Russian invasion of Ukraine | Fewer tweets, more discussion

the_cliff said:
Let's just say for example, Russia and the opec+ come to an agreement to only sell their oil/gas in yuan. Within a week you'll see those numbers dramatically change. It would crash the dollar and nearly overnight make the Yuan one of the strongest currencies in the world.
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That's a hell of an operation their banks would need to perform. Would need to basically rebuild every bank's infrastructure. Where I work we did some napkin calculations on how much it would cost to replace all our legacy stuff that is now end of life, which might be representative of the changes required to completely shift over for example and that came to the low billions. That's one bank.

Can CIFS even support that many transactions per day? That again is a hell of a feat and would need significant work.
 
the_cliff said:
Let's just say for example, Russia and the opec+ come to an agreement to only sell their oil/gas in yuan. Within a week you'll see those numbers dramatically change. It would crash the dollar and nearly overnight make the Yuan one of the strongest currencies in the world.

EDIT: Before anyone jumps out at me I'm not saying it will happen, there are way too many influences at stake for it to even remotely happen, I'm just using it as an example in a dramatic scenario.
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The main challenge is the confidence people have in the yuan vs the US dollar. China isn't transparent enough about its decision-making to give people that much confidence in how they manage their currency.
 
calodo2003 said:
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My son was toddling around the brewery site of this beer festival a few months ago. I bought some children's books for him at the building in the background, which is a publishing house. Now the Pravda site is a Molotov factory:

 
the_cliff said:
Let's just say for example, Russia and the opec+ come to an agreement to only sell their oil/gas in yuan. Within a week you'll see those numbers dramatically change. It would crash the dollar and nearly overnight make the Yuan one of the strongest currencies in the world.

EDIT: Before anyone jumps out at me I'm not saying it will happen, there are way too many influences at stake for it to even remotely happen, I'm just using it as an example in a dramatic scenario.
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I thought this when the Swift sanctions were first announced.
 
Russian warship went and fecked itself, maybe.



edit:
"here is an opinion that this is not a Russian ship, but a civilian vessel "Helt" under the Panamanian flag"
 
MTF said:
The main challenge is the confidence people have in the yuan vs the US dollar. China isn't transparent enough about its decision-making to give people that much confidence in how they manage their currency.
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I would have to disagree there. I think the problem would be more to do with banking infrastructure as @IWat mentioned, I don't think any nation would have a choice.

One of the reasons why the dollar is strong is because you can only buy oil with the dollar, hence the phrase the petro-dollar. So anyone anywhere in the world that wants to buy oil has to first buy the dollar. Of course I'm talking legally, there are black markets i.e Iranian oil etc. But are irrelevant in the grand scheme of things.

If Russia and Opec were to decide to only sell in Yuan everyone will literally be forced to buy Yuan to buy Oil, similar to the dollar now. Only way around it for the West would be to ramp up their own productions of oil excessively to compete.

Of course I'm not saying this will happen but just thinking on what options Putin has to evade sanctions.

Problem is for Putin all of them make China top dog.

Or they could sell it in Gold and really feck up the worlds economy...
 
the_cliff said:
Let's just say for example, Russia and the opec+ come to an agreement to only sell their oil/gas in yuan. Within a week you'll see those numbers dramatically change. It would crash the dollar and nearly overnight make the Yuan one of the strongest currencies in the world.

EDIT: Before anyone jumps out at me I'm not saying it will happen, there are way too many influences at stake for it to even remotely happen, I'm just using it as an example in a dramatic scenario.
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It will be the strongest one bar none in this scenario. It depends what China are going to do and how they want to play. If Russia gets them on board those western sanctions might not hurt them as much in the long run. I'd imagine Putin has worked well in advance in that direction.
 
I love how someone is arguing that it'd be wise for China to assist in tanking the global markets to help Russia :lol:
 
Cardboard elk said:
No, if this is true (the source was critisised and it was a bad source) - then the Russians have gotten a system that not at all can replace SWIFT. Cips is chinese laguage and yen-based. They have 1 clearing station in Moscow. So it would need extensive build up and change to work well. Also CIPS dealt with 11,513 transactions in contrast with round 40 million messages per day for SWIFT.

