Just now, a new round of financial sanctions imposed by the United States on Russia formally came into effect. Since June 14, U.S. companies have been prohibited from buying Russian government bonds issued for the first time, and Russian government bonds issued in euros have also been included in the prohibition of buying, which was once called the “most powerful” punitive measure in the financial market.

Russia’s counterattack was also unrelenting. The Russian Ministry of Finance announced that it would change the structure of the National Wealth Fund in the next month, reducing the share of the US dollar to zero, and Russia almost completely emptied the US long-term national debt.

The timing of this round of competition between the two sides in the financial market is very sensitive. On June 16, local time, US President Biden and Russian President Putin will meet in Geneva, Switzerland for a US-Russian summit. On the eve of the summit, the capitals of the two parties have already released “ruthless words.” Therefore, the market expects that this meeting will be the fiercest political game.

The “most powerful” financial sanctions?The U.S. puts pressure on Russia again

According to CCTV News, since June 14, US financial sanctions against Russia have come into effect. The U.S. government prohibits domestic companies from buying Russian government bonds (in rubles) that are issued for the first time. Russian government bonds issued in euros are also included in the prohibition. However, U.S. companies are allowed to trade Russian government bonds on the secondary market.

So, how much impact will this punitive measure, regarded by the financial market as “the most powerful”, have on the Russian economy?

First, let’s look at the scale of Russian national debt issuance. According to the latest data from the Audit Office of the Russian Federation, as of the first quarter of 2021, Russian national debt has increased by 741.3 billion rubles (approximately RMB 64.4 billion) from the previous quarter. The total scale of Russian debt is as high as 19.7 trillion rubles (about 1.71 trillion yuan), accounting for 17% of Russia’s GDP.

At present, the government bonds of the Russian Federation held by foreign investors are about 2.7989 billion rubles, accounting for about 14% of the total size of Russian bonds, but this part of the government bonds are stocks that are normally traded in the secondary market and are not subject to the US sanctions. limit.

In addition, looking at the issuance of Russian government bonds, Gehrman Greev, President of the Russian Federal Reserve Bank, made it clear that Russia’s related bond issuance plan will be completed as scheduled. According to the Russian Ministry of Finance, starting from June 16, Russia will release its first national debt to the market, and will issue three national debts worth 500 billion rubles on the same day.

The British analyst firm Oxford Economics believes that because the United States only prohibits the purchase of Russian government bonds in the primary market, the sanctions have limited impact on the Russian government bond market, and are more symbolic. If sanctions (the United States against Russia) affect transactions in the secondary market, the threat effect will be very violent.

Faced with the entry into force of US financial sanctions, Russian Finance Minister Siluanov also strongly stated that Russian government bonds will still maintain a high demand rate and that sanctions will only cause losses to US companies.

In fact, this financial sanctions policy began in mid-April this year, when the U.S. government announced a series of measures to sanction Russia, including prohibiting U.S. companies from buying Russian initial treasury bonds, but they can buy and sell Russian treasury bonds on the secondary market. Effective from June 14, 2021.

At that time, the reasons for the sanctions given by the United States were that Russia interfered in the U.S. election, hacked the system, and a series of “hostile acts.” In addition to prohibiting U.S. companies from buying Russian government bonds, it also expelled 10 Russian diplomats. The U.S. Treasury Department Thirty-two Russian entities and individuals were sanctioned.

Fight back! Russia is going to dump the U.S. dollar and U.S. debt?

Russia has already begun to “strike back” against the US financial restrictions. On June 3, local time, Russian Finance Minister Siluanov stated at the St. Petersburg International Economic Forum that the Russian Ministry of Finance will change the structure of the State Wealth Fund within one month, in which the share of the US dollar will be reduced to zero and the share of the British pound will be reduced. At 5%, the yen will remain at 5%, the euro will grow to 40%, the renminbi will grow to 30%, and gold will account for 20%.

It is reported that the Russian National Wealth Fund was established to support the Russian pension system. Its funds can also be used to make up for the budget deficit during the crisis. It has now become an important part of the Russian Federation’s budget assets.

