[HN Gopher] A quick breakdown of what SWIFT is and why it matters
___________________________________________________________________
A quick breakdown of what SWIFT is and why it matters
Author : tosh
Score : 344 points
Date : 2022-02-24 15:47 UTC (1 days ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| ck2 wrote:
| Well that didn't age well
|
| https://archive.today/XqZzK
|
| > _When Western nations threatened Russia's access to Swift in
| 2014, Alexei Kudrin, a onetime finance minister close to
| President Vladimir Putin, estimated that it could reduce Russia's
| gross domestic product by 5% in a year. Cutting Russia off from
| Swift could have ramifications for other nations as well, since
| Russia is a key energy supplier to Europe and countries rely on
| the Swift system to pay for fuel. Russian officials have
| repeatedly denied assertions that they intend to invade Ukraine._
| eole666 wrote:
| Glad it's not about the Swift language
| TekMol wrote:
| I often wonder how money is stored.
|
| It can't be just a number on a computer in a bank, right?
| Otherwise some Russian bank could just increase that number to
| whatever they like. And say "Look, we own 100 Trillion USD. Now
| let's go shopping.".
|
| So I guess USD needs to be recognized by the US somehow?
|
| Could the US simply "void" all USD that are owned by Russia?
| dcolkitt wrote:
| Let's just talk about USD specifically. (Other currencies work
| pretty similar, just with different central banks.)
|
| The "single source of truth" is the Federal Reserve. Member
| banks (about 10,000 US domestic banks) can hold reserves
| directly at the Fed. Any reserve bank can directly transfer Fed
| reserves to another member bank or to the US Treasury using
| FedWire. The Fed "creates money" simply by crediting a member
| bank's reserve.
|
| This is done in two ways, one is by paying interest on
| reserves. So if you're a member bank holding one million in
| reserves, the Fed simply bumps your balance up every night to
| reflect your interest payments. The other is by the Fed
| conducting "open market operations". When it wants to stimulate
| the economy by "providing liquidity" the NY Federal Reserve
| trading desk will buy treasury bonds and pay for them simply by
| crediting the balance of whichever member bank sold the bonds.
|
| Member banks themselves can "create money" in the form of
| demand deposits. If you have one million in your checking
| account at Chase bank, all you really have is a promise by
| Chase bank to give you or whoever you want to send money to one
| million dollars. Essentially money is created the same way the
| Fed creates money, your checking account is nothing more than a
| credit in Chase's database.
|
| _However_ Chase 's ability to create money is highly regulated
| and constrained. Banks have to conform to strict capital and
| leverage constraints. The OCC and other banking regulators will
| require that Chase hold enough assets in high enough quality to
| cover its deposit "liabilities". Some fraction of those assets
| will be dollars held as reserves at the Fed. Some will be bonds
| or loans, i.e. promises by other high-quality actors to pay
| dollars. Some of those assets could even be risky stocks, low
| quality bonds, commodities, etc. However the "risk-weighted"
| leverage ratio quickly scales up with risk.
|
| In exchange for this regulation, deposits held at Chase or
| other member banks are treated as equivalent to Federal reserve
| dollars. That's because if for some reason, Chase is unable to
| pay back its depositors when they demand their money back, the
| Federal Reserve will "create money" to meet the obligations.
| This is essentially why bank runs no longer exist in modern
| banking.
|
| Then there's the concept of "money markets", which is short-
| duration, high-quality assets that are essentially treated as
| "money-like". Often this tends to be short-term commercial
| paper from high-quality corporate issuers. A promise from Apple
| to pay $1.00 in 30 days is treated as "almost a dollar" by most
| of the market. In this sense, Apple can also "create money".
| But it's highly constrained, because it would quickly lose its
| credit rating or breach covenants in its longer-term bonds if
| it did so.
|
| Finally there's the concepts of "eurodollar deposits". These
| are dollar deposits held at non-American banks but denominated
| in dollars. For example you could hold $1 million dollars at
| Mitsubishi bank in Japan, and you have a claim against
| Mitsubishi to pay out dollars whenever you want. Mitsubishi is
| not an American bank, and therefore is not directly regulated
| or insured by the Federal reserve. In some sense this makes
| eurodollars slightly less safe than dollars held at domestic
| member banks.
|
| That being said Mitsubishi is regulated by Japanese banking
| regulations and implicitly insured by the BOJ (central bank of
| Japan). Mitsubishi will also make sure its dollar liabilities
| are never that large relative to its yen-assets. In the case of
| Mitsubishi failing, its highly likely the BOJ would bail them
| out by creating yen in the same way the Fed creates dollars.
| Some of that yen could be converted to dollars on the open FX
| market, and make the dollar depositors whole. Hence eurodollars
| are essentially just as safe as regular dollars as long as
| they're inside another high-quality banking system.
| pgwhalen wrote:
| I have been learning (via books, podcasts, coursera, etc.)
| about what money is and how it's created, both domestically
| and internationally, both in commercial banks and central
| banks; and let me just say this is a _superb_ summary of all
| of that. Bravo!
| rowls66 wrote:
| > In exchange for this regulation, deposits held at Chase or
| other member banks are treated as equivalent to Federal
| reserve dollars. That's because if for some reason, Chase is
| unable to pay back its depositors when they demand their
| money back, the Federal Reserve will "create money" to meet
| the obligations. This is essentially why bank runs no longer
| exist in modern banking.
|
| This is not exactly true. Chase, like many other US banks, is
| regulated by the Fed, and deposits at Chase are insured by
| the FDIC (Federal Deposit Insurance Corporation). If Chase
| becomes insolvent, the FDIC will take over, pay depositors up
| to the FDIC insured maximum, and liquidate any Chase assets.
| The Fed is not required to do anything in such a situation.
|
| The Fed may choose to conjure up some new money and loan that
| new money to Chase, and as Chase is a systemically important
| bank, the Fed might well do that before the FDIC steps in,
| but they are not required to.
| RC_ITR wrote:
| USD are ultimately bearer notes, we've just built a bunch of
| trust-based infrastructure to enable transactions without
| moving physical currency.
|
| The key feature of this system (and what everyone is ignoring)
| is bank accounts that x/German bank has at y/Russia bank (this
| is also the actual means of transaction for SWIFT).
|
| So in your example, 'y bank erroneously says we have $100tn'
| would actually just mean 'y bank is willing to credit the
| account of x bank by $100tn.'
|
| If x bank then tried to pay y bank for a separate transaction
| with those fake $, then y bank is the loser anyway.
|
| EDIT: Put alternatively, 'making up' USD is a near equivalent
| to making a loan, which is sort of the core thing a bank does
| anyway.
| vishnugupta wrote:
| > So I guess USD needs to be recognized by the US somehow?
|
| You could start here:
| https://www.federalreserve.gov/releases/h41/20220224/
|
| H.4.1 is a really useful and important data set. For example,
| you can see that US Fed is holding T2.7$ worth of mortgage
| backed securities i.e., it's funding them.
|
| > Could the US simply "void" all USD that are owned by Russia?
|
| Beyond a certain threshold those USDs are typically stored as
| US Treasury bills because it's too risky to deposit billions of
| $$ in bank accounts. The risk of bank going under is real at
| those deposit levels.
|
| For anything more I _highly_ recommend reading up Fed Guy blog
| [1]. It 's one of the best sources of this information I've
| come across; he's extremely concise, no-jargon and explains the
| core principles really well.
|
| While at it, take a look at this BIS data[2]. tl;dr Russian
| residents owe ~B121$ to other countries' banks.
|
| [1] https://fedguy.com
|
| [2] https://stats.bis.org/statx/srs/table/b4?c=RU
| shuntress wrote:
| Yes.
|
| It's a distributed shared ledger.
|
| If this hypothetical Russian bank attempts to add fraud to the
| ledger, it will cause a fork.
| can16358p wrote:
| They do have physical cash reserves in central banks.
| pmontra wrote:
| Which could be revoked by printing new money with a new
| design and giving them only to the friendly parties in
| replacement of the old ones. It's routinely done (Euro is on
| its second design) and old banknotes and coins are no more
| valid after some years (the first series of Euros doesn't
| have an end of life yet.)
| tazjin wrote:
| Which would significantly devalue the currency because
| you'd hedge your bets against not becoming unfavourable to
| whichever regime controls its issuance.
| yokaze wrote:
| Yes, the design is routinely changed to make the currencies
| more safe against falsification. And the old currency is
| often taken out of circulation simply by wear and tear. But
| it is the sign of a stable economy that legal tender does
| not have an expiration date.
|
| "Note that it is U.S. government policy that all designs of
| Federal Reserve notes remain legal tender, or legally valid
| for payments, regardless of when they were issued. This
| policy includes all denominations of Federal Reserve notes,
| from 1914 to present as per 31 U.S.C. SS 5103."
| https://www.uscurrency.gov/acceptance-and-use-older-
| design-f...
|
| Despite not being legal tender anymore, the Deutsche
| Bundesbank changes your DM notes, if they are after issued
| after 1948 (https://www.bundesbank.de/en/tasks/cash-
| management/dm-bankno...). The currency has been introduced
| in 1948.
|
| If you feel inclined to do so, you can spend a 1 Yen note
| from 1885
| https://en.wikipedia.org/wiki/Banknotes_of_the_Japanese_yen
|
| So, inflation and wear and tear takes old notes out of
| circulation rather than expiry.
| johannes1234321 wrote:
| not only are first series euros still valid, but you can
| still exchange pre-Euro currencies for the original rate.
|
| The purpose of the new series is just to keep up with
| counterfeit money, to include newer security measures.
|
| But yes, countries in the world have revoked currencies
| from time to time.
| PTcartelsLOL wrote:
| No, you can't. They were only valid for 20 years, and 20
| years have passed since 2002.
| grozzle wrote:
| A notable anecdote is the Northern Bank robbery of 2004,
| when (presumably IRA) robbers stole 26 million UK pounds
| from the biggest Belfast branch of the Northern Bank,
| which, like other private banks in Northern Ireland and
| Scotland, issued its own banknotes. They held a manager's
| family at gunpoint during the action.
|
| This total sum seemed to be far beyond the robbers' actual
| intentions, and the Northern Bank quickly issued a new
| banknote design, offering free exchanges for anyone with
| the old one.
|
| Of course the robbed money had serial numbers, so it's now
| generally believed the IRA just burned most of the stolen
| cash.
| mohanmcgeek wrote:
| > Russian bank could just increase that number to whatever they
| like.
|
| Money is an IOU from the bank. So that's what _all_ banks do.
| But they 'll need assets on the right side of their balance
| sheet.
| snovv_crash wrote:
| Bit what if they didn't, and just changed some numbers in
| their database?
| mohanmcgeek wrote:
| Then the left side and the right side of their balance
| sheet will not add up to the same value
| majormajor wrote:
| Other comments are making comparisons to asset bubbles or
| governmental money-printing, which is rather different than
| immediate bald-faced fraud on the part of a single actor.
|
| Do you really think it's that easy? That *nobody else
| involved in the system ever was like "wait, what if someone
| tries to defraud us?"? That there aren't various levels of
| checks and methods to prevent such easy, easy things?
|
| That, say, the FDIC in the US is just telling banks "sure,
| we'll insure your bank accounts, don't bother sending us
| verification, we trust you!"
|
| Whenever you hear someone complain about onerous reporting
| requirements or other such business regulations, remember
| that those things get put in place to catch shit like this.
| waterheater wrote:
| Then you have fraud, likely leading to an economic crisis.
|
| Consider the 2007-2008 financial crisis. Abstractly,
| investors believed that homes had significant value until,
| one day, society realized the value didn't exist in reality
| but only "on paper." We know that investment bankers were
| hiding the problem until the proverbial lid blew.
