Current Affairs Ukraine

[Deleted member 48881]

yes yes yes yes yes yes

 

[Martin Alvito]

The SWIFT international payments system said on Saturday it was preparing to implement Western nations’ new measures targeting certain Russian banks in coming days, Reuters reports.

In a statement, it said:




-- If Ukraine can hold on until Wednesday I think that date is going to be a turning point. Just guesswork.

The Russian people's everyday lives will be affected, bank runs could be severe and the Anonymous group hacking Russian media tells the public why this is happening and the world is watching.

Putin can do away with reserve requirements at the stroke of a pen. The US, UK and Canada all function without reserve requirements. I don't think bank runs will be a problem.

No one really knows what will happen as a result of this. The logic is the same as it was with Iran - cut off an economy built on fossil fuel exports, and they are going to struggle. There are substantive differences this time around. Iran did not have a real outlet. Russia does. The sanctions will jack up global oil and gas prices, but the Chinese can and will buy more from the Russians given a sufficient discount. That shouldn't much affect the Russians on price. The problem is getting it there.

There are ways (tankers, lay more pipeline) to address that issue, but they take time and cost money. We know Putin has a war chest for taking a financial punch, and some sketchy reports on how large that war chest is. I can think of some ways that he could address short-term problems while integrating his economy more closely with China's energy sector. I have no idea whether his war chest is up to it, or whether or not an authoritarian leader of an economy that size can pull off some financial voodoo in order to avert chaos if the war chest falls short. It's not a proposition that has been tested.

The sanctions also probably mean that things like some of the more popular cheeses, which are largely imported, will disappear from Russian store shelves and domestic products will become more expensive. The Russians import a lot of machinery, which means that they also import a lot of replacement parts, and that could get interesting. I don't know enough about the details on what they import, or what their options are for evading possible import controls, to tell you what the implications are.

 

[Sassy Colombian]

Earlier today we discussed the war in Ukraine with my daughter because she wanted to know why we have been so concerned the past couple of days. It is not easy to talk with your child about such subject and she is obviously scared, but thankfully tonight as we go to bed she has nothing to be worried because she has a safe home. Unlike the many children that are being bombarded by Russia and are having to flee their homes to find safe shelter. This shouldn’t be happening. It is sickening, it is heartbreaking.

 

[Zatara]

Putin can do away with reserve requirements at the stroke of a pen. The US, UK and Canada all function without reserve requirements. I don't think bank runs will be a problem.

No one really knows what will happen as a result of this. The logic is the same as it was with Iran - cut off an economy built on fossil fuel exports, and they are going to struggle. There are substantive differences this time around. Iran did not have a real outlet. Russia does. The sanctions will jack up global oil and gas prices, but the Chinese can and will buy more from the Russians given a sufficient discount. That shouldn't much affect the Russians on price. The problem is getting it there.

There are ways (tankers, lay more pipeline) to address that issue, but they take time and cost money. We know Putin has a war chest for taking a financial punch, and some sketchy reports on how large that war chest is. I can think of some ways that he could address short-term problems while integrating his economy more closely with China's energy sector. I have no idea whether his war chest is up to it, or whether or not an authoritarian leader of an economy that size can pull off some financial voodoo in order to avert chaos if the war chest falls short. It's not a proposition that has been tested.

The sanctions also probably mean that things like some of the more popular cheeses, which are largely imported, will disappear from Russian store shelves and domestic products will become more expensive. The Russians import a lot of machinery, which means that they also import a lot of replacement parts, and that could get interesting. I don't know enough about the details on what they import, or what their options are for evading possible import controls, to tell you what the implications are.

The Russian central bank has around $620billion in FX and Gold reserves.

Of that amount theres probably $120billion in physical bars and currency.

If the central bank is targeted with sanctions then the $500+billion will be in limbo as it will be in digital form.

So the central bank itsself will go from having $620billion to $120billion (approx) in working/useable capital.

This goes from the central bank...to the institutions...to the corporates...

...to the individual who simply wants to make an overseas incoming/outgoing bank transfer.

If the sanctions are as advertised.

 

[BlueTX]

 

[LinekersLegs]

The Russian central bank has around $620billion in FX and Gold reserves.

Of that amount theres probably $120billion in physical bars and currency.

If the central bank is targeted with sanctions then the $500+billion will be in limbo as it will be in digital form.

So the central bank itsself will go from having $620billion to $120billion (approx) in working/useable capital.

This goes from the central bank...to the institutions...to the corporates...

...to the individual who simply wants to make an overseas incoming/outgoing bank transfer.

If the sanctions are as advertised.

And all that is assuming usual deposit/withdrawal rates.

People/companies adapt over the long term and I’d presume that Russia has studied the lessons learnt of what worked/didn’t in Iran but these sanctions, particularly the central bank one, seem to have some teeth.

 

[Martin Alvito]

The Russian central bank has around $620billion in FX and Gold reserves.

Of that amount theres probably $120billion in physical bars and currency.

If the central bank is targeted with sanctions then the $500+billion will be in limbo as it will be in digital form.

