Russian Government Ratifies Huge China Gas Pipeline Deal

President Vladimir Putin ratified a gas supply agreement with China on Saturday that allows for a Siberia pipeline known as the East-Route to supply gas to China. The move is part of Gazprom’s pivot to China which has been amplified since European sectoral sanctions were introduced against Russia last summer because of the Kremlin’s involvement in the Ukraine crisis.

Russian Government Ratifies Huge China Gas Pipeline Deal

A little history

I stumbled on this article the other day. I waited to post it because I wanted to make sure it was real. I am amazed this is not all over the news cycle... or maybe I shouldn't be...

So Russia is building a pipeline to China. Why do we care?

Because Donald Trump called Clinton a [insert term of choice here]? Nah, that's just a good diversion.

Oil is energy, but it's also much more. Oil is also money. For quite some time, we have had an agreement with OPEC that tied the value of the US dollar to oil, thanks to our relationship with Saudi Arabia. I'm not going into the full history of that; I linked the original thread I made on the Middle East situation at the beginning. The Arab Springs, the wars in Iraq and Afghanistan, Sadam Hussein, and several other recent events are all tied into this Web of economic deceit, and you can read all about how and why there.

Simply put, our dollar is NOT fiat. It is backed by something more precious than gold: oil. The petro-dollar-peg is the reason why the dollar is the International Reserve Currency, and thus the reason we get away with running a deficit and maintaining that multi-trillion dollar debt. There are a lot of countries who would prefer a different IRC, primarily because the US tends to use some pretty sinister methods to maintain its status.

The biggest player against us was Iran, due to some underhanded tactics we pulled some time back. They have depegged from the dollar for some time, but we can't get into Iran to set off another Arab Spring. Iran has a good relationship with Russia, and this is where the pipeline comes into play. The original plan, I believe, was to convince Israel to take out Iran in a pre-emptive strike, but to do that, we had to get Syria, Iran's biggest ally in the region, out of the way. That's why we're trying to take out Assad. Russia became involved, and we caused some strife in the Ukraine to boil over and tried pointing the finger of blame at Russia, to get their attention elsewhere.

The problem with that is that Putin didn't like playing our game.

There's a hoax thread up that claims Russia was able to get access to Clinton's email server while she was Secretary of State. It's in hoax because the source is Sorcha Faal, a site known for hoaxing. Maybe it's really a load of cow patooties, or maybe they actually caught a sliver of truth? Those emails had information about the plans of the US as it relates to other countries... like Russia. And even if the story isn't true, it doesn't mean Russian Intelligence and Putin didn't get access to the information another way. A personal email server is extremely insecure.

The guy is smart. He isn't going to jump into WWIII with the US, but at the same time he has to get us off his back. Instead of military posturing, he has turned to economic warfare... this pipeline. With its completion, the Chinese oil market, a considerable and growing chunk of the global market, will be out of our control, as will the strict dollar peg on oil. There goes the dollar-oil peg, our IRC, our international credit rating, our ability to borrow, and, finally, our economy.

I am not talking about a recession or depression even. I am talking triple-digit inflation and a complete and total collapse. The government will become bankrupt overnight. I'm not talking about some budget impasse... bankrupt to the point of no salaries to workers being paid, no benefits available, no SS checks, not even gasoline to power military vehicles. The thing is that such a disaster won't only affect the US. It will also affect Europe, Japan, and any other areas that are tied to Wall Street. Everything we have become used to, our standard of living, our toys, our luxurious lifestyles... they all hang from the dollar-oil peg.

It doesn't help that almost all of our manufacturing is now being done overseas. We make almost nothing anymore. Almost all of our electronics now come from China or countries close to China. China has the bulk of natural deposits of rare-earth metals, which we depend on for semiconductors, batteries, magnets, alloys...

It also doesn't help that the Congress just angered Saudi Arabia by allowing US citizens to sue over 9-11. They're the reason we got the IRC in the first place. We'll get no help from them now. They have been flooding the market with oil, in an attempt to place economic stress on Russia and stop them from completing this pipeline deal. That's why we're not still paying $3.50 a gallon for gas. It's also why Obama has vowed a veto; he knows how badly this could hurt us.

I suggest everyone buckle their seat belts and return their seats to the upright position. It could bumpy.

TheRedneck

a reply to: TheRedneck

What a well though out and logical post Redneck. S+F. BTW, congratulations on the degree(s).