|
| You might consider that our current financial paradigm has
| never been tried before in human history. For thousands of
| years, currency was based upon various measures of value
| which attempted to be as objective as possible. Semi-rare
| materials (e.g. gold and silver) and difficult-to-replicate
| coinage were some examples. The US dollar was decoupled
| from the gold standard under the Nixon administration. The
| end result is, one dollar now holds value relative to the
| amount of dollars in existence. To increase the relative
| amount of precious metals into the world is relatively
| difficult (actual physical labor is required), but to
| increase the total amount of dollars in existence is as
| simple as updating a database entry.
|
| If financial controls work exceedingly well, the current
| economic system is viable. We know, however, that they
| don't.
| nradov wrote:
| One dollar now holds value relative to your tax bill. If
| you're subject to US taxes then you have to hold dollars.
| The IRS doesn't accept precious metals, and if you fail
| to pay in dollars then they'll seize your other assets.
| (Technically the IRS might accept official US minted gold
| coins at face value but that's not really something that
| happens in practice.)
| mohanmcgeek wrote:
| > The end result is, one dollar now holds value relative
| to the amount of dollars in existence.
|
| This idea of commodity money is far detached from how it
| actually works. Thread has several good links if you want
| to learn how it actually works.
|
| What is the reason behind so many people believing this?
| Do they teach it like this at school? (This resurfaces
| everytime money is discussed here)
| lisper wrote:
| > We know, however, that they don't.
|
| We know no such thing. The only objective fact is that
| there have been fewer financial crises since the dollar
| went off the gold standard than before.
|
| Financial controls don't work _perfectly_ , but having
| money tied to a commodity is fraught with its own
| difficulties. It's actually quite handy to have fine-
| grained control over the money supply that is not coupled
| to external physical circumstances because then at least
| we have the _option_ of controlling it to produce better
| outcomes even if we don 't always succeed.
| tintor wrote:
| Then you have inflation, and rise of prices.
| Aunche wrote:
| If anyone suspects that, then everyone will try to withdraw
| their money from their account and they'd soon get exposed
| of fraud.
| orangepurple wrote:
| Well, it hasn't happened yet and reality is staring at
| you in the face
|
| https://fred.stlouisfed.org/series/BOGMBASE
| andrepd wrote:
| > But they'll need assets on the right side of their balance
| sheet.
|
| [citation needed]
| vishnugupta wrote:
| https://www.bankofengland.co.uk/quarterly-
| bulletin/2014/q1/m...
|
| "Whenever a bank makes a loan, it simultaneously creates a
| matching deposit in the borrower's bank account, thereby
| creating new money."
|
| So on the asset is a loan made by the bank.
| nradov wrote:
| What kind of citation are you looking for? That's not a
| controversial issue, it's just the basic reality of how
| fractional reserve banking has always worked. I'm sure that
| was covered in your Econ 101 class so open up your old
| textbook.
| EarthIsHome wrote:
| > I often wonder how money is stored.
|
| In a computer account. Here's a 22-second clip[0] from a
| 60-Minutes interview with a former chair of the Federal Reserve
| talking about how money is lent to banks. Literally just
| numbers on a computer.
|
| "...We simply use the computer to mark up the size of the
| account that they have..."
|
| [0]: https://www.youtube.com/watch?v=hiCs_YHlKSI
| agumonkey wrote:
| I know nothing but instead of one number, think transaction.
|
| To fake money you need to forge transaction with input from
| somewhere, this can be checked.
| majormajor wrote:
| This is similar to the "why are banks allowed to print money by
| issuing loans and I'm not?" confusion that sometimes goes
| around.
|
| Your internal balances are only good so long as the rest of the
| system trusts you. Magic up some fake balances and good luck
| getting the rest of the world to continue to take you
| seriously. "You want us to believe you've actually got that 100
| Trillion? Show us?" How would this Russian bank spend these
| trillions? They can't cash out, because they don't actually
| have that much paper USD. Transfer it to another bank somewhere
| more reputable? How are you going to make those transfers
| clear?
|
| I invite you to open your own bank and print yourself ten
| million dollars out of the air. Good luck converting that
| number to cash or transferring it to anywhere else!
| 13415 wrote:
| I'm sure you're right in principle but have to point out that
| ten million dollars is peanuts, people have loaned more than
| that and not given back.
| majormajor wrote:
| You mean that "real" banks have issued loans of 10M+ and
| not gotten repayed by people/companies who went bankrupt or
| such? Certainly!
|
| Banks do their due diligence for a reason, but they don't
| always get it right. And a certain amount of "bad loans" is
| expected anyway. Part of the fees and interest they charge
| is to cover that.
|
| But that's very different than simply printing _yourself_
| 10 million dollars. Or even just ten dollars.
|
| It's also different from _you_ starting a bank and saying
| you loan _me_ 10 million dollars. I now have a statement
| saying I have 10M in your bank. I try to take that to a
| "real" bank to cash out. It's not gonna work.
| dogman144 wrote:
| Numbers on a computer paired with account balancing/settlement
| protocols, one example being:
| https://en.wikipedia.org/wiki/Nostro_and_vostro_accounts
|
| When people talk about the manual inefficiencies of finance,
| it's referring to all this happening in the backend behind the
| abstraction of quick/automated digital payments in fiat
| currency. It gets especially complex in international finance,
| hence SWIFT etc.
| csomar wrote:
| They can "print" as many USD as they want in-house. But in
| order to process transactions abroad, they need a US bank
| account. They can't print money in that.
|
| The US sanctions (freezing their US assets) has more effect, in
| that regard, than a SWIFT blockade. The US seems to be the
| interested party in this war, and Germany is much less
| enthusiastic about it. Remember, SWIFT is a Belgium company and
| the US has been hostile to European financial institutions
| lately.
| netsharc wrote:
| As far as I know they really are just numbers in databases, but
| if it's foreign currency, they can't just magic them out of the
| DBA's fingers. There probably are ledgers that have to agree
| with each other, e.g. if a Russian bank claimed it had those
| 100 Trillion dollars from a Cypriot bank, then the Cypriot bank
| would have to confirm it gave them that much, and then show
| everyone the source of that money.
|
| Which does make one wonder how easy it'd be for your trick to
| work.
|
| North Korea is a major printer of fake $100 bills, a piece of
| paper that's actually worthless but others are willing to trade
| $100 worth of goods and services, or exchange for a bank
| transfer. Until a bill is found to be fake and destroyed, I
| guess there really is $100 more in circulation, and when the
| last person found out the note is fake, in effect NK has robbed
| them out of $100.
| dmingod666 wrote:
| There was a huge company in china I think, taking loans by
| using gold bars as collateral.. for years, turned out they
| weren't gold
| nonfamous wrote:
| Some good answers above provide more detail here, but
| ultimately yes: money, for the most part, really just is a
| number on a computer.
|
| Here's a good example: when you borrow $500,000 from the bank,
| the bank's funds don't go down by $500,000. The bank just
| creates that money out of thin air, by adding to the number in
| your bank balance. Eventually that number goes down as you
| repay the loan, so it all washes out in the end (modulo
| interest, defaults, etc).
|
| As an aside, that's why low interest rates stimulate the
| economy: more loans are made, and more money is created,
| spurring more economic activity.
| louloulou wrote:
| > Otherwise some Russian bank could just increase that number
| to whatever they like. And say "Look, we own 100 Trillion USD.
| Now let's go shopping."
|
| Yeah, they can, and do. This is what Eurodollars are. And why
| the World is continually on the brink of financial collapse
| whenever Dollars get too scarce.
| jaywalk wrote:
| It's mostly just numbers on a computer in a bank. There are
| regulations concerning what banks can do with those numbers,
| but it all boils down to people having faith in the system in
| the end. That's why bank runs can quickly lead to economic
| disaster.
| lxgr wrote:
| > That's why bank runs can quickly lead to economic disaster.
|
| That is true, but arguably not a consequence of money being
| digital, but rather of fractional reserve banking.
|
| Physical vs. digital accounting is largely orthogonal to
| full/fractional reserve banking.
| nradov wrote:
| No that's not how it works. Bank runs are possible even
| with full reserve banking. If banks make any loans at all
| then obviously they don't hold enough cash to redeem all
| depositors. Regardless of reserve ratios, the only way to
| reliably prevent bank runs is with a central bank that
| provides liquidity upon request.
| mohanmcgeek wrote:
| > with full reserve banking. If banks make any loans at
| all
|
| These are contradictory. The banks with full reserve
| banking can't make loans from easily withdrawable
| deposits. They can do that only with term deposits that
| can't be withdrawn for a specific period
| mohanmcgeek wrote:
| > That is true
|
| Is it still true though? The Fed averted this through QE by
| buying assets of questionable value at the face value from
| the illiquid banks and providing them with enough cash..
| didn't they?
| MatteoFrigo wrote:
| > I often wonder how money is stored.
|
| The Bank of England published a summary of how modern banks
| work. See https://www.bankofengland.co.uk/quarterly-
| bulletin/2014/q1/m...
|
| > It can't be just a number on a computer in a bank, right?
|
| It can and it is, see the BOE paper.
|
| > So I guess USD needs to be recognized by the US somehow?
|
| This is a complicated question that will start a flamewar, but
| basically, any bank in the world can create dollars out of thin
| air given adequate collateral. Read about "Eurodollars".
| bally0241 wrote:
| It's amazing to watch people who have never really thought
| about this before realize the entire banking system is built
| upon a handful of centralized, permissioned databases which
| can pretty much be turned on/off at will for certain parties
| by the central banks.
|
| What is even more amazing is watching these same people (no
| necessarily you OP, but prevailing opinion on HN...) then go
| on an argue that a permission-less distributed ledger like
| Bitcoin is a completely unnecessary waste of resources.
| andruby wrote:
| Honestly curious. What is the dissonance that you see
| there?
|
| Digital fiat currency is indeed bank databases. Similarly,
| stock markets and stock ownership are also stored in
| permissioned databases. Both are highly regulated and
| enforced by law. For people in countries with a high level
| of rule-of-law, and a stable financial system, I'd argue
| that this works reasonably well.
|
| I also think that blockchain and other crypto currencies
| can be very useful. Especially for people in countries
| where rule-of-law is not as important and corruption is
| high.
| bally0241 wrote:
| > For people in countries with a high level of rule-of-
| law, and a stable financial system, I'd argue that this
| works reasonably well.
|
| I agree, but that's not always obvious at first glance.
| For example, I would've said Canada qualifies as a stable
| rule-of-law country with strong property rights up until
| a couple weeks ago.
| phphphphp wrote:
| You describe money as if it's just numbers being moved
| around: yes, the technology is just numbers moving around,
| but money is a social construct not a technology, the use
| of technology is a very small part of what makes money
| money.
| hprotagonist wrote:
| > permission-less distributed ledger like Bitcoin is a
| completely unnecessary waste of resources.
|
| it certainly is when it immediately _de facto_ centralizes!
| which is in the event what has happened
| bally0241 wrote:
| I'm not sure how you can say it is de facto centralized.
| You may have had a decent argument as recently as last
| summer when most of the mining was done in China.
| However, we just watched them ban mining there
| completely, and the network carried on relatively
| unfazed. Seems pretty distributed to me.
| wyager wrote:
| > it immediately de facto centralizes
|
| In what respect? Hash power is well-distributed.
| Consensus (formal and informal) is working as expected.
| HideousKojima wrote:
| >What is even more amazing is watching these same people
| (no necessarily you OP, but prevailing opinion on HN...)
| then go on an argue that a permission-less distributed
| ledger like Bitcoin is a completely unnecessary waste of
| resources.
