Putins Revenge!

By Amr Dabbous on January 21, 2015

This is probably one of the most important editorials youll read in 2015, and I mean it with every sense of earnestness. But first, let us set the
facts and numbers, which you wont find as direct and complete elsewhere. Europe imports around 36% of its natural gas from Russia, which
in turn exports 60% of it through Ukraine. The other 40%, Russia exports through Belarus, Latvia and Finland. When Russia supported the
separatists in Ukraine, the US and Europe responded with some tough sanctions against the Russians. This week, Russian president Vladimir
Putin ordered that Russian gas to Ukraine be stopped, accusing the latter of stealing it. The end result is that Europe just lost 22% of its total
natural gas supply overnight. Now the details.

Obviously, Putin has launched his own revenge agenda, and as usual hes playing it smartly by the book. He didnt cut Russian gas passing
through any other country, or otherwise, he would be officially declaring World War 3, and hes too smart to do that. Instead, he picked the
same country, which the Americans and the Europeans are claiming to defend, i.e. the cause of the problem, and which happens to handle the
majority of Russian gas exports. Instead, Putin is offering the West Russian gas through Turkey, and with infrastructure not ready yet, the
Europeans have to wait; let alone the infrastructure between Turkey and the rest of Europe. Do I hear anyone calling for Turkeys inclusion
to the EU? Well, lets first take Erdoans opinion on this.
And if you think this is all whats Putin been preparing for the West, youd be terribly wrong. The Russian president, this week, also ordered
the liquidation of Russias dollar dominated assets fund. He is now selling nearly 100 billion U.S. Dollar worth of Western assets, and what
is he doing with the cash? Aha, he is first rescuing his ailing Russian Ruble, and second, hes buying dirt cheap Russian energy stocks from
their Western shareholders! The Russian stock market, which lost 35% of its value in December 2014, tempted the Russian president to bring
those energy shares back home at less than half the price they were originally sold for. Smart enough? Read on, its not over yet!
Russia has been accumulating physical gold since 2005. Oh wait, this is when Putin served his first presidential era! Indeed, and now during
his second presidency, he has tripled his countrys gold reserves, so whats the trick? Simple, the Russian leader is moving closer to back his
Ruble with physical gold. He first hiked the key interest rate from 10% to 17%, then he gave state-owned companies until March 2015 to
bring down their foreign exchange balances to their October 2014 levels. This last move translates into tens of billions of U.S. Dollars being
sold for Rubles in the coming few weeks. And eventually, he looks set to back the Russian currency with gold.
And as if natural gas and gold were not enough of a revenge, Putin added oil to his arsenal. This oil price war started with both the Americans
and the Saudis triggering it in defense of the U.S. currency and in an attempt to bring Russia the worlds second largest oil exporter to its
knees. So how exactly did president Putin respond to this? He is selling Russian oil for physical gold! In other words, he is pulling Russia out
of the Petrodollar market, and hence exposing the U.S. currency to a disastrous outcome. Consequently, what started as an attempt to bring
Russia to its knees, could very possibly end with the U.S., Europe and the rest of the world except China on their knees instead.

The best thing I read on Vladimir Putin, which actually led me to burst into laughter was what Russian lawyer Dmitry Kalinichenko wrote
few days ago, when he described the case as follows: Very few people understand what Putin is doing at the moment. And almost no one
understands what he will do in the future. I definitely agree! So what should you be doing as this geopolitical financial war escalates? One
thing! Buy silver and gold, and reread our Gold.. is there hope? and Silver: Pick of the Year 2015 editorials before you go.
2015 Amr Dabbous & eTradingPicks.com. All Rights reserved.
Amr Dabbous is a prominent MENA economist and analyst. He is the author of two investment books and publisher of the quarterly "Top
Picks Report", where he forecasts the next best investment opportunities in equities, currencies and commodities! Get it FREE here:
http://www.etradingpicks.com/top-picks-report/
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