According to data disclosed on the official website of the Russian Ministry of Finance, as of May 1 this year, the total assets of the fund reached 185.87 billion US dollars, or 13.82 trillion rubles (equivalent to RMB 1.2 trillion), accounting for 12% of Russia’s GDP.

As of early May, the fund’s liquid assets were worth approximately US$119 billion, of which one-third (approximately US$41.5 billion) were in US dollars. This means that in the next month, the Russian National Wealth Fund will substantially sell US dollars.

On February 24 this year, the Ministry of Finance of the Russian Federation announced that it would include the RMB and the Japanese Yen in the National Wealth Fund. The two currencies accounted for 15% and 5% of the fund’s foreign exchange structure, respectively. At the same time, the share of the US dollar and the euro both fell to 35%, while the share of the British pound remained unchanged at 10%.

Russian President Press Secretary Peskov said in response to a question about the adjustment of the investment structure of the National Wealth Fund that de-dollarization is a long-term process visible to the naked eye. Not only Russia is de-dollarizing, but many countries in the world are also doing similar things. , Because these countries are beginning to worry about the reliability of the major foreign exchange reserve currencies.

Before March 2018, the U.S. dollar has been one of the most important foreign exchange reserves of the Russian Central Bank, accounting for as high as 43%-48%. Since then, as the United States has tightened sanctions against Russian companies and citizens, in order to minimize the risk of sanctions, the Central Bank of Russia began to continuously reduce the proportion of U.S. dollars in foreign exchange reserves. As of the end of 2020, U.S. dollars and U.S. dollar assets are in Russia’s international The share of reserves has dropped to 21.2%, and the share of gold and RMB has increased to 23.3% and 12.8%.

While Russia is selling the U.S. dollar, it is also reducing its holdings of U.S. Treasury bonds in a “clearing-out” manner. According to the latest data released by the US Treasury Department, in February this year, Russia almost completely emptied long-term US Treasury bonds (only US$306 million left), and reduced its holdings of US debt by US$389 million that month, and the final position dropped to US$5.8 billion. Compared with Russia’s highest holding of US debt, the cumulative sell-off ratio reached 94%.

Biden and Putin are about to meet, how to talk?

Behind the secret rivalry between the United States and Russia may be for the upcoming summit of US-Russian leaders.

According to the official website of the White House, US President Biden will meet with Russian President Putin in Geneva, Switzerland on June 16, local time.

At this point, Biden is already in Europe and has just finished attending the G7 summit. After three days of dialogue and consultation, the leaders of the G7 announced that they have reached a certain consensus on fighting the epidemic, rebuilding the economy, trade reform, and green transformation. It will be announced in the form of a summit communiqué.

China has been mentioned many times in the G7 Communiqué, and it even touched on issues such as Xinjiang, Hong Kong, and Taiwan. Subsequently, the spokesperson of the Chinese Embassy in the United Kingdom said in response to reporters that the G7 Communiqué published distorted and reversed remarks on Xinjiang, Hong Kong, Taiwan and other issues, deliberately slandered China, and arbitrarily interfered in China’s internal affairs. The serious violation of the basic norms of international relations has further exposed the sinister intentions of a few countries such as the United States. We are strongly dissatisfied and firmly opposed to this.

India, which is plagued by the epidemic, is also making small calculations. The Global Times quoted foreign media reports that India may join the G7 infrastructure plan, which aims to provide a so-called “value-driven, high-standard, and transparent” partnership against China. The Belt and Road Initiative.

If the G7 summit is a closed-door game of tongue war, then the probability that the US-Russian summit on June 16 will not make Biden so easy, and the meeting between Biden and Putin will likely be The fiercest political game.

In fact, from the series of signals released by the United States and Russia before the meeting, a strong smell of gunpowder can be smelled.

On June 6, Biden’s signed article in The Washington Post stated that the United States does not seek to conflict with Russia, but will not hesitate to respond to Russia’s harmful activities in the future. When meeting with Putin, he will emphasize again The United States, Europe, and like-minded democracies support the promise of human rights and dignity.

According to CCTV News, on June 4, local time, Russian President Putin spoke at the St. Petersburg International Economic Forum. Speaking of the upcoming summit of Russian-US leaders, he said that Russian-US relations are at a very low level, and he will work with US President Biden to find solutions to the problems of bilateral relations, and will discuss strategic stability, arms reduction, and the new crown epidemic. And other issues.

