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The articles I've seen about this say it's a significant move, but what exactly will it mean for Russia and its economy? Will it also impose costs on western ec

The articles I've seen about this say it's a significant move, but what exactly will it mean for Russia and its economy? Will it also impose costs on western economies? What exactly are those?

mikeryan 5y ago
Personally I have a contractors that work for me in Russia. We pay them via a wire. If this goes through I’m not sure how I’m going to do that. Have to look at running them through a different system maybe? Any ideas I’d take them.
- deleted 5y ago
  [deleted]
- josephcsible 5y ago
  Isn't the point of this sanction to keep people from doing things like that?
- mediocregopher 5y ago
  Bitcoin. People may complain about the volatility, but you only have to hold it long enough to send it, and they only have to hold it long enough to sell, if that's what they care to do.
  - whatshisface 5y ago
    Beware that this might count as circumventing US sanctions by the time they're done writing these new regulations.
- cryptoegorophy 5y ago
  PayPal still works as far as I know. But yeah. Bitcoin is the go to. Ironically I have workers in both and I send bitcoin to ukraine because all other means are expensive and get questioned a lot.
  - mikeryan 5y ago
    Yeah I have workers in both too. The two I’ve got in Ukraine I've run through Upwork as they seem to have had that handled in the past and we cover the Upwork percentage. I’ll have to check with the comfort level of my guys taking bitcoin but that seems like an option at least. Don’t want to think about the accounting issues we will have to figure out but thanks for the idea.
- jmvoodoo 5y ago
  How about stop working with them and funding the murder of Ukrainians through your tax dollars? Seriously though if your business is impacted by sanctions I'd suggest consulting a lawyer before trying to get creative with payment methods.
- DyslexicAtheist 5y ago
  hire someone from Ukraine
- 7steps2much 5y ago
  You could go for a fancy money transfer option. Western Union, Ria or transfer wise would be options at the top of my head. If those get shut down as well it is likely that continued business with Russians would be in violation of sanctions anyways so you might want to consult a lawyer. Alternatively you could just mail the money there. As in, put it in a letter and hand it to your national postal service. That said, this is not possible in all countries and sometimes restrictions apply that may make this unusable. That said, if you are hellbent on continuing to use that contractor crypto is an option. I recommend something more modern and easy to use than Bitcoin though.
jlduan 5y ago
It is a cross-border banking system, widely used to do international transactions.
endymi0n 5y ago
It's gonna be tough. Germany was opposed to the measure for a long time not just because they wanted to play softball, but because it effectively meant saying good bye to up to 55 billion dollars of credit.
- hungrygs 5y ago
  Not a German, but their official language on "turning point" is very precise. The close relationships between government and industry means everyone has accepted to take their medicine. Germans are better at doing this than others.
rwaksmunski 5y ago
West will pay more for energy, Russia's economy will get rekt.
- pruski 5y ago
  I’m more than happy to pay more for energy if that’s the price of peace
  - bhawks 5y ago
    This is not going to buy peace.
    - pruski 5y ago
      It won’t. But it might make them sell it cheaper somewhere else, resulting in lower spend on the army. Also, think of all Russian businesses loosing money. Their owners will be pushing the government to fix the situation. At the end of the day, money is power, you don’t want to loose it.
      - bhawks 5y ago
        If money is power it didn't help Jack Ma. Looking at this situation through a western political lense is not going to offer insights. Putin has a firm grip on power within Russia, I don't see this move changing that calculus. It only will escalate the situation.
        TameAntelope 5y ago
        Good, escalation is the only option. The people of Kyiv are dying.
        bhawks 5y ago
        Escalation with a nuclear super power is not something to be done lightly. Leaving war as the only option on the table is a very bad idea. This is likely to end poorly for the entire world.
neilwilson 5y ago
It will have next to no effect on Russia because they have their own currency and, unlike Iran, are not dependent upon imports. The fantasy of the dollar hegemony is a western myth. They are about to find out that they are completely irrelevant. If nobody is selling anything to you then you don’t need to settle in foreign currencies. However Russia could demand roubles in payment for its gas and then ban foreigners from holding them. Which would mean the EU couldn’t settle its gas bill. And we all know what happens when you fail to pay the gas bill. Always remember that a country only exports to obtain imports. If there are no imports to be had then there is no need to export anything. The gas will stay in the ground and the world will have even less supply than it does now.
- Victerius 5y ago
  Much of this comment is wrong. Cutting off some Russian banks from SWIFT will have significant consequences on the Russian economy. The fact that Russia prints its own currency doesn't change anything. > are not dependent upon imports. Russia imports hundreds of billions of dollars worth of goods each year. Source: https://tradingeconomics.com/russia/imports https://tradingeconomics.com/russia/imports > The fantasy of the dollar hegemony is a western myth. The hegemony of the dollar is actually very real. The dollar is the de facto global currency for cross border transactions and settlements. And it will remain so as long as the United States remains the world's dominant superpower, which is forever. https://palladiummag.com/2020/12/05/why-the-us-dollar-could-outlast-the-american-empire/ https://palladiummag.com/2020/12/05/why-the-us-dollar-could-... > However Russia could demand roubles in payments for its gas. And buyers could put their foot down and demand to pay in dollar. If Russia refuses, said buyers will simply look to other producers. > and then ban foreigners from holding them. No one outside of Russia wants to hold roubles. Everyone wants euros, dollars, or pound sterlings. The rouble is not a significant currency in the global economy. > Which would mean the EU couldn't settle its gas bill. The EU can import gas from the United States, the United Kingdom, and the Middle East. US exports of natural gas to Europe are already rapidly increasing: https://www.reuters.com/business/energy/europe-remains-top-destination-us-lng-second-month-running-2022-02-01/ https://www.reuters.com/business/energy/europe-remains-top-d.... Gas isn't the leverage you think Russia has. The rest of the world needs Russia less than Russia needs the rest of the world. For gas, or anything else.
neilwilson 5y ago
It will mean little or nothing to Russia. They’ve been working on autarky for years. If the EU wants gas it has to offer something material in return. Or Russia won’t supply the gas. Why should it? A country exports in order to gain imports. If there are no imports on offer then the people engaged in the export businesses are better engaged producing import substitutes. Or war goods.
- pcwalton 5y ago
  What you're describing is the North Korean playbook: completely cut yourself off from the rest of the world and let your people starve in order to hang on to power. North Korea shows that it is possible--in North Korea. But is it possible in a country over a hundred times the land area, between five and six times as large in population, with many different ethnic groups, run by an oligarchy of businessmen who depend on, well, business, that now will have to deal with a never-ending Ukrainian insurgency without any exit plan to speak of, and, most importantly, without China willing to spend the vast resources necessary to prop them up? I'm extremely doubtful, as is the West, and that's why the sanctions are being imposed.
  - josephcsible 5y ago
    > without China willing to spend the vast resources necessary to prop them up Why wouldn't China be willing to do this? They already said they're going to increase their wheat purchases to make up for what the West isn't buying anymore.
    - pcwalton 5y ago
      What's in it for China? Unlike North Korea, Russia isn't a buffer state between US military installations and the Chinese border. And it would cost far more to prop up Russia than it does to prop up North Korea.
      - josephcsible 5y ago
        When has "because it would be bad for the West" not been enough of a reason for China to do something?

