* The West pledged to isolate Russia from world markets by removing banks from the SWIFT network
* The US, European Commission, France, Germany, Italy, the UK, and Canada made the move on Saturday
* 'We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin,' they said
* They will also set up a transatlantic taskforce to hunt down assets of sanctioned companies and oligarchs
* A senior administration official said it would go after 'their yachts, luxury apartments, their money and their ability to send their kids to fancy colleges in the West'
* Ukraine has been demanding the move for days as it battles about 75,000 invading Russian troops
* Ursula von der Leyen, president of the European Commission, said it would stop Putin using his 'war chest.'
* Earlier a Pentagon official said the US was sending more Javelin anti-tank missiles to Ukraine
The US and its Western allies announced on Saturday a new raft of crippling sanctions on Moscow, as they promised to ban key Russian banks from the international SWIFT banking network and impose restrictions on the Russian Central Bank.
They will also set up a transatlantic taskforce to go after sanctioned oligarchs, 'their yachts, luxury apartments, their money and their ability to send their kids to fancy colleges in the West,' said a senior Biden administration official.
Read more ....
Update #1: West unleashes SWIFT bans, more crushing penalties on Russia (AP)
Update #2: White House and EU nations announce expulsion of 'selected Russian banks' from SWIFT (CNN)
WNU Editor: The Russian Central Bank will still be permitted to use SWIFT (for now). But if the Russian Central Bank is expelled it would be unprecedented, especially for an economy the size of Russia.
As I had mentioned in a previous post, Russia's complete expulsion from SWIFT would have an enormous impact on the US being able to maintain its currency as a reserve currency. We will probably end up with is a basket of currencies that would replace the US dollar, as we saw only two weeks ago when Russia and China signed an $80 billion dollar natural gas contract that will be paid in Euros.
One more point.
Russian President Putin did say a few years ago that if Russia is expelled from SWIFT, it would be seen as a declaration of war by the Kremlin. Am I the only one who is nervous now?
Update: This post is from last year .... Kremlin Says Threats To Unplug Russia From SWIFT Represents A National Security Issue (December 17, 2021).
"Am I the only one who is nervous now?" Nope!!
ReplyDeleteEven before this situation the loss of the US currency as world reserve currency was probably inevitable in my considered opinion and it would occur sooner rather than later. With this in mind our leaders needed to prepare for this with the goal of achieving a "soft landing" when the inevitable happened as opposed to a "hard landing." Hopefully they've been preparing with this knowledge and goal in mind. I'm not optimistic so, yes, I'm a bit nervous.
War is good. The bigger the better. Then maybe the politicians will have to pay also for being shitty leaders.
ReplyDeleteWhile WNU Editor's analysis is sound and I find no material fault with it, it assumes countries are simply going around SWIFT to continue doing business with Russia. Furthermore my "gut" tells me the leading powers are nuch closer to agreeing on the replacement than is generally let on.
ReplyDeleteAll of this would've definitely been true in my considered opinion before the invasion of Ukraine. Even the Chinese seem to have some misgivings about Russia's actions in Ukraine.
The unified stance against Russia here has been a pleasant surprise me. Can it continue? I'm skeptical. If it can, Russia may declare war against exclusion from SWIFT all it wants. When arrayed against a number of entities, going it alone without allies wouldn't generally end well.
Of course there are tactical nukes. Use of such weapons will almost certainly invite a similar response. I always thought it would be the US who would be surtounded by enemies and need to take such a drastic step.
Now it seems this could be Russia. All because of a decision to invade Ukraine when there was zero possibility of Ukraine joining NATO. Prior to this Sweden and Finland never would have either. Surely Putin and Russian leadership knows all this. This must go way beyond NATO.
The blessing of a nuclear war will be not antitroll, B Poster, or other trolls.
ReplyDeleteDo you find a flaw in my analysis? If so, please address. That's a much better approach than insults.
DeleteAgree with parts of the analysis. I'm glad the central bank was excluded from the list. I've been pretty nervous about this action being taken for a while. With the alternatives to the Dollar and the weakening and inflation and of course 30 trillion in debt this has sounded like a terrible idea all along. So nice that we have people in charge that think long term...
ReplyDeleteDoes isolating Russia from the world and collapsing their economy, make it a more or less dangerous country to deal with?
ReplyDeleteIt depends. Isolating a country as powerful as Russia is very tricky and there is certainly the risk of further enraging them which would make them even more dangerous.
DeleteThe fear of being isolated provided it's credible may lead to a desired behavioral change. The unity in support of Ukraine an opposition to Russia here has surprised me. As long as we stay unified, the plan probably works. Otherwise America is probably left to bear the brunt of a Russian reprisal alone.
Does letting Hitler, I mean Putin, get away with shit make them more or less dangerous country to deal with?
ReplyDeleteAs long as the world is unified against Putin and Russia's allies are largely doing nothing, he won't get away with it.
DeleteDemocrats have been isolating Russia since 2014 or before (2009 RESET Button). Trump did not. Merkel did not. We are merely seeing the isolation get more solid a little faster is all.
ReplyDelete