By John Friend
Russian President Vladimir Putin announced on Wednesday that Russia would only accept payment from “hostile countries” for its natural gas in rubles, the traditional currency of the Russian Federation, a move that could have major ramifications in the international financial and currency markets.
Western nations, led by the U.S., have imposed severe economic sanctions against Russia in response to its invasion of Ukraine, which Russia has repeatedly called a special military operation with specific goals.
Russian Finance Minister Anton Siluanov has stated that roughly $300 billion worth of foreign reserves held by Russia in Western institutions have been frozen with Russia being unable to access them as a result of the Western-imposed sanctions. Many commentators have seen this move as a confiscation of Russian foreign reserves which in essence amounts to a theft of Russian assets or a default on Western obligations to Russia.
“The United States and the EU have practically defaulted on their obligations before Russia,” Putin explained. “Some have suspected this, but now everyone in the world knows that obligations in the [US] dollars and euros can be left unfulfilled.”
Given the economic warfare being waged against Russia by the West, Putin insisted it “makes no sense anymore” to sell Russian goods and commodities for dollars or euros to the U.S., EU nations or any other hostile nation. Putin promised that Russia is embarking upon a path to “stop using all compromised currencies for transactions.”
Speaking to Russian officials yesterday, Putin described the sanctions as “unlawful decisions to freeze Russian assets,” and went on to argue that the “West has de facto destroyed the credibility of its currencies.”
In a speech last week, Putin stated that Western nations “are using economic, financial, trade and other sanctions against Russia as weapons,” and noted that “these sanctions have backfired in Europe and in the United States where prices of gasoline, energy and food have shot up, and jobs in the industries associated with the Russian market have been cut.”
President Biden and other Western leaders have incessantly blamed Russia for rising inflation, rising energy costs and other economic maladies, failing to recognize that their own misguided policies are causing significant damage and harm to their own economies.
“Do not shift the blame on us and do not accuse our country of everything that goes wrong in your countries,” Putin stated last week in a direct dig at President Biden and other Western leaders.
“The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets,” Putin explained, referring to Western-backed financial arrangements and institutions. “In fact, the U.S. and the EU have defaulted on their obligations to Russia. Now everybody knows that financial reserves can simply be stolen. And many countries in the immediate future may begin – I am sure this is what will happen – to convert their paper and digital assets into real reserves of raw materials, land, food, gold and other real assets which will only result in more shortages in these markets.”
Earlier today, the British Foreign, Commonwealth and Development Office released a memo announcing that 59 more individuals and entities from Russia and its ally Belarus would have their assets frozen in the UK, prohibiting them from entering the country. British officials declared that the new sanctions were imposed to “encourage Russia to cease actions destabilizing Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine,” although it is unclear how effective the sanctions will actually be.
President Biden, who is beginning a European tour that will include attending an emergency NATO meeting and meeting with a variety of EU officials and European heads of state, hinted that more Russian political figures would be sanctioned soon by the U.S. as well.
Western leaders continue to double down on their program of economic warfare against Russia, which is leading to a total discrediting of the entire Western-led economic system.