Edit: But if true, China are taking sides imo.
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Well it is true it's just not news. A decent amount of Russian banks have been on CIPS for sometime now.

The volumes are a bit irrelevant they'll grow quickly if needed but the actual blocker is CIPS is still dependent on SWIFT last i checked.
 
UncleBob said:
I love how someone is arguing that it'd be wise for China to assist in tanking the global markets to help Russia :lol:
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They won't do it to help Russia per say. They will in a sense but use it as a tool to make them the worlds biggest and best economy, but it doesn't mean that Russia will be winners in this transaction. They will be hugely dependent on China for export/import/energy and essentially be their expensive hooker that bears the fruit of being able to access and operate in that market until they are cut off.
 
BorisManUtd said:
I'm Serbian and we, as a country, traditionally have close ties with Russia but what their government is doing is clear invasion on another country. My support for Ukraine and their people. Not sure if they can hold on but defending even this long seems impressive given the size of their enemy.

Think what Putin is doing will inevitably spread some anti-Russian sentiment that was probably there in Europe and USA anyways, and even hatred towards Russian people. We have to always remember it can never be fault of every Russian citizen, but of those leading the country.
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Meeting Russian premades in world of warcraft aside, I don't think many people are anti-Russian in the UK.
 
Cardboard elk said:
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This tweet is wrong. Major russian banks are already on CIPS, and even if they just joined it wouldn't improve their ability to trade with the rest of the world in any way. We know they're still going to do business with China and a few other countries anyway, but that's obviously far from enough to prevent their economy from tanking.
 
the_cliff said:
Let's just say for example, Russia and the opec+ come to an agreement to only sell their oil/gas in yuan. Within a week you'll see those numbers dramatically change. It would crash the dollar and nearly overnight make the Yuan one of the strongest currencies in the world.

EDIT: Before anyone jumps out at me I'm not saying it will happen, there are way too many influences at stake for it to even remotely happen, I'm just using it as an example in a dramatic scenario.
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It's not a dramatic scenario, it's a preposterous one. China and most Opec states hold tens of billions in dollar assets and the US consumes c2.5, more oil than China and Russia combined.

Oil is also one asset of loads out there, unless gold, palladium, soy beans etc all switch to yuan.
 
Enigma_87 said:
They won't do it to help Russia per say. They will in a sense but use it as a tool to make them the worlds biggest and best economy, but it doesn't mean that Russia will be winners in this transaction. They will be hugely dependent on China for export/import/energy and essentially be their expensive hooker that bears the fruit of being able to access and operate in that market until they are cut off.
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I think since the use of dollar as a weapon for Trump against China it has certainly crossed his mind (Xi). Although China has been the biggest winner in this current economy, people do seem to forget that he also has his eyes on Taiwan and will not want the sanctions to effect them as much as well.
 
Smores said:
Well it is true it's just not news. A decent amount of Russian banks have been on CIPS for sometime now.

The volumes are a bit irrelevant they'll grow quickly if needed but the actual blocker is CIPS is still dependent on SWIFT last i checked.
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I think there will be sanctions on Chinese banks that do business with russian banks through CIPS if that happens. Still, a sign of where China is headed in this conflict? They have a lot to loose economically if they start taking sides.
 
IWat said:
That's a hell of an operation their banks would need to perform. Would need to basically rebuild every bank's infrastructure. Where I work we did some napkin calculations on how much it would cost to replace all our legacy stuff that is now end of life, which might be representative of the changes required to completely shift over for example and that came to the low billions. That's one bank.

Can CIFS even support that many transactions per day? That again is a hell of a feat and would need significant work.
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Why would you need to rebuild your entire systems, CIPS follows the same ISO standards so the integration isn't that different. Obviously many legacy systems are a bit outdated in regards to currency but I've been involved in multi-currency and FX adaptations and it's certainly not even a fraction of that cost.
 