I think a lot of what we're starting to see in the global economy is a move away from trading and economic blocs, and every country looking out for their own interests more frequently. With the global decline of oil and gas prices though, I don't see Russia getting a huge financial advantage from this deal. It is another chink in the armor of the dollar as the IRC, but I'm sure the Fed and global banking elite still have a few tricks up their sleeves.

a reply to: TheRedneck

Russia and China are smart to be cementing plans for this pipeline. Will we be speaking Russian or Chinese in 20 years? I'm doubtful.

a reply to: peter_kandra

Russia and China will take a hit financially as we go down, but much more minor than we experience. The markets will rise again, but in the scenario I see, with China sitting in the catbird's seat and us just a minor marketplace lost beneath the new economic powerhouses.

I don't know how many tricks the Fed has left. Interest rates are barely above zero. You can't go much lower to stimulate the US market. They do not control the interest rates or exchange rates of other markets. And without OPEC's backing on oil... well, we're really just a nuisance internationally.

TheRedneck

My apologies to the readers. In my attempts to find the most news-worthy article, I apparently picked one from a year ago. I have located another article a little more to date that shows this is still underway.

China Grants Environmental Approval To Russia-China Gas Pipeline

BEIJING, May 17 (Reuters) - China granted an environmental clearance to the Chinese section of the Russia-China natural gas pipeline, the Ministry of Environmental Protection said on Tuesday. The ministry has approved construction of the 737-kilometre (456-mile) pipeline from Heihe in the northeastern Heilongjiang province to Changling in the northeastern Jilin province.

TheRedneck

a reply to: TheRedneck

I share some of those same sentiments, but I don't have as bleak of an outlook. I think the hole card for the US will end up being fusion. Oil and gas prices would literally tumble overnight, and our domestic production would more then adequately supply our remaining needs for transportation, manufacturing, etc. Electric car sales would sky rocket, and that may allow us to bring some manufacturing jobs back onshore.

As far as tricks the Fed has left,I don't know, but I'd fully support another round of QE, but with the bulk of it going towards upgrading the aging infrastructure across the country (tons of jobs) and the remainder funding renewable energy R&D and 3D manufacturing (would allow us to compete financially and bring back jobs onshore)

Meh, US will just send in operatives to infiltrate, sabotage, and disrupt the flow of oil.

A huge revenue stream the West doesn't have its mitts in will not be tolerated. Just like Ukraine was going to be the conduit for Russian Pipelines to Eastern Europe, look what happened there.

Edit: Nicely done by the way, good understanding of world events.

Well said, Red. Can I call you Red? Anyway, this is the best and most informative thread I've read in a while. I can hear Putin yelling "checkmate."

a reply to: peter_kandra

Fusion has a lot of promise, but little success thus far. You're right that it would be a game changer, but we have to make it actually work first. Electric vehicles, I am coming to think, are the future (thank you Elon Musk) but there's still quite a transition time to completely upgrade the infrastructure to accommodate them. Plus, that infrastructure won't cover things like airlines... that's gonna take some out-of-the box thinking. Military is another issue; at this time, it is far easier to find fuel than a recharge station where our military operates much of the time.

Still, I like to think there are always... possibilities...

TheRedneck

a reply to: lostbook

Haha, join the crowd. You have to slap a redneck 5 or 6 times to offend them.

Thank you for the compliment.

TheRedneck

a reply to: TheRedneck

The FED can go 0 percent rates , like Japan currently.

They even have something that is called a helicopter drop.
blogs.wsj.com...

They have plenty of more tricks.

Russia and China are traditionally enemies but in recent years I've noticed that they are becoming closer and closer in the battle against their common foe-the US. This Russia/China pipiline will only further cement their union.

a reply to: TheRedneck

I am not talking about a recession or depression even. I am talking triple-digit inflation and a complete and total collapse. The government will become bankrupt overnight. I'm not talking about some budget impasse... bankrupt to the point of no salaries to workers being paid, no benefits available, no SS checks, not even gasoline to power military vehicles. The thing is that such a disaster won't only affect the US. It will also affect Europe, Japan, and any other areas that are tied to Wall Street. Everything we have become used to, our standard of living, our toys, our luxurious lifestyles... they all hang from the dollar-oil peg.

For instance this piece

The role as world reserve currency is something no financial hegemon in history has willingly surrendered. It took two world wars for the City of London and Bank of England to reluctantly concede hegemony of the Pound Sterling to the Dollar. As Henry Kissinger is said to have remarked decades ago, “If you control the money, you can control the entire world.” Whether or not Kissinger ever said that publicly, he and his patron, David Rockefeller, certainly believed it. Now, with US government debt shooting past $19 trillion and the true state of the American economy and its infrastructure at its worst since the Great Depression, with most Americans living on the brink of financial disaster, the brilliant financial engineers of Wall Street and Washington have once again come up with a scheme to prolong the role of Dollar as King in the world economy.