|
| Hating the way modern banking works doesn't mean blockchain
| is a flawless solution. It comes with a ton of its own
| problems (not the least of which being that it's utterly
| inscrutable to normies). I personally would prefer we go
| back to currency backed by gold or some other comparable
| commodity (silver, etc.)
| bally0241 wrote:
| Sure, I'd agree commodity money is preferable (and
| certainly trustless in p2p transactions), and in many
| ways better than blockchain. I just don't see how to map
| that paradigm onto a world where people who have never
| met each other regularly transact across continents
| without introducing some trusted 3rd party. And the
| moment you add that 3rd party you end up right back where
| we are now.
| ajross wrote:
| > This is a complicated question that will start a flamewar,
| but basically, any bank in the world can create dollars out
| of thin air given adequate collateral. Read about
| "Eurodollars".
|
| This is true, but it's actually sort of a specious point.
| What a eurodollar deposit "really" is, is just a short
| contract. Your European bank takes your exchange and promises
| to give you back dollars when you ask for them. That they may
| not have them right now is just a technical detail. But the
| value of the dollar is still set by what the market is
| willing to pay for it. The bank going "short USD" is a risk
| it takes, not an inflationary pressure per se.
|
| So... sure. Foreign banks can create dollars just like
| brokerages can "create stock shares"[1]. Except, they really
| can't. They're just playing accounting tricks.
|
| [1] Or, more relevantly perhaps, how one crypto exchange can
| create wrapped tokens representing foreign coins. This
| capability was part of the exploit chain that led to the DeFi
| hack last month.
| lokar wrote:
| Exactly, they don't give you dollars, they give you a
| dollar denominated liability.
| MatteoFrigo wrote:
| Just to make sure we are speaking the same language: If I
| have $1 in a checking account in a US bank, do I have one
| dollar, or do I have a dollar-denominated asset of $1
| face value, backed by a dollar-denominated liability of
| the bank?
| ajross wrote:
| Reserve requirements at US banks are regulated by the US
| government as one of many mechanisms used to control the
| money supply. So... yes, sure. It's complicated, but a
| dollar at a US bank is a "dollar", because that's what
| "dollar" means.
|
| The contention upthread was that foreign banks could do
| the same thing to print dollars. And, again, it's
| complicated. They sorta can, but only in the sense of
| placing a gargantuan short bet on the dollar. (A ton of
| short selling on a small security can push the price down
| for the same reason). So no one does that, because no
| bank wants to play that kind of game (or is allowed: all
| those large foreign banks are themselves regulated by
| their own national regimes).
| beambot wrote:
| > It can't be just a number on a computer in a bank, right?
|
| And yet people question the utility of a decentralized,
| trustless, public ledger -- ie. blockchain.
| nradov wrote:
| What is the utility? Sure it makes money laundering and
| buying illegal goods slightly easier than dealing in cash but
| otherwise what's the point?
| beambot wrote:
| Decentralized consensus & trust doesn't rely on banks and
| all the associated cost, complexity, obscurity, and
| gatekeeping that comes with them. With crypto: "Banks"
| can't unilaterally or fraudulently print more money,
| settlement is much faster & public / atomic, and no need to
| rely on trust that funds are real compared to (say)
| Eurodollar derivatives -- i.e. many of the legacy hacks
| that others are talking about in this thread.
| atlantas wrote:
| Unfortunately many won't until they find themselves in a
| circumstance where decentralization is of vital importance.
| At which point it may be too late.
| Hamuko wrote:
| Which is not just a number on a computer, right?
| TeeWEE wrote:
| ITs a number of lots of computers that use crypto
| algorithms to decide what the True ledger is.. So it cant
| be edited like a row in a DB can. But yes. you're right.
| lxgr wrote:
| > It can't be just a number on a computer in a bank, right?
|
| It really is, but to answer your second question, it's
| important to consider *which* bank. There's reserves (i.e.
| balances of banks at the Federal Reserve) and bank deposits
| (which really are just numbers in banks' databases).
|
| Having an account at the former is effectively what makes
| numbers in the database of the latter "real USD".
|
| > Otherwise some Russian bank could just increase that number
| to whatever they like. And say "Look, we own 100 Trillion USD.
| Now let's go shopping.".
|
| They could, but these assets/liabilities would not be backed by
| any reserves linked to the USD payment rails.
|
| Reserves are theoretically irrelevant (though practically
| regulated) as far as transfers between accounts of a single
| bank are concerned. But as soon as a second bank comes into the
| picture, i.e. for inter-bank transfers communicated via SWIFT
| or otherwise, all transfers will ultimately be backed by Fed
| account to Fed account transfers in the background.
|
| > So I guess USD needs to be recognized by the US somehow?
|
| Indirectly so, yes: What makes USD "real" is the ability to
| transact with the larger ecosystem of US and offshore banks
| that have a shared agreement on what "real" USD are.
|
| Practically, this means being connected either directly (via a
| Fed account) or indirectly (via a bank that itself does have a
| Fed account) to that system.
|
| > Could the US simply "void" all USD that are owned by Russia?
|
| Indirectly, yes: They can force every bank holding USD balances
| for embargoed beneficiaries to freeze these assets. Failing to
| comply could, in the absolute worst case, lead to that bank's
| Fed accounts being frozen as well (which would take away its
| ability to settle in USD with other banks).
| tony_cannistra wrote:
| I am astounded at how much I just learned about banking from
| you -- Thank you!
| thomasahle wrote:
| I suppose what OP was arguing is, when bank A transfers to
| bank B, does bank B check with the Feds that the money from
| bank A is "real"? And is a transfer from A to B really a
| transfer from A's account at the Feds to B's?
|
| In that case, why would the US have to act "indirectly",
| threatening bank A not to work with bank B? They could simply
| deny any transfers to and from bank B's account at the Feds,
| which would make any transactions impossible?
| randyrand wrote:
| A Euro/anywhere bank could be a middle man to a russian
| bank, and hold USD for them.
| lxgr wrote:
| Yes, but they could not transfer it to many places for
| them. Non-widely transferrable USD are worth much less
| than USD on common payment rails.
| lxgr wrote:
| > when bank A transfers to bank B, does bank B check with
| the Feds that the money from bank A is "real"?
|
| Yes, unless the banks have mutual accounts with each other
| that they can use to settle instead. So, if bank B is
| accepting to be owed money by bank A for any transfer from
| A to B, they don't need to settle - but there's practical
| limits to that, imposed by both risk and regulatory
| concerns. Eventually, they'll need to settle up if funds
| flows A -> B and B -> A don't largely cancel each other
| out.
|
| > And is a transfer from A to B really a transfer from A's
| account at the Feds to B's?
|
| For wire transfers and ACH, it is.
|
| > They could simply deny any transfers to and from bank B's
| account at the Feds, which would make any transactions
| impossible?
|
| Yes - that's in fact exactly what a freeze of that bank's
| Fed reserves is!
| thomasahle wrote:
| Thanks for clearing this up for me!
|
| > unless the banks have mutual accounts with each other
| that they can use to settle instead.
|
| So this is just based on trust that the other bank will
| keep a truthful score of the transfer, and there won't be
| a dispute at settlement time?
|
| If the banks are often willing to trade with each other
| "on trust alone" like that, I suppose that shows why the
| Feds can't always directly block dollar transfers, but
| have to rely on threats of account freezes.
| lxgr wrote:
| > So this is just based on trust that the other bank will
| keep a truthful score of the transfer, and there won't be
| a dispute at settlement time?
|
| Exactly: Either there is trust (and external settlement
| is not required), or there isn't, in which case banks
| will usually only credit incoming transfers to their
| customers once the underlying funds have settled.
|
| Practically, trust is a spectrum, and banks might only
| settle once the outstanding balance in either direction
| has become too large (that's then called "netting").
|
| > If the banks are often willing to trade with each other
| "on trust alone" like that
|
| Bank balances are ultimately only be useful to their
| accountholders if they can effect some payment with them.
| There is therefore also a spectrum of fungibility of USD
| balances.
|
| If you think about it, what makes USD useful is the fact
| that they can be used to pay for imports from the largest
| economy in the world. Only very few US companies would be
| willing to trade with you when being paid in USD balances
| at some foreign bank that they can't, as one significant
| example, pay their taxes with.
| kzrdude wrote:
| With the already agreed sanctions (so not swift, but the ones
| about transactions in USD and EUR etc) - it was also written
| that the russian banks have up to May 24 to settle their
| transactions. Is that the last level of inter-bank
| settlements that's about? Or does it mean that the sanctions
| are ineffective until then?
| rosndo wrote:
| > Indirectly, yes: They can force every bank holding USD
| balances for embargoed beneficiaries to freeze these assets.
| Failing to comply could, in the absolute worst case, lead to
| that bank's Fed accounts being frozen as well (which would
| take away its ability to settle in USD with other banks).
|
| They could also go much further. US has the power to force
| any bank that wants to transact in USD to freeze all Russian
| assets no matter the currency.
|
| This is a very big stick.
| JumpCrisscross wrote:
| > _US has the power to force any bank that wants to
| transact in USD to freeze all Russian assets no matter the
| currency_
|
| Ish. In reality, this power is constrained by our courts.
| Which is why we have the privilege. A foreign person
| wrongly frozen can take on the U.S. government in court and
| win.
| tomp wrote:
| Isn't it in actual reality just a matter of passing the
| right set of laws?
|
| "I deem it legal to freeze assets of terrorists."
|
| "I now deem you a terrorist."
| lmm wrote:
| You could equally say that in actual reality it's a
| matter of having enough men with guns. Occasionally the
| abstractions break down and that's where it all bottoms
| out.
| mohanmcgeek wrote:
| Isn't that what blocking them on SWIFT actually is?
|
| Or do they have another way?
| Slartie wrote:
| No. Swift is "just" a messaging system. No money is
| transferred over it.
|
| Blocking Swift access makes it very inconvenient for
| banks to perform international settlement, because banks
| today rely on automated Swift messages to coordinate such
| transfers. However, even before Swift, international
| transfers were possible: by phone or telex. The banks
| have to find other ways to communicate, which isn't easy
| in practice, but not impossible. The fact that Russia has
| its own Swift competitor, to which some international
| banks might switch over time, would probably help with
| that.
|
| But by freezing bank accounts at the Fed, the actual
| settlements - the events at which money actually changes
| hands - could be prevented in the first place, no matter
| the way in which banks agreed over those settlements.
| Switching back to good old telex (or another financial
| communication network) wouldn't help in such a scenario.
| Banks would have to fall back to exchanging big suitcases
| of dollar bills, which obviously wouldn't practically
| work.
|
| Because no bank would survive this, they would
| immediately cooperate when confronted with such a threat
| and freeze any Russian-held funds, even if those funds
| weren't actually held in USD in the first place and thus
| would theoretically be unaffected by the Fed account
| freeze.
| lxgr wrote:
| Yep - I suspect that when people say "block them from
| SWIFT", they really do mean "put them on international
| embargo lists and/or block anybody violating these at the
| various currency's settlement layers".
|
| But as a short-term measure, revoking SWIFT access is
| probably also somewhat effective. As you say, setting up
| alternatives is not impossible, but not easy either.
| anonporridge wrote:
| tl;dr, what makes electronic USD "real" is a system of
| consensus like bitcoin, except it's a node of 1 (the US Fed)
| with a handful of spokes (banks with Fed accounts) for
| scaling off that base node.
| TeeWEE wrote:
| So reading this: Banks are basically a necessary "evil" to
| make the current money system work. When I read how banks
| works, their technology, and how money works in general.. It
| makes me think: Is this really the way we want it to work.
