exit (and now Greek citizens threatening violent protests with the new four-month can-kicking deal), and the effects of the nine-month-long West Coast port strike not yet quantified. This is not just a fleeting expression of a negative first quarter; it is a sign of things to come.

In addition, things continue to look quite bleak for Europe.  Once upon a time, many expected the euro to overtake the U.S. dollar as the primary global reserve currency, but that didn’t happen.  And in recent months the euro has been absolutely crashing.  On Wednesday, it hit the lowest point that we have seen against the dollar in more than a decade…

The euro last stood at $1.1072, off 0.90 percent for the day and below a key support level, Sutton said. It fell to as little as $1.1066, which was the lowest level for the euro against the dollar since September 2003, according to Thomson Reuters data.

The euro also declined to one-month lows against the Japanese yen, which was flat against the dollar at 119.72 yen to the dollar.

As the U.S. and Europe continue to struggle, China is going to want a significantly larger role on the global stage.
And as the billboard in Thailand suggests, they are more than willing to step up to the plate.
So will the road to the future be paved with Chinese currency?  - Investment Watch.

PARADIGM SHIFT: Precursors To The End Of The Petrodollar And The Collapse Of The United States Corporation - President Putin Says Russia And Egypt Will Drop U.S. Dollar And Use National Currencies In Bilateral Trade!

Russia's President Vladimir Putin (R) shakes hands with his Egyptian counterpart Abdel Fattah al-Sisi (Reuters / STR)

February 8, 2015 - RUSSIA - Russia and Egypt might soon exclude the US dollar and use their national currencies in the settlement of accounts in bilateral trade, Russian President Vladimir Putin said in an interview to Egyptian media ahead of his Monday visit to the country.

The issue of abandoning the dollar in trade is “being actively discussed,” Putin told Al-Ahram daily newspaper ahead of his two-day trip to Egypt. The Russian president was invited for a bilateral meeting by his Egyptian counterpart Abdul Fattah al-Sisi.

“This measure will open up new prospects for trade and investment cooperation between our countries, reduce its dependence on the current trends in the world markets,” Putin said.

“I should note that we already use national currencies for trade with a number of the CIS [Commonwealth of Independent States] states, and China. This practice proves its worth; we are ready to adopt it in our relations with Egypt as well. This issue is being discussed in substance by relevant agencies of both countries.”

Egypt is a long-time and trusted partner of Russia and the relationship between the two countries has been rapidly developing, the Russian president said.

“The volume of bilateral trade has increased significantly over the past years: In 2014, it increased by almost half compared to the previous year and amounted to more than $4.5 billion,” he said urging for this trend to be strengthened.

He also praised the development of “mutually beneficial and effective” cooperation in the sector of agriculture. “Egypt is the major buyer of Russian wheat, Russia provides about 40 percent of grain consumed in the country; as for us, we import fruits and vegetables.”

Moscow imposed a full ban of EU, US, Australian, Canadian, and Norwegian food exports to Russia on August 7 for one year. Amid Russian sanctions, Egypt said in August that it was ready to boost agricultural deliveries to Russia by 30 percent.

During 2013, Egypt’s deliveries of agricultural products to Russia amounted $440 million, while during the first half of 2014, Cairo supplied $460 million, said the head of the Ministry of Agriculture of the Russian Federation, Nikolay Fedorov in August 2014.

Moscow and Cairo are also engaged in energy, automobile manufacturing and transport cooperation, developing the intergovernmental trade, economic and scientific-technical cooperation commission as well.

During Sisi’s last visit to Russia in August 2014, the two leaders agreed to look at a possibility of creating a free trade zone between Egypt and the countries of the Customs Union. Meeting in the Black Sea resort city of Sochi, the presidents also agreed upon the creation of a Russian industrial zone in Egypt, which will be part of a new Suez Canal project.

Egypt launched a Suez Canal development project worth $4 billion in August 2014. The project envisages the digging of a new canal parallel to the original built 145 years ago with the aim of speeding up traffic along the existing waterway and boosting the country’s economy. - RT.

GLOBAL ECONOMIC MELTDOWN: Precursors To A Global Financial Collapse - The Canadian Dollar Is Going Crazy After The Bank Of Canada Cut Interest Rates!

January 21, 2015 - CANADA - Canada just joined the easing party — and now the Canadian dollar is going crazy.

The Bank of Canada just announced that it cut its main interest rate to 0.75% from 1%, joining the trend of central banks around the world trending toward easier monetary policy.

Following the announcement, the Canadian dollar, also known as the loonie, weakened sharply against the US dollar, to nearly 1.24 against the dollar. Earlier on Wednesday, the loonie was at around 1.206 against the dollar.

In its announcement, the Bank of Canada said the move to cut rates followed the sharp drop in the price of oil.

Here's the chart of the loonie's rapid fall against the dollar.

Crazy movement for the loonie after the Bank of Canada cuts rates.

Canada's announcement comes ahead of Thursday's European Central Bank meeting, at which the ECB is expected to announce a quantitative-easing program to fight deflation in the eurozone.

Reports on Wednesday morning from The Wall Street Journal and Bloomberg said the ECB is expected to announce a bond-buying program of €50 billion per month.