I read a piece the other day that talked about the west having to pull out of Afghanistan because the Taliban are controlling nearly 80% of the place and sooner or later the Poppie production will go back to 0% like it was before the war went there .

Aside from China and the oil and gas lines which is very big we see this which is no small thing to consider.

On April 21 Israeli Prime Minister Benjamin Netanyahu flew to Moscow for closed door talks with Russian President Vladimir Putin. The media reported that the talks were over the situation in Syria, a theme where Moscow has made certain a regular hotline dialogue exists to avoid potential military clashes. It seems, however, that the two discussed quite another issue–potential Russian involvement in developing Israel’s giant offshore Leviathan gas field in the Eastern Mediterranean. Were the two to strike a deal, the geopolitical implications could be enormous for Putin and Russia’s strategic role in the Middle East as well as for the future of the US influence in the region. journal-neo.org...

Add to that this piece

Six month ago, in December 2015, the town of Mary in Turkmenistan witnessed a long-awaited occurrence significant not only for the country, but for the entire Central Asian region: the launch of the construction of the Turkmen section of TAPI (Turkmenistan–Afghanistan–Pakistan–India) gas pipeline. The parties signed an agreement on the construction of a gas pipeline at the end of 2010. A nearly 2-thousand-kilometer pipeline will run from the southeastern regions of Turkmenistan that are rich in natural gas (the area where the giant gas and oil field of Galkynysh is being developed) to the Indian town of Fazilka, on the Indian-Pakistani border. More than 200 kilometers of the line will be laid in the territory of Turkmenistan. In Afghanistan, the line will go through the towns of Herat and Kandahar. In accordance with the 30-year agreement signed between the Turkmen state corporation Turkmengaz, Afghan Gas Corporation, Pakistani ISGS and Indian GAIL, Turkmenistan will export up to 33 billion cubic meters of gas annually (90 million cubic meters per day) via TAPI. This volume will be distributed between India, Pakistan and Afghanistan, with India and Pakistan receiving 38 million cubic meters and Afghanistan— 14 million cubic meters of gas. The completion of the construction works is scheduled for 2019. According to the estimates, the cost of the project will amount to approximately $12 billion. journal-neo.org...

One has to wonder just what the sanctions on Russia is actually doing .it must worl like the war on drugs means more drugs or the war on poverty brings more poverty or the war on terrorist brings more terrorist . Will the war on Russia and or Syria mean they also will increase ?

The US may control the oceans but it seems a different straggly is being worked around .

All but overlooked by Western mainstream media in their focus on the recent flare-up of military tensions between Armenia and Azerbaijan in the simmering conflict over the mountainous enclave of Nagorno-Karabakh is the announcement by Russian Foreign Minister Sergei Lavrov, following talks with his Iranian counterpart, that work will now begin on a long-discussed North-South Transportation Corridor along the Caspian Sea. Significant is the fact that Azerbaijan has also agreed to participate in the project. If so, it suggests that Russian diplomacy and economic infrastructure development have again trumped the Washington urge for wars everywhere to hold their grip on an eroding global superpower hegemony. journal-neo.org...

This last piece is a doosie .It has to deal with a canal being built from the Caspiean to the Persian Gulf .There is two options and one looks a lot better then the other in the event of a ME war .

With the US and EU economic sanctions gone, it’s becoming clear that Iran today wants to build not destroy as the West seems hell-bent to do. The latest is announcement that Teheran has decided to proceed with a major infrastructure project which will take perhaps a decade to complete—an inland canal linking the Caspian Sea to the Persian Gulf for the first time across Iran. Given Iran’s very mountainous topography, it is no simple dig. It will also be a big benefit for Russia and other nations along the Caspian Littoral as well as nicely fitting China’s One Belt, One Road infrastructure Great Project. journal-neo.org...

China has lots of Money that they want to invest in these types of projects and Iran has been suppressed by the west for too long ..Interesting times we live in and the harder the West tries to grow the worse it gets ...

a reply to: TheRedneck

I don't know how true it is but it sounds exactly right to me.
I expect some serious problems starting to evolve from this


Imagine if Russia starts selling it into Europe, if India join in

Scary scary

a reply to: Raggedyman

There are two things happening , One is the TPP but it seems to not be something that is trying to be sold but some kind of a do as I say from the Washington think tank land . This piece has a lot to say on the counter to the TPP but the West is left way out of the Loop .I think France and may Britain can see the writing on the wall in some of this .

