Russia and Iran developed a way to avoid the US dollar routing system known as SWIFT, Trade between the nations is booming.
What is the SWIFT Banking System?
Investopedia explains: The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system powers most international money and security transfers. SWIFT is a vast messaging network used by financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions.
Most global transitions touch SWIFT in some way. The EU wanted to develop a way around SWIFT because the EU is sick (rightfully so) of the US setting sanction policy for the whole world.
Russia beat the China to secure SWIFT avoidance mechanism.
Russia’s Trade Routes to Iran
Eurointelligence discusses Russia’s Trade Routes to Iran
Business between the two most sanctioned countries in the world, Russia and Iran, is thriving. Iran’s exports to Russia have surpassed the $2bn mark last year according to Iran’s ambassador to Moscow. This is a considerable jump from the figures the previous years, and a 30% rise throughout the year, according to the Tehran Chamber of Commerce. The total value of bilateral trade between the two in volume reached $4.9bn in 2023 according to Iran’s official statistics. A Russian economic delegation with 170 representatives was in Tehran this week as the two countries held the 17th round of their joint economic commission. The two sides have pledged to increase trade tenfold over the coming years.
What facilitates their trade is their own banking solution, which the two countries set up last year to circumvent the dollar. The two central banks managed to connect Iran’s Sepam national financial messaging service to Russia’s SPFS messaging service, its equivalent to the Swift system. In connection with this new system, Russian banks started operating offices in Tehran, and offered credit lines to ease exports from Russia to Iran. There are similar plans in Iran for exports towards Russia. Intensifying trade with Russia is part of Iran’s Look to the East strategy that aims to neutralise the effects of US sanctions by expanding into new markets.
Lesson of the Day
On September 19, 2023, my Lesson of the Day was Sanctions Don’t Work Because They Create New Markets
Lesson of the Day: Sanctions Create New Markets
Foreign Policy: “Since Russia’s invasion of Ukraine, Greece’s mighty shipping sector has continued to earn good money shipping Russian oil. But Greek shipowners have discovered an apparently even more lucrative source of revenue: selling the ships themselves to mysterious buyers linked to Russia. One publication has declared that a “Great Greek Tanker Sale” is taking place, and no price seems too high for a secondhand tanker. But the formerly Greek ships are entering a Hades-like shadow economy.”
Lesson Number Two
Countries, political leaders, and market makers act in their best interest.
It is in the best interest of Greek shippers to sell ships so they do. It is in the best interest of India and China to buy Russian oil and Greek ships so they do. It is in the best interest of Dubai middlemen to make a market in ships so they do.
What this boils down to is simple: It is the best interest of middlemen in Greece, Russia, India, China, and Dubai to tell Biden to go to hell, so they do.
How Russia Makes a Mockery of US Sanctions in One Picture
Unprecedented US and EU sanctions against Russia have had no impact on Russia’s oil exports or revenue. Who’s the beneficiary?
On December 29, 2023 I explained How Russia Makes a Mockery of US Sanctions in One Picture
Buyer’s Cartel Silliness
The number of economists promoting a buyer’s cartel to suppress the price of Russian oil (and only Russian oil) only was stunning.
I laughed at the idea when it was proposed on June 28, 2022 in A Laughable Explanation of the G7 Oil Price Buyers’ Cartel Emerges
Despite the obvious stupidity of the scheme, some prominent economists backed the idea.
How China Gets Around US Sanctions on Semiconductors
On February 18, 2024 I noted How China Gets Around US Sanctions on Semiconductors
If You Weaponize the Dollar and Confiscate Assets, Expect Retaliation
Russia seized the local assets of Carlsberg beer and yogurt maker Danone. It now threatens Austria’s Raiffeisen bank.
My lesson of the day on July 20, 2023 was Lesson of the Day: If You Weaponize the Dollar and Confiscate Assets, Expect Retaliation
At the onset of the war, the Fed, under direction of the Biden Administration, illegally seized Russia’s foreign reserves. Illegal is the correct word.
Nowhere does the act give the Fed the right or power to confiscate the reserves of sovereign nations. But that is exactly what the Fed did when it seized Russia’s US dollar reserves.
If the Fed can confiscate Russia’s reserves, who’s next?
Weaponization of Swift
Please consider the Richmond Fed article What Is SWIFT, and Could Sanctions Impact the U.S. Dollar’s Dominance?
