OPINION | Truth, lies, and sellotape writes Kanthan Pillay

A few thoughts around what has been happening in the world recently. You decide which is which.

  1. The EU refuses to pay for Russian gas in roubles. They have called Putin’s bluff.
  2. The Russia-Ukraine war is upending world order and will end globalization. Companies and governments worldwide will now be forced to further reevaluate their dependencies and reanalyze their manufacturing and assembly footprints. As de-globalization pushes inflation higher, central banks have a choice between higher prices or lower economic activity.
  3. Russia has withdrawn its purported goal of denazification of Ukraine. This is a sign that they are losing.
  4. The Russian rouble has recovered to near where it was before Western nations inflicted sanctions on the Russian central bank and economy. Russia has made all its foreign currency bond payments.

Well, let’s read between the lines…

  1. If the EU pays for Russian gas in euros, Russia cannot access payment for gas because euro transfers to Russia under sanctions are frozen. In other words, the EU would get free gas. This is not going to happen. Expect the EU to capitulate or have their gas turned off in two days. Also, Russia has upped the ante by offering to buy back US $2 billion Eurobonds maturing April in roubles,
  2. This is quoting directly from CEO and Chairman of Blackrock, Larry Fink, in his letter to shareholders . Blackrock is the world’s largest asset manager overseeing US $10 trillion.
  3. “Denazification” meant taking out the Azov Battalion which effectively controlled Mariupol. (The sea alongside the city is called the Sea of Azov.) Given that Russia has taken effective control of Mariupol with the Donetsk separatist flag flying over city hall, that objective has been achieved.
  4. Yes, this is from a Reuters report. Their analysts are now trying to explain why sanctions haven’t worked as expected.

By Kanthan Pillay

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