Putin pointed out that Russia and the United States have no differences, but the United States wants to contain Russia’s development. He said that the relationship between Russia and the United States has largely become a bargaining chip for the United States to govern its internal affairs, and hopes that this situation will end at some point.

In addition to the mutual temptation of the two heads of state on the verbal level, the wrestling of military forces between the United States and Russia has also become more frequent. On June 11, the National Defense Management Center of the Russian Ministry of Defense announced that the US Navy’s “Labourn” guided-missile destroyer had entered the Black Sea and the Russian Black Sea Fleet had begun to monitor it.

On the same day, the U.S. Pentagon suddenly announced that it would allocate 150 million U.S. dollars in security assistance to Ukraine to help Ukraine maintain its territorial integrity and improve its coordination with NATO. On the Russian side, the Russian Navy held the largest military exercise after the collapse of the Soviet Union to show off its muscles.

From this point of view, the secret rivalry between the US and Russia on the financial and military levels may be to increase the weight of the negotiations at the upcoming US-Russian leadership summit.

Bad cell phone reception Lost in the dead zone

As of: June 8th, 2021 3:59 p.m.

Cell phone reception is still patchy in many rural areas. According to the network agency, more than ten percent of the country’s area is affected. Expansion is often delayed – companies could now face sanctions. The deeper you go into Germany’s rural regions, the worse the cell phone reception. This is the result of a current report by the Federal Network Agency. This is by no means a rare phenomenon. As the report shows, the supply is poor or non-existent on eleven percent of the country’s area. However, complete dead zones are really rare: Cell phone users, regardless of the provider, have no reception at all on just 0.3 percent of the area in Germany – they are “areas that are not provided with any technology”. This proportion is highest in Bavaria and Rhineland-Palatinate with 0.8 percent. In eight of the 16 federal states it is zero.

Annoying “gray spots”

However, 3.8 percent of the country’s area is referred to as so-called “white spots” in the report. In these areas, reception is only possible in the age-old 2G cellular standard. This standard is too slow for modern, complex mobile radio applications such as videos. 7.2 percent of the area are considered “gray spots”. Only one of the three German cellular networks, Telekom, Vodafone or Telefónica Deutschland, can be received there in the 4G standard. Anyone who is a customer of another network is left behind. Gray spots are astonishingly widespread: In Baden-Württemberg the proportion is ten percent, in Hesse and Rhineland-Palatinate it is 9.9 percent. Bavaria is fourth from bottom with 9.2 percent.

Industry points to high costs

In the Internet age, stable cell phone reception across the board is considered crucial for the development of rural areas. The flow of data is also becoming increasingly important for farmers in the fields, forest workers and hikers. The data from the Federal Network Agency show how great the need for expansion is. The telecommunications industry points to the high costs incurred in rural expansion. The network operators are now cooperating with each other to fill the gaps. In addition, there is a new state “mobile radio infrastructure company” that wants to use funding to enable radio locations where economic operation is not worthwhile. In the future, it is also planned to map 5G coverage and the main points of disconnections in voice telephony in a suitable form.

Main traffic routes not fully supplied

The report by the Federal Network Agency also deals with the issue of network supply along the main transport routes. Since the beginning of 2020, there should be 4G reception everywhere on motorways and ICE routes. However, 100 percent coverage has not yet been achieved. In the case of the motorways, the degree of coverage is between 95.4 and 99 percent, depending on the company, and between 94.4 and 98.2 percent for the railways, writes the Federal Network Agency. After all, the supply along the main traffic routes has been improved.

Fines not excluded

The authority refers to a total of around 550 locations where the companies were unable to ensure the required network supply in good time. “The examination has shown that there are cases of actual and / or legal impossibility at around 20 planned locations. The majority of the cases are temporary delays,” it says. The Federal Network Agency is currently examining possible sanctions against the mobile network operators. It is crucial here whether the delays were caused by the mobile network operator – for example due to late planning of the location – or by third parties, for example due to long building permit procedures or late cancellations by landlords. If the network operator is responsible for the delay, there is a risk of fines.