The recent removal of Russian banks from the SWIFT messaging system has highlighted the importance of payments in supporting economies. But the weaponization of SWIFT has also left some commentators worrying about the loss of the U.S. dollar’s dominance, as it might drive banks and firms to other substitutes. This Economic Brief discusses the economics of SWIFT and explains why emigrating from the U.S. dollar may be more difficult than we thought.
It appears to me Russia and Iran just succeeded.
US policy is to blame.
However, it’s easier for Russia than it will be for China because China is too dependent on exports to the US and EU. Regardless, more dollar and SWIFT avoidance is in the pipeline.
The BRICS are working on a similar idea. They will fail to achieve much traction except in one area, sanction avoidance.
For discussion and reasons why, please see What Would it Take for a BRIC-Based Currency to Succeed?
None of the conditions for a meaningful launch of a BRIC-based currency are in place, at least on a dollar volume basis. Talk of dethroning the dollar is silly.
However, sanction avoidance is another matter. Coupled with central bank digital currencies, countries and individuals will have a clear means of sanction avoidance. US sanctions on Iran, Venezuela, and other nations and individuals are a tiny percent of global trade, but those sanctions are not trivial to the individuals and countries sanctions.
I wrote that August 23, 2023. And here we are.
If you don’t have nuclear capabilities America will attack you. Notice no one attacks north Korea. I wonder why?
North Korea receives protection from both China and Russia. North Korea is not afraid of the Americans.
Iran is building it’s own indigenous submarines with cruise and ballistic missile capabilities.Impressive for a country with embargoes and zionists.and America after it.
“The BRICS are working on a similar idea. They will fail to achieve much traction except in one area, sanction avoidance.”
But if sanctions can be avoided successfully, then they won’t work. So countries that the US and Europe don’t like will have the breathing space to pursue their national interests more aggressively, and part of those national interests include walking away from the dollar and the Western-based international trade system, from what we’ve seen so far. So it’s a self-reinforcing feedback loop, at least until some kind of wall is hit.
The world is moving on.
The US debt will be the primary catalyst that drives down the dollar. Foreign countries will wake up very soon that holding dollar reserves are not a good idea.
Notice how Uncle Sam gave them lots of time to work out the bugs.
“The Russian SPFS system has been in successful development since 2014, when the United States government threatened to disconnect the Russian Federation from the SWIFT system.”
link to en.wikipedia.org
“If You Weaponize the Dollar and Confiscate Assets, Expect Retaliation”
If Newton was an economist, his theory on equal and opposite reactions would be in play. Boom and bust are equal and opposite reactions, as well.
I suppose they exchange handcuffs for scaffolds. Big producers they are…
The United States owns the world. Get use to it.
Hurry, the 1990s are calling
Japan owns the world – 1980’s
You’re funny.
Who was Mossadegh, Alex.
64 Years Later, CIA Finally Releases Details of Iranian Coup
64 Years Later, CIA Finally Releases Details of Iranian Coup – Foreign Policy
How The CIA Overthrew Iran’s Democracy In 4 Days
How The CIA Overthrew Iran’s Democracy In 4 Days : Throughline : NPR
The guy who wanted to shatter the CIA got his skull shattered on 11/22/1963. They (and numerous new 3-letter agencies) are Kunstler’s Blob. They are the Deep State. They are whom Putin was referring to as really running the U.S, not some animated crooked corpse, clown, glib talk show wannabe, village idiot… as president.
Sow the wind, reap the whirlwind.
There is no doubt that people, companies, and countries will do what is in their best interest. However for Russian and Iran this trade is less efficient (i.e. less profitable) and I don’t see how it harms the USA (except of course if it drives other countries away from the dollar). However I feel that the USA has been relying on the dollar (reserve currency) crutch for way too long. To me this article is sort of a “The Sky is Blue” headline.
Denninger stated that the inflation of dollars were kept in check through international trade. He said the trade embargos have upset that balance, feeding back inflation into the U.S.
I read a story the other day about the California government boycott of doing business with red states, due to their position on abortion for one. This was raising costs for CA government, as red states produced at lower cost. It dovetails with what Mish has said about the tariffs on foreign goods, raising prices for Americans. With a 70 billion $ deficit, California is apparently going to drop the boycott of red states. It’s costing too much.
“Denninger stated that the inflation of dollars were kept in check through international trade.”