The articles I've seen about this say it's a significant move, but what exactly will it mean for Russia and its economy? Will it also impose costs on western economies? What exactly are those?

mikeryan 5y ago

Personally I have a contractors that work for me in Russia. We pay them via a wire. If this goes through I’m not sure how I’m going to do that. Have to look at running them through a different system maybe? Any ideas I’d take them.

deleted 5y ago
[deleted]
josephcsible 5y ago
Isn't the point of this sanction to keep people from doing things like that?
mediocregopher 5y ago
Bitcoin. People may complain about the volatility, but you only have to hold it long enough to send it, and they only have to hold it long enough to sell, if that's what they care to do.
- whatshisface 5y ago
  Beware that this might count as circumventing US sanctions by the time they're done writing these new regulations.
cryptoegorophy 5y ago
PayPal still works as far as I know. But yeah. Bitcoin is the go to. Ironically I have workers in both and I send bitcoin to ukraine because all other means are expensive and get questioned a lot.
- mikeryan 5y ago
  Yeah I have workers in both too. The two I’ve got in Ukraine I've run through Upwork as they seem to have had that handled in the past and we cover the Upwork percentage. I’ll have to check with the comfort level of my guys taking bitcoin but that seems like an option at least. Don’t want to think about the accounting issues we will have to figure out but thanks for the idea.
jmvoodoo 5y ago
How about stop working with them and funding the murder of Ukrainians through your tax dollars? Seriously though if your business is impacted by sanctions I'd suggest consulting a lawyer before trying to get creative with payment methods.
DyslexicAtheist 5y ago
hire someone from Ukraine
7steps2much 5y ago
You could go for a fancy money transfer option. Western Union, Ria or transfer wise would be options at the top of my head. If those get shut down as well it is likely that continued business with Russians would be in violation of sanctions anyways so you might want to consult a lawyer. Alternatively you could just mail the money there. As in, put it in a letter and hand it to your national postal service. That said, this is not possible in all countries and sometimes restrictions apply that may make this unusable. That said, if you are hellbent on continuing to use that contractor crypto is an option. I recommend something more modern and easy to use than Bitcoin though.

jlduan 5y ago

It is a cross-border banking system, widely used to do international transactions.

endymi0n 5y ago

It's gonna be tough. Germany was opposed to the measure for a long time not just because they wanted to play softball, but because it effectively meant saying good bye to up to 55 billion dollars of credit.

