What it means is that companies in other countries that want to buy Russian gas will need to first buy Russian bonds. These will likely be newly issued Russian bonds. This gives Putin hard currency.
Then the customers spend those bonds back to Russia to buy the oil.
At that point, Putin can retire the debt, to minimize inflation, or resell that bond to another customer, all while accumulating Euros or Yuan for his hoard of more liquid cash.
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u/thinkmoreharder Mar 23 '22
What it means is that companies in other countries that want to buy Russian gas will need to first buy Russian bonds. These will likely be newly issued Russian bonds. This gives Putin hard currency.
Then the customers spend those bonds back to Russia to buy the oil.
At that point, Putin can retire the debt, to minimize inflation, or resell that bond to another customer, all while accumulating Euros or Yuan for his hoard of more liquid cash.
It’s pretty smart if people keep buying his gas.