This raises the question of whether the current Western sanctions against Russia strike at the heart of the Russian system or merely pretend to do so. Since the sanctions were introduced, no Western government has made a meaningful effort to investigate the provenance of hundreds of billions of dollars in Russian offshore assets. No significant asset freezes have taken place. The money is still out there, to be invested inside or outside Russia, in the service of its "perceived national interest" or otherwise (Putin would like to get his hands on some of it, too, but it doesn't belong to his cronies).
A Western effort to track down that money and make it available to a post-Putin, democratic Russia could potentially be a game-changer. But it would require far more work, and probably a lot of uncomfortable revelations about Western business and politics. The current sanctions regime is simply not intended to open that can of worms.Bloomberg View
Piketty Zeroes In on Putin's Pain Point
Leonid Bershidsky
How do you bring a USD 'back' to Russia? The whole article is out of paradigm...
ReplyDeleteIn a suitcase? :)
ReplyDeleteActually, you exchange the USD for RUB.
How do you bring a USD 'back' to Russia? The whole article is out of paradigm...
ReplyDeleteIt's not about getting funds back into Russia but getting funds out of Russia. If the Western finance people weren't supporting the transfers out of Russia and providing havens for it, there would be a lot less corruption in Russia, and it isn't only Russia, either. Large-scale crime and corruption depend on a complicit financial system.
Also notable is that LB says that the people involved are not Putin cronies as advertised in the media.
These are the folks that Putin clamped down on and the West wants to take over Russia when Putin is gone.
They were just riding the oil monopolists coat tails same as the Texas assholes ... .... it's all accumulated monopoly rent hope they choke on them...
ReplyDeleteThe external surpluses generated would only leave the Russia CB capable of exchanging RUB for USD so they would still be at the US Fed just in official accounts... all they could do is either keep them as savings or buy some stuff from the US...
They are better off just focusing on providing better domestic outcomes for all their citizens and find a cure for their USD zombie condition... or else everyone competent and qualified is going to leave for the US like everyone else does... brain drain and they will become the next Venezuela....
They are better off just focusing on providing better domestic outcomes for all their citizens
ReplyDeleteThey did the moment the sanctions were imposed in 2011 or whenever it was. Cut off European food and other imports so they could concentrate on their own, which crippled some European agricultural economies selling to them.
Not a chance Russian will become the next Venezuela. Venezuela used their oil dollars to import everything, including food, without developing their own sustainable markets.
Besides, Russia has developed China as a market and vice versa, (eg the $400 billion oil deal) and is thinking of using currency other than the USD for oil payments. And we aint gonna' hear about it until it's a done deal.
In a suitcase? :)
ReplyDeleteA Federal Reserve spokesman I talked to said that Russians have the greatest supply of physical USD ($100 bills) of any country in the world outside the US. He chortled it’s in mattresses.
I think 2nd is Koreans and the 3rd Argentinians. But don't hold me to it. It was three or four years ago.
ReplyDeleteAlso,
ReplyDeleteVenezuela: 341,000 square miles
Russia: 6,600,000 million square miles
Venezuela: oil and a coastline
Russia: rich in multiple natural resources and agricultural land
They have better conditions than Venezuela... still no guarantee...
ReplyDeleteAnd 30% of the world's natural resources.
ReplyDeleteThey've lasted for 1,000 years and no one has ever conquered them. Ever.
ReplyDeleteI don't think the risk is a conquest but rather they remain second tier...
ReplyDelete"They did the moment the sanctions were imposed"
ReplyDeleteThere are limits to that... can they grow their own citrus? Coffee? Etc... Do they have palm trees anywhere? Any cities like Melbourne Australia? Miami?
How much potato soup can you eat?
They are already bartering things they are fat its, like weapons and oil, with the Global South for the things they don't produce to avoid USD transactions.
ReplyDeleteAll the sanctions are going to do is inconvenience them a bit....
ReplyDeleteThere are limits to that... can they grow their own citrus? Coffee? Etc... Do they have palm trees anywhere? Any cities like Melbourne Australia? Miami?
ReplyDeletePalm trees in Sochi, Crimea, Odessa (altho that’s in the Ukraine now, it was in Russia before 1954). All around the Black Sea. Look at a map. It’s sub-tropical. Don’t you remember the Winter Olympics?
Citrus? Same thing.
Coffee? The Russians never drank coffee before 1917 or during the Soviet era. It’s only a 20/25-year taste there. They’ve drunk tea for centuries: “chai.” Of course, when the ‘stans were still part of the USSR, they drank coffee; look at a map.
Cities like Melbourne and Miami? Their total population is 144 million, less than half ours, with twice our land area. They have St. Petersburg and Moscow. St. Petersburg is one of the most beautiful cities I’ve ever been in. It’s enchanted. Moscow is massive and majestic. Who puts chandeliers in their subways? and ornate architectural gold leaf detailing and artwork? I was there during the Soviet era, and stunned to see the subways with zipperino elevators, chandeliers, and roads four and five five lanes wide on both sides (empty, no cars to speak of) and wide landscaped boulevards down the middle with mature trees.
How much potato soup can you eat?
Potato soup? Hunh? They make it like they make most other vegetable soups, in chunks with herbs and other veggies, just like we do. Just like our grandmas did. Beet soup—borscht—is more like it, that’s the signature dish.
You have a parochial view of the rest of the world, Matt, and an arrogant assumption of our vaunted exceptionalism. Our infrastructure is 3rd-world compared to Asia’s, so is our telecommunication prowess, which is diddly-squat compared to what you get in Korea, Malaysia, Japan, urban China, etc. I remember being in Kuala Lumpur Malaysia in 2000 and the secretary could watch TV on her phone and text her family like a champ. They ignore us.
Bartering weapons and oil, Tom? Where did you read that? They didn’t do that with China. They don’t do that with Iran. Hauling weapons down to deal in what? Apples? Maybe they trade in Euro. Or demand payment in Rubles.
ReplyDeleteBloomberg
ReplyDeleteIndonesia Barters Coffee and Palm Oil for Russian Fighter Jets
AP
Thanks Tom. I wonder what kind of indonesian "defense equipment" is part of that deal. I wasn't aware that Indonesia made defense equipment. I suppose I could look it up.
ReplyDelete" assumption of our vaunted exceptionalism."
ReplyDeleteWe have excessively better material conditions... you couldn't even flush toilets at Olympics in Sochi...
Vail, Beaver Creek, Aspen, Utah, South Beach, Austin, SoCal, Florida Keys, Hilton Head, Cape Cod, Hamptons, Nashville, etc... there is no comparison with Russia only 20 years out of communism...
No one rational would rather live in the Russia material conditions vs the US conditions..
Asia is largely an open sewer....
Everybody is leaving there or wants to leave there to come to the US.... the conditions are much better here... causes "brain drain" for the ROW...
Well, I looked it up and am I out to lunch. Indonesia's been selling defense equipment to Pakistan for years.
ReplyDeleteOpen sewer? Then you haven't been there.
ReplyDelete