In an email following the Bank of Canada's decision, Sebastian Galy, currency strategist at Societe Generale, said he's targeting a level of 1.25 against the dollar for the loonie, "with a possible overshoot to 1.28."

So it looks like things could get crazier for the Canadian dollar, as it appears that for the second time in one week, a central bank took the market by surprise.

Here's the full statement from the Bank of Canada:

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent. This decision is in response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada.

Inflation has remained close to the 2 per cent target in recent quarters. Core inflation has been temporarily boosted by sector-specific factors and the pass-through effects of the lower Canadian dollar, which are offsetting disinflationary pressures from slack in the economy and competition in the retail sector. Total CPI inflation is starting to reflect the fall in oil prices.

Oil’s sharp decline in the past six months is expected to boost global economic growth, especially in the United States, while widening the divergences among economies. Persistent headwinds from deleveraging and lingering uncertainty will influence the extent to which some oil-importing countries benefit from lower prices. The Bank’s base-case projection assumes oil prices around US$60 per barrel. Prices are currently lower but our belief is that prices over the medium term are likely to be higher.

The oil price shock is occurring against a backdrop of solid and more broadly-based growth in Canada in recent quarters. Outside the energy sector, we are beginning to see the anticipated sequence of increased foreign demand, stronger exports, improved business confidence and investment, and employment growth. However, there is considerable uncertainty about the speed with which this sequence will evolve and how it will be affected by the drop in oil prices.

Business investment in the energy-producing sector will decline. Canada’s weaker terms of trade will have an adverse impact on incomes and wealth, reducing domestic demand growth.

Although there is considerable uncertainty around the outlook, the Bank is projecting real GDP growth will slow to about 1 1/2 per cent and the output gap to widen in the first half of 2015.

The negative impact of lower oil prices will gradually be mitigated by a stronger U.S. economy, a weaker Canadian dollar, and the Bank’s monetary policy response. The Bank expects Canada’s economy to gradually strengthen in the second half of this year, with real GDP growth averaging 2.1 per cent in 2015 and 2.4 per cent in 2016. The economy is expected to return to full capacity around the end of 2016, a little later than was expected in October.

Weaker oil prices will pull down the inflation profile. Total CPI inflation is projected to be temporarily below the inflation-control range during 2015, moving back up to target the following year. Underlying inflation will ease in the near term but then return gradually to 2 per cent over the projection horizon.

The oil price shock increases both downside risks to the inflation profile and financial stability risks. The Bank’s policy action is intended to provide insurance against these risks, support the sectoral adjustment needed to strengthen investment and growth, and bring the Canadian economy back to full capacity and inflation to target within the projection horizon.

 - Business Insider.

GLOBAL ECONOMIC MELTDOWN: Precursors To The End Of The Petrodollar And The United States Corporation - Fund Manager Declares That The U.S. Economy Is "TOTALLY FAKE, DEEP CRASH COMING"; Paul Singer’s Elliott Management Corp. Says Growth Optimism Unwarranted As Data Is "COOKED"!

Image Credits: mikeporesky, Flickr

November 5, 2014 - UNITED STATES - Paul Singer’s Elliott Management Corp. said optimism on U.S. growth is misguided as economic data understate inflation and overstate growth, and central bank policies of the past six years aren’t sustainable.

The market turmoil in the first half of October may be a “coming attractions” for the next real crash that could turn into a “deep financial crisis” if investors lose confidence in the effectiveness of monetary stimulus, Elliott wrote in a third-quarter letter to investors, a copy of which was obtained by Bloomberg News.

“Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,” New York-based Elliott wrote. “When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.”

Six years of near-zero interest rates and three rounds of asset purchases by the Federal Reserve have fueled economic growth and helped U.S. stocks more than triple from their 2009 low when including dividends. The stock market has rebounded 8.3 percent through yesterday from a six-month low on Oct. 15, fueled by better-than-forecast economic data and improving earnings reports.

Paul Singer, founder and president of Elliott Management Corp., reiterated criticisms of the Federal Reserve and central banks globally for quantitative easing.
Photographer: Jacob Kepler/Bloomberg

Republican Backer

The 70-year-old Singer, one of the biggest backers of Republican politicians, reiterated criticism that monetary policies won’t create lasting growth. While the U.S. is doing better than the rest of the world, the acceleration in the second quarter only reversed a “terrible” first quarter and has yet to be sustained in the remainder of the year, Elliott wrote.

“We do not think this optimism is warranted, and we think a lot of the data is cooked or misleading,” Elliott, which manages $25.4 billion and was founded by Singer in 1977, wrote. “A good deal of the economic and jobs growth since the crisis has been fake growth, with very little chance of being self-reinforcing and sustainable.”

Elliott said that the reported growth numbers are too high because the official inflation number is understating actual inflation by as much as 1 percent a year. That’s because economists focus on measures such as core inflation or make “hedonic adjustments” for improvements in the quality of consumer goods. Inflation is also distorted “by the increasing gap between the spending basket of the well-off and that of the middle class,” the firm said.

Bonds, Art

“The inflation that has infected asset prices is not to be ignored just because the middle-class spending bucket is not rising in price at the same rates as high-end real estate, stocks, bonds, art and other things that benefit from” quantitative easing, Elliott wrote.

