Thread by @bidetmarxman

Russia announced today that starting immediately, they will begin selling natural gas to ‘unfriendly countries’ in Rubles. This is a far bigger development than is being reported. 🧵

Russia currently supplies about 40% of Europe’s natural gas, which is used to heat homes and power their grid. Current EU sanctions against Russia have conveniently excluded nat gas for this reason.

There is no way for Europe to cut off such a significant portion of their own gas supply and not cause complete chaos. Even if the US and other countries swoop in to frantically try and make up the shortfall, the infrastructure to switch to LNG isn’t yet built.

The EU could maybe limp their way through the rest of this cold season, but by next fall they’ll be unable to heat their homes or power their grid. So they need Russian nat gas for the foreseeable future.

But given that the EU’s sanctions place them firmly within the ‘unfriendly’ camp, they are now faced with needing to procure Rubles to be able to purchase Russian nat gas. But how do they procure Rubles?

The EU have 4 options:
1. exchange gold for Rubles with Russia.
2. sell goods to Russia.
3. exchange Euros for Rubles on forex market
4. buy Rubles from Russia’s central bank with Euros/USD.

1 gold is sanction proof.
2 is impossible without lifting sanctions.
3 will cause the Ruble to appreciate against the €, something the US is vehemently fighting against.
4 Russia may not accept USD/€ given the ways their holdings could (and would) be weaponized against them.

If 4 occurs, this will force unfriendly countries to first purchase an intermediary currency, like the Yuan. The prospect of being forced into purchasing Yuan is something the west has been anticipating but has little defence against.

And this is the reason behind the recent barely veiled threats and gunboat style diplomacy from the US toward China for helping Russia skirt their unilateral sanctions. This bifurcation of the world into "with us or against us" is setting the stage for renewed sanctions on China.

The resulting prices on not just gas, but on all imported commodities in the EU are set to skyrocket. This is going to cause massive instability, which the US eagerly hopes to exploit.

Thus, we see that this entire conflict is arguably less about the west isolating Russia and more about cleaving a receding Europe off of Asia and forcing it back into dependency on the US.

The EU now has a choice to make: if they continue down the path of subordinating to US aggression against Russia, Europe will be plunged into chaos.

But if they break from the US, they have a chance at a soft landing. So far, they seem to be veering decisively toward the former.

Zooming out further, this conflict is a direct result of a declining rate of profit and the increased difficulty the core is having in imperializing the periphery, which is why we’re seeing the core begin the process of eating itself.

https://twitter.com/bidetmarxman/status/1502963848432607233?s=20&t=bxizBAsozQa5BafgzP4Ksg