4 ms·
It has been a problem. There is pretty much a duopoly, look at the difficulties you face if they disapprove your business or politics. More competition is long
by cm2187 5y ago
It has been a problem. There is pretty much a duopoly, look at the difficulties you face if they disapprove your business or politics. More competition is long overdue.
But we are testing modern finance by weaponising the financial system. The most problematic move I think has been freezing the central bank's reserve. It might achieve the short term gain of hurting Russia, but what about the long term impact on the trust in holding foreign currencies?
- cgio 5y agoI anticipate lots of gold moving physically over the next few months.
- theshrike79 5y agoPretty much all of Russia's liquid cash is in physical gold and bills, it'll be interesting to see how that's getting moved and used.
- stubish 5y agoUnfortunately for Russia, if it does need to significantly dip into it's gold reserves it is likely to crash that market. I think China will get to negotiate a sweet discount to convert it to Yuan, if for no other reason than China seems to be the only place the gold can be laundered at the moment. I think I heard about $US 180bn worth?
- selcuka 5y agoI believe it could be the other way around, i.e. other countries paying in gold for Russia's natural gas to bypass sanctions. Iran has been able to sell petrol using the same method despite of the embargo.
- mvc 5y agoIf you wanna play at autocracy, don't hold foreign reserves in countries that value democracy. Simples
- cm2187 5y agoAs simple as the economic impact when China reaches this conclusion.
- mvc 5y agoChina is seeing that people who live in democratic countries have been given a timely reminder about how valuable that is. They will fight to protect that status. And over the medium to long term, they will reorient their economies so that they are not dependent on autocratic countries. Autocracy will lose long term.
- ceejayoz 5y agoThe Chinese aren't dumb enough to pretend their economy wouldn't collapse if they got the sort of embargo Russia's seeing. Their #1, #2, #3, #5, #6, and #7 top trading partners are all US or US allies.
- tsol 5y agoThe United States would also face huge shortages and other problems if they couldn't trade with China. China also realizes that too-- it's a two way street. Globalization makes everyone vulnerable
- ceejayoz 5y agoYes. It’s MAD, without the “everyone is on fire in 15 minutes” aspect. I’m inclined to see that as good.
- selimthegrim 5y agoRussia saw what happened to the Taliban and shrugged, they didn't realize the bell would toll for them too so soon