The German government remains committed to completing the Nord Stream 2 project despite strong objections from Washington. Photo: AP According to Bloomberg, Foreign Minister Maas affirmed that it is too early to conclude that the US will not impose additional sanctions against the Nord Stream 2 project. Maas emphasized, in fact, in US politics, neither Democrats nor Republicans have a positive view of the gas pipeline from Russia to Germany. However, Minister Maas expects that the gas cooperation project between Moscow and Berlin will no longer be a conflict in US-German relations. The US has repeatedly voiced its objections and continuously put pressure on the implementation of the Russian gas project. Most recently, Washington imposed sanctions on 13 Russian ships and 3 companies related to the project, but lifted sanctions on Nord Stream 2 AG – the company operating the Stream project. The North 2, and CEO Matthias Warnig. Speaking at a press conference on May 19, Foreign Minister Maas said the US decision was “a constructive step”, and affirmed that Berlin would continue to dialogue with its partners in Washington. The German government remains committed to completing the Nord Stream 2 project despite strong objections from Washington, and asserts that this pipeline will help ensure Europe’s energy security and is completely a economic project. In a related development, Russian President Vladimir Putin on June 4 said that the Nord Stream 2 project is ready to transport natural gas from Russia to Germany.

Last week, the administration of US President Joe Biden imposed sanctions on Russia. (Source: Getty) On April 23, White House top international economic aide Daleep Singh said that the US sanctions imposed on Russia last week had achieved “pretty close” results. Washington, amid tensions between the two countries over Ukraine, seems to have eased. “Our intention is to act adequately, to focus on our approach, as well as to signal that we are likely to cause greater losses if Russia continues,” Mr. Daleep Singh stated. To date, the results of the sanctions are quite close to our expectations. ” Earlier, the Russian Defense Ministry said it had begun withdrawing military units from the Crimean Peninsula to its permanent bases after deploying tens of thousands of soldiers near the Ukrainian border area, causing concern. afraid of war. Last week, the administration of US President Joe Biden imposed sanctions against Russia for “intimidating” Ukraine, meddling in the US election in 2020, cyber attacks and other actions. . Mr. Biden passed provisions to make it easier for officials to extend sanctions in any sector of the Russian economy in response to future aggression. However, Mr. Biden also stressed that he did not want to escalate tensions with Russia.

Are you really worried that the upcoming climate summit will be yellow?

According to CNN, US President Biden will organize a global climate summit from April 22 to 23. The United States also deliberately mentioned inviting Russia and China to participate. Recently, some media reported that Biden proposed the possibility of face-to-face talks between the United States and Russia. However, at this critical juncture, the United States suddenly launched sanctions and pressure, just as it did with the negotiations with China.

On the evening of April 15, Beijing time, according to the White House website, Biden will ban Bank of America from participating in the primary market of Russian sovereign debt denominated in rubles from June 14. Restricting Russia’s sovereign debt is a direct response to Russia’s intervention in the 2020 U.S. election. At the same time, the U.S. Treasury Department sanctioned 32 entities and individuals who implemented the instructions of the Russian government in an attempt to influence the 2020 U.S. presidential election and other acts of spreading rumors and interference.

On the other hand, the Middle East, which is also an oil-producing region, has also been extremely uneven recently. The Houthi armed forces and Saudi Arabia seem to have a sense of immortality. A spokesman for the organization said on the 15th that the use of drones and 11 missiles in Jizan attacked Saudi Aramco’s oil facilities. The missile and drone attack caused a fire at a Saudi Aramco facility. Accidents continued in Iraq. On the evening of April 14, local time, another explosion occurred at the international airport in Erbil, the capital of the Kurdish Autonomous Region in northern Iraq, and the US consulate near the area sounded an alarm. On the 15th, Baghdad was attacked by a bomb again, causing more than a dozen casualties.

Oil prices fly again?

“Hot Hand” Biden

The United States suddenly increased sanctions against Russia.