|
| I'm not sure if crypto is currently ready. But one BIG reason
| for it to succeed, is that the current system is just old...
| We have all these fintech startups improving money flow, and
| transfer times, and easy of payment... But it seems like tech
| build upon tech. centralized startups/companies owning
| payment systems (Apple Pay, Stripe, Adyen).... Man, i'm going
| to buy some more ETH :p
| kmeisthax wrote:
| Well, no: this _isn 't_ the way we want it to work. It's
| how it _has_ to work. Banks aren 't just a necessary evil -
| any functioning financial system _needs_ intermediaries.
| Furthermore, in all but a small handful of cases, those
| intermediaries need to be trusted and trust-worthy.
| Bitcoin, and all other protocols based on Satoshi 's
| design[0], are limited to maintaining a secure ledger of
| "on-chain assets". Any interaction with the real world
| still _requires_ a trusted intermediary to feed data back
| into that ledger; and once you do that the downsides of
| maintaining a distributed trustless global ledger for the
| virtual side of those assets becomes apparent.
|
| [0] Including Ethereum.
| mohanmcgeek wrote:
| > Is this really the way we want it to work
|
| Yes. This is not a technology problem. This is how banks
| have been working for the last 400 years.
|
| You can't get rid of banks because banks are what create
| the money. The crypto people have a terrible understanding
| of what money is.
| sb057 wrote:
| Within the US banking system, all of that is, for the most
| part, kept in line with the Federal Reserve System and other
| regulatory apparatuses to keep everybody honest. Outside of the
| US, you run into so-called "eurodollars" (unrelated to the Euro
| currency) which is a complete mess of intertwined financial
| systems from across the planet that a lot of people smarter
| than me pin on being the cause of the European debt crisis.
| baobabKoodaa wrote:
| > I often wonder how money is stored. It can't be just a number
| on a computer in a bank, right? Otherwise some Russian bank
| could just increase that number to whatever they like. And say
| "Look, we own 100 Trillion USD.
|
| A bank could easily create fake money into its own accounts,
| but it would have trouble transferring that money over to other
| banks. I wrote extensively about this topic here:
| https://www.attejuvonen.fi/money-out-of-thin-air/
| HWR_14 wrote:
| > A bank could easily create fake money into its own
| accounts, but it would have trouble transferring that money
| over to other banks.
|
| In fact, isn't that indistinguishable (mathematically) from
| paying interest? The bank's internal accounts all go from X
| to Y. In theory, the bank should made more money that that in
| total, so at any given point the sum of all accounts is less
| than the banks money and accounts recieveable (usually via
| loans). And the bank can provide that money to other people
| if needed. But if a bank paid 1000% APR on savings accounts,
| all that would happen is the bank goes belly up and a lot of
| those accounts won't be worth the numbers they claim to have.
| jaxrtech wrote:
| Well, it's a number in a ledger system somewhere (e.g.
| mainframe system, Oracle database, or what have you), with a
| lot of auditing, reporting, and procedures around changing that
| number. (Though, having an internal API to instantly get a new
| bank account number always seemed kinda funny to me).
|
| Slightly related, I'd have to find it again, but I recall there
| was at some point an assembly level hack on some Oracle
| database holding core banking in one country.
| pschastain wrote:
| Relevant: https://www.economist.com/the-economist-
| explains/2022/02/25/...
| Pxtl wrote:
| Canadian PM Trudeau just publicly announced his government's
| support for booting Russia out of the SWIFT system a few minutes
| ago. So the international pressure is there.
| hamilyon2 wrote:
| Russian citizens like me will be hit hardest, as usual. Large
| institutions and wealthy individuals will find another ways to
| transfer money. Costs of goods and services will rise.
| mlindner wrote:
| Russian citizens should be formenting anti-Putin thoughts in
| the general public. His popularity allows him to do this
| nonsense. If the sanctions help convince you such a thing is a
| good idea then they're working as intended.
| wara23arish wrote:
| IMO I think such acts only make the state stronger.
|
| People will be "cheaper" buy. Votes will be cheaper. It only
| helps consolidate the wealth in the target country and makes
| the massez more reliant on large institutions and wealthy
| individuals.
|
| I wish you best of luck in dealing with things to coms brother.
| daenz wrote:
| I was watching a mainstream news report (I'll try to find it
| and edit my comment) where the host and the guest were talking
| about the impact of economic sanctions. They said it's not
| intended to stop Russia, but to inflict pain on the citizens,
| so that they citizens will turn against leadership.
|
| In that moment, it really clicked for me how much normal people
| are pawns to be used in much larger games. And there apparently
| is no morality when dealing with pawns, unless it is
| convenient.
| m_ke wrote:
| With all due respect Russian people are the only ones who can
| stop Putin.
| dmingod666 wrote:
| If the US citizens can't improve their own govt and get
| them to stop neverending wars, I think it's a tall order to
| expect citizens in a dictatorship to do it. Point isn't US
| bad -- point is, no easy way to affect change other than
| revolution which too ends up with bigger tyrants..
| megous wrote:
| I don't think the suggestion is to wait for the next
| election... revolutions are a thing too, and happened in
| Russia several times already.
| charcircuit wrote:
| Ukraine complying with Russia would also stop Putin from
| attacking Ukraine.
| myko wrote:
| Complying means losing their sovereignty to a foreign
| autocrat who literally has a list of people he intends to
| kill.
| daenz wrote:
| That's my point. The ruling class is free to exploit,
| manipulate, and abuse the working class, up until they're
| really needed for something important, like bailing out
| banks, or pressuring another country's government. I
| guarantee we all share more in common with the working
| class from different cultures than we do with our own
| ruling class.
| mcguire wrote:
| I would submit that most of the commenters in this forum
| have more to do with the ruling class than with the
| working class. (The median personal income in the US is
| about $36,000/year.
| (https://fred.stlouisfed.org/series/MEPAINUSA672N))
| daenz wrote:
| 1) Having more money than the median doesn't put in you
| in the ruling class. 2) How does the proportion of HN
| users that are ruling vs working class add to the
| conversation about not abusing the working class?
| [deleted]
| lesuorac wrote:
| That's how war (hard diplomacy) works as well.
|
| World leaders don't get into an octagon and duke it out to
| see who controls what territory. They send normal people
| (soldiers) to go acquire it for them. Occasionally the
| soldiers capture/kill a world leader but usually they reach
| some kind of (conditional/unconditional) agreement before
| that point. But the soldiers are not world leaders themselves
| anyways.
| daenz wrote:
| Soldiers are fair game to me, because they often choose to
| participate. Normal working people are just trying to
| survive, and destroying their lives in the hopes of
| influencing their country's leadership is on a different
| level. I get that it's war and war isn't fair, but my point
| is that war clearly reveals the underlying classes of
| people and how they're treated.
| hef19898 wrote:
| Ukraine is under general mobilization now. So no choice
| whatsoever. Even in volunteer armies one cannot ignore
| social economic pressure. Usualy the low grunt, those
| that do the killing and dying, are just poor bastards. On
| both sides. I read a comment not long ago: Simple
| soldiers on both sides have more in common with each
| other than their leadership. That very much true. Are
| aoldiers, and other combatants legitimate targets? Yes.
| Does it make their losses and casualties any less tragic?
| No.
| myko wrote:
| Zelensky and Poroshenko are carrying rifles into battle as
| we are posting comments on this thread.
| KrishnaShripad wrote:
| > They said it's not intended to stop Russia, but to inflict
| pain on the citizens, so that they citizens will turn against
| leadership.
|
| Which country has it ever worked out on? Cuba? Venezuela?
| North Korea?
|
| None of them have turned on their dictators. Rather, they are
| living life in misery. What is worse is they have been not
| just cut off monetarily from the rest of the World, the
| dictators have made sure to censor all content coming into
| the country. So they have no idea (or worse: false
| propaganda) of what is going on outside their territory.
|
| I haven't seen sanctions actually work in even one case (will
| be happy to correct myself if there has been a case where
| sanctions actually worked). Where people fought back against
| the dictator and established democratic rule. Even if there
| were popular uprisings it has lead to establishment of even
| more autocratic rulers or worse, control by militias/warlords
| or terror groups.
| mysecretaccount wrote:
| > [Cuba citizens] are living life in misery.
|
| Cuba has higher life expectancy and a lower infant
| mortality rate than the USA. I think it is a mistake to
| lump it in with Venezuela or North Korea.
| krzyk wrote:
| Romania, Libya? Tzar Russia?
| sudosysgen wrote:
| Libya didn't work. NATO had to do it militarily. As for
| Romania, it had nothing to do with sanctions, and that's
| the same for the Tsars.
| ido wrote:
| South Africa[0]?
|
| "Economic sanctions against South Africa placed a
| significant pressure on the government that helped to end
| apartheid."
|
| [0] https://en.wikipedia.org/wiki/International_sanctions_d
| uring...
| stef25 wrote:
| Sanctions would work indirectly in the sense that the
| people would support regime change even if they can't bring
| it about themselves, if it means sanctions will be lifted
| and their standard of living will get better.
|
| I don't think in any of the countries you list there's
| popular support of the leadership.
| csomar wrote:
| Cuba/NK are much smaller countries. For Venezuela, it
| insured the country cannot function properly. Russia is
| huge. Russia becoming the next Venezuela will trigger a
| sequence of events that will lead to its de-fragmentation
| into smaller states. (ie: Chechnya will probably go rogue)
| muglug wrote:
| Any broad sanctions will always affect the poorest more than
| the richest.
|
| Modern warfare also affects poor people more than it affects
| the rich -- children of Russian oligarchs are off in New York
| and London, not fighting on the battlefields.
|
| But the sanctions are very much meant to stop Russia's
| invasion of Ukraine, and to disintentivise Russia from
| invading other sovereign nations. Only Russians can stop this
| aggression.
| mcguire wrote:
| Well, a) they are literally the only ones who can do anything
| about Putin's regime, and b) they are paying taxes, no? Those
| taxes pay for the Russian military. Destroying a country's
| economy is just about the only way to stop a modern nation's
| military.
|
| Oh, and c) are there any _other_ knobs to adjust Russian
| foreign policy?
| daenz wrote:
| a) I am unconvinced that they have any more direct power
| over their leadership than any other country's citizens do.
| Is this naive? b) We all know that taxes are involuntary.
| You make it sound like the Russian people are complicit in
| this attack. c) There isn't always a knob to turn when
| someone does something that you don't like. A bully can
| sometimes take someone's lunch. There doesn't seem to be
| unified international response, so this is what happens.
| The best I've heard is "let's hurt their citizens and see
| if it helps."
| krisoft wrote:
| > Russian citizens like me will be hit hardest, as usual.
|
| Not to sound disrespectful, but I think it's the Ukrainian
| citizens who perished or will perish who "will be hit hardest".
|
| I know you have no personal choice in the matter, but still
| important to keep in mind the ongoing suffering.
| hurflmurfl wrote:
| I believe the poster meant that normal people like him (and
| myself) will be hit the hardest [by the SWIFT cut-off (or
| other sanctions)] and the influential and wealthy will
| continue their act as they are prepared / wealthy enough to
| not care.
| ivraatiems wrote:
| I'm sorry that this is the case, but, I'm pretty sure that's
| the idea. At this point, your government is not acting with
| anyone's best interest in mind, including that of its citizens.
| It's up to the rest of the world to make it clear what the
| consequences are for that, in the hopes that if your leaders
| don't change their mind on their own, you'll do it for them.
| Aunche wrote:
| That's the propaganda used to justify sanctions, but
| historically, no government has been overthrown due to
| sanctions. The sanctioned country can just use the sanction
| as an example of hegemony, which isn't exactly inaccurate.