Stephen Spruiell, a spokesman for Elliott, declined to comment on the letter.

The unemployment rate, at 5.9 percent in September, doesn’t reflect that the workforce participation rate is at a 35-year low, according to Elliott, and that full-time jobs have been replaced by part-time jobs, and high-paying jobs by relatively low-paying jobs. Real wages, the firm said, have been stagnant since the financial crisis.

The economy grew 2.3 percent in the year ended in September, compared with an average 2.9 percent advance in the four years before the past recession began, according to figures from the Commerce Department. It’s forecast to grow 2.2 percent this year and 3 percent in 2015, according to the median estimate of economists surveyed by Bloomberg last month.

Deficit Shrinks

Inflation, meanwhile, has been muted and government bonds rallied. Consumer prices over the past five years have grown 2.1 percent on average, and were up 1.7 percent in the 12 months through September, according to figures from the Labor Department. They are projected to rise 2 percent in 2015 and 2.2 percent in 2016, according to economists surveyed by Bloomberg last month.

Government bonds as measured by the Bank of America Merrill Lynch Treasury Index have rallied 26 percent in the past six years. The U.S. budget deficit has narrowed to the lowest level since 2008, marking the sharpest turnaround in the government’s fiscal position in at least 46 years. The shortfall of $483.4 billion in the 12 months ended Sept. 30 was 2.8 percent of the nation’s gross domestic product of $17.2 trillion over the same period, according to data compiled by Bloomberg using Commerce Department figures. The figure peaked at 10.1 percent of GDP in December 2009.

‘Generally Improved’

“Mortgage rates dropped, Treasury rates stayed low, and things generally improved,” said Brian Jacobsen, who helps oversee $232 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin. “Was this due to the Fed? Not entirely, but probably at least partially.”

Bill Gross, in his second investment outlook since joining Janus Capital Group Inc., said yesterday that fiscal spending may be needed to fight the “growing possibility” of deflation, because central bank policies have pushed up only asset prices and not prices in the real economy.

Elliott, whose oldest fund has delivered compounded annual returns of 13.9 percent since inception, said that while central banks have lifted asset prices, there have been no “significant structural improvements” since the financial crisis that would allow the developed economies to grow faster.

“Our belief is that the global economy and financial system are in a kind of artificial stupor in which nobody (including ourselves) has a good picture of what the next environment will look like,” the firm wrote. - Bloomberg.

GLOBAL ECONOMIC COLLAPSE: Precursors To The End Of The Petrodollar And The United States Corporation - Total U.S. Debt Soars To Nearly $60 TRILLION, Foreshadows New Recession!

June 16, 2014 - UNITED STATES - America - its government, businesses, and people - are nearly $60 trillion in debt, according to the latest economic data from the St. Louis Federal Reserve. And private debt - not government borrowing - is the biggest reason for the huge deficit.

Reuters/Lee Jae-Won

Total US debt at the end of the first quarter of 2014, on March 31 totaled almost $59.4 trillion - up nearly $500 billion from the end of the fourth quarter of 2013, according to the data. Total debt (the combination of government, business, mortgage, and consumer debt) was $2.2 trillion 40 years ago.

“In 50 short years, debt has gone from being a luxury for a few to a convenience for many to an addiction for most to a disease for all,” James Butler wrote in an Independent Voters Network (IVN) op-ed. “It is a virus that has spread to every aspect of our economy, from a consumer using a credit card to buy a $0.75 candy bar in a vending machine to a government borrowing $17 trillion to keep the lights on.”

According to a 2012 study published in the Economist, rapid growth in private debt is a better predictor of recessions than increases in public debt, growth in money supply, or trade imbalances. Consumer credit in the US rose by 22 percent over the last three years, reaching a record-high $3.18 trillion in April, the Fed reported on Friday.

Credit card use (or revolving credit) rose by $8.8 billion, while non-revolving credit like auto loans and student loans made by the government surged up by $18 billion in April. Non-revolving credit jumped by 8.2 percent over the last year, while revolving credit only rose 2.2 percent over the same time period.

“For a while after the recession it was trendy to cut up your credit cards and get out of debt,” Michael Snyder wrote in an InfoWars op-ed. “But that fad wore off rather quickly, didn’t it?”

Snyder noted that 56 percent of all Americans have a subprime credit rating, and that the average monthly car payment in the US is $474. He added that 52 percent of homeowners are overextended on their mortgages and “cannot even afford the house that they are living in right now.”

Debt is hurting young adults the most. Millennials say they are spending at least half their monthly paychecks on paying off debt, a recent Wells Fargo survey found. And two years out of college, half of all graduates are still relying on their parents or other family members for some sort of financial help, according to a University of Arizona study, which also found that only 49 percent of graduates are working full-time.

"Whether or not a weak labor market is increasing the need for intergenerational support -- a likely driver in today's economy -- our data clearly showed that many young adults today may not be earning enough to make it on their own, even when working full time," the report stated.

Most of the debt that young adults face is student loan debt, which totals more than $1.2 trillion, according to the Federal Reserve. Of that debt, approximately $124 billion is more than 90 days delinquent.

“What we have done to our young people is shameful. We have encouraged them to sign up for a lifetime of debt slavery before they even understand what life is all about,” Snyder wrote.