According to news from the White House website on Thursday night, President Biden signed a new executive order of sanctions to show that the government is determined to deal with and contain all harmful activities in Russia. This executive order sends a signal that if Russia continues or escalates its destabilizing international operations, the United States will impose costs on Russia in a way that has strategic and economic influence. This especially includes undermining efforts to hold free and fair democratic elections and democratic institutions in the United States and its allies and partner countries; participating in and targeting malicious cyber activities against the United States and its allies and partners; facilitating and using transnational corruption to influence foreign governments; engaging in targeting Extraterritorial activities of dissidents or journalists; undermining the security of countries and regions that are vital to the national security of the United States; violation of recognized principles of international law, including states that respect territorial integrity.

In these actions, President Joe Biden authorized the U.S. government to impose sanctions on any sector of the Russian economy and to restrict Russia’s ability to issue sovereign debt in order to punish Moscow for interfering in the 2020 U.S. election.

Biden will ban Bank of America from participating in the primary market of Russian sovereign debt denominated in rubles from June 14. Restricting Russia’s sovereign debt is a direct response to Russia’s intervention in the 2020 U.S. election. Biden will issue an executive order authorizing the US government to crack down on any area of ​​the Russian economy. Withdrawing US buyers from the primary market for ruble-denominated Russian sovereign debt may increase Russia’s borrowing costs. The US move may also cause capital to flee Russia, leading to a devaluation of the Russian currency. The new executive order authorizes the United States to increase restrictions on Russian sovereign debt when necessary.

The United States announced sanctions on six Russian companies that have supported cyber attacks on U.S. federal agencies and companies. The United States will expel 10 Russian intelligence officials. Since 2019, Bank of America has been banned from entering the main market for non-ruble sovereign bonds. The U.S. Treasury Department also blacklisted 32 entities and individuals to punish Russia for influencing the 2020 U.S. presidential election and other “disinformation and interference behaviors.” At the same time, the United States has also cooperated with the European Union, the United Kingdom, Australia and Canada, and the Treasury Department has sanctioned eight people related to Russia’s continued occupation and suppression of Crimea.

On April 14, local time, according to RIA Novosti news, US Ambassador to Russia John Sullivan was invited to meet with Russian Presidential Assistant Yuri Ushakov. Ushakov stated that if the United States imposes a new round of sanctions on Russia when President Biden intends to improve relations with Russia, Russia will respond in the strongest way. On the 15th, after the White House issued a sanctions order, a Russian Foreign Ministry spokesperson stated that Russia’s response to US sanctions is inevitable. The sanctions imposed by the United States are contrary to the interests of our two countries.

On April 13, Russian President Vladimir Putin was invited to have a telephone conversation with US President Biden. During the call, Biden expressed interest in normalizing bilateral affairs and was willing to establish a stable and predictable interaction mechanism with Russia. At the same time, Biden proposed to consider the possibility of holding a meeting between the two heads of state in the near future. However, the sudden picking of the matter by the United States may make the prospects of the US-Russian talks dim.

War continues in the Middle East

Russia, the United States, and the Middle East are always inseparable from this triangular relationship, even if the United States is withdrawing troops from Afghanistan recently. The most unstable corner of this triangle is the Middle East. Recently, wars in the Middle East have continued, and the two most prominent places are: Saudi Arabia and Iraq.

The former provoked a Houthi who could not get rid of it. According to Reuters, the Yemeni Houthi militants said on the 15th that they used drones and missiles to attack multiple targets in the southern Saudi city of Jizan. Among them, a facility of Saudi Aramco, the national oil company of Saudi Arabia, caught fire. At the same time, the organization also launched an attack on the Saudi “Patriot” anti-missile system. The Saudi Press Agency reported that Saudi Arabia intercepted 4 drones and 5 missiles that attacked Jizan.

Since this year, the Houthis have never stopped their attacks on Saudi Arabia, and the source is still the original Yemeni government. On January 22, 2015, after the Houthi armed forces occupied the presidential palace, official residences and important military facilities, President Abdul Rab Mansour Hadi and his cabinet resigned. It was announced on February 6 that the “Presidential Committee” and “National Transitional Committee” were established to replace the Yemeni president and parliament to govern the country. The United Nations said it would not recognize it. On November 5, 2017, Saudi Arabia issued a reward for the arrest of 40 leaders of the Houthi armed group in Yemen, with a total bonus of up to 440 million U.S. dollars. It has always been believed that Iran is behind the Houthi, and Saudi Arabia is behind the original government of Yemen. This is also the main reason why Houthi has always attacked Saudi Arabia.