| What sanctions do accomplish is that they give you an avenue
| for more aggressive intervention. An example of this is
| America's sanctions against Imperial Japan before WWII.
| mcguire wrote:
| And the alternatives to sanctions are?
| ivraatiems wrote:
| If I understand the parent's argument, it's not that
| there are alternatives - it's that the actual goal of
| sanctions is to "rachet up" to more aggressive responses,
| possibly including military responses. I don't disagree
| that they can have this effect, but I really don't think
| that's the direction the US wants to go right now.
| ivraatiems wrote:
| There's evidence that economic sanctions destablizie the
| specific leaders of countries they target, even if they do
| not affect direct regime change.[0] I don't think it's
| propaganda to say that's the goal of sanctions; I think the
| argument that the sanctions will definitely _work_ is
| propaganda /tough talk on the part of the US. Candidly, I
| think much more severe consequences than unilateral
| sanctions would be necessary to actually stop this invasion
| at this point. However, given that Putin is the driving
| force behind this invasion, it makes sense to take measures
| that are designed to get rid of him.
|
| [0] https://www.jstor.org/stable/3647732
| dragonwriter wrote:
| > That's the propaganda used to justify sanctions, but
| historically, no government has been overthrown due to
| sanctions.
|
| Since the idea is to get governments to change their
| behavior and being overthrown is just one of the extreme
| tail risks that play in to motivating that behavioral
| change, that's neither surprising nor inconsistent with
| sanctions working.
| Imnimo wrote:
| War has costs for everyone. Consider these hardships doing your
| part to stop your country's aggression, and remember the
| Ukrainians have it much worse than you.
| kgeist wrote:
| I have a VPS I bought at OVH to act as a VPN, does it mean I
| won't be able to access information freely on the Internet if
| SWIFT is cut (I use a Russian bank account)? Or maybe I can
| open a bank account in some neutral country?
| rozab wrote:
| Even mainstream VPNs like NordVPN will take privacycoins like
| Monero
| kgeist wrote:
| NordVPN is blocked in Russia, as far as I know
| espadrine wrote:
| If you make card payments, SWIFT won't be what cuts the
| renewal.
|
| If you make transfers, it may be temporarily interrupted or
| slower while your bank shifts their integrations. They
| plausibly have either accounts at the ECB, or relations to a
| bank that does.
|
| There may be KYC hurdles to opening a EUR account online.
| ex3ndr wrote:
| Yeah I just lost my business banking and can't anymore get
| payments from the states. But, most Russians support war, I
| don't care about them and ok with small inconvenience.
| hurflmurfl wrote:
| I know this might be perceived as a flame-inviting response,
| but who are those "most Russians" that "support war". Even
| pretty patriotic people in my social circle don't support it.
| Now, of course, it might just be me and my circle, but the
| "majority supporting war" might also be someone's circle, and
| not really representative of reality. In any case, from what
| I see, most people are just afraid. Withdrawing cash, some
| stocking food. It's not like the west is watching a horror
| show, and the people in Russia are watching a comedy.
| Everyone's losing. I honestly don't know who's the winning
| party here.
|
| I don't really care much about the state of Russia, and
| maybe, just maybe the sanctions will have some positive
| effect; just wanted to say that "most Russians support war"
| is a very shabby argument in support of approving of
| punishing "most Russians".
| badrabbit wrote:
| One of my favorite hacks:
| https://en.m.wikipedia.org/wiki/Bangladesh_Bank_robbery
|
| Almost stole a billion dollars, if it wasn't for a very obvious
| typo.
| mepian wrote:
| Do Mastercard and Visa require SWIFT to function within the
| borders of Russia?
| dopa42365 wrote:
| Is there some sort of "tweet-chain combiner" extension?
|
| Can't think of a worse format to share a few sentences of text.
| js2 wrote:
| https://threadreaderapp.com/thread/1496861068945154056.html
| tosh wrote:
| For reading: https://threadreaderapp.com/
|
| For authoring: https://threadstart.io/
|
| but I'm sure there are more
| dang wrote:
| " _Please don 't complain about tangential annoyances--things
| like article or website formats, name collisions, or back-
| button breakage. They're too common to be interesting._"
|
| https://news.ycombinator.com/newsguidelines.html
| nimbius wrote:
| quite a few commenters have pointed out SWIFT as a hand of soft
| power and i think its important to understand the twitter post
| doesnt mention an important fact:
|
| SWIFT was created in order that Europe may resist Kissingers
| increasingly capricious hand of soft power as it emerged as a
| lead sap in an increasingly arbitrary US foreign policy. 40 years
| ago the US had become effectively drunk on soft-power moves
| against states it perceived as even remotely objective to US
| interests. Is your president elect too socialist? you get an
| aircraft carrier floating in your strait for a year. did you
| nationalize your oil fields? sanctions mean you cant sell it to
| anyone. Cuba to this day still enjoys endless sanctions for
| resisting regime change.
|
| in 2022 sanctions are to international diplomacy as a tantrum is
| to a toddler. theyre effectively meaningless as most capable,
| observant countries have managed to sidestep in part or in whole
| the once dominant US hegemony of finance and trade. even the
| threat of a blue-water naval presence is an unspeakable taboo as
| Russia is one of a handful of emerging countries you wouldnt dare
| send an aircraft carrier to patrol, unless its goal was to secure
| the ocean floor.
|
| The only meaningful threat SWIFT offers is the ability to assuage
| short-term market fears among traders that dont fully understand
| just how inapplicable SWIFT is in this case.
| [deleted]
| [deleted]
| jorblumesea wrote:
| > in 2022 sanctions are to international diplomacy as a tantrum
| is to a toddler. theyre effectively meaningless
|
| This is just straight up wrong. This is why the Magnitsky Act
| got Putin so rattled. It is also why Putin has said being cut
| off from swift is an act of war. If it's meaningless, why does
| Russia care so much?
| isodev wrote:
| Access to SWIFT is one of several economic tools which work
| together to limit and essentially "bleed out" the target
| economy. Although Russia acts like a big bully, their economy
| is relatively small (e.g. smaller GDP than Italy) which makes
| economic actions especially impactful (even if it will take a
| moment for them to fully reach their potential).
| aluminum96 wrote:
| > in 2022 sanctions are ... effectively meaningless as most
| capable, observant countries have managed to sidestep in part
| or in whole the once dominant US hegemony
|
| This is only true to the extent that the US unilaterally
| imposes sanctions. The proposed sanctions involving SWIFT are
| multilateral, with the support of the entire EU. That's around
| double the economic power of the US alone, and roughly half of
| the entire world's GDP. Being sanctioned by half of the global
| economy (more, if Asian democracies participate) is very
| punishing indeed.
| imwillofficial wrote:
| Yeah, China isn't going to side with the US/EU, and the rest
| of the Asian countries are too small to matter, including
| Japan/Korea.
|
| In fact, China has stepped up their efforts to aid Russia.
|
| The next few weeks will be history in the making. Pay
| attention.
| krzyk wrote:
| India are far from small, bu they did not condemn Russia.
| imwillofficial wrote:
| Yeah I actually have no idea where India stands
| geopolitically and I had totally forgotten their
| considerable impact. I wonder how their government views
| these events?
| morelisp wrote:
| They did not condemn it but they also did not signal
| support like China did - I suspect Modi expected Putin to
| stop at Donbas and sees his best option right now as a
| ceasefire, which is what he's openly asked for as well.
|
| Unlike Russia's allies other than China, India cannot
| afford to be shut out of the US and supported by Russia,
| and unlike China, Europe and the US can impose fairly
| strict sanctions on India in the short-term.
| imwillofficial wrote:
| Are Russia and India tight?
| legalcorrection wrote:
| The EU would only go along with this because the US has them
| by the proverbial balls. European militaries are a joke and
| there is no domestic political support for building them up.
| m2fkxy wrote:
| A reminder that two of Western Europe's militaries are
| nuclear, which hardly makes them "a joke". You seem to be
| projecting the state of Germany's military to all European
| forces, which is... questionable.
| Mountain_Skies wrote:
| The nuclear arsenals of France and the UK are a bit
| meager relative to Russia and the US. That doesn't mean
| that they can't inflict a good bit of damage but MAD
| isn't in play with them unless the US is backing them up
| with its own nuclear arsenal.
| [deleted]
| ascar wrote:
| A combined amount of about 500 nuclear warheads sounds
| like enough for mutual assured destruction or even
| nuclear winter, no?
|
| That's enough to send two warheads to every single city
| with over 100k population in Russia and then there would
| be the Russian retaliation...
| m2fkxy wrote:
| French (and probably British, although I know it less)
| doctrine is not MAD - it is to incur "unacceptable
| damages" to an offender. And 500-ish combined warheads
| sure sounds like it can achieve that.
| brimble wrote:
| The EU collectively outclasses every likely regional
| aggressor or likely regional coalition, and can project
| power better than any but a handful of other states (most
| of which are unproven against that challenge). Throw in
| Britain and only the US--which is in a mutual defense pact
| with several EU states--is clearly ahead of them. How's
| that "a joke"?
| legalcorrection wrote:
| European countries could barely sustain bombing runs
| during the Libya intervention. They struggled to
| consistently field single digit number of planes at the
| same time.
| isodev wrote:
| You are assuming the US is leading the effort, which is not
| the case. Also EU and US are partners and allies and so
| mutual support is expected.
| Kina wrote:
| America represents 40% of NATO forces. America guarantees
| the physical security of Europe in consultation with the
| governments of these nations, but there is an inherent
| power imbalance here.
| thomasahle wrote:
| In this particular conflict, the stakes for the EU is much
| higher than for the US.
|
| Sure, the US is historically (recent) more happy to go into
| conflicts around the world, but this is a conflict
| bordering many EU states. The Baltics, Poland, Slovakia,
| Hungary, Romania definitely aren't happy seeing Putin on
| their doorsteps.
| nimbius wrote:
| this is an excellent point, one i hadnt considered. SPFS only
| has 23 banks connected to it as of 2020, so if its to be an
| alternative Russia would have to consider it as an alterative
| of last resort. just how strong is it?
|
| the consternation im still faced with is "with the support of
| the entire EU." It may be difficult to secure a resounding
| vote with the bemoaned sword of Damocles. much heating fuel
| comes from Russia in the dead of winter.
|
| still other HN posters make a great point (and in other posts
| too) that every time SWIFT is disconnected, it popularizes
| alternate markets at the expense of US and EU interest.
| certainly a stronger SPFS must be taken into account.
| krzyk wrote:
| Winter is coming to an end here. So lack of gas would hit
| industry more than home heating.
| [deleted]
| [deleted]
| bpodgursky wrote:
| > Cuba to this day still enjoys endless sanctions for resisting
| regime change.
|
| I mean, I suspect we agree that the embargo should be lifted,
| but that's a really poor way of saying "communist dictatorship
| with a penchant for, among other things, lining up homosexuals
| against a wall and shooting them".
|
| Hopefully the last few days have reinforced that even if one
| country does things wrong sometimes, it doesn't mean the other
| side is a good guy.
| stef25 wrote:
| > in 2022 sanctions are to international diplomacy as a tantrum
| is to a toddler. theyre effectively meaningless
|
| Earlier today a report on BBC said existing sanctions on
| Russian already made their economy suffer to a significant
| extent. I forgot the percentage points they mentioned but it
| was surprisingly high. Applying even more sanctions will
| unfortunately hurt the Russian people the most and the
| discontent that will create among the people over the many
| years to come should not be underestimated.