The Congressional Budget Office predicts that the economy will stall by 2017 because Americans will continue spending, but wages and wealth won’t be going up - leading to increased income inequality in the country, the Guardian reported.

“That ever-increasing gap between income and consumption has been filled by borrowing,” the Guardian said. “These were the debt dynamics in the lead-up to the recession. But they are also the dynamics leading out of the crisis, and continuing today with no end in sight.”

Economists have not agreed on how to stave off the impending crisis. But Americans’ addiction to spending on credit will not help.

“The problem is, the more debt we have, the more future income must be used to pay the debt and its interest, which reduces the money we have to spend on things. This works to slow the economy,” Butler wrote.

“Eventually, the negative effect of the debt load becomes stronger than the positive effect of the added spending and a recession is triggered — or worse.” - RT. 

MONUMENTAL PARADIGM SHIFT: Precursors To The Collapse Of The Petrodollar And The United States Corporation - Russia Is Actually Abandoning The Dollar!

June 12, 2014 - RUSSIA - The Russians are actually making a move against the petrodollar.  It appears that they are quite serious about their de-dollarization strategy.  The largest natural gas producer on the planet, Gazprom, has signed agreements with some of their biggest customers to switch payments for natural gas from U.S. dollars to euros. 

And Gazprom would have never done this without the full approval of the Russian government, because the Russian government holds a majority stake in Gazprom.  There hasn't been a word about this from the big mainstream news networks in the United States, but this is huge.  When you are talking about Gazprom, you are talking about a company that is absolutely massive.  It is one of the largest companies in the entire world and it makes up 8 percent of Russian GDP all by itself.  It holds 18 percent of the natural gas reserves of the entire planet, and it is also a very large oil producer.  So for Gazprom to make a move like this is extremely significant.

When Barack Obama decided to slap some meaningless economic sanctions on Russia a while back, he probably figured that the world would forget about them after a few news cycles.

But the Russians do not forget, and they certainly do not forgive.

At this point the Russians are turning their back on the United States, and that includes the U.S. dollar.

What you are about to read is absolutely stunning, and yet you have not heard about it from any major U.S. news source.  But what Gazprom is now doing has the potential to really shake up the global financial landscape.  The following is an excerpt from a news report by the ITAR-TASS news agency...

Gazprom Neft had signed additional agreements with consumers on a possible switch from dollars to euros for payments under contracts, the oil company's head Alexander Dyukov told a press conference.

"Additional agreements of Gazprom Neft on the possibility to switch contracts from dollars to euros are signed. With Belarus, payments in roubles are agreed on," he said.
Dyukov said nine of ten consumers had agreed to switch to euros.

And Gazprom is not the only big company in Russia that is moving away from the U.S. dollar.

According to RT, other large Russian corporations are moving to other currencies as well...

Russia will start settling more contracts in Asian currencies, especially the yuan, in order to lessen its dependence on the dollar market, and because of Western-led sanctions that could freeze funds at any moment.

“Over the last few weeks there has been a significant interest in the market from large Russian corporations to start using various products in renminbi and other Asian currencies, and to set up accounts in Asian locations,” Pavel Teplukhin, head of Deutsche Bank in Russia, told the Financial Times, which was published in an article on Sunday.

Diversifying trade accounts from dollars to the Chinese yuan and other Asian currencies such as the Hong Kong dollar and Singapore dollar has been a part of Russia’s pivot towards Asian as tension with Europe and the US remain strained over Russia’s action in Ukraine.

And according to Zero Hedge, "expanding the use of non-dollar currencies" is one of the main things that major Russian banks are working on right now...

Andrei Kostin, chief executive of state bank VTB, said that expanding the use of non-dollar currencies was one of the bank’s “main tasks”. “Given the extent of our bilateral trade with China, developing the use of settlements in roubles and yuan [renminbi] is a priority on the agenda, and so we are working on it now,” he told Russia’s President Vladimir Putin during a briefing. “Since May, we have been carrying out this work.”

“There is nothing wrong with Russia trying to reduce its dependency on the dollar, actually it is an entirely reasonable thing to do,” said the Russia head of another large European bank. He added that Russia’s large exposure to the dollar subjects it to more market volatility in times of crisis. “There is no reason why you have to settle trade you do with Japan in dollars,” he said.

The entire country is undergoing a major financial conversion.

This is just staggering.

Meanwhile, Russians have been pulling money out of U.S. banks at an unprecedented pace...

So in March, without waiting for the sanction spiral to kick in, Russians yanked their moolah out of US banks. Deposits by Russians in US banks suddenly plunged from $21.6 billion to $8.4 billion. They yanked out 61% of their deposits in just one month! They'd learned their lesson in Cyprus the hard way: get your money out while you still can before it gets confiscated.

For those that don't think that all of this could hurt the U.S. economy or the U.S. financial system, you really need to go back and read my previous article entitled "De-Dollarization: Russia Is On The Verge Of Dealing A Massive Blow To The Petrodollar".  The truth is that the U.S. economic system is extremely dependent on the financial behavior of the rest of the globe.