He was right. And quite obviously so. Dollars are increasingly the only thing America can competitively produce anymore. They are, no doubt, the best in class product for settling international trade. But still; there is a crazy long way down if anything disturbs the applecart; when they are sold at the absolutely astonishing markups they currently are.
“He said the trade embargos have upset that balance, feeding back inflation into the U.S.”
It’s only the tip of the iceberg. There are so many unbacked dollars out there, that even the tiniest change in the marginal utility of dollars; vs literally any other currency like instrument for international trade, settlement and/or reserves, will have an outsized effect on Americans’; and by now hence also Europeans’; purchasing power.
Mish is always guaranteed lots of comments with up and down votes whenever he talks about Ukraine, Russia and sanctions.
Or climate change or EV’s or anything political.
Basically any of his topics where there are multiple sides where you can have an opinion.
Posts that are essentially just stating facts (inflation rate, housing sales etc) really just get some supporting anecdotes because you can’t really argue with math.
We should be talking to Russia, China and all the rest.
Biden has built a large coalition of countries AGAINST THE US and they have labor, resources and plenty to gain.
The world needs the O+G, minerals, and labor.
OBTW : The Russian GDP was +5.5% and the US GDP was +3.3% = they are winning.
Do you wish to reconsider your position that there is no imminent threat to the dollar’s supremacy?
If trade is conducted by its simplest definition of this for that; then no money is necessary to exchange goods and services.
Russia has the natural resources that the world wants. The US has a BS currency that is on the road to a dinosaur end. China can redeem your tokens ( of whatever denomination) for real goods. The sanctions ( imposed though swift ) are at the end of their effective life. Circumvention? Nay, it is the end of the US dominance in international trade. Bad choices by imbeciles.
When there is insufficient penalties for anything, people/companies will take advantage.
In my area of the SF Bay Area, our police do not enforce traffic laws so red light running and stop sign busting are rampant. Similarly for retail theft laws, as one can see in videos from CA, people just walk into stores with bags, load up what they want and walk out. They are rarely stopped.
Sanctions, etc. with no teeth or possibility of reasonable enforcement (nuking a country is not considered reasonable) are going to be ignored and end runned.
You are spot on. What are “sufficient penalties”? The war on drugs has no end of penalties and solutions yet the market keeps growing.
A willing buyer and a willing seller will always meet in the middle and no western government action can stop it. All it does is increase the cost for us at the bottom while those above receive all the benefits.
“All it does is increase the cost for us at the bottom while those above receive all the benefits.”
Which is also all it has ever been supposed to do.
The penalties were not severe enough and or were not enforced. If we implemented a death penalty for drug dealing, as places like Indonesia, saudi Arabia and others do, the problem would be a lot smaller.
Same for theft. If we cut off a finger every time someone was convicted of theft, there would eb a lot less theft.
To what end is all this sanctioning, vilification and war mongering? Putin and Russia deserves none of this. It was the disgusting Victoria (Jabba the Hut) Nuland and her neocon associates that stoked this whole Russia thing and idiot Boris Johnson who scuttled the possibility of peace early in the conflict. Now the entire venture has blown up in their faces. Ukraine is destroyed with hundreds of thousands of young men are dead or maimed for life. Europe’s economy is on the ropes and the US is sinking fast. And all these A-hole can think to do is to stoke more wars and double down. These F-ers never learned anything from Afganistan, Iraq, Libya, Syria, and Yemen.
Now genocidal beserker Netanyahu is mass murdering women and children and the evil neocons are their cheering him on and providing the bombs to do so.
Time for a war crimes trial with all the neocons, and Israel’s leadership in the dockets.
THAT will never happen so long as the MONEY is great and it is. The War Machine is gluttonous.
It is important to note that Russia has not seized anybody’s balance.
So-called seized assets were forfeit because of breach of contract.
Some companies were “forced” to sell assets at bottom prices because they wanted to say they were out of Russia … those assets were usually bought and used by others to continue the business.
Putin has said that they will honor contract law.
Russian handshake over the empire’s signed contracts for one million, Alex.
Other than the puppets in Europe, it seems the entire world opposes the incessant bullying of the USA. Instead of leading by example, the USA true to lead by force. Today most of the world is not fearful.
So long as America the GREAT is also accompanied by the concept of being a Hegemon, it WILL continue, right?
So far, everyone is KOW-TOWING to America’s Gluttony. It will not cease in our lifetimes, unless America makes a huge Mistake, such as a preemptive Nuclear Strike.
