Ukraine Always Get What You Want

1) An import ban on Russian gold would actually have some teeth. Russia was a very aggressive buyer of gold over the last decade +. While it was going on, I figured it was because they saw the fiat currencies -- dollar, euro, yen, yuan -- being so massively devalued over that time that they figured a reset was going to come and whoever held hard assets would be in a good place. But since the invasion of Ukraine, they have used that gold to really good effect to circumvent some of the bite of the U.S. and European sanctions. Europe should have tried to cut off Russian gold sales, in any way possible, long before now if they were serious.

2) At the end of the day, though, all of the sanctions are relatively meaningless as long as Russia can export natural resources, particularly oil and nat gas. Oil and nat gas are Russia's real currency, not the ruble. And they have buyers for them. They are just as happy to settle in yuan (or rupees) as they are to transact in dollars and euros. In fact, Russia is actively trying to get India, Iran, Egypt and some other emerging markets that are relatively outside our sphere of influence, to work together to remove the dollar and euro from commercial transactions and settle in other currencies. This makes the U.S. and Europe vulnerable, because while we have shit all over the dollar for decades, we have benefitted more than most people understand from being a reserve currency -- given special status, by virtue of nothing we are doing to earn it. And our behavior has made us really vulnerable now, and Russia knows it. If you get major commodities settling in other currencies, it is going to have a major effect on how much we can keep debasing our currency. We have been propped up by the fact that other countries were essentially forced to use our dollars. Take that away and we are standing naked. Regardless, whether Russia (and others) can do any harm to the dollar's reserve currency status or not, as long as Russia has oil and gas to export, and there are large buyers like China and India, sanctions are never going to be some magic elixir to bring Russia to its knees. It's really mostly for show.

 

Exclusive: Russia's Gazprom declares force majeure on some gas supplies to Europe

 

Where else were they supposed to get their heating supply from, at anything coming close to a comparable cost?

It's not like they have multiple ways to heat their country, all at comparable costs, and they made a bad choice. LNG from the U.S (or Canada) is way more expensive for Germany. Iran isn't an option.

 

Yes, they hurt themselves with the shutdown of all of those nuclear power plants, and the utter stupidity surrounding it, but really only 15 percent of the electricity generation in Germany is coming from gas. And that isn't the problem for them. Their problem is that more than half of the households in the country heat with gas. ... and a gas boiler can't run on electricity, whether that electricity is being generated by coal, gas, nuclear or leftover McDonald's fry oil.

As for renewables. ... the idea that there is some renewable energy alternative that can provide energy reliably at anywhere near the current cost of energy is just magical thinking. There are plenty of people investing in "renewables." A breakthrough would make someone rich. But the technology isn't there.