[gutitout]

I’m surprised I haven’t seen the right answers here yet, so I will chime in.

1. Russia produces 12% of the world's oil and has a similar share of global oil exports. [0] Those purchases are now being made in Rubels.[1] This was a direct retaliation to the USA and European sanction efforts. Before this oil was universally exchanged in USD or EUR. This has helped prop up the Rubel.

2. Russia moving back to a gold standard. [2] This is the single most interesting economic move in my opinion. Russia is continuing to buy more of the worlds gold supply. The Rubel is going to be pinned to the Gold standard. This makes the Rubel incredibly attractive as it can be a stable currency and easier to purchase than Gold itself. My personal feeling (contrary to most comments here) is that the sanctions have a terrible effect on the USA and Europe and have contributed to a world where China, India and Russia will be working to destabilize the USD and its allies. Moving away from the petrodollar, SWIFT and other USD centric methods is a very negative proposition for those of us who live in the west.

0. https://en.m.wikipedia.org/wiki/Petroleum_industry_in_Russia

1. https://www.nytimes.com/2022/03/23/business/putin-russian-oi...

2. https://seekingalpha.com/amp/article/4498704-russias-3-step-...

Edit: Spelling

[burntoutfire]

> The Rubel is going to be pinned to the Gold standard. This makes the Rubel incredibly attractive as it can be a stable currency and easier to purchase than Gold itself

The Rubel can be just as easy "unpinned" from gold on any given day by a politician's decision and that's absolutely something you can expect from Russia.

[brnt]

This. Those contracts werw not paid in Rubles for a good reason. Even at the height of the cold war communist countries used the USD for trade amongst themselves: the Kremlin is not and never was interested in creating the sort of rules-based systems that provide an expectation of long term stability.

[tuatoru]

> My personal feeling (contrary to most comments here) is that the sanctions have a terrible effect on the USA and Europe .. [etc]

Russia's GDP is about 5% that of the US and the EU combined. It's not big enough to "destabilise" anything. Brexit (loss of an economy 4x larger than Russia's) is not having a terrible effect on the EU.

Wannabe competitors to SWIFT are even smaller in relative size, and as for India and China working together on something for a long period of time... well, I think India wants to retain access to the developed world's economy.

Sure, Russia shutting off gas supplies to the EU would be inconvenient for a while, but it would be more than inconvenient for Russia.

[lr1970]

> Brexit (loss of an economy 4x larger than Russia's) is not having a terrible effect on the EU.

By Purchasing Power Parity (PPP) the GDP of Russia (4,365,443 $MM) is larger than the GDP of UK (3,751,845 $MM) [1]. Stating that UK economy is 4x of Russia's does not seem to have a basic in reality.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

[lostmsu]

Why would you use PPP in this case? PPP makes sense only for individuals spending their money.

[arroz]

This answer is wrong from what I read

Not all countries are buying oil and gas in rubble, just the ones russia considers “unfriendly”. But even from those, russia isnt enforcing it. Germany has said it wouldn’t pay in ruble. US doesn’t buy anything from Russia. Hungary is paying in ruble.

By paying in ruble they create an artificial demand for the currency, making it worth more. However Russian government can make the same thing with the euro / dollars they receive from oil / gas purchase. The only reason they asked others pay in ruble is so they don’t have to do the conversion themselves because you know, with all the sanctions it is a pain to do it.

The price spikes in Russia didn’t go back after the currency stabilized, so regular Russians are still screwed

I’ve never seen anything about the gold standard thing, but even if it is true 1- gold price is also volatile and 2- there is a reason people moved away from gold standard

[gutitout]

“US doesn’t buy anything from Russia.”

https://www.wsj.com/amp/articles/russian-oil-flows-but-incre...

“Germany has said it wouldn’t pay in ruble.“

True. Due to long term contracts in place, some oil is not purchased using rubles. Still, other European countries including Netherlands, Hungary, Poland, Lithuania, Greece and others are purchasing in rubles. Also, India and China are purchasing a large amount of oil. https://www.reuters.com/business/energy/who-is-still-buying-...

“By paying in ruble they create an artificial demand for the currency, making it worth more.”

The demand is not artificial. The demand is the damn. Europe still imports 27% of oil from Russia.

“However Russian government can make the same thing with the euro / dollars they receive from oil / gas purchase. “

This is false. They cannot “do the same thing with the euro / dollars”.

“The only reason they asked others pay in ruble is so they don’t have to do the conversion themselves because you know, with all the sanctions it is a pain to do it.”

Again, false. They are deliberately increasing the value of the ruble.

“I’ve never seen anything about the gold standard thing”

https://seekingalpha.com/amp/article/4498704-russias-3-step-...

[ratsforhorses]

"other European countries including Netherlands, Hungary, Poland, Lithuania, Greece and others are purchasing in rubles. Also, India and China are purchasing a large amount of oil. https://www.reuters.com/business/energy/who-is-still-buying-..."

I did a bored skim read through the linked article, but couldn't find any reference to " Netherlands, Hungary, Poland, Lithuania, Greece and others are purchasing in rubles" Do you have any other sources? Btw thanks for the link, interesting info

[gutitout]

Everyone is now paying in rubles.

[arroz]

The link you posted has absolutely nothing to do with what you quoted

You can say what I am saying is false

I can say what you are saying is false

Sharing so you can learn a bit… https://youtu.be/_PwsU43S_Cs

[gutitout]

Ok. Everyone now paying in rubles.

[deepsun]

Any sources on Netherlands and others paying in roubles? Your link doesn't say anything about it. All I heard is about Hungary said they'll pay in roubles, but not sure about any actual payments made.

[gutitout]

How about now

[radu_floricica]

> This makes the Rubel incredibly attractive as it can be a stable currency and easier to purchase than Gold itself.

I'd rather buy tether, or the latest crypto fad. It may be pegged to a gold amount, theoretically, but trying to get your gold out of Russia is the object of many jokes in my home country. Currencies are based on trust, and Russia will get out of this with maybe half a bucketfull of it left intact. I literally can't remember when they said anything not obvious and true.

[Bugaddr]

please fix nytimes link

[gutitout]

Apologies.

https://www.nytimes.com/2022/03/23/business/putin-russian-oi...

[popilewiz]

Those payments are not being made in roubles yet, most western countries have declined to make them directly. Instead Russia is offering them to open bank accounts in Russia where they could deposit euros or dollars, which then are converted into roubles.

The rouble is currently propped up by the dwindling currency reserves of the central bank and by the fact that you can't buy $/€/£ anywhere as a private citizen. The banks are out for the most part, the exchanges work with a giant commission and the supply of cash is just not there. You can exchange it virtually, but the rate is about 30% worse than the one advertised by the CB. This can't go on for much longer.