The world will.abandon the dollar..the zionists then will get on their planes and ruin another country. they might go to China and make them feel guilty about the Holocaust.
David, the Chinese are stupid enough to fall for that. Only American tax payers are stupid enough to fund large expensive memorial to Jewish suffering in every city in the US. Now will need to build Oct 7 memorials as well complete with mass rape and beheaded baby doll exhibitions.
amen. they massacred desperate people seeking a food truck. the zionists can get away with anything .
15rael will fight to the last American
Russia and Iran have a combined population of 230M, about half of the EUs 440M in 27 countries. That’s a large number of people wanting to buy food, machinery, clothing and other consumer goods. I’m sure the trade is more than just missiles and planes.
If you like to add 3B Chinese and Indian consumers into the mix, you wonder why bother trading with the EU or USA at all?
Good point!
Nato country populations total 960 million people who consist of the wealthiest and most productive on this planet. That market is lost for Russia for the foreseeable future. Nato is a formal defensive alliance that has gotten bigger and tighter in the last couple of years. Iran came to Russia’s aid but India did not. Russia is a seller of raw material and China loves buying them at discounted prices in exchange for consumer goods like cars and enough electronics to keep Russia fighting but not winning. It is an astute move but they know they can’t support Russia all the way because they do need Western markets. The Brics are not enough and won’t be.
I would suggest that plenty of this Western wealth is a mirage based largely on debt. You don’t need to have wet feet to see the tide coming in, but I feel this is where we are now; our feet will eventually get wet.
The decline of the West is slow, but perceptible. I can only speak of direct experience of the UK, but the decline in services and infrastructure is very tangible, as is the increasing cost of just keeping things static, never mind moving forward. Nepotism and corruption are no longer hidden, they are quite blatant. Extreme left wing ideology is wrecking society and institutions are not fit to compensate for our increasing fragmentation.
Large debt and ageing populations is not in Western nations’ favour. Don’t get me wrong. I can’t see countries like China surpassing the US or Europe for the simple reason of their lack of human rights or respect of property rights. A good litmus test is if you asked any random person on this planet where they would prefer to reside: China, Russia, India, Iran, Europe or USA- I bet the vast majority would opt for USA, then Europe. However, respect for human and property rights seem to be fast eroding in supposed democracies, so how long this advantage remains is anyone’s guess.
If China or Russia decided to clean up their human rights record I think they would leapfrog ahead both socially and economically.
I have been hearing this for all my life and I am 70 years old so if the Empire is falling it certainly is taking quite some time to fall. Nothing I have seen so far leads me to believe that my money is better invested in China, Russia, India or any of the Brics.
“Look at a stone cutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred-and-first blow it will split in two, and I know it was not the last blow that did it, but all that had gone before.” ― Jacob August Riis
All empires fall. You’ve been hearing this all your life and the reason it hasn’t happened yet is because of the dollar being used as the world’s reserve currency. The transition away from the dollar has started to happen. It all takes time and China has significant dollar denominated debt and assets. However, what has happened is that US foreign policy has made some severe blunders in the last 4 years. The US government has alienated alliances with the House of Saud and the Chinese, especially with our treatment of Russia.
Given both China and Russia play the long game, and given they have seen how both the dollar and SWIFT can be used as a weapon given the whims of foreign policy, you can be sure that the actions of the past 4 years have put in motion the eventual demise of the dollar as the world’s reserve currency and other countries shouldering the burden of dollar depreciation so we can maintain our own living standards by spending more than we produce.
“Nothing I have seen so far leads me to believe that my money is better invested in China, Russia, India or any of the Brics.”
But the reason for that, is that nowhere else are productive people being robbed for the benefit of contribute-nothing so-called “investors”; in reality simply idle beneficiaries of Fed welfare; to nearly the extent that they are in the current, fully financialized West.
If you wanted to make a buck in most other parts of the world; as well as throughout most of history; you had to produce something of real value. If for no other reason; then simply because very rarely were there mountains of value produced by generations prior; the way there was in the US in ’71. Value which The Fed and Junta could then hand out, in return for nothing productive, to negative-contribution rent seekers in the ensuing decades.
Once 90% of all new year-over-year purchasing power is simply distributed to whomever happens to be closest to the Debasement Authority: Any so called “investment returns” are, at the very best, entirely unrelated to anything which has to do with underlying productivity. In practice, the correlation is invariably straight up negative; since the rent seekers’ so-called gains have to be taken from pools of real value. Meaning: Value created either by previous generations, or by the ever dwindling pool of current productives who are currently being bled into uncompetitiveness and destitution by the incessant and growing transfers to the beneficiary leeching classes.
