US Dollar Fate

Gazprom May Switch Oil, Gas Sales to Rubles as Dollar Weakens
By Dan Lonkevich
Nov. 29 (Bloomberg) -- OAO Gazprom, the world's largest natural-gas exporter, may start selling its crude and gas production in rubles rather than dollars and euros after the U.S. currency weakened.
``We are seriously thinking about selling our resources in rubles,'' Alexander Medvedev, Gazprom's deputy chief executive officer, told reporters today in New York. He didn't give a specific timeline for the decision.
The switch would happen ``sooner, rather than later,'' Gazprom Chief Financial Officer Andrei Kruglov told the same gathering of reporters.
To contact the reporters on this story: Dan Lonkevich in New York at dlonkevich@bloomberg.net .
Last Updated: November 29, 2007 14:04 EST
It is interesting to note that a primary concern other countries have with the drop in the US dollar relative to their currency is the fear that their trade export position, and consequently,thier export driven ecomonies would suffer. In the case of Gazprom, referenced above, considering repricing in rubles rather than US dollars signals a perception of the decreasing significance of ruble strengthening relative to the dollar. It suggests when the demand is relatively inelastic for an export, such as energy, the concern about the likelihood of decreased exports is diminished. Moreover, it is somewhat of a two edged sword. As the ruble strengthens the purchasing power, and consequently the real wealth of ruble holders increases. It is a win on two fronts, increased purchasing power and increased accumulation through continued export driven growth.
Absolutely brilliant. Wait until some of the other petro powers catch on to this.
Ryan Darwish
Author of The Emperor's Clothes: A Look at the MegaTrends Affecting Your Financial and Investment Decisionshttp://www.investmentmegatrends.com/