As the EU prepares for sanctions, Russia threatens to put oil on a gold standard

Courtesy of Atlantic Sentinel

Kenneth Schortgen Jr

Finance Examiner

March 13, 2014

First it was the United States, which threatened Russia with economic sanctions and even a removal from the G-8 over their intervention in Ukraine and the Crimea. And now, on March 13, Europe appears to have finally gotten on board as well as the EU officially voted to impose their own form of sanctions on the Eur-Asian Superpower for the first time since the Cold War.

However, like with the Syrian crisis of last September, Russia is quickly retaliating with their own economic threats, and one major action that they could undertake as a response is to discard the Petro-Dollar and demand physical gold as payment for energy purchases in both oil and natural gas.

Just as the Iranians did under U.S. sanctions just a few years ago.

The biggest factor driving gold prices at the moment is the increasing tension between the West and Russia over Ukraine. The EU agreed on a framework yesterday for its first sanctions on Russia since the Cold War.

Russian government officials and businessmen are bracing for sanctions resembling those applied to Iran, and should Russian foreign exchange reserves and bank assets be frozen as is being suggested, then Russia would likely respond by wholesale dumping of their dollar reserves and bonds, and could opt to only accept gold bullion for payment for their gas, oil and other commodity exports. – Silver Doctors

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Moscow won’t exclude sanctions to counter US and EU – Ministry

Published time: March 13, 2014 10:31
Edited time: March 13, 2014 15:08

RIA Novosti / Aleksandr Vilf

Russia is ready to retaliate with counter sanctions against the EU and US if they go ahead with economic measures against Russia over tension in Crimea, the Russian Economic Ministry has said.

“We hope that there will only be targeted political sanctions, and not a broad package affecting economic trade,” Deputy Economic Development Minister Aleksey Likhachev said.

“Our sanctions will be, of course, similar,” he added.

One way Russia plans on shielding itself from pending sanctions is by boosting trade in other currencies, not the US dollar.

“We need to increase trade volume conducted in national currencies. Why, in relation to China, India, Turkey and other countries, should we be negotiating in dollars? Why should we do that? We should sign deals in national currencies- this applies to energy, oil, gas, and everything else,” Aleksey Ulyukaev, the Minister of Economic Development said in an interview with the Vesti 24 TV channel.

The Duma, Russia’s parliament, is drafting legislation to allow Moscow to freeze assets of Western companies and individuals in the event sanctions are imposed following the Crimea referendum vote on March 16.

The bill would give “the president and government opportunities to defend our sovereignty from threats,” according to its author, Andrey Klishas, as quoted by RIA Novosti on March 5.

The US Congress has already denounced Russia’s actions in Ukraine. On Tuesday, lawmakers passed a resolution that urges the US to “to work with our European allies and other countries to impose visa, financial, trade and other sanctions on senior Russian Federation officials, majority state-owned banks and commercial organizations, and other state agencies, as appropriate.”

 

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Obama offers $1B loan to Jordan for refugees: It’s important to be ‘supportive of the kingdom’

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Photo by: Jacquelyn Martin

President Barack Obama waves to the media as he greets Jordan‘s King Abdullah II at The Annenberg Retreat at Sunnylands, Rancho Mirage, Calif., Friday, Feb. 14, 2014. (AP Photo/Jacquelyn Martin)

 

The Washington Times

President Obama announced late Friday night that the U.S. will provide a $1 billion loan guarantee to Jordan, money meant to help the nation deal with the flood of refugees that have crossed over from Syria to escape a bloody civil war.

Mr. Obama made the announcement during a bilateral meeting with Jordan’s King Abdullah II at a private retreat in Rancho Mirage, Calif. The president also said he intends to renew a five-year memorandum of understanding with Jordan, worth about $360 million in direct economic support and another $300 million in military financing, according to the White House.

Mr. Obama said both the agreement and the $1 billion loan are designed to help Jordanian economic development overall, but also said the deteriorating situation in Syria has placed a burden on Jordan that other countries must help bear.

“The people of Jordan have been very generous in absorbing hundreds of thousands of displaced persons from that war-ravaged country,” Mr. Obama said at the outset of his meeting with the king. “It puts a great strain on the resources of Jordan and it’s very important for us to make sure that we’re supportive of the kingdom in accommodating all these refugees.”

 

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Obama Expected to Reduce Military Aid to Egypt

Mohamed Abd El Ghany/Reuters

Months before the military takeover, Gen. Abdul-Fattah el-Sisi discussed the new era of public scrutiny of the army.

The New York Times

By MARK LANDLER and MICHAEL R. GORDON

Published: October 8, 2013

WASHINGTON — The Obama administration plans to suspend a substantial portion of American military aid to Egypt, several administration officials said Tuesday, after last summer’s deadly crackdown on the Muslim Brotherhood and the recent surge in violence there.