hungrygs 5y ago
Not a German, but their official language on "turning point" is very precise. The close relationships between government and industry means everyone has accepted to take their medicine. Germans are better at doing this than others.

rwaksmunski 5y ago

West will pay more for energy, Russia's economy will get rekt.

pruski 5y ago
I’m more than happy to pay more for energy if that’s the price of peace
- bhawks 5y ago
  This is not going to buy peace.
  - pruski 5y ago
    It won’t. But it might make them sell it cheaper somewhere else, resulting in lower spend on the army. Also, think of all Russian businesses loosing money. Their owners will be pushing the government to fix the situation. At the end of the day, money is power, you don’t want to loose it.
    - bhawks 5y ago
      If money is power it didn't help Jack Ma. Looking at this situation through a western political lense is not going to offer insights. Putin has a firm grip on power within Russia, I don't see this move changing that calculus. It only will escalate the situation.
      - TameAntelope 5y ago
        Good, escalation is the only option. The people of Kyiv are dying.
        bhawks 5y ago
        Escalation with a nuclear super power is not something to be done lightly. Leaving war as the only option on the table is a very bad idea. This is likely to end poorly for the entire world.

neilwilson 5y ago

It will have next to no effect on Russia because they have their own currency and, unlike Iran, are not dependent upon imports. The fantasy of the dollar hegemony is a western myth. They are about to find out that they are completely irrelevant. If nobody is selling anything to you then you don’t need to settle in foreign currencies. However Russia could demand roubles in payment for its gas and then ban foreigners from holding them. Which would mean the EU couldn’t settle its gas bill. And we all know what happens when you fail to pay the gas bill. Always remember that a country only exports to obtain imports. If there are no imports to be had then there is no need to export anything. The gas will stay in the ground and the world will have even less supply than it does now.

Victerius 5y ago
Much of this comment is wrong. Cutting off some Russian banks from SWIFT will have significant consequences on the Russian economy. The fact that Russia prints its own currency doesn't change anything. > are not dependent upon imports. Russia imports hundreds of billions of dollars worth of goods each year. Source: https://tradingeconomics.com/russia/imports https://tradingeconomics.com/russia/imports > The fantasy of the dollar hegemony is a western myth. The hegemony of the dollar is actually very real. The dollar is the de facto global currency for cross border transactions and settlements. And it will remain so as long as the United States remains the world's dominant superpower, which is forever. https://palladiummag.com/2020/12/05/why-the-us-dollar-could-outlast-the-american-empire/ https://palladiummag.com/2020/12/05/why-the-us-dollar-could-... > However Russia could demand roubles in payments for its gas. And buyers could put their foot down and demand to pay in dollar. If Russia refuses, said buyers will simply look to other producers. > and then ban foreigners from holding them. No one outside of Russia wants to hold roubles. Everyone wants euros, dollars, or pound sterlings. The rouble is not a significant currency in the global economy. > Which would mean the EU couldn't settle its gas bill. The EU can import gas from the United States, the United Kingdom, and the Middle East. US exports of natural gas to Europe are already rapidly increasing: https://www.reuters.com/business/energy/europe-remains-top-destination-us-lng-second-month-running-2022-02-01/ https://www.reuters.com/business/energy/europe-remains-top-d.... Gas isn't the leverage you think Russia has. The rest of the world needs Russia less than Russia needs the rest of the world. For gas, or anything else.

neilwilson 5y ago

It will mean little or nothing to Russia. They’ve been working on autarky for years. If the EU wants gas it has to offer something material in return. Or Russia won’t supply the gas. Why should it? A country exports in order to gain imports. If there are no imports on offer then the people engaged in the export businesses are better engaged producing import substitutes. Or war goods.

pcwalton 5y ago
What you're describing is the North Korean playbook: completely cut yourself off from the rest of the world and let your people starve in order to hang on to power. North Korea shows that it is possible--in North Korea. But is it possible in a country over a hundred times the land area, between five and six times as large in population, with many different ethnic groups, run by an oligarchy of businessmen who depend on, well, business, that now will have to deal with a never-ending Ukrainian insurgency without any exit plan to speak of, and, most importantly, without China willing to spend the vast resources necessary to prop them up? I'm extremely doubtful, as is the West, and that's why the sanctions are being imposed.
- josephcsible 5y ago
  > without China willing to spend the vast resources necessary to prop them up Why wouldn't China be willing to do this? They already said they're going to increase their wheat purchases to make up for what the West isn't buying anymore.
  - pcwalton 5y ago
    What's in it for China? Unlike North Korea, Russia isn't a buffer state between US military installations and the Chinese border. And it would cost far more to prop up Russia than it does to prop up North Korea.
    - josephcsible 5y ago
      When has "because it would be bad for the West" not been enough of a reason for China to do something?