| ajross wrote:
| > in 2022 sanctions are to international diplomacy as a tantrum
| is to a toddler. theyre effectively meaningless
|
| I don't see how this follows from your (correct) description of
| US influence in the cold war. Soft power works now the same way
| it always has, all it requires is coordination on a "pool of
| influence" large enough. It's absolutely true that the US can't
| unilaterally do what it did in the 70's. But the e.g.
| USA+EU+Japan+Korea? That's pretty dominant, still.
|
| Russia's only out from something like that would effectively
| mean becoming a sattelite state to the PRC. And... maybe that's
| where we're headed. But it's surely not where Putin _wants_ to
| head, so it remains leverage.
| s_dev wrote:
| Nah -- Bill Browder seems to be a expert on this exact topic.
| He's saying to pull Russia from Swift. His experience suggests
| he is intimately familiar with the financial world and the
| consequences.
|
| He's the genesis of the Magnitsky Act -- the one thing that
| actually scares Putin. I know this because Putin even said if
| Russia was removed from Swift he would consider it an act of
| war.
|
| https://twitter.com/Billbrowder/status/1496799227082649603
| from wrote:
| If the Magnitsky Act actually worked then we would expect
| changes in the behavior of the people it sanctioned to get
| off the list. Looking at https://en.wikipedia.org/wiki/Magnit
| sky_Act#Individuals_affe..., it doesn't seem too effective.
| Dan Gertler is still a billionaire even though he's on the
| list. In practice I suspect OFAC designations just mean the
| designated individuals need to pay some lawyers a fee to get
| their assets held in the names of nominees.
| legalcorrection wrote:
| Him thinking that, however qualified he is, does not mean
| he's right. Being the CEO of a hedge fund, with a personal
| grudge against Russia, does not make you infallible.
|
| The US benefits enormously from owning the reserve currency
| and running the world financial system, and the ultimate
| effect of our trigger-happy approach to sanctions is to push
| countries away from those, especially with the US becoming a
| smaller percent of the world economy every year. Even the
| Europeans are sick of it. The Europeans only play along still
| because they are militarily dependent on the US, in part
| because their populations have, under the comfort of the US
| security umbrella, developed irrational political beliefs
| against building up their own militaries.
| jorblumesea wrote:
| As opposed to random commenters on HN who are likely SWE
| and not experts in finance or geopolitics?
|
| I hate this trend of "well he's an expert so he might be
| wrong". Okay, sure, we are all human and make mistakes,
| but, he's also an expert and you don't become an expert by
| being wrong all the time. Not sure how many people here are
| qualified to comment on these events instead of him.
| legalcorrection wrote:
| > _I hate this trend of "well he's an expert so he might
| be wrong"._
|
| Trotting out an expert who you agree with, to end
| discussion, is just as bad. You can find reasonable
| experts on all sides of issues. It's almost always used
| as a rhetorical technique to shut down debate.
| jorblumesea wrote:
| Trotting out an expert is far better than just random
| comments from uninformed people. I'd just rather say "I
| have this expert I agree with" vs "I'm a SWE that has no
| background in this and my opinions are somehow weighted
| the same" or "this expert is wrong despite the fact that
| I have no understanding of this subject"
| ajross wrote:
| > The US benefits enormously from owning the reserve
| currency and running the world financial system, and the
| ultimate effect of our trigger-happy approach to sanctions
| is to push countries away from those
|
| That seems belied by actual history. The US has been a
| "trigger happy" sanctioner for basically the entirety of
| the post-war era, and the dollar has been dominant
| throughout. What would change now that didn't when we
| sanctioned Iran, or Iraq, or Cuba, or Yugoslavia, or...
| legalcorrection wrote:
| What's changing is that every year the US economy is
| becoming less important for the rest of the world.
| Mountain_Skies wrote:
| Eventually a tipping point is reached and a seemingly
| minor event can cause irreversible change many magnitudes
| larger than the event itself. This is ok if you're
| certain where the tipping point exists and can keep from
| getting too close to it but in economics, especially when
| intertwined with geopolitical matters, it's doubtful
| anyone even knows the ballpark of where that tipping
| point exists until they're looking at it in the past.
| james-redwood wrote:
| I think anyone with knowledge of how badly Iran has been hit by
| sanctions would understand that they have a very punitive
| effect.
| parkingrift wrote:
| Everything you've said is true except that this would be a
| joint effort between US, Europe, and likely others.
|
| This same situation happened with Iran and it torpedoed their
| economy.
| pohl wrote:
| > ...theyre effectively meaningless as most capable, observant
| countries have managed to sidestep...
|
| In this case, though, one wants to apply pressure not on the
| country, but on the surrounding oligarchs. When a nation is,
| essentially, a syndicate of organized criminal oligarchs around
| a strongman, financial pressure on those people is exactly what
| you need.
| lvl100 wrote:
| This is a conspiracy theory. Please stop.
| sealthedeal wrote:
| CEO and co-founder of Routefusion here, a cross-border bank to
| bank payment API. We use the SWIFT network regularly. I can 100%
| confirm that all money in the world is just literally numbers,
| and it is balanced by the different federal reserve systems
| around the world to ensure no one can "create" money without
| notifying everyone.
|
| I guess if I was super cool I would do an AMA because this is the
| only thread that is really my time to shine hahaha.
| melony wrote:
| Pricing for routefusion?
| rocgf wrote:
| Well, since you semi-offered... :)
|
| Could you explain this to me like I am a complete moron? I
| understand that SWIFT allows for international payments, but I
| don't understand exactly how it differs from a normal bank
| account transfer within the same country.
| lxgr wrote:
| When people say SWIFT, they usually mean "international
| payments via correspondent banking". SWIFT is just a
| messaging layer to enable that.
|
| Look into correspondent banking if you're curious how all of
| that works - SWIFT is just one (very popular) way
| correspondent banks can communicate with each other and/or
| look up paths to facilitate international payments for their
| account holders.
| ta988 wrote:
| You should do that AMA.
| JacobThreeThree wrote:
| >I can 100% confirm that all money in the world is just
| literally numbers, and it is balanced by the different federal
| reserve systems around the world to ensure no one can "create"
| money without notifying everyone.
|
| How does the system guarantee that nobody's creating money
| without notifying everyone? Furthermore, does the system
| guarantee that the central banks of each country are correctly
| adjusting their books in consequence? Is it all just a trust-
| based system, or are there additional controls?
| JumpCrisscross wrote:
| > _How does the system guarantee that nobody 's creating
| money without notifying everyone?_
|
| Simple answer is balanced books. Longer answer is public
| reporting and reconciliation.
|
| If a bank shows its Federal Reserve balance at X on its asset
| side and the Federal Reserve shows its bank balance at 0.9X
| on its liability side, that will raise issue on
| reconciliation. The system lazily evaluates, however, which
| makes it nimble but also corruptible--if that bank never
| tries to spend that money, it may not come to light until
| audit.
| lxgr wrote:
| > How does the system guarantee that nobody's creating money
| without notifying everyone?
|
| Through a series of regulations regarding minimum
| liquidity/capital [1] and/or reserve [2] requirements.
|
| > Furthermore, does the system guarantee that the central
| banks of each country are correctly adjusting their books in
| consequence?
|
| By requiring them to periodically report on their assets and
| liabilities, checking for compliance with [1] and [2], and
| monitoring their reserve accounts.
|
| [1] https://en.wikipedia.org/wiki/Basel_III
|
| [2] https://en.wikipedia.org/wiki/Reserve_requirement
| anonporridge wrote:
| So it's all trust based?
|
| We have to trust that all the governments of the world, who
| pinky promised to follow the rules, aren't secretly
| cheating internally and reporting false numbers to everyone
| else?
| mvkel wrote:
| Yep! This is the fundamental "disruption" blockchain tech
| introduced. It doesn't require trust.
| worik wrote:
| Yes.
|
| Money means nothing without trust.
|
| I do not think we can have civilisation without trust
| anonporridge wrote:
| "The root problem with conventional currency is all the
| trust that's required to make it work. The central bank
| must be trusted not to debase the currency, but the
| history of fiat currencies is full of breaches of that
| trust." -- Satoshi Nakamoto
| adolph wrote:
| It seems like the linked regulation is not yet implemented.
| Further, your response to a question about a guarantee is
| regulation and reports? How does anyone know the reports of
| another central bank are true? When a central bank fakes
| numbers, what are the consequences, if any, and who
| adjudicates them?
|
| _Basel III was agreed upon by the members of the Basel
| Committee on Banking Supervision in November 2010, and was
| scheduled to be introduced from 2013 until 2015; however,
| implementation was extended repeatedly to 1 January 2022
| and then again until 1 January 2023, in the wake of the
| Covid-19 pandemic._
| lxgr wrote:
| Good point - I should have linked to the general concept
| instead: https://en.wikipedia.org/wiki/Basel_Accords
|
| > Further, your response to a question about a guarantee
| is regulation and reports? How does anyone know the
| reports of another central bank are true? When a central
| bank fakes numbers, what are the consequences, if any,
| and who adjudicates them?
|
| Money, especially fiat money, is a social construct. The
| conformance with and violation of it is therefore within
| the domains of law and politics.
|
| > How does anyone know the reports of another central
| bank are true?
|
| Monetary theory is not my expertise, but I'm curious how
| a central bank report can even be "false" (assuming it is
| issuing fiat currency and isn't falsely claiming to be
| backed by foreign reserves or commodities, for example).
| mi_lk wrote:
| what's the best book/resources to read about your what you
| described?
| mvkel wrote:
| Do you see blockchain tech eventually replacing these trusted
| systems with a trustless one?
| periheli0n wrote:
| What would keep some entity that has its SWIFT access revoked
| from switching to China's CIPS or even crypto? Would it be
| merely an inconvenience, requiring the change of a few
| processes, or would it create hard problems?
| daniel-grigg wrote:
| In the short term, both. Longer term yes, many countries
| would migrate to other systems which mitigates the value of
| SWIFT. Fear of that happening is part of the reluctance to
| use it as a political weapon.
| elliekelly wrote:
| The two systems aren't mutually exclusive. You can be a SWIFT
| member or participant and also use CIPS or cryptocurrency,
| though I think switching to crypto for payments would create
| a _ton_ of procedural issues for most financial institutions.
| anonporridge wrote:
| Or Russia's new SWIFT alternative that they stood up after
| the west threatened SWIFT censorship after they annexed
| Crimea?
|
| https://en.wikipedia.org/wiki/SPFS
| lxgr wrote:
| When people say "revoking somebody's SWIFT access", I think
| they really mean putting them on national or international
| sanction/embargo lists that prohibit them from doing any kind
| of business with them (in particular, sending payments in
| their name or for their benefit), rather than actually,
| technically removing their SWIFT network access.
|
| Since SWIFT is not the only, but certainly the largest
| financial/interbank messaging network, I suppose the effects
| are similar, but "disabling SWIFT" to me always sounds like
| an implementation detail.
| JulianMorrison wrote:
| I'm guessing it depends on the kind of sanctions. If dealing
| with rogues makes you a rogue, internationally, then CIPS may
| shy away from it.
| kuprel wrote:
| Sounds like decentralized consensus in crypto world
| anonporridge wrote:
| With significantly more cost, complexity, obscurity, and
| gatekeeping.
| _448 wrote:
| How does one connect to the SWIFT network? Say, someone wants
| to start a company for providing some financial service like
| fund transfer across borders, then connecting to SWIFT will be
| very helpful. I was always fascinated by how all this works and
| what does it take to directly use the SWIFT network. Any
| insights on this will be really helpful.
| mistrial9 wrote:
| help yourself to some legal accreditation in your actual
| jurisdiction, to start.
| lxgr wrote:
| > How does one connect to the SWIFT network?
|
| You generally need to be a bank or regulated financial
| institution.