The decision, which is expected to be announced in the coming days, will hold up the delivery of several types of military hardware to the Egyptian military, these officials said, including tanks, helicopters and fighter jets. But it will not affect aid for counterterrorism operations or for border security issues involving the Sinai Peninsula and Gaza.

The administration’s move follows a lengthy review that began in August after days of bloody attacks on supporters of Egypt’s ousted president, Mohamed Morsi, which left hundreds of people dead. The administration had already frozen the shipment of four F-16 fighter jets and canceled joint military exercises with the Egyptian Army.

The United States will also suspend nonmilitary aid that flows directly to the government, but not support for other activities like education or hospitals, the officials said.

The decision, which was first reported Tuesday by CNN, does not amount to an across-the-board cutoff of aid to the Egyptian government, officials said. But they said Mr. Obama felt compelled to take stronger action, especially after street clashes erupted in several Egyptian cities on Sunday, killing more than 50 people.

Under the administration’s plan, officials said, the military aid could be restored later if the Egyptian government showed signs of restoring democratic institutions and a new government.

In a statement on Tuesday evening, Caitlin Hayden, a spokeswoman for the National Security Council, said: “Reports that we are halting all military assistance to Egypt are false. We will announce the future of our assistance program with Egypt in the coming days.”

Mr. Obama, she noted, said at the United Nations General Assembly last month that the “assistance relationship will continue.”

In that speech, however, Mr. Obama was critical of Egypt’s military-backed government and warned that the delivery of American military hardware could be affected if it did not take steps to put the country on the path to a democratic transition.

While acknowledging that Mr. Morsi and his Muslim Brotherhood-led government had lost the support of a large part of the Egyptian public before the military ousted him in July, Mr. Obama said the interim government “has made decisions inconsistent with inclusive democracy.”

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Multimedia

Multimedia Feature

Timeline of Turmoil in Egypt After Mubarak and Morsi

 

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US to cut military and economic aid to Egypt in shift of policy after ‘coup’

Obama administration set to suspend military and economic assistance to Egyptian government in protest at Morsi ousting

• Associated Press
• theguardian.com, Wednesday 9 October 2013 08.50 EDT

Egyptian supporters of ousted president Mohamed Morsi confront troops during a protest in Cairo last week. Photograph: Khaled Elfiqi/EPA

The Obama administration is poised to slash hundreds of millions of dollars in military and economic assistance to Egypt, US officials have said. An announcement is expected this week.

The US has been considering such a move since the Egyptian military removed the country’s first democratically elected leader in June. It would be a dramatic shift for the Obama administration, which has declined to label President Mohamed Morsi‘s ousting a coup and has argued it is in US national security interests to keep aid flowing.

The decision is likely to have profound implications for relations between the US and Egypt after decades of close ties that have served as a bulwark of security and stability in the Middle East.

The US officials spoke on condition of anonymity because they were not authorised to talk publicly before the administration’s official announcement.

President Obama’s top national security aides recommended the aid cutoff in late August – a policy shift Obama had been expected to announce last month. But the announcement got sidetracked by the debate over whether to launch military strikes against Syria.

The US provides Egypt with $1.5bn (£940m) a year in aid, $1.3bn of which is military assistance; the rest is economic. Some of the aid goes to the government and some to other groups but it is only the money that goes to the government that would be suspended.

 

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Why Obama is making an African power-play against China

CBC NEWS

Three-country tour meant to entice African trading partners away from China

By Lucas Powers, CBC News

Posted: Jul 2, 2013 5:10 AM ET

Last Updated: Jul 2, 2013 12:39 PM ET

 

U.S. President Barack Obama delivers remarks at a business leaders’ forum in Dar es Salaam, Tanzania, on Monday. (Reuters)

 

 

When U.S. President Barack Obama wraps up an African tour today, it will mark the end of what some international development experts say is an attempt to counter China’s growing influence throughout sub-Saharan Africa and assert American economic dominance on the continent.

 

China surpassed the U.S. in total trade in sub-Saharan Africa in 2009, but its increasingly strong economic ties took root in 2000, when then-Chinese president Hu Jintao hosted representatives from 44 African nations in Beijing to establish the Forum on China-Africa Co-operation.

 

That meeting “set a mandate for China to become Africa’s largest trading partner,” says Richard Poplak, a Johannesburg-based Canadian author and journalist writing a book about China’s growing role in Africa.

U.S. President Barack Obama speaks at the University of Cape Town on Sunday. (Reuters)

It was also an early sign that the Chinese viewed economic opportunity in Africa through a different lens than their American counterparts.

 

“What the Chinese did that no one else had done before was that they considered Africa as a market — a market for Chinese goods, institutions and services — when the rest of world viewed Africa as an economic basket case and a place for aid programs,’ says Poplak.