Newsflash. Western nations don’t care human rights.
Doug, did you see that graph of India’s purchases of Russian oil? I’d call that coming to Russia’s aid. If that isn’t flipping the bird to the US and EU, I have no idea what is.
Have you watched Tucker’s Putin interview? Russia and China are playing the long game. They have extremely low time preferences.
I think you’ve got to stop sucking on the propaganda tailpipe a bit in order to see what’s happening here more clearly. Russia may be a seller of oil and other raw materials, but sanctions have forced them to first import key technologies, then develop those industries and technologies in-house. You can’t create that in 2 years. It will probably be a decade before they see investments pay off, but in the meantime, you’ve got China and India making up for everything that the EU was importing. Then you’ve got technology transfers from them and Iran. Plus, it’s not like Russia is starting from scratch with its industrial base either. They build their own airplanes, cars, and heavy equipment. They export same plus military hardware.
These aren’t stupid, backwards people.
Yes and getting a nice discount on Russia’s oil. India is a true friend and not interesting in making money off of Russia’s misfortune. Everything else you wrote is pretty much wishful thinking. Is China investing in Russia much in Russia or mainly just selling them consumer products that Europe used to do? Look at the numbers. China is selling some tech products to Russia but not investing in making those products there. The Power of Siberia project to bring gas and oil formally piped to Europe is not even in the planning stage. The list goes on. You may think that Russia is a major military and industrial power but it is not what it once was. It should have been able to roll over Ukraine in a few days but it couldn’t. It just didn’t have the resources in equipment, training and industrial capacity. The rot is very deep there.
China is selling technology IP to Russia. It isn’t just consumers goods. Where do you think all those nice fancy chips are made that the whole world uses for AI get manufactured? The same China that’s been stealing and hacking IP for decades is not sharing that with the Russians? Dude. You gots some good sheet you’re smoking.
“..most productive on this planet…”
“most productive” at producing what? Paper pieces with dead guys’ faces on them?
I hate to go off topic but did everyone see TWO presidents down at the border today? I’m going to sleep well tonight knowing all of our border problems are now behind us, I mean with TWO presidents looking into the problem this thing is going to get fixed in a snap.
TWO Presidents! No need to send in money for political donations now, the problem will get fixed….any…day…now…
Well, the one (Trump) did try to close it with a physical barrier. But he was defeated in his efforts and then Biden sold for scrap what remained of Trump’s wall. And then Biden emasculated the Border Patrol and converted it into a welcoming committee.
10+ million illegals later….here you are.
Sleep well.
Not really. He played the rubes to win their vote. What happened to the “Mexico will pay for the wall”? What happened to discussions of building the wall once he got into office. Face reality, we have two bad choices. I’ll hold my nose and vote for Trump. I hope he’ll be better this time around but I wouldnt bet on it.
Maybe all the hot air will blow the migrant caravans all the way Guatemala.
The point was to illustrate the theatrics around the border issue and we both know that absolutely nothing will get done except some token measure for talking points at Fox News or CNN.
But hey it’s an election year so let’s have a circus show so the crowds are entertained, idiots send in some nickels and dimes and then the politicos do nothing.
That’s the reality of the situation so the only thing left is how do I profit from immigrants and the whole situation because that’s all any of us can do.
The EU objects to US sanctions use of SWIFT? I never heard of this but would like to know more as it appears EU leaders are obsequious vassals and cowards – as with avoiding any conclusions or repairs to Nord Stream
Why would they want to repair Nord Stream? That’s over forever.
Nah, 5 minutes after the situation in Ukraine gets resolved the EU will be asking about the availability of Russian Gas.
History shows that when peace finally arrives bitter enemies happily do business together again (look at Germany and Japan after WWII) if it make sense economically.
The only way Russian Gas is over is if somehow by some miracle the world no longer needs fossil fuels.
No it won’t. They will not trust Russia for their energy ever again. They will use a mix from several sources and they are even starting to drill for oil and gas again. Your examples are with countries that were completely defeated so they were a clean slate. No one is going to invade Russia and change its government so it will be a very cold peace. There will be some trade but nothing like before. Russian energy was not as cheap as that compared to other markets but Europe did find it politically expedient to use it as a political inducement for Russia.
