This headline is only half right–“Putin turns up the heat in Ukraine.” It should read, Obama and Putin turn up the heat. I think this is the big story, and it is being underreported. It has both financial and real war implications.
Let’s start with what Russia is doing. It is now going to issue a new bond based in the yuan. Are you getting that? This is yet another move away from using the U.S. dollar to settle international trade. Russia is also hiking the price of natural gas to Ukraine by at least 50% in May. The Russians are going to want the cash for natural gas up front. Russia is warning of the dire debt crisis in Ukraine and how this could threaten Russian natural gas deliveries to the EU. I said it’s game on for financial war, and this is proof.