The Impact Of A SWIFT Ban On Russia And The World
Authored by Daniel Lacalle via Zero Hedge,
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the global financial system that allows immediate and secure transfers of money across borders. It is the web that verifies all financial transactions. It links 11,000 banks and institutions in more than 200 countries, with 40 million messages a day. Using SWIFT ensures that transactions happen in seconds in a secure way. Around 1% of those messages involve Russian payments, according to the BBC.
As part of the West sanctions against Russia, its banks have been banned from the SWIFT system. Additionally, the United States and the European Union have announced restrictions on the Russian central bank that block access to more than $600 billion in reserves. The Bank of Russia reports that only 22% of its international reserves are US Dollars, while gold accounts for 23%.
What does this mean? On the one hand, the move aims to block all options of the central bank to defend its currency from plummeting even more against the US dollar or the euro. In recent years, the Russian central bank has been reducing its exposure to US treasuries and shifting from US dollar reserves to euro and yuan, as well as gold. Access to those reserves is more difficult now, and in the case of euro and yen, probably close to impossible.
For Russian banks, the ban from the SWIFT system increases the risk of a bank run as citizens fear for the loss of their deposits and a collapse in daily operations, even if they start to use other alternatives.
However, we cannot forget there is an important impact on European banks as well. According to JP Morgan, European banks have up to $80 billion in claims with Russian banks. Being banned from SWIFT does not make these claims disappear, but if Russian banks fall into a de-capitalization process, the risks of defaults multiply.
Only three countries have been banned from SWIFT. Iran, since 2012, North Korea and now Russia, albeit partially. Oil and gas exports as well as other key commodities remain in the system.
Without SWIFT, Russian banks and the central bank are effectively blocked from operating on a global scale which means an added risk of a domino of defaults from issuers and the impossibility to conduct the most basic international operations.
However, Russian banks may bypass the SWIFT system and use other alternatives, mainly though a parallel system in China, called CIPS (Cross-Border Interbank Payments System), which facilitates transactions in yuan. According to CIPS, at least 25 Russian banks conduct yuan transactions through their system.
Using CIPS and other direct or indirect tools to bypass SWIFT has been an alternative for Iran and North Korea but does not solve the problem of access to reserves of the central bank nor does it truly mitigate the impossibility of conducting global transactions. The yuan is only used in 4% of global currency transactions according to the BIS (Bank Of International Settlements). ... Continue reading >>>
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[ Curreny Wars ] ... [ Globalisation ] ... [ Money and Finance ] ... [ Russia Ukraine ]
EXPLORE: [Daily Stirrer] ... [ Our Page on on Substack ]... [Boggart Aboad] ... [ Greenteeth Home ] ... [ Greenteeth on Minds.com ] ... [ Latest Posts ]Fertilizer Crisis About to Become a Food Crisis
by Capitalist Exploits
Monday, Feb 28, 2022
Don’t underestimate this fertilizer/agriculture fiasco. It is going to be far more severe and prolonged than what the vast majority has led themselves to believe. As Europe’s farmers prepare to spread fertilizers on fields after winter, sky-high nutrient prices are leaving them little choice but to use less and try to pass on the cost down the food chain.
For growers of staples like corn and wheat, it’s the first time they’ve really been exposed to a fertilizer crisis fueled by an energy crunch, export curbs and trade sanctions. It now costs much more to buy chemicals needed for winter crops coming out of dormancy, and the extra expense could prompt smaller spring plantings that make up roughly a third of European grain.
Europe has been hardest hit by fertilizer-plant cutbacks on soaring costs of natural gas used to run them — and nutrient prices there remain at a record even as the pressure eased in North America. Europe could face a deficit of about 9% of its annual nitrogen-fertilizer needs in the first half, VTB Capital estimates. Food may get even pricier if harvests suffer or crop prices rise.
Who would have ever thought that the closing of the Dutch Groningen gas field would lead to a fertilizer, agricultural production, food, and inflationary crisis? Well, we did actually, but never mind that. It wasn’t critical to our analysis at the time. Rather, our thinking was along the traditional energy lines. Simple rising costs of all energy components due to insufficient capex spend in the fossil fuel industry.
The thing is there were multiple reasons (or moving parts) here, and we only needed one or two of them to rear their inevitable and ugly head for profits in this space to come. It’s not always about being right but about running the probabilities and positioning oneself to get lucky.
So we positioned ourselves to get lucky in an asymmetric way. And what do you know, the “Gods of Chance” looked kindly upon us. We mention this because a few subscribers have been thanking us for “our bullish call” on SDF, having bought it in mid 2020. Well, consider yourselves lucky!
By the way, if you think being up 250% is time to “take profits,” we are thinking the upside is just getting into gear. ... Continue reading >>>
Russia – Ukraine – Who is To Blame?
Patricia Haritty, The Expose, 28 February 2022
“The first casualty when war comes is truth”.
This is a quote that is as true today as it was when California senator Hiram W Johnson, said it in 1917, and while the mainstream media and our politicians have been getting away with broadcasting provable lies for every single conflict for decades, we can be pretty certain that what we are hearing from the mainstream media is not the truth.
The propaganda machine has been indoctrinating the public for years into believing that Russia and Putin are our enemies.
This has been done by fabricating stories about Putin’s involvement in the 2016 U.S elections, tales of how Putin hacked the DNC, and claims Donald Trump was linked to a Russian bank.
Was this all fabricated to prepare us for what is happening right now?
On 24 February 2022, after weeks of speculation, Russia invaded Ukraine, triggering a massive outrage all over the world. The attack on Ukraine has also created confusion as to the stance of the Russian government or more precisely President Putin on the WEF agenda.
The truth at this time concerning the Ukraine crisis is hard to find among the many discussions on social media too.
This seems to be a result of Putin announcing that Russia was launching a military operation directed towards the ‘demilitarization’ and ‘denazification’ of Ukraine and a Twitter thread posted not long after by @WarClandenstine claiming that Russia was targeting the Biolabs.
Although the thread was deleted soon after because of Twitter suspending the account, it can be seen in the video below, and read in its entirety here.
As Russia started attacking the military installations, speculation also began as to why the United States Biolabs established in Ukraine were also among the targets.
This led to optimism that Putin is perhaps showing signs of being against the WEF’s agenda.
[Daily Stirrer] ... [ Our Page on on Substack ]... [Boggart Aboad] ... [ Greenteeth Home ] ... [ Greenteeth on Minds.com ] ... [ Latest Posts ]The Crisis in Ukraine Is Not About Ukraine. It’s About Germany
from Great Game India
The Ukrainian crisis has nothing to do with Ukraine. It’s about Germany and, in particular, a pipeline that connects Germany to Russia called Nord Stream 2. Washington sees the pipeline as a threat to its primacy in Europe and has tried to sabotage the project at every turn. Even so, Nord Stream has pushed ahead and is now fully-operational and ready-to-go. Once German regulators provide the final certification, the gas deliveries will begin. German homeowners and businesses will have a reliable source of clean and inexpensive energy while Russia will see a significant boost to their gas revenues. It’s a win-win situation for both parties.
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