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American leadership can not even imagine what kind of punch force can inflict on the dollar Russia
The well-known trader Jim Sinclair believes that the US government, by imposing sanctions against Russia, not miscalculate what response they can cause. From the point of view of Sinclair, petrodollar now there is only one real value in the world, and Russia may unleash it, merely demanding for their oil is not dollars and euros or yuan. In this case, the US economy will collapse, while Europe, by contrast, will rise sharply. And if Ukraine will go on loan from the IMF, the crisis there will be such that in six months she will fall into the hands of Putin.
"The imposition of sanctions against Russia equivalent to shot yourself in the foot"
- Most likely, we will face economic sanctions, the economic war that is already going. And one of the things they say - is the exclusion of Russia from the Swiss system [the system of international payments], the prohibition of its use. In turn, Russia may declare that he wants to get paid for gas in gold and silver. And they do it selectively: for Europe and the Western allies - the gold, the yuan is suitable for China. What do you think of it?
- You raise several problems. Firstly, the use of the Swiss system to create enormous difficulties in the translation of bank payments. This is one of the possibilities. But the BRIC countries are already developing their own payment system. So use it as a lever to pressure - this is a wrong measure in any situation except war. They [the West] have simply created a competitor. Use it to put pressure on Iran, albeit selectively, in my opinion, it was a mistake - a premature application of powerful weapons. If there is a hot war, you can thus strike at the enemy's economy. Using it in the situation of the Cold War, you only create a competitive mechanism for the Swiss system. Swiss system - it is only the western communication system. It's just a platform. Such platforms can easily repeat ...
To impose sanctions against Russia, you forget that it is the source of Europe's gas. To impose sanctions against Russia, you forget that at this point in its territory are numerous European and American companies. I firmly believe that the sanctions against Russia equivalent to shot yourself in the foot. You are asking for the creation of a new system of international payments and the introduction of retaliatory sanctions against foreign companies, which are also heavy for the Western powers, as well as any of their actions against Russia. This cold war that could turn into a second hot.
- There are rumors that the Russian just come in European and American businesses and say, this is all ours, we all nationalized. You have imposed sanctions against us, now we introduce sanctions against you, get out.
- If you think you can shove away with the former KGB colonel, your analysis of his personality is fundamentally not true. Until now, all public statements by Putin were very soft, he did not mention any hard measures and behaved like a gentleman in international relations. We constantly thunderstorm draconian measures against Russia, I would say that he would keep a low profile and will begin the escalation of the situation in accordance with the requirements of the moment.
- On I read that a Russian official said last week that their sanctions will be symmetrical.
- Yes, symmetrical action opponents, ie limited reaction. Nevertheless, it is so dangerous. The idea that Russia - a regional power ... Where did they get this? Any country that has nuclear weapons and their means of delivery as much as Russia is a world power. And we hear all the time that it is a regional power. We hear a lie. We hear the truth. We do not have a clear picture of what is happening. Large corporate media called Russian aggressor, when in fact there was a coup, during which came to power a new government, which is no more or less legitimate than the Russian presence in Crimea.
"Russia may retaliate against the dollar"
- Let's go back to the financial side of the issue. Can these sanctions to blow up the world economy? This is the beginning of the end?
- When Nixon abolished the gold-dollar parity, he translated it into oil security. He signed an agreement with Saudi Arabia that all energy contracts will be denominated in US dollars. Therefore petrodollar - is the sphere of demand for settlement of contracts need to buy dollars, petrodollar - a standard which is based on US dollar strength. More recently, when the US Dollar Index [USDX, the index showing the ratio of the dollar against a basket of six major currencies: the euro, yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc], fell below 80, it might seem that the dollar has lost vitality, but for a long time below this mark, he does not stay on the market all the time there is an exchange stabilization fund (exchange stabilization fund), and when the dollar falls below 80, it is constantly trying to get it back to 80.50 or 81.20, to create the impression of strength. But the dollar beats at this level, and it happens because he feels teeth retaliation lies in the simple acceptance for payments to Europe any other currencies. And believe me, they will be calculated in other currencies. The calculations in the euro - a very simple matter for energy dealers.
The dollar's strength lies in the fact that you have to go to the dollar market and buy dollars to settle energy contracts. We went to war for the sake of the petrodollar. Greg, if the petrodollar is even slightly weakened, it will mean a shift of the entire force, momentum shift. Petrodollar - is the momentum of the US dollar. And if Russia will challenge the petrodollar, starting calculations for energy in a currency will change in momentum, and the dollar index may fall to 76.
- That is, Russia can easily say, you know what, we want to pay in gold, they can also say - we pay in rubles ...
- ... Pay us anything ...
- ... Or we pay in yuan or euros, rupees - anything. We no longer make payments only in dollars.
