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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

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
"Russia imports hundreds of billions of dollars worth of goods each year." They do, but do they need to do that or are they just nice to have. And what that means is that the West is down by hundreds of billions of dollars of earnings. Where else are they going to sell that output now? There isn't a magic source of demand in the rest of the world, and unlike Russia, we don't have new jobs springing up supplying a war machine. In real terms we lose, and Russia's export system frees up manpower that can be redirected to War. ""The dollar is the de facto global currency for cross border transactions and settlements. " That isn't the case. Everybody pays in the currency they have, and receives the currency they need - particularly the one they need to settle taxes. The US dollar is used only because it is convenient to do so. Once it stops being a convenient hop for getting from one currency to another, they will use some other method. "If Russia refuses, said buyers will simply look to other producers." Which other producers. Gas prices are going up. That means there is insufficient supply. "Gas isn't the leverage you think Russia has." Really. So why are gas prices going up then if there is an excess of supply? Why is the UK's gas price cap looking at going up by 50%? There is no magic porridge pot in the world. The world of excess supply ended with Covid - and the restrictions in place have crippled supply chains. It's going to take time to replace the power supplies. There is a wonderful pamphlet called "How to pay for the war" by JM Keynes. You may wish to read it. Because I can guarantee Putin has.

neilwilson 5y ago

"Russia imports hundreds of billions of dollars worth of goods each year." They do, but do they need to do that or are they just nice to have. And what that means is that the West is down by hundreds of billions of dollars of earnings. Where else are they going to sell that output now? There isn't a magic source of demand in the rest of the world, and unlike Russia, we don't have new jobs springing up supplying a war machine. In real terms we lose, and Russia's export system frees up manpower that can be redirected to War. ""The dollar is the de facto global currency for cross border transactions and settlements. " That isn't the case. Everybody pays in the currency they have, and receives the currency they need - particularly the one they need to settle taxes. The US dollar is used only because it is convenient to do so. Once it stops being a convenient hop for getting from one currency to another, they will use some other method. "If Russia refuses, said buyers will simply look to other producers." Which other producers. Gas prices are going up. That means there is insufficient supply. "Gas isn't the leverage you think Russia has." Really. So why are gas prices going up then if there is an excess of supply? Why is the UK's gas price cap looking at going up by 50%? There is no magic porridge pot in the world. The world of excess supply ended with Covid - and the restrictions in place have crippled supply chains. It's going to take time to replace the power supplies. There is a wonderful pamphlet called "How to pay for the war" by JM Keynes. You may wish to read it. Because I can guarantee Putin has.