|
| SWIFT is just a messaging layer for correspondent banking. If
| you're not a bank, SWIFT access is about as useful as
| suddenly learning your country's president's cell phone
| number: Definitely cool, but the two of you would probably
| not have much to talk about.
| VBprogrammer wrote:
| I used SWIFT messages as part of my first real job (finance
| rather than tech). The format itself is comically loose, ill
| defined and fugly by any reasonable measure.
|
| When something really screwed up you resorted to sending
| MT599 messages around, free format text messages.
|
| I believe it's all SWIFT over IP this century so probably not
| dissimilar to any other API you might use.
| chiefalchemist wrote:
| IDK. In an interconnected global economy my sanction of you hurts
| you, but it hurts me as well. For example, the higher price of
| oil is good for Russia and OPEC, but not the rest of us.So where
| is the pain?
|
| Certainly there are things that Russia has that the West needs.
| In addition, if Russians are generally used to less - and the
| West isn't - then again where is the pain? After two years of
| pandemic are most Americans up for this? Most importantly, how
| can this not influence the 2024 election?
|
| Finally, I listened to (most of) Biden's speech yesterday and I
| was stunned by the irony. Per invasion Putin was effectively
| saying "Russia can't trust The West. They're out to get us" and
| Biden follows that with "Lookout Vlad...we're gonna put a hurting
| on Russia." Doesn't this validate Putin's narrative?
|
| I understand...it's complicated. But it's also 2022, not 1952.
| mupuff1234 wrote:
| High price of oil is good for Russia only if they have buyers.
|
| And yes, in the short term it will hurt us but in the longer
| term you are disarming the influence of a bad actor with the
| added benefit of incentivizing cleaner energy and perhaps more
| efficient means of transportation.
| anm89 wrote:
| They are absolutely not going to have issues selling oil .
| Note that the US didn't even sanction their oil because a)
| they need it on the market b) they know they are going to
| sell it anyway
| wara23arish wrote:
| Countries will almost definitely buy oil from them.
|
| We had Turkey a NATO member buy cheap fuel from ISIS in the
| past.
| chiefalchemist wrote:
| > are disarming the influence of a bad actor
|
| I have to take issue with this assumption. We've used such
| tactics against a number of previous bad actors, and yet
| those actors keep coming. The latest round (in this case
| against Russia) certainly wasn't a surprise about the
| sanctions, yes?
|
| So again, back to my OP...Exactly how effective can we expect
| these sanctions to be if Russia knew they were coming and
| that threat didn't deter them? Who is actually feeling more
| pain?
|
| The arc of my point is simple...Putin had a plan and we (and
| The West) led with our chin. What's our solution? "Print"
| more money? Let's not be naive, there are economic
| consequences to that here.
| netsharc wrote:
| Seems like China is fine with taking the oil. And China knows
| the world won't seriously sanction it...
| mupuff1234 wrote:
| Yes, but then China can easily squeeze them on the price
| (being the single big buyer)
| chiefalchemist wrote:
| True. But it's relative. Even if Russia get 75% of the
| market price, that's still a solid buck. And since they
| can control the chaos, they can manipulate price.
|
| So if everyone loses, not just Russia, and relatively The
| West has more to lose, where is the pain for Russia?
| dmingod666 wrote:
| 'Disarming the influence of a bad actor'
|
| Russia is going nowhere. They are not NK. Consequences are
| never one sided, in a conflict, the other side gets a vote
| too.
| rcpt wrote:
| To be honest high oil prices would be a godsend.
| anm89 wrote:
| for who? Is this some kind of environmental argument. If so I
| think that is very short sighted. Renewables aren't going to
| magically overcome all of their headwinds because oil get's
| more expesnive.
|
| All we are going to get is huge inflation and maybe a very
| marginal increase to the renewables time frame while we get a
| huge and costly headache in the short term.
| nwatson wrote:
| > Per [sic, "pre-"?] invasion Putin was effectively saying
| "Russia can't trust The West. They're out to get us" ... Biden
| follows that with "Lookout Vlad...we're gonna put a hurting on
| Russia."
|
| Between those two (in-effect) statements, first from Putin,
| second from Biden, was Russia's/Putin's invasion of Ukraine. No
| irony there, just cause and effect.
| chiefalchemist wrote:
| You've missed it, just like Biden did. If you leave the US
| media bubble, you find that the US gov ( not the people per
| se) have a reputation. So now Putin - and others - can say
| "See. Told ya so." Because he promised anti-Russia and we
| delivered it.
| errantmind wrote:
| While, in principle, I support sanctions against Russia for their
| actions, I can't help but think they are using Ukraine as part of
| a larger economic game. Basically, they are forcing countries to
| take sides to some degree, and any country that wants to continue
| trading with Russia will have to adopt an alternative financial
| system/network, one that is not Dollar-centric like most of the
| world currently uses.
|
| I think Putin means to hold out economically as long as possible
| and give other countries a chance to adopt this financial network
| and eventually get to a point where Russia doesn't need to play
| by the West's rules anymore, because sanctions will have a
| diminished effect.
| psychlops wrote:
| Pretty sure it's China using Russia for part of its larger
| economic game to accomplish the goals you mention.
| chalst wrote:
| I think this has things the wrong way around. Russia and China
| have for the last twenty years been trying to break free of the
| dollar-centric financial system with some degree of success:
| both countries have, for instance, built up large gold
| reserves. Now Russia is using that prior preparation to engage
| in old-fashioned revanchism. Rather than being a move in a
| bigger game, I think this is Russia cashing in its chips.
|
| The potential for bad consequences for Russia in the months
| ahead depends to a large degree on how China reacts.
| sealthedeal wrote:
| If we "cut" off SWIFT it would hurt Europe and the States just as
| much as it would Russia because this is how all money moves.
| Think paying for natural gas, oil, commodities, etc etc.
| aqme28 wrote:
| Isn't that kind of how all sanctions work? Eliminating trade
| hurts both parties equally, though the effects will be felt
| less to the bigger party.
| morelisp wrote:
| That's... that's the point. We should not be paying them for
| gas. We should not be funding their war.
| whoomp12342 wrote:
| this guy doesnt use twitter like twitter
| svilen_dobrev wrote:
| What is robbing a bank compared with founding a bank? Bertolt
| Brecht ...
| easton wrote:
| https://threadreaderapp.com/thread/1496861068945154056.html
| tpoacher wrote:
| thank you
| jancsika wrote:
| > A cutoff from SWIFT may also have longer-term second-order
| effects on Bitcoin and non-fiat currencies.
|
| And remember that Bitcoin has a fascinating property here-- the
| more demand there is for transactions on it, the better it gets
| at scaling for something approaching SWIFT level of transactions.
|
| Oh wait I'm thinking of Bittorrent's scaling wrt popular
| torrents. Yeah, Bitcoin's ability to scale is complete shit.
| asasidh wrote:
| pavlov wrote:
| Also, if global Bitcoin demand increases because it's used to
| circumvent Russian sanctions, the more likely it becomes that
| Western governments will simply shut down exchanges within
| their reach. And that would certainly have a chilling effect on
| Bitcoin price.
| [deleted]
| errantmind wrote:
| Bitcoin's Lightning Network scales just fine, but based on your
| comment it doesn't look like you are interested in how Bitcoin
| works, instead wanting to jump on a bandwagon.
| dskloet wrote:
| Lighting doesn't work for large transactions, and isn't
| trustless for very small transactions. And lightning relies
| and being able to close channels so lighting security breaks
| when Bitcoin is congested.
| errantmind wrote:
| You have pointed out a few caveats, but LN works well for
| the vast majority of transactions. What point are you
| trying to make?
| jdrc wrote:
| bitcoin is going to be tricky. unless most miners are in russia
| they can be convinced to fork chains
| kache_ wrote:
| https://en.wikipedia.org/wiki/Ring_signature
|
| There are protocols that work around address banning
| tenuousemphasis wrote:
| Tell me you don't know how bitcoin works without telling me you
| don't know how bitcoin works.
| dmingod666 wrote:
| Sir, this is a HN. Reddit is in the next tab. ;)
| [deleted]
| bpodgursky wrote:
| China has basically fully eliminated bitcoin mining.
| iszomer wrote:
| I think, if the SWIFT ban really was "on the table", they
| would be making the case for China's own CIPS/CBCD system, if
| Russia decided to opt for such service as _an_ alternative.
|
| TIL the NSA [1] has it's tentacles in SWIFT too..
|
| [1] https://en.wikipedia.org/wiki/SWIFT#Monitoring_by_the_NSA
| morelisp wrote:
| The NSA targeting SWIFT is interesting because it's
| difficult to legally justify if one (or especially both)
| parties are US citizens. But spying on CIPS is exactly what
| the NSA is supposed to be doing. It's unlikely they are
| not.
| gruez wrote:
| 1. Russia has been building up gold reserves, not crypo
| reserves
|
| 2. It's actually much harder than convincing 51% of miners that
| Russia is bad. You'll need to get them to agree on a list of
| addresses to freeze/sanction. Given that bitcoin addresses are
| pseudonymous, I'd imagine on agreeing on such a list would be
| politically impossible. Not to mention, how such action would
| affect trust in the network and the value of bitcoin
| [deleted]
| decremental wrote:
| I doubt the majority of bitcoin miners live in places that
| care about the western neoliberal agenda.
| Ekaros wrote:
| I doubt they much care about neoliberal agenda in first
| place. It is all about profit. Or being outside that
| system.
| astoor wrote:
| There's plenty of services which map Bitcoin addresses to
| real-world entities, e.g. Chainalysis Reactor, so coming up
| with a list of addresses to freeze/sanction would be the easy
| part.
| gruez wrote:
| >coming up with a list of addresses to freeze/sanction
| would be the easy part.
|
| Coming up with a list of suspects is easy, convincing
| others that they're totally guilty is the hard part. I
| doubt miners would want a company like Chainalysis to be
| judge, jury and executioner of the bitcoin network.
| gruez wrote:
| >Russia has also been building an in-house system since 2014--the
| last time SWIFT cutoff was threatened--which may mean they are
| able to temper some of the impact a cutoff would have on its
| economy.
|
| If they're building a replacement, doesn't that also mean we
| should use "cut off SWIFT" now, rather than later when it'll be
| ineffective?
| Barrin92 wrote:
| Another interpretation is that keeping them on SWIFT at least
| gives you some leverage, while forcing them out of it only
| accelerates other payment infrastructure, which essentially
| will play right into Russia's hands anyway.
|
| SWIFT sanctions are kind of blunt given that we're now living
| in a world where any major power can write some software. And
| in this case _both_ China and India offer alternatives.
| espadrine wrote:
| > _If they 're building a replacement, doesn't that also mean
| we should use "cut off SWIFT" now, rather than later when it'll
| be ineffective?_
|
| The replacement is already functional.
|
| In fact, Russia is not the only one having built a replacement
| to protect against the risk that SWIFT would be sanctioned:
| Europe has done it too with Instex: https://instex-
| europe.com/about-us/
|
| SWIFT is a private company; those sanctions make it less
| competitive, and it is hard to play whack-a-mole with a
| worldwide market.
|
| SWIFT, to be fair, is very convenient because of its standards
| and high connectivity. But if SWIFT was sanctioned today, banks
| can use literally any mechanism to route funds, from SPFS to
| email. What matters is the recursive existence of accounts held
| at banks that have accounts held at banks.
| abhishekjha wrote:
| India has UPI and Rupay which is getting adopted by other SEA
| countries. Nepal is as another addition.
| [deleted]
| actuator wrote:
| I might be wrong but both of them aren't an equivalent to
| Swift. Rupay seems to be a card network like Visa and UPI
| builts on top of IMPS which might be considered an
| alternative, however IMPS is limited to financial
| institutions of one country and one currency.