Because nearly everyone else around the rest of the planet uses our currency to trade with one another, that keeps the value of the U.S. dollar artificially high and it keeps our borrowing costs artificially low.
As Russia abandons the U.S. dollar that will hurt, but if other nations start following suit that could eventually cause a financial avalanche.

What we are witnessing right now is just a turning point.

The effects won't be felt right away.  So don't expect this to cause financial disaster next week or next month.
But this is definitely another element in the "perfect storm" that is starting to brew for the U.S. economy.

Yes, we have been living in a temporary bubble of false stability for a few years.  However, the long-term outlook has not gotten any better.  In fact, the long-term trends that are destroying our economic and financial foundations just continue to get even worse.

So enjoy the "good times" while you still can.

They certainly will not last too much longer. - TEC.

MONUMENTAL PARADIGM SHIFT: Precursors To The Collapse Of The Petrodollar And The United States Corporation - Russian Companies Prepare To Pay For Trade In RENMINBI CURRENCY!

June 09, 2014 - RUSSIA - Russian companies are preparing to switch contracts to renminbi and other Asian currencies amid fears that western sanctions may freeze them out of the US dollar market, according to two top bankers.

Russia's President Vladimir Putin, left, and China's President Xi Jinping shake hands after signing an agreement during a
bilateral meeting at the Xijiao State Guesthouse ahead of the fourth Conference on Interaction and Confidence Building
Measures in Asia (CICA) summit, in Shanghai, China Tuesday, May 20, 2014. (AP Photo/Carlos Barria, Pool)

“Over the last few weeks there has been a significant interest in the market from large Russian corporations to start using various products in renminbi and other Asian currencies and to set up accounts in Asian locations,” Pavel Teplukhin, head of Deutsche Bank in Russia, told the Financial Times.

Andrei Kostin, chief executive of state bank VTB, said that expanding the use of non-dollar currencies was one of the bank’s “main tasks”.

“Given the extent of our bilateral trade with China, developing the use of settlements in roubles and yuan [renminbi] is a priority on the agenda, and so we are working on it now,” he told Russia’s President Vladimir Putin during a briefing. “Since May, we have been carrying out this work.”

The move to open accounts to trade in renminbi, Hong Kong dollars or Singapore dollars highlights Russia’s attempt to pivot towards Asia as its relations with Europe become strained.

Sanctions are pushing Russian companies to reduce their dependence on western financial markets while US and European banks have dramatically slowed their lending activity in Russia since the annexation of Crimea in March.

The central bank is working to create a national payment system to reduce the country’s dependence on western companies such as Visa and MasterCard.

“There is nothing wrong with Russia trying to reduce its dependency on the dollar, actually it is an entirely reasonable thing to do,” said the Russia head of another large European bank. He added that Russia’s large exposure to the dollar subjects it to more market volatility in times of crisis. “There is no reason why you have to settle trade you do with Japan in dollars,” he said.

The chief executive of a Russian manufacturer that derives 70 per cent of its revenues from export in US dollars said his company had done the groundwork to move its contract settlements to different currencies in the event of further sanctions. “If something happens, we are ready to switch to other currencies, for example to the Chinese yuan or the Hong Kong dollar,” he said.

Alexander Dyukov, chief executive of Gazprom’s oil division, has said that the company has discussed with its customers the possibility of shifting contracts out of dollars, while Norilsk Nickel told the FT that it was discussing denominating long-term contracts with Chinese consumers in renminbi.

“It looks like this is not just a blip, this is a trend,” said Mr Teplukhin of Deutsche Bank. He added that Russian companies were able to hedge the risk of further US sanctions by “changing the letter of their contracts to allow them to change currency if it is necessary”.

Some politicians have suggested Moscow should respond to western sanctions by entirely “de-dollarising” its economy.

But while in recent discussions with big business about how to make the economy less vulnerable the government has advocated listing back home and settling more trade in currencies other than the dollar, it has rejected more extreme measures.

“As long as Russia is not subject to systemic sanctions, which could bring an artificial limit to our economy’s access to dollars . . . then I don’t think Russia will take any steps in order to bring about artificial de-dollarisation,” said Andrei Belousov, economic adviser to Mr Putin. - FT.


WATCH:  Peace researcher Dr Jan Oberg -  'US empire collapsing; over-stretched, over-militarized'.

THE AGE OF PUTIN & CHILDHOOD'S END: Precursors To The End Of The Petrodollar And The Collapse Of The United States Corporation - Russia, Belarus, Kazakhstan Sign "EPOCH" Eurasian Economic Union; Monumental And Historic Deal Comprises 170 MILLION People; The Largest Common Market In The Ex-Soviet Sphere; "A New Geopolitical Reality Of The 21st Century Is BORN"!

May 29, 2014 - RUSSIA - Russia, Belarus, and Kazakhstan signed the historic Eurasian Economic Union which will come into effect in January 2015. Cutting down trade barriers and comprising over 170 million people it will be the largest common market in the ex-Soviet sphere.

The leaders of Russia, Belarus and Kazakhstan signed the EEU into existence in Astana. Reuters.

"The just-signed treaty is of epoch-making, historic importance," Russian President Vladimir Putin said.

The troika of countries will cooperate in energy, industry, agriculture, and transport.

"In fact, we are shaping the largest common market in the CIS, with huge production, scientific and technological potential and enormous natural resources," the President added.

