Forget Ukraine. Is Putin Getting Ready For An All Out Nuclear Strike On The US Economy? (PART II)

With heavy fighting breaking out all over East Ukraine (At least two Ukrainian army helicopters shot down over Slavyansk), it’s just the matter of time before Russia intervenes militarily. Yet, as we have reported yesterday in Part I of this story, there might be a much bigger story brewing behind the scenes.

According to some reports Mr.Putin has ordered a creation of exchange where Russian oil and gas will be traded in Rubbles or Euros or Pounds or Yuans or Goats, etc….basically anything but the US Dollar (aka Petrodollars). Russia wouldn’t be the first country to try this, but it would be the first country to be able to actually pull it off because of the nuclear force equalizer.

The countries that have attempted this in the past, most notably Iran, Iraq and Libya, have faced the full force of America’s military might or crippling sanctions. Will Putin be the first to pull this off?

He certainly has all of the tools and military power to do just that, but what would it mean to the USA?. According to some, an all out economic collapse. As the theory goes, if Mr.Putin is to strike at the heart of the American economy (by moving away from the Petrodollar), the US dollar will collapse, interest rates will surge, financial markets will crash and the US Economy will fall into a deep depression that will make the Great Depression look like a picnic.

Fact or fiction? I don’t buy it. First, the US Economy is too well diversified and too large to collapse because of Mr. Putin’s actions. Second, with the US Dollar being the global reserve currency and with no alternative in sight, it would take a lot more than accepting Rubbles for gas&oil to persuade the world to move away from the USD.

What it will do is weaken the USD and the US Economy and show that the US might no longer be in control. In other words, it would show a crack in the armor the USD and that could cause significant problems down the road. If the reports above are true, perhaps that’s exactly what Mr. Putin is trying to accomplish here.