So the central bank itsself will go from having $620billion to $120billion (approx) in working/useable capital.

This goes from the central bank...to the institutions...to the corporates...

...to the individual who simply wants to make an overseas incoming/outgoing bank transfer.

If the sanctions are as advertised.

I'll be honest. I'm not sure how you think these details map onto Putin's ability to prevent a drastic drop in standard of living, or retain control of the security apparatus if he cannot.

I know how I think about these problems, and it seems clear that I think that these details represent a much smaller problem than you do. Can you tell me why you think this matters?

And all that is assuming usual deposit/withdrawal rates.

People/companies adapt over the long term and I’d presume that Russia has studied the lessons learnt of what worked/didn’t in Iran but these sanctions, particularly the central bank one, seem to have some teeth.

They're meaningful. I would argue that the difficulties in transacting business and presumed drop in his ability to import critical goods and export goods (with the attendant spillover effects) are going to be a much bigger deal than a freeze on electronic assets.

 

[Deleted member 48881]

 

[Frenk]

Less incompetenter than the orange fascist

Personally, I think they are indistinguishable on an incompetency level. It’s a joke that Americans chose either of them.

 

[LinekersLegs]

I'll be honest. I'm not sure how you think these details map onto Putin's ability to prevent a drastic drop in standard of living, or retain control of the security apparatus if he cannot.

I know how I think about these problems, and it seems clear that I think that these details represent a much smaller problem than you do. Can you tell me why you think this matters?


They're meaningful. I would argue that the difficulties in transacting business and presumed drop in his ability to import critical goods and export goods (with the attendant spillover effects) are going to be a much bigger deal than a freeze on electronic assets.

Think domestically that bank runs could be a real issue, guess we’ll see on Monday.

 

[Martin Alvito]

Think domestically that bank runs could be a real issue, guess we’ll see on Monday.

I think there are ways out of the box, if you stop thinking like a Westerner and implicitly assume that standard financial rules cannot be end-run.

I've shouted at enough Krugman articles over the years to know what I think about macroeconomists, even Nobel Prize winners, getting out of their lane and into mine. I respect what they do, respect Krugman and his clear communication enormously, and generally defer to their judgment in their areas of expertise unless I have very good reason to believe otherwise.

I also get very irritated at their blind spots.

 

[LinekersLegs]

I think there are ways out of the box, if you stop thinking like a Westerner and implicitly assume that standard financial rules cannot be end-run.

I've shouted at enough Krugman articles over the years to know what I think about macroeconomists, even Nobel Prize winners, getting out of their lane and into mine. I respect what they do, respect Krugman and his clear communication enormously, and generally defer to their judgment in their areas of expertise unless I have very good reason to believe otherwise.

I also get very irritated at their blind spots.

Like what?

There are limitations to how much physical currency is available at one time - if credit cards don’t work and everyone wants all, or even a bit of their bank deposits, all at the same time I don’t see a way out of that box.

 

[Yarrgh]

Nah I don't think there's really much appetite at all in the UK for people to own guns other than the posh toffs who like shooting pheasants

Don't underestimate it mate. I know a few people in gun clubs. It would be easy for it to go a lot more mainstream.

 

[LinekersLegs]

 

[Zatara]

And all that is assuming usual deposit/withdrawal rates.

People/companies adapt over the long term and I’d presume that Russia has studied the lessons learnt of what worked/didn’t in Iran but these sanctions, particularly the central bank one, seem to have some teeth.

Russia is a very very very different beast to the middle east. These sanctions as advertised will really shock the public with the middle class and above that Putin relies upon being hit hard.

I can see a move into the crypto stablecoin market but other than that I think they'll be in trouble with Chinese and other nations willing to do business with them...the costs will be enormous.

I'll be honest. I'm not sure how you think these details map onto Putin's ability to prevent a drastic drop in standard of living, or retain control of the security apparatus if he cannot.

I know how I think about these problems, and it seems clear that I think that these details represent a much smaller problem than you do. Can you tell me why you think this matters?


They're meaningful. I would argue that the difficulties in transacting business and presumed drop in his ability to import critical goods and export goods (with the attendant spillover effects) are going to be a much bigger deal than a freeze on electronic assets.

I think there are ways out of the box, if you stop thinking like a Westerner and implicitly assume that standard financial rules cannot be end-run.

I've shouted at enough Krugman articles over the years to know what I think about macroeconomists, even Nobel Prize winners, getting out of their lane and into mine. I respect what they do, respect Krugman and his clear communication enormously, and generally defer to their judgment in their areas of expertise unless I have very good reason to believe otherwise.

I also get very irritated at their blind spots.

You can think like an Asian if you like....take a look at South East Asia in 97 and you'll see what happens to economies which were imo more self reliant than Russia is currently, over many decades of growth.

Im actually very confused how you think that cutting off the ability of a central bank to use 80% of their capital reserves along with preventing electronic bank transfers with an inability to use the major curencies is a "smaller problem" than I do?

The Russian economy would be crippled within a week if they continued with the war.