Citizens of Russia, Belarus, and Kazakhstan will have the right to work freely throughout the member states without having to be issued any special work permits, Putin said.

Over the last three years, trade within the Customs Union has increased by $23 billion, or nearly 50 percent. At the end of 2013, it stood at $66.2 billion.

Belarus and Kazakhstan are in third place in foreign trade with the Russian Federation, after the EU and China, Putin said.

The Russian leader said that the document brings Russia, Kazakhstan and Belarus to a new level of integration yes lets each individual state fully retain its sovereignty.

Russian President Vladimir Putin, Kazakh President Nursultan Nazarbayev and Belarusian President Aleksandr
Lukashenko (from right to left) at the meeting of the Supreme Eurasian Economic Council in Astana,
Kazakhstan. (RIA Novosti / Michail Klimentyev)

“We ensure a close and coherent economic collaboration and cooperation. Today we have created a powerful and attractive center of economic development, a large regional market that brings together more than 170 people. Our union has huge reserves of natural resources, including energy, which accounts for one fifth of the world’s gas reserves and 15 percent of oil reserves,” Putin said.

"A new geopolitical reality of the 21st century is born,” Kazakh President Nursultan Nazarbayev said shortly after the final treaty was signed by the three leaders.

“We see this as an open space and a new bridge between the growing economies of Europe and Asia,” Nazarbayev added.

David Gray, head of PricewaterhouseCoopers, Russia, said he hoped improving trade will help boost investment, as in the EU.

“If you look at the EU, for example, the reduction of trade barriers within the EU had a significant impact in terms of doing business, which does encourage investment. And I’m looking forward to similar results in terms of the Eurasia deal,” Gray said while speaking to RT at the St. Petersburg Economic Forum on May 24.

However, Kazakh President Nazarbayev warned members to try and avoid repeating the mistakes of the European Union, which is still facing grave economic consequences from the continent-wide recession.


WATCH: 'Eurasian Economic Union a huge wake-up call for US and its power'.

 


“The point is that none of the participating countries were subject to de-industrialization, and traditional industries did not suffer. Lessons from the European recession are in this,” Nazarbayev said.

Belarusian President Lukashenko hailed the signing, but said there was still major work to be done in areas of bilateral trade.

“We believe the Economic Union will be the foundation for the future of political, military, and humanitarian unity,” he said.

The Customs Union is a project to gather ex-Soviet states into a free trade zone to rival the European Union. The three member states of Russia, Belarus and Kazakhstan only comprise 2.5 percent to the Earth’s population, but account for 15 percent of the total land.

"The geographical position permits us to create transport, logistic routes of not only regional, but also global importance that permits attracting massive trade flows in Europe and Asia," Putin said ahead of the signing ceremony in Astana, Kazakhstan on Thursday.

All member states will retain full state sovereignty. Russia is financing the lion’s share of the administration, but each state will have a one-third voting status.

(L-R) Russian President Vladimir Putin, President Nursultan Nazarbayev of Kazakhstan and President Alexander
Lukashenko of Belarus during a joint photo opportunity before a regular meeting of the
Supreme Eurasian Economic Council in Astana. (RIA Novosti / Michael Klimentyev)

“The Eurasian Economic Union will operate on universal transparent principles understood by all, including standards and principles of the WTO,” Putin said.

The idea of creating a regional trading bloc was first suggested by President Nursultan Nazabayev of Kazakhstan back in 1994, when he gave a speech at Moscow State University. The Customs Union began on January 1, 2010, and started operating under a comprehensive customs code in July 2011.

Commonwealth Independent States (CIS) like Armenia, Tajikistan, and Kyrgyzstan may be brought into the free trade zone later.

Kyrgyzstan plans to join the Customs Union by the end of 2014, President Almazbek Atambayev said at the meeting.

A decision on Armenia's membership will have to be made by July 2014, Kazakhstan's President Nursultan Nazabayev said.

Commenting on the fact Ukraine once wanted to join, Lukashenko said sooner or later, the country’s leadership will realize “where their happiness lies”, and what is “right for the Ukrainian people.”

“We lost some [potential member states] along the way. Ukraine started this hard work with us, but it was very difficult for Ukraine,” the Belarusian president said.

Neighboring oil-rich Azerbaijan hasn’t made a decisive move towards either the Customs Union or European Union integration. - RT.

THE AGE OF PUTIN & CHILDHOOD'S END: Precursors To The End Of The Petrodollar And The Collapse Of The United States Corporation - Russia And China Seal Historic And Monumental $400 BILLION "Gas Deal Of The Century"!

May 21, 2014 - RUSSIA/CHINA -  After 10 years of negotiations, Russia's Gazprom and China's CNPC have finally signed a historic gas deal which will provide the world's fastest growing economy with the natural gas it needs to keep pace for the next 30 years.

Vladimir Putin and Xi Jinping celebrate 'gas deal of the century' between Russia, China http://on.rt.com/jjn3m8 @RT_com

The total value of the contract is $400 billion, Gazprom CEO Aleksey Miller said. However, the price of gas stipulated in the document remains a "commercial secret."