Vietnam was never defeated by the US yet the US happily does business with Vietnam these days.
I didn’t say the EU would 100% rely on Russian gas because they won’t. But the idea that they won’t reopen pipeline and use Russian gas is absurd. Of course they will as long as it’s cheaper than another seller.
The argument that “What Is SWIFT, and Could Sanctions Impact the U.S. Dollar’s Dominance?” uses for why its weaponization won’t end US Dollar dominance, while technically true, entirely misses the point. It doesn’t have to end US Dollar dominance. All that has to happen is that a competing messaging system gains enough traction to allow for account-based money to transfer between members. The argument is that fewer counterparties will exist on those competing systems, and for now, that’s true. However, get a country like China or Saudi Arabia to use an alternative messaging system and there’s a whole lot of incentive to create a technology solution for multiple account-based messaging systems and it’s honestly all over.
This is a technology issue and there’s no reason why it can’t readily be solved. Iran and Russia are extremely technically capable. As a software engineer, does it really take much to route certain countries on one messaging system and other’s on another? Or even better, why not have an order of preference that uses another system should the message be unavailable on the first?
These are very solvable problems and all that has to happen is for China and OPEC countries to get sick of how the US is allowing Israel to kill tens of thousands of Palestinians and then you’ve got a substantial amount of account-based messaging looking for alternatives. None of the countries would even have to do anything violent against Israel or the USA. Given what’s happening now in Gaza, I think you could convince a whole lot of OPEC countries to protest in such a fashion.
There is a huge opportunity here. The question is, who’s going to capitalize on it?
So far the Capital, and CASH flows, are remaining with the Hegemon. We shall see.
“Look at a stone cutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred-and-first blow it will split in two, and I know it was not the last blow that did it, but all that had gone before.” ― Jacob August Riis
Russia barter SU-35 with Iran. Iran supplies Russia missiles, drones and ammo…
Iran loads Hezbollah, Syria, the Shia in Iraq and the Hooties. They already gave Hezbollah a conditional instructions to attack the zionist state and the US forces in Iraq and Syria. Putin opened a second front in the ME to stretch the US. The US and the Europeans are severely depleted of “good” stuff. Budget cuts will not stop them from filling the gaps. China is flexing/stretching on the sidelines, waiting to see how/if the US is sinking in the mud. Taiwan might switch sides if we lose to Iran, the Hooties and Hezbollah.
Michael Engel is a zionist
No, no…he misspells his name Micheal.
Are Zionists good spellers?
Looking at it philosophically, if you have the reserve currency and associated assets, your best interest is not to let anybody notice. You sit in a cloud like god, only occasionally, gently reminding the earthlings of your presence.
But the best plan cannot last in idiocracy because it’s counter to nature.
Going back to Rome, it didn’t have external enemies to speak of, except the dumb violent idiots who battled it out for dominance.
Similarly to the current empire, the selected one is the biggest, boldest, most warmongering loudmouth, not the smartest bulbs.
Those dumb violent idiots are now our politicians. For the most part, they are the biggest enemies of this country. They don’t give two hoots about the Constitution.
The near future will show that our EU circus clowns, useful vasals and idiots of the US of A , have no fckn idea about the stinking mess they got themselves involved in since 2022 ! ….For the time bein they don t seem to mind very much as long as their, tax free , inflation adjusted , ‘well deserved ‘ wages are being paid punctually with a out of the blue created currency monster , called the Euro….for the time being ….
You want to go back to the Belgium Franc?
Let’s see. Russia weaponized war and apparently that, although deplorable, is ok while we weaponize trade against Russia and somehow that is not ok.
From what Mish said, Russia replaced trade with Europe, the US and some others with trade with Iran and that is a win? The object of the sanctions is to make it harder and especially more expensive for Russia to make weapons. They are also there to cut into Russia’s profits from selling its oil. Together, the growth rate of the Russian economy will be trimmed and over several years the differential between their growth rate and ours will grow basically allowing us to leave them into the dust. Contrary to what some predicted, The West has been able to source oil and gas and other materials formerly bought from Russia from other places in the world with really no problem.
Gas prices after the peak last year are now back to the 2010-2019 averages. An industrial organization is taking place within Europe with winners and losers but we certainly don’t see a collapse and after a bad 2023 because of high energy costs and general uncertainty, industrial production in the EU became positive again in the fourth quarter of 2023 and is accelerating so no disaster as some had predicted.