In addition to the Houthis’s constant attacks on Saudi Arabia, Iraq is also very uneasy. After Biden came to power, Iraq has never stopped, and news of bomb attacks have been reported continuously. On the evening of April 14, local time, an explosion occurred at the international airport in Erbil, the capital of the Kurdish Autonomous Region in northern Iraq, and the US consulate near the area sounded an alarm. The Kurdish Autonomous Government’s counter-terrorism department stated that the explosion was caused by at least one rocket attack. There are US troops stationed in the military zone of Erbil Airport, and there is no specific information on casualties and property damage.

On April 15, Iraqi police and medical sources said that 4 people were killed and 17 others were injured in a car bomb attack in the Sada city area of ​​Baghdad on Thursday. Police said the car was parked in a busy second-hand equipment market in a predominantly Shia Muslim area. The Iraqi military statement stated that the explosion targeted the eastern market in Baghdad, killing a civilian, wounding 12 people, and opening fire and destroying several cars.

Oil prices still fly?

On the evening of April 14th, international oil prices soared suddenly, and Bulk Oil finally closed up by more than 4%. As the political situation of oil-producing countries changes, does it mean that oil prices are still flying?

Goldman Sachs (Goldman Sachs) analysts said in a report that supply constraints and economic recovery will provide oil with an opportunity to break through the near-term range. Goldman Sachs analysts said: “Due to the recent rebound in demand and supply laws, we are optimistic about the forecast of Brent oil prices in the third quarter of 2021 at 80 US dollars per barrel.”

As the economy promotes decarbonization and the penetration rate of electric vehicles continues to increase, Goldman Sachs has also advanced the estimated peak of global oil transportation demand to 2026 by one year. Even so, he did not predict the peak oil demand in the next ten years due to the growth of petrochemicals and aviation fuel markets, although it is expected that the overall oil demand after 2025 will be “mainly due to electrification to reach a downturn.”

In fact, apart from economic factors, political factors are also very important. It can be expected that as the situation in the Middle East continues to be tense, Russia’s development space will continue to be squeezed, and there will be great variables in the supply of oil. Moreover, from the current technology point of view, although electric vehicles are popular, they also need electricity, and whether it is lithium batteries or fuel cells, it is largely converted from petrochemical energy. From this perspective, in the short term, the price of crude oil may have a tendency to rise easily but not fall.

Russian President Vladimir Putin and US President Joe Biden.

The sanctions are part of the US government’s response to Russia’s election meddling in the US and the launch of the SolarWinds cyber attack last December, according to the New York Times.

Sources say that among the Russian citizens that the US is preparing to impose sanctions are both government officials and intelligence services.

The Wall Street Journal also cited sources as saying that US President Joe Biden would issue a decree extending a ban on US banks from conducting transactions related to Russia’s national debt.

Earlier in January, the US Agency for Cyber ​​Security and Infrastructure (CISA) issued a joint statement by the FBI and several other agencies, under which Russia is likely to be behind the attack. Large-scale networks targeted at customers of the computer security firm SolarWinds.

According to Washington, the goal of the attack was to gather intelligence. However, it was later reported that the attackers did not gain access to sensitive information.

In mid-March, US intelligence released a new report, accusing Russian President Vladimir Putin of directing the Russian government’s influence campaigns to reduce the likelihood of Democratic candidate Joe Biden’s victory in elections in 2020 and deepening political divisions in America.

Advisor to US President Joe Biden on national security Jake Sullivan recently stated that in response to this attack the White House is ready to use a variety of methods, not only sanctions but also “tangible and intangible” tools.

The New York Times also wrote that the US is planning to carry out “secret counterattacks” on Russian systems.

The Kremlin rated the allegations as “completely unfounded” and said that this was just an excuse for the new sanctions. Kremlin spokesman Dmitry Peskov said Russia did not interfere in the US election and was not involved in cyber attacks.

.