Earlier this year, despite immense fanfare, the US-ASEAN Summit held in Sunnylands, California ended in a fizzle rather than a bang. Little of substance emerged from and admittedly “symbolic” summit, and the US even went as far as criticizing guests as they departed – lecturing them regarding “democracy” and “human rights.” Coupled with this send-off designed to humiliate, was the US State Department’s various funded media fronts operating in each respective ASEAN state, mocking and denigrating ASEAN leaders who have fallen from Washington’s favor. Far from another step toward fostering better relations between Washington and Asia as prescribed by the US “pivot to Asia,” it was instead a transparent attempt to empty out the resources of the region via compromising and coercive free trade agreements – more specifically, the Trans-Pacific Partnership (TPP) – and line up an unwilling Southeast Asia as an adversarial proxy against Beijing – a notion none save for Washington attending the summit found appealing. journal-neo.org...

India will be and has been looking at this very seriously seeing they are part of the BRICS .

Later this month Russia is to host its own version of a joint ASEAN summit. In addition to the Russia-ASEAN Summit, there will be various bilateral meetings between Russian leaders and respective ASEAN states, including Thailand. Russia, unlike the US, does not possess extensive extraterritorial networks of NGOs dedicated to subverting and coercing foreign governments. It has no historical or current presence in Asia militarily, unlike the US who is permanently occupying Japan, building bases in the Philippines, and regularly provokes security crises in the South China Sea. Russia spends a fraction of what the US does on its military overall, and cultivates a multipolar, non-interventionist worldview in direct contrast to America’s “intentional order” it places itself atop. In reality, Russia represents for ASEAN a much more equitable partner to deal with, not only directly for mutual economic and political benefit, but also as a means of balancing stronger relations and alternative economic opportunities against uncompromising hegemony imposed by Washington. Stronger ties with Russia could offer ASEAN the ability to leverage more from the US, if not offer an exit to inequitable impositions altogether. journal-neo.org...

a reply to: TheRedneck

Very good thread! This is so logical, and frightening. I doubt the US will go down without pulling every kind of trick it has up its sleeve though.

Oh, and congrats on the degree and welcome to the club. Got my EE back in '07.

a reply to: the2ofusr1

Almost makes it sound like the US is an oppressive regime manipulating other country's to control them, or at least feed off of them
Russia is benign to benevolent country, more trustworthy than the US

Sounds like Trump or Clinton.

Seems like the current government is setting the US society up for a fall

Time to move to Mexico

Russia pumping gas to China won't destabilise the democratic developed world.

The US is already pretty much self-sufficient in oil and gas and Europe are well have reduced any reliance on Russia.

The question that is better asked is:

(1) What price is China extracting from Russia for this deal? Russia has made this deal from a position of weakness.
(2) Russia has so far squandered their earnings from oil and gas. They still have a one-track economy. Is there any evidence that Russia will diversify and develop into a "developed" economy?
(3) Why do people "big" Russia up? They have an GDP that is lower than Italy, and Italy is the fourth biggest European economy.

If there is a depression that you are predicting then the countries with depth in economic advancement will fare better. Do you really think China would survive passed Thursday if no-one bought goods from them? If the West goes into depression then China dies too, but more terminally.

a reply to: Raggedyman

I think Mexico got the weather but has some big issues with crime . My brother just married a gal from China and he was impressed with what he saw over there . This piece makes any place other then the West look better then what seems to be coming on us ....

China, as current chair of the G-20 group of nations, called on France to organize a very special conference in Paris. The fact such a conference would even take place in an OECD country is a sign of how weakened the hegemony of the US-dominated Dollar System has become. On March 31 in Paris a special meeting, named “Nanjing II,” was held. People’s Bank of China Governor, Zhou Xiaochuan, was there and made a major presentation on, among other points, broader use of the IMF special basket of five major world currencies, the Special Drawing Rights or SDR’s. The invited were a very select few. The list included German Finance Minister Wolfgang Schaeuble, UK Chancellor of the Exchequer George Osborne, IMF Managing Director Christine Lagarde discussed the world’s financial architecture together with China. Apparently and significantly, there was no senior US official present. On the Paris talks, Bloomberg reported: “China wants a much more closely managed system, where private-sector decisions can be managed by governments,” said Edwin Truman, a former Federal Reserve and US Treasury official. “The French have always favored international monetary reform, so they’re natural allies to the Chinese on this issue.” journal-neo.org...

a reply to: the2ofusr1

Without commenting yet on your posts; i TY for pointing me to the website. Journal-neo.com. It is quite a refreshing POV and for sure went right into my book-marks.