Russian production is up but it costs more to produce the same thing than before. Sanction enforcement is always wack a mole and that is no surprise. It’s like crime. Doing nothing about it is usually not a good alternative so you keep at it.
Tucker Carlson showed that they have a good supply of bread in the example supermarket he was allowed to film!
Tucker was amazed to find that shopping cart system the Russians use and thought it was a sign of Russian ingenuity when it is European and has been used for the last forty years in European countries. In the Lex Freidman interview Tucker said that the Russian military industrial complex was bigger than that of Nato when in reality it is not even a 20%. Tucker is a great example of the difference between accuracy and precision.
The sanctions have created some stupid problems that cost both Russia and the West. As Europe limits Russian gas it has to pay more for Qatari gas. The Russians then have to find new markets for the gas that Europe doesn’t buy so they increase exports to China.
Then the mess in the Red Sea means both Qatar and Russia are taking the longer Cape route and their ships pass each other. And this longer route adds to sailing time which is squeezing the availability of ships. And all this inefficiency is adding to the costs of energy. Not good for both households and industry. Eventually more Russian gas pipelines will send gas east and sanctions will become even more ineffective.
As Ukraine will collapse this year what will be the point of the sanctions?
The few hundred billion of stolen Russian money will also be offset by Russia guiding the post war Russia friendly Ukrainian government repudiating all debts and contracts with the West. Russia will also help post Nazi Ukraine to rebuild and integrate its economic connections to Russia and BRICS.
You are on the side who want to cleanse Ukraine of “gay Nazis”.
“ Eventually more Russian gas pipelines will send gas east”. It’s been over two years and nothing has been done on the front.
Assuming that Russia will win is like assuming the Russian army can take Kyiv in three days. If Ukraine were going to collapse, it would have done so by now. The Culmination Point has already passed.
The Russian army would take Kyiv in 3 days without being propped up by NATO.
Ukraine will collapse when one or both of the following happen:
1) It runs out of men.
2) NATO stops propping it up.
We just gave them some Javelin and the Ukrainians did the rest. Why would you object to helping a country that is being invaded?
The WEST shot itself in the foot and made RUSSIA stronger with Sanctions … Politicians are so stupid because they keep doing it … they have no idea how world trade functions … Too Bad because the collapse of the WEST is on schedule ….
Blowing up the Nordstream pipeline certainly did not help Europe.
If sanctions don’t work, why Iran and Russia are so angry about them? All russian and irani lobbys are pushing desperately against sanctions.
He wants them lifted as a condition for peace talks.
They’re not the least bit angry. They just ignore the sanctions and go about their business, and business has never been better.
All things being equal, Russia would prefer normalized trade relations with Europe.
Easier to spy also when one isn’t under a microscope and being watched for every move you make.
This is what happens when the arrogant duhmerican warmongers, neocons and just plain stupid ivy leaguers with no world or life experience receive govermment jobs that “influence” policy.
Fn idiots shooting themselves in the foot. These people hate real Americans, freedom, sovereignty and all of their made up “boogeyman” fall guys as a way to deflect and overshadow their incompetence and often times pure evil intentions . Well deserved
They have no hatred or even dislike – it’s just that their paycheck is dependent on toeing the line. Who do you vote for? You have a choice – paycheck or ethics.
It’s not smart for the blob known as U.S.A. to use its reserve currency privilege to club their least popular foreign baby seals. I always thought the purpose of having the currency is you wanted EVERYONE to use it and look at it as a smart store of purchasing power. (Silly, I know)
A financial war is the best and the safest weapon the US has and know, without being directly involved with Russia and Iran.
It will be interesting to see if the West confiscates Russian assets held overseas.
The US confiscated an Iranian skyscraper on 54st and Fifth Ave, NYC.
The Iranians are probably laughing their asses off. The Canada Pension Plan Board just sold its stake in a Park Ave. high-rise for $1. I’ve been to NYC maybe 100 times on business, now that I’m retired I’d rather have late stage syphilis than have to step foot in that shit hole again.
At least antibiotics can cure syphilis, nothing will cure NYC from emulating Detroit.
Those assets will be confiscated after due process and used to rebuild Ukraine. That is already in the works
Due process – LOL. You mean outright theft since there is no actual unbiased place to do such ‘process’.
Of course the West could just let Ukraine surrender to Russia and then Russia would end up rebuilding it using its own assets which is what the west seems to want anyway.