Assuming the overall price of the contract includes only the cost of supplies of Russian gas, then the $400 billion price tag means China will pay about $350 per 1,000 cubic meters. Delivery price for the contract will be tied to market oil prices, Putin said from Shanghai on Tuesday.


WATCH: Russia, China sign 'gas deal of the century'.

 


Infrastructure investment from both sides will be more than $70 billion and will be the world's largest construction project, with Russia providing $55 billion up front and China $22 billion for pipelines on their respective territories.

This is Gazprom's biggest contract to date.

Russia will supply China 38 billion cubic meters of gas per year via the eastern 'Power of Siberia' pipeline, which crosses Siberia and reaches China's populous northeast regions. A separate route that could deliver gas to China's western provinces and provide diversification is also in the works, according to Putin.

A memorandum of understanding was signed in the presence of Russian President Vladimir Putin and President of China Xi Jinping on the second day of Putin’s two-day state visit to Shanghai.

According to Miller, the deal was set to go through at 4:00pm Shanghai time when he understood "all fundamental issues were resolved."

RT producers were informed of the landmark energy deal prior to its signing after a conversation with Miller.

The deal comes as a part of Russia’s larger-scale pivot to Asia and especially China as Western economies threaten sanctions over turmoil in Ukraine. Sanctions by the US and the EU have been mostly limited to visa bans and asset freezes on some of Russia’s top officials, while so far only threatening a so-called third round of real economic sanctions against Russian hydrocarbon businesses.

Just ahead of Putin's visit to Shanghai, Russian Prime Minister Dmitry Medvedev gave reassurance that the agreed price would be fair.

“One side always wants to sell for a higher price, while the other wants to buy for a lower price,” Medvedev said. “I believe that in the long run, the price will be fair and totally comparable to the price of European supplies.”

A major breakthrough in negotiations came on Sunday as Gazprom chief Aleksey Miller sat down with his CNPC counterpart, Zhou Jiping, in Beijing to discuss final details, including price formulas.

Although Europe is still Russia's largest energy market – buying more than 160 billion cubic meters of Russian natural gas in 2013 – Moscow will use every opportunity to diversify gas deliveries and boost its presence in Asian markets.


WATCH: Historic Deal Signed - Russia, China seal $400bn gas contract.

 


“I wouldn’t look for politics behind this, but I have no doubt that supplying energy to the Asia Pacific Region holds out a great promise in the future,” Medvedev said.

In October 2009, Gazprom and CNPC inked a framework agreement for the Altai project which envisions building a pipeline to supply natural gas from fields in Siberia via the western part of the Russia-China border.

In March 2013, Gazprom and CNPC signed a memorandum of understanding on Russian gas supplies to China along the so-called eastern 'Power of Siberia' route. When both pipelines are activated, Russia can supply Asia with 68 billion cubic meters of gas annually.

Last year, China consumed about 170 billion cubic meters of natural gas and is expected to consume 420 billion cubic meters per year by 2020. - RT.

THE AGE OF PUTIN & CHILDHOOD'S END: Precursors To The End Of The Petrodollar And The Collapse Of The United States Corporation - Russia, China Plan To Expand Payments In National Currencies!

May 20, 2014 - RUSSIA/CHINA - Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement on a new stage of comprehensive partnership and strategic cooperation signed during high-level talks in Shanghai on Tuesday.

Russia, China Plan to Expand Payments in National Currencies
© Fotolia/ selensergen

“The sides intend to take new steps to increase the level and expansion of spheres of Russian-Chinese practical cooperation, in particular to establish close cooperation in the financial sphere, including an increase in direct payments in the Russian and Chinese national currencies in trade, investments and loan services,” the statement said.

The two countries are also set to deepen dialogue on macroeconomic policy issues, as well as boost growth in mutual investment, including in transportation infrastructure, the development of mineral deposits, and the construction of budget housing within Russia.

Russian President Vladimir Putin arrived in China on Tuesday for high-level talks with President of the People’s Republic of China Xi Jinping. A large package of documents, including bilateral, intergovernmental, inter-departmental and corporate agreements are expected to be signed during the two-day visit, aimed at cementing Russian-Chinese relations.

The decision to switch to the national currencies, thus reducing dependence on the US dollar was first announced in 2010 by then-Russian Prime Minister Vladimir Putin and Chinese Premier Wen Jiabao. The announcement was followed by a deal struck by the central banks of the two countries that allowed bilateral trade in the ruble and renminbi, as well as in freely convertible currency. - RIA Novosti.

THE AGE OF PUTIN & CHILDHOOD'S END: Precursors To The End Of The Petrodollar And The Collapse Of The United States Corporation - Russia And China To Sign MONUMENTAL 30-Year Gazprom Gas Deal, As Putin States That Russia-China Ties Are At The Highest Level In History!

May 19, 2014 - RUSSIA/CHINA -  Russia and China are set to sign a long-awaited 30-year gas contract during a two-day meeting, when Russian President Vladimir Putin visits Shanghai on May 20-21.

Russia's President Vladimir Putin (R) and his Chinese couterpart Xi Jinping.(AFP PHOTO / Alexei Nikolsky)

Gazprom, Russia’s largest natural gas producer, and China National Petroleum Corporation (CNPC) are set to sign a gas deal that will send 38 billion cubic meters of natural gas a year eastward to China’s burgeoning economy, starting in 2018.