 

While the U.S. focused on global security following the attacks on Sept. 11, 2001, Chinese firms began shoring up major contracts throughout the continent that ensured access to Africa’s vast resource wealth in exchange for the funding and construction of infrastructure projects like roads, railways and airports.

 

China also emphasized multilateral agreements with entire regions of sub-Saharan Africa — agreements the U.S. has largely avoided in the past, says Thomas Tieku, an assistant professor at the Munk School of Global Affairs at the University of Toronto.

• Obama declares a new era of U.S.-Africa relations

“The U.S., in many senses, miscalculated their approach to Africa. It has always been to focus on bilateral relationships— select a few countries and deal solely with them,” says Tieku. “Now they’re playing a catch-up game to try to establish equally strong relationships with multilateral institutions like the African Union.”

A new approach

Obama’s three major announcements during the trip — a $7-billion project to increase electrical infrastructure in sub-Saharan Africa; an investment in trade with the East African Community (EAC); and a meeting in Washington with leaders from throughout Africa next year, are signs of a shifting U.S. approach to business in Africa, says Tieku.

 

“One area where China cannot compete with the U.S. is soft power. Many Africans love American pop culture, and the best way to get a pro-American message to Africans is through televisions, radios and the internet.

 

“So the infrastructure investment will help Africans, but also the U.S. down the road.”

• Obama challenges young Africans to seize future

The agreement with the five EAC nations signals that the U.S. is willing to begin dealing on the regional level to increase intra-continental trade, which accounts for only 10 per cent of all trade in Africa, says Poplak.

‘They’re not doing this to counter the U.S., they are doing it because it fits into their vision of themselves as a major player. They need African resources, but moreso they need African support and diplomatic partnerships.’—Deborah Brautigam

Included in that deal is a commitment to renew and strengthen the Africa Growth and Opportunity Act, a major initiative passed by the U.S. Congress and signed by President Bill Clinton in 2000 to help open sub-Saharan economies.

 

The act is largely considered a failure because the infrastructure was not in place to get African products to global markets, says Tieku.

 

“With new infrastructure coming into place, being built every day, it’s possible AGOA will realize its potential.”

 

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BLOOMBERG

 

Obama Unveils Plan to Boost Electric Power in Sub-Saharan Africa

By Julianna Goldman & Margaret Talev – Jun 30, 2013 5:00 PM CT

President Barack Obama, putting his mark on U.S. aid to Africa, announced a plan to boost access to electric power in the sub-Sahara and said America stands to benefit if the continent reaches its full economic potential.

Obama unveiled the $7 billion initiative dubbed Power Africa at the University of Cape Town in a speech that his aides billed as the centerpiece of his three-country tour through Senegal, South Africa and Tanzania to promote trade and investment on the rapidly growing continent.

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U.S. President Barack Obama acknowledges the audience after delivering a speech at the University of Cape Town on June 30, 2013. Photographer: Saul Loeb/AFP via Getty Images

The president’s goal is to double access to electricity across six countries that the White House has singled out for promoting good governance — Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.

“I’m calling for America to up our game when it comes to Africa,” he said. “There’s no question Africa’s on the move, but it’s not moving fast enough for the child still languishing in poverty in forgotten townships.”

American companies see growing opportunity in Africa. U.S. merchandise exports to the 49-country region were $21 billion in 2011, up 23 percent from 2010, according to the Office of the U.S. Trade Representative. Imports from sub-Saharan Africa were worth $74 billion in 2011, up 14 percent from 2010. Most of that, about $60 billion, was crude oil.

Africa has 15 percent of the world’s population yet it accounts for only 3 percent of energy consumption, according to a 2011 report by the African Union and other organizations.

Mandela’s Health

With Nelson Mandela’s fragile health weighing heavily throughout the African trip, the U.S. president has invoked the anti-apartheid icon’s legacy to draw the connection between democratic values and economic growth.

Obama’s speech included a tribute to Mandela and he and his family toured the apartheid-era prison at Robben Island, finishing in a courtyard near Mandela’s former prison cell. He then visited a community center that provides HIV education and treatment run by Archbishop Desmond Tutu’s foundation.

While Africa is rising, progress is “fragile,” vulnerable to “the rot of corruption” and “the undertow of conflict,” Obama said in his speech.

He will travel today to Tanzania for the last stop of the three-nation tour. In the country’s fast-growing metropolis of Dar es Salaam, he’ll convene a roundtable of company executives and promote investments in electrification projects.

Recognizing Africa’s rapid growth — as well as domestic budget constraints — Obama said yesterday the U.S. is moving beyond the kind of direct financial assistance its provided in the past. Instead, he said he wanted to promote a new model that focuses on Africa’s “capacity to solve problems.”

 

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