Enigma_87 said:
They won't do it to help Russia per say. They will in a sense but use it as a tool to make them the worlds biggest and best economy, but it doesn't mean that Russia will be winners in this transaction. They will be hugely dependent on China for export/import/energy and essentially be their expensive hooker that bears the fruit of being able to access and operate in that market until they are cut off.
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First of all, China are less than happy about the current situation and they want it solved, peacefully, just the consequences for the global energy market is of annoyance to China as it means increased costs. Secondly, prior to all of this Ukraine was a bigger trade partner to China than Russia, and China depend on a well functioning global market. Tanking the global market, sure as shit isn't something they're keen on and there's nothing at all right now that suggests Russia is even going to compensate for the increased costs in the energy market.
 
Cardboard elk said:
No, if this is true (the source was critisised and it was a bad source) - then the Russians have gotten a system that not at all can replace SWIFT. Cips is chinese laguage and yen-based. They have 1 clearing station in Moscow. So it would need extensive build up and change to work well. Also CIPS dealt with 11,513 transactions in contrast with round 40 million messages per day for SWIFT.

Edit: But if true, China are taking sides imo.
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Thanks for the explanation.

I'm worried about the taking sides part if true
 
Cardboard elk said:
I think there will be sanctions on Chinese banks that do business with russian banks through CIPS if that happens. Still, a sign of where China is headed in this conflict? They have a lot to loose economically if they start taking sides.
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China are asking for peace via negotiations.
 
huyn said:
This tweet is wrong. Major russian banks are already on CIPS, and even if they just joined it wouldn't improve their ability to trade with the rest of the world in any way. We know they're still going to do business with China and a few other countries anyway, but that's obviously far from enough to prevent their economy from tanking.
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Tweet is by some random guy with no underlying link to any article backing up the headline. Could very well be a bot.
 
Smores said:
Well it is true it's just not news. A decent amount of Russian banks have been on CIPS for sometime now.

The volumes are a bit irrelevant they'll grow quickly if needed but the actual blocker is CIPS is still dependent on SWIFT last i checked.
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I actually spoke to a someone in Russian banking yesterday and they're completely hobbled by the Swift ban. It's freezing the whole system cos there's effectively no foreign currency left and hefty restrictions on withdrawals enacted. Brokers and other financials don't have access to capital or counterparties and they're dealing with very worried clients.
 
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RedTiger said:
You forgot the resource rich African countries who do most of their trade with China, if China can strong arm them into their system then it might really create a parallel system to Swift.
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You just can't trade internationally without SWIFT, China has no reason to kill their own economy by leaving SWIFT since they trade with everyone in the world. You just can't replace SWIFT without getting over 200 countries to agree to it.
 
the_cliff said:
I think since the use of dollar as a weapon for Trump against China it has certainly crossed his mind (Xi). Although China has been the biggest winner in this current economy, people do seem to forget that he also has his eyes on Taiwan and will not want the sanctions to effect them as much as well.
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What do you mean? This sentence is very unclear.
 
Jippy said:
I actually spoke to a someone in Russian banking yesterday and they're completely hobbled by the Swift ban. It's freezing the whole system cos there's effectively no foreign currency left and hefty restrictions on withdrawals enacted. Brokers and other financials don't have access to capital or counterparts and they're dealing with very worried clients.
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Yeah that's the key thing, access to counterparties. The actual SWIFT messaging isn't really the significant issue it's the various mechanisms almost embedded alongside it that aren't so easy to replicate.

A lot of this is the other banking sanctions taking their effect, they're still significantly more of an impact.
 
Smores said:
Yeah that's the key thing, access to counterparties. The actual SWIFT messaging isn't really the significant issue it's the various mechanisms almost embedded alongside it that aren't so easy to replicate.

A lot of this is the other banking sanctions taking their effect, they're still significantly more of an impact.
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Yep just seen the counterparties autocorrect by my phone. Foreign banks won't deal with the non-sanctioned ones either, the person said, so they're fully expecting to lose ctwo thirds of their assets by the time this is through.
 
Anyone else following Rob Lee on twitter astounded by sheer amount of russian machinery left behind? They're basically arming ukrainians themselves.
 
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