Saturday, July 29, 2017

US Sanctions Push Russia Closer to Abandoning the Dollar — Deputy FM Sergei Ryabkov

It will be interesting to see what comes of this. Many are predicting a return to gold, but I am betting on digital.

Whatever the result, there is little doubt he is right about this:
Ryabkov: I think we can, and I think also every single step that people—on the Hill [US Congress] in particular—take to make our lives more difficult brings us closer to the moment when we will develop all sorts of alternatives to the US financial system, to the dollar reserve currency system, the dollar-based reserve currency system, to all sorts of areas where the whole world and not just Russia is dependent on very frivolous actions on the part of the US.
And I should say: You undermine confidence in your system altogether.
It's a big mistake politicizing the economic and financial system to exert pressure on other nations. They will eventually react, and it is already happening.

Russia Insider Daily Headlines
US Sanctions Push Russia Closer to Abandoning the Dollar — Deputy FM Sergei Ryabkov
RI Staff
US Secretary of State Rex Tillerson said Saturday that the US sanctions bill "represents the strong will" of the Americans to see Russia take steps to improve Moscow-Washington ties.
Washington double-speak.

Russia's response: Throw the bums out.
A statement posted on the ministry’s website said the number of diplomatic and technical personnel across US diplomatic missions in Russia should not exceed 455.
The foreign ministry said it would also close down the embassy dacha (summer residence) on the outskirts of Moscow and rescind access to warehouse space. The restrictions on the properties come into force on 1 August, while the reduction in diplomatic presence is to take place by 1 September, the Russians said.

The ministry said the figure of 455 was equivalent to the number of Russian diplomatic staff accredited for work in the US. The figure refers to all embassy staff, including both US diplomats and local hires.
Reuters quoted an embassy source stating that there are about 300 US diplomats based in Moscow, with about 1,100 staff altogether between the Moscow embassy and three consulates across the country. If this figure is accurate, the Russian move would mean more than 600 employees would have to leave.
What are all those people doing there anyway?

The Guardian
Russia cuts US diplomatic presence in retaliation for sanctions
Shaun Walker

As the US Senate approved the introduction of new sanctions against Russia, EU countries have repeatedly criticized the move as contradicting their interests. According to German economist Rudolf Hickel, the sanctions are driving a wedge between Washington and Brussels.
That is putting it mildly. 

France's foreign ministry on Wednesday said new U.S. sanctions against Iran, Russia and North Korea appeared at odds with international law due to their extra-territorial reach.


Matt Franko said...

The zombies will freak out...

MRW said...

Digital won't work if you mean something like Bitcoin. You need a device for that to happen, something that can survive the Siberian winter for example, or a week without access to battery charging (Do you know how wide that country is? Takes 10 days for the train to go from Moscow to Vladivostok). They need something tourists can use.

Tom Hickey said...

This is about central bank banking, payments systems and international settlement.

MRW said...

I know.

MRW said...

So? Doesn't relate to what I wrote.

Tom Hickey said...

I don't think it would replace normal use of the currency anymore than credit cards did.

The first step in getting away from the dollar is circumventing SWIFT, which the US controls. They already have a workaround.

The problem is firms borrowing in dollars because settlement is now mostly in USD. They want to preclude that.

I don't think the public would notice the switch much.