Russia-China cooperation has reached its highest level ever, Russian President Vladimir Putin has said in an interview with Chinese media on the eve of his visit to Shanghai, where a record package of documents is expected to be signed by the two nations.

Vladimir Putin: Now Russia-China cooperation is advancing to a new stage of comprehensive partnership and strategic interaction. It would not be wrong to say that it has reached the highest level in all its centuries-long history.

Click HERE for the full transcript of the Russian president’s interview with Chinese Central Television, Xinhua news agency, China News Service, The People's Daily, China Radio International, and Phoenix Television.

The timing is almost flawless as Russia is looking to shield itself from Western sanctions by pivoting towards Asia, and China desperately needs to switch from dirty coal to more environmentally friendly natural gas.

“The arrangements on export of Russian natural gas to China have nearly been finalized. Their implementation will help Russia to diversify pipeline routes for natural gas supply, and our Chinese partners to alleviate the concerns related to energy deficit and environmental security through the use of ‘clean’ fuel,” President Vladimir Putin said.

The deal has been on the table for over 10 years, as Moscow and Beijing have negotiated back and forth over price, the gas pipeline route, and possible Chinese stakes in Russian projects. The gas price is expected to be agreed at between $350-400 per thousand cubic meters.

“Of course Russia wants to sell gas and resources at the highest possible prices. But because of the sanctions from European partners, we need to find a partner that can buy our gas long-term, which is why at the moment China looks very attractive to us,” Aleksandr Prosviryakov, a partner at Lakeshore International, a Moscow-based asset management firm, told RT at a Confederation of Asia Pacific Chambers of Commerce and Industry (CACCI) in Moscow ahead of the big meeting on Tuesday.

On Sunday, Gazprom chief Aleksey Miller sat down with his CNPC counterpart, Zhou Jiping, in Beijing to discuss final details, including price formulas.

Siberian pipeline to China

But the sticking point is how to finish the pipeline from Russia to China.

Currently there is one complete gas pipeline that runs throughout Russia to the Chinese border, “Siberian Power” which Gazprom broke ground on in 2007, three years after Gazprom and CNPC signed a strategic cooperation agreement in 2004.

The pipeline stretches across Russia’s Far East and after extension to China, it will deliver gas to the country’s populous north, near Beijing.

Gas could be delivered via Vladivostok, Russia’s eastern port city on the Sea of Japan, or through the city of Blagoveshchensk, an landlocked city in the Amur region.

However, to finish the project for 2018 delivery, Gazprom and CNPC need to come to an agreement on how to finish the proposed portion of the pipeline into China, which could cost between $22-30 billion, according to various estimates. Russia wants China to either pay or issue a loan for the project, which has been a delaying factor in talks.

In 2009, Beijing and Moscow signed a deal that Gazprom would supply China with 30 billion cubic meters of gas a year by 2015, but via the Altai pipeline, which would deliver gas to China’s Western Xinjiang province. Russia stopped work on this project in 2013 and prioritized the ‘Power of Siberia’ line. If and when both pipelines are activated, Russia could be pumping 68 billion cubic meters of gas annually to the world’s second largest economy.

Reuters / Heinz-Peter Bader

China, the superpower

Home to nearly 1.5 billion people, China’s demand for energy is rising faster than ever. In 2014, the country expects to increase natural gas imports by 20 percent, and import 186 billion cubic meters annually.

“This deal with Gazprom and cooperation with Russia shows that China is expanding, becoming bigger and bigger, and that this part of the world is dominated by China, India, and Russia, the US role is shrinking,” said Aleksandr Prosviryakov.

“China is the fastest growing economy. China is the biggest market in terms of volume and value. China is the next superpower and number one economy in the world,” Peter Panov, Chairman of Triotoni, a Singapore-based investment firm, told RT at the CACCI conference in Moscow.

Russia’s Deputy Energy Minister Anatoly Yanovsky has said the deal is 98 percent ready. China has kept quiet on the subject.


 WATCH: Dollar Dive - China's economy soon to leave US far behind.

Europe remains Russia’s largest energy importer, having bought more than 160 billion cubic meters of natural gas in 2013. However, recent tensions over Russia’s actions in Ukraine have forced European ministers to rethink their dependence on Russian gas, a sentiment that has been openly voiced throughout the continent

“Now is the time for Russia to compromise a little bit so that they can lessen their dependence on Western Europe as a buyer of Russian gas. Diversification is a strategy for Russia to have good long-term business relationships with both Europe and China,” Benedicto Yujuico, president of the Confederation of Asia-Pacific Chambers of Commerce and Industry, told RT at an Asian business gathering in Moscow on Wednesday.

“Needless to say, China is a very wise nation and will try and get the best out of both parties, and maneuver: give a little bit to Russia, and a little to the West,” Panov said.

Gas is an important element of the upcoming talks, but the leaders will discuss many aspects of Russia-China relations, including payments systems, military cooperation, and upcoming infrastructure projects.

A record amount of agreements are expected to be signed at the working meeting between Russia and China. Already 30 out of the 43 prepared agreements are expected to be inked, according to presidential aide Yury Ushakov, as reported by RIA Novosti. - RT.