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Page added on April 15, 2014
Russia has a secret weapon against the West, and it’s not oil, gas or nukes
Energy markets have been a bit more volatile recently, thanks to sporadic violence in Ukraine and the war of words between Russia and the West. Both sides of the conflict are playing pipeline politics, with threats and counter-threats flying between some of the world’s biggest energy suppliers and consumers. As tempers flare, the threat of crucial pipelines running dry is enough to frighten even the steeliest traders.
Although oil and gas are top of mind, they aren’t necessarily the only commodities that traders are worried about. Palladium prices spiked to a three-year high today:
Russia is the world’s largest producer of the metal, a crucial ingredient for catalytic converters in cars, capacitors in electronics, dental crowns, jewelry, and much else besides. As the West threatens tougher sanctions against Russia for its perceived provocations in eastern Ukraine, Russia may try to do equal damage with trade restrictions of its own. Limiting palladium exports may be a useful weapon—harsher than the travel bans imposed on key Western officials, but not as provocative as oil or gas embargoes.
What gives Russia a strong hand in a potential game of “palladium politics” is that miners are on strike in South Africa, which happens to be the world’s second-largest palladium producer. Some 80,000 miners walked out in January over a pay dispute, and have yet to return to work. Between them, Russia and South Africa control more than three-quarters of the world’s palladium supply, according to Johnson Matthey. Last year, global palladium demand outstripped supply by 23 tonnes (25.4 tons), so stocks were already running low.
Europeans are rightly worried about the reliability of Russian energy supplies, while the US has begun to throw its weight around as a potential swing producer in the oil markets. But the initial skirmishes in the economic war between Russia and the West won’t be fought over pipelines.
The US has already leveraged its financial-sector might to hobble a Russian bank and disrupt the country’s payment systems, while European countries have frozen Russian defense contracts. Russia’s control of an obscure but important precious metal gives it a means to retaliate; the price of palladium is up 13% in the spot market so far this year, with futures suggesting further gains ahead. It may sound strange, but a dispute over territory in Ukraine might push up prices in European car showrooms and American dental clinics.
4 Comments on "Russia has a secret weapon against the West, and it’s not oil, gas or nukes"
Makati1 on Wed, 16th Apr 2014 2:25 am
Interesting turn isn’t it? Now we wait for the escalation or the surrender by the Empire.
Arthur on Wed, 16th Apr 2014 7:16 am
Forget about paladium. The ultimate weapon Russia has against the western elite is the one hidden in their WW2 archives. Push Putin too much and he will open that box of Pandora, straight into the camera instead of via proxies like Iran or the Russian ministery of defense.
http://www.telegraph.co.uk/news/worldnews/europe/russia/5445161/Russia-accuses-Poland-of-starting-Second-World-War.html
rockman on Wed, 16th Apr 2014 1:27 pm
Arthur – Thanks. For a long time I had suspected Hitler was really a Pole pretending to be from Austria. Now we have the proof.
I tease you but I do understand the situation was much more complex then most realize.
Arthur on Wed, 16th Apr 2014 5:33 pm
History is written by the victors. Russia was one of the victors. Now Russia is pushed in the defensive by former (1933-1945) ally USA. At some point Russia could be tempted to let the cat (historic truth) out of the bag in return for an alliance with Germany (and the rest of the EU, currently gradually shifting to the right). In order to do that, Russia needs to jump over it’s own shadow and admit that the real picture was vastly different from what we learn at school.
P.S. Hitler was an Austrian, looking down a little on the Poles. He was desperate to have an alliance with Britain, but the US and their proxy Churchill made sure that that would not happen, although Chamberlain was willing. Confronted with an escalating Polish situation around the German town of Dantzig, parked in Poland at the end of WW1, he got an offer from the hated Soviets, who understood that Hitler needed cover in the East so he could intervene in Poland and hope that the Pact with Soviet-Russia would keep the British and French from declaring war on Germany. It was all a trap. When Britain and France declared war on September 3 regardless, the Germans were devastated as their strategy had failed. What began with a dispute over a German town escalated into a world war, planned from the start by Roosevelt, paid stooge Churchill and Stalin. Now Putin could let THAT cat out of the bag.
You read it all here first.lol
youtube I7zVLfjWzmE (Viktor Suvorov’s book presentation at the United States Naval Academy on October 7, 2009)
youtube FfKdCH0D_Xw (Tyler Kent)