- It does not necessarily have to be RUR, large consumers should not have foreign currency transaction energy cheaper due to simplify the exchange volume. Why pay in dollars, if it is possible to pay in their own currency. The dollar will be under so much pressure, under which he had never been, and the dollar and that is what shows what is able to rise above 80. Europeans selling US stocks should go to a safe harbor, to buy dollars and US government bonds, but why then the index can not rise above 80? Because the dollar looks up and says that Russia could retaliate, and this will have a huge impact on the dollar. And it's not about selling bonds - they say, I am no longer in the Swiss system, pay me in any currency other than the dollar.
- How will this affect the gold price?
- I will say that gold will rise immediately to $ 1 550, while the dollar index would be at around 76 on the way to 72.
- If they impose such measures, can I go back? This will be the beginning of the end of the petrodollar? Do not decide whether to go to Saudi Arabia on Russia's way and make the yuan, rupee, euro, whatever?
- Anything ... For comparison: for example, that the dollar - this is a common action of the United States who have lost a significant amount of demand that will break the momentum of his tendencies. You break the momentum of the trend, when a bull market ends and a bear starts. When does a bear market, such as gold, the bull market begins. When the end of the dollar bull market, bear market will begin. Russia has the potential and, of course, the desire to make one single: start taking energy payments in any currency. We'll get a couple of dollar / euro at 1.45 / 1.50 and the dollar index is at around 72 - 76.
- Then they get a bonus in Europe, their currency will rise in price, energy prices will fall, and they will say that they like to pay for natural gas and oil in the euro.
- Merkel will shut up and smile. Is not it cheaper to do without foreign exchange markets? For trade needs cheap euros, and for the long term - an expensive euro.
- But it will be a disaster for American consumers. Petrol will rise from 3.50 - 4.50 to $ 4 - $ 5 per gallon (3.78 liters).
- I'm already 12 years talking about the cost of inflation caused by currency factors, which may cause hyperinflation in the worst business climate. If the value of your imports goes into the ceiling, what will happen to the price of what you sell in the local market? - It also goes into the ceiling.
"The IMF will give Ukraine Putin"
- Yeah, this is a very ominous technical look at what can happen. I think that all this was done very clumsily, they do not see beyond their own noses, do not believe all this is threatened. Another threat - military scenario. And I am on your website quoted people who talk about the topic of Ukraine into two halves, but really? Russia will allow NATO to deploy missiles and troops in western Ukraine, protective and offensive capabilities, a NATO member country to receive directly in their border? Do you think that is so?
- You did not think for a moment that the IMF was going to do - let's call it the Western Ukraine. They will lend the country and it needs $ 37 billion instead of 15 billion dollars, because they have to remember payments in 2015. IMF will do the same thing in Greece. Six months later, people in Western Ukraine will scream and demand entry into Russia because pensioners who are now receiving $ 165 per month will receive $ 80 for the IMF loan conditions. Do you think they will be happy to remain in the free Western Ukraine? They want to become Russian. There is no doubt that the IMF performs the task of transferring Western Ukraine Putin using the conditions set for granting loans.
- Putin has increased the number of troops on the Ukrainian border. Do you think he will wait or invade?
- Look, you see the guy who rides a horse bare-chested, who inspects weapons at gun shows, which weighs in hand a gold bar. No need to be a genius to understand that it is not necessary to push. He is a former KGB officer, you will push it too hard and troops begin to cross the Belarusian border. Lord, forgive them, for they [the Americans] do not know what they do. We pushed around by a group whose ideology demands of war. We do not have enough intelligence and leadership abilities to recognize that Russia holds all the cards. Petrodollar - is the single most important factor that exists today in the global economy - without any exceptions. And Russia holds his hand ... and in an instant can respond in a way that would cause the collapse of the [stock index] Doe, never seen a story.
"Russian could put the US economy on its head"
- Brilliant Simplicity: we just accept payment in any currency and regardless of the continuation of membership in the Swiss system. Are you saying that it would break our economy will cause inflation and cause tooth gold bull market to continue.
- No other scenarios no, Russian have a more powerful weapon than the Swiss system. Banish them from the Swiss system is equivalent to a shot at their own pace, they can destroy everything - especially because of the derivatives market, which is so tied to interest rates.
- You want to say that they can completely destroy the US economy in the framework of retaliation?
- They can put the US economy on its head and completely destroy it. You can as much as necessary to wave the flag, but the fact remains - they have the opportunity.
- It's amazing prediction!
- This is reality.
Questions - Greg Hunter
Greg Hunter's USAWatchdog, 16.03.2014
Jim Sinclair (Jim Sinclair) - American trader. Son of the famous financier Bert Seligman (Bert Seligman), whose family controlled about 10% of trade on the New York Stock Exchange in 1950. Family seligmannite maintained close ties with the clan Kennedy.
It works independently on the market since 1958 year. It has the nickname Mr. Gold, because it is considered the largest gold trader in the market of the 1970s, being able to predict the peak price to the day.
In 1980, the Fed has allocated $ 1 billion. Distressed investment banks Bache and Merrill Lynch provided that Jim Sinclair will advise them.