|
| https://www.npci.org.in/what-we-do/imps/product-overview
| tobylane wrote:
| That applies to a lot of known future sanctions. Eg clearly
| Germany would like to not need any gas pipeline, and Russia
| will aim to build more pipelines to China before German
| governments can say no more Russian gas. However, could
| excluding them from Swift at some point between 2014 and this
| week be justified?
| mediumsmart wrote:
| Absolutely, the German Banks can send trucks to collect their
| loans in Rubles. No biggie.
| Thaxll wrote:
| Replacement that other country don't use so I'm not sure
| exactly what it would be used for, just connecting to China
| maybe?
| stef25 wrote:
| They seem to be planning to use the CIPS, the Chinese
| alternative.
| elliekelly wrote:
| SWIFT is kind of like Facebook. It has the benefit of
| "everyone" already using it. So even if you make your own
| Facebook it won't have the same functionality as Facebook and
| it's very unlikely everyone from Facebook will be motivated
| enough to make an account on your platform, too.
| xenocratus wrote:
| I'm way too far away from power on anything like this so I
| might be terribly wrong, but I imagine that cutting off SWIFT
| might convince other countries doing bad things to consider
| adhering to Russia's system, if they see the West willing to
| cut them off as well. You then get fragmentation and SWIFT
| losing some of its "soft power".
| baybal2 wrote:
| Russia already uses multiple alternative settlement systems
| with China, Iran, and few other buddies like Norko, and
| Belarus.
|
| > You then get fragmentation and SWIFT losing some of its
| "soft power".
|
| This already lost any power it had in 2014, because the
| threat of disconnection was wasted.
|
| An honestly, EU lost its face now to talk "soft power." Every
| foreign head of state going to meet EU bureaucrats will now
| look at them, and think "can I rely on these people who threw
| out every treaty for a want of sleeping without a blanket?"
| Azsy wrote:
| I'm not satisfied at all with Europe response so far, but i
| might be missing something here.
|
| > can I rely on these people who threw out every treaty for
| a want of sleeping without a blanket?
|
| Why isn't the US sending troops? Because the risk of
| escalation and nukes are unacceptable. In case you forgot,
| Europe also has nuclear powers and the risk of escalation
| is higher if the EU as an organization openly acts on more
| then soft power.
|
| And as far as i know, only the US and the UK are ignoring a
| treaty to offer security to Ukraine.
|
| Again, I'm not satisfied with the response so far, but what
| exactly are you suggesting so that EU bureaucrats don't
| lose their credibility?
| baybal2 wrote:
| > Because the risk of escalation and nukes are
| unacceptable.
|
| He can lob a nuke right now, but he knows he will lose
| against the US.
|
| He will retreat to avoid an even bigger defeat.
|
| Thugs I fought in my teenage years, even when they
| brought a knife to the fight, when they are afraid of
| getting KOed, and humiliated in front of their peers,
| they wrap up, and leave.
|
| They don't want to get beaten up, risk humiliation, and
| potentially committing murder at the same time.
|
| Similarly, US can give _Russian state_ 2 choices, a
| defeat with orderly surrender, or end like Yugoslavia,
| but 10 times worse.
| celticninja wrote:
| It's still an effective sanction because the Russian
| alternative is a half baked approach. It can only handle a
| fraction of the daily required transactions, only 40% of
| Russian banks are signed up to use it and it can only
| process payments during office hours.
| RustyBucket wrote:
| Russia, I think, has 11 timezones. So essentially it is
| office hours entire day.
| dgan wrote:
| Processing only during office hours? That's hilarious. Is
| there someone manually debugging transactions, and that's
| the reason?
| pmontra wrote:
| To be fair, it's not only heating. It's power plants and
| gas to keep many factories working. Think about ovens of
| all sorts and all industrial processes that need a lot of
| electricity. But yes, it's the n-th loss of face of EU.
| It's not much about EU bureaucrats but about EU head of
| states, prime ministers, etc. which ultimately decide what
| bureaucrats do. On the other side of the ocean, if the USA
| let Putin go too far they risk losing part of their empire
| [1] which is always bad for business.
|
| [1] https://en.wikipedia.org/wiki/Empire#Present
| bonyt wrote:
| If you want a fun podcast about a crazy heist involving SWIFT,
| check out The Lazarus Heist.
|
| https://www.bbc.co.uk/programmes/w13xtvg9/episodes/downloads
| optimalsolver wrote:
| How many people complaining about the weaksauce sanctions
| proposed against Russia would be prepared to deal with the
| effects of more stringent measures?
|
| I'm thinking especially of people in Europe castigating
| politicians for not wanting to clamp down hard on the Russian
| energy sector. The way I see it, the europols are in a no-win
| situation. If they go easy on Russia and keep the gas and oil
| flowing, they look like weak and waffling appeasers, which yes,
| they are. If they cut off the Russian gas supply, will the people
| posting Ukrainian flags on Twitter remember or care about the
| noble root causes when faced with unprecedented energy prices?
|
| I.e. the politicians know their people better than they know
| themselves, and they're well aware that showing support on social
| media is one thing, but being asked to make drastic sacrifices is
| quite another. These politicians will not survive if they do what
| their voters are clamoring for them to do.
|
| Of course, they probably wouldn't be in this position if they
| hadn't taken energy strategy advice from Greta Thunberg, but
| that's neither here nor there.
| andrepd wrote:
| > Of course, they probably wouldn't be in this position if they
| hadn't taken energy strategy advice from Greta Thunberg, but
| that's neither here nor there.
|
| What the fuck? I'm pretty positive that the energy strategy of
| major western powers was not radically revamped in two years on
| the advice of a teenager. If anything, they're in this position
| because they pursued an opposite strategy to what ecologists
| advocate: reduce dependency on fossil fuels including Russian
| natural gas, and invest massively in renewables + nuclear to
| bridge the gap.
| buu700 wrote:
| I think what they were referring to was Germany prematurely
| decommissioning nuclear plants only to start replacing them
| with coal and (more importantly) Nord Stream 2, which I never
| understood either.
|
| I can't comment on whether Greta Thunberg had anything to do
| with that, but I do see in a recent article that she appears
| to be anti-nuclear:
| https://www.theguardian.com/world/2021/dec/21/eu-in-row-
| over...
| KarlKemp wrote:
| Replacing them with coal would have been a good idea, at
| least as far as Russia is concerned, since it's a local
| source of energy. In reality it was, indeed, natural gas
| and renewables.
|
| Bringing Thunberg into this discussion serves no purpose
| except making conservatives giggle because they love hating
| her. She had nothing to with the decision, and being anti-
| nuclear isn't what she's known for.
|
| Northstream 2 was, indeed, a terrible idea. But it never
| became operational and therefore does not affect the
| current situation.
| I_am_tiberius wrote:
| If you are pro SWIFT exclusion of Russia, please like this tweet
| (or a similar one).
|
| https://twitter.com/IchBin_RO/status/1497274721418760193
| [deleted]
| morelisp wrote:
| What good will liking a tweet do?
|
| If you are pro-SWIFT-exclusion-of-Russia and live in Germany
| please contact your national representatives and let them know
| you're willing to bear some hardship so others don't have to.
| MandieD wrote:
| #PullisGegenPutin (sweaters against Putin) - turn the
| thermostat down to 18 C (64 F) and throw on a sweater.
|
| Then call and email your feckless MdB.
| deutschewelle wrote:
| Thanks I had quite a laugh reading your last sentence because
| most peers here in Berlin couldn't be bothered to report
| anything that doesn't directly impact them.
|
| For people living somewhere out rural shthole in West Germany
| perhaps might be triggered enough to file a report with the
| myriad of administrative concerns available to the spoiled
| citizen
| morelisp wrote:
| On average you're not wrong but it's still more effective
| than liking a random tweet.
| deutschewelle wrote:
| How will Germany pay for Russian oil if they cannot use SWIFT
| anymore? I know! Our politicians will simply use whatever
| financial system that Russia will propose.
|
| It would be even possible to trade a fleet of AMGs for a week
| of oil if need be. Removing SWIFT would only delay trade
| between Russia and Germany not hinder it in anyway.
|
| In fact bartering system would produce more efficiencies, a
| bullet proof AMG G-wagon for instance would fetch more oil than
| a regular C-class offered to Putin's low ranking officers!
|
| All in all, Ukraine gains nothing from this action, it would
| only give Putin the political ammunition to sell the narrative
| that Russia is under attack.
|
| The US certainly stands to gain everything and risk nothing in
| this region and its puzzling to me why Ukraine would choose
| this as a hill to die on as if their self sacrifice would move
| the hearts and minds of NATO officers on some emotional basis
| KarlKemp wrote:
| Germany wouldn't pay for gas and oil, and deliveries would
| stop. Reserves are probably high enough to last into spring,
| so there'd be about 9 months to find alternatives before next
| winter.
|
| Russia, meanwhile, would be bankrupt within a few months.
| thriftwy wrote:
| 45lkjl45yk wrote:
| june_twenty wrote:
| The way people write things on Twitter amuses me. Is this person
| a SWIFT expert or did they just google all this stuff to be able
| to tweet about it?
|
| Plus.. I can't read it all because Twitter throws a sign up
| modal.
| supernova87a wrote:
| I have always wondered, what combination of manual vs. automatic
| processes are happening when one makes a bank wire (actual wire
| transfers, not ACH)?
|
| Because whenever I have done wires, in addition to the
| bank/IBAN/account numbers, there are all these manual fields like
| "for further credit to" etc. that are clearly having to be
| interpreted by someone. And very often errors come up and the
| funds are held or in limbo on one end or another.
|
| Does anyone have a good explanation of what happens both on the
| initiating bank side and receiving bank side when a wire is done?
| I imagine that this is why it still costs $25-40 to handle them.
| ilaksh wrote:
| I would make a comment about cryptocurrency being relevant to
| replace this system, but I know it will just be buried and
| ignored.
| moonchrome wrote:
| Umm - crypto would prevent any sort of sanctions ? How is that
| a good thing ?
| patrickaljord wrote:
| Because sanctions don't work and not everyone agree they are
| needed?
| leodriesch wrote:
| For a Russian Citizen that would probably be a good thing.
| exogeny wrote:
| l4yj3lkzf wrote:
| setheron wrote:
| Honest question: are sanctions that affect normal citizens OK if
| it's through SWIFT?
|
| In my mind that would cause the populace to be more frustrated
| with Putin for what he's done.
| kgeist wrote:
| Putin will simply accuse the West of trying to make lives of
| Russians more miserable (technically it wasn't Putin who cut
| Russia from SWIFT) and many people will believe him,
| considering that thanks to fake news on state TV the majority
| believe the crisis was provoked by NATO. It won't work.
| mcguire wrote:
| On the other hand, it will damage the Russian economy, which
| will in turn damage the Russian ability to field military
| forces.
| sega_sai wrote:
| All these sanctions are a bit of the joke when you are dealing
| with an insane leader in a country without elections and sitting
| on top of a pile of reserves. And the west is not doing one thing
| that could actually actually make a difference -- cutting oil and
| gas export because the west thinks it'll be too expensive for the
| west.
|
| I feel these sanctions are still more of signalling, than
| actually doing something useful to help Ukraine.
| rozab wrote:
| The energy/heating situation in Europe is very tenuous. In the
| UK most everyone has gas central heating, and energy bills are
| skyrocketing. This is the most pressing domestic issue in the
| country right now, far above covid. Johnson is attempting to
| gain some popularity by putting on a tough face, but there is
| no chance he can survive if energy prices rise any further.
|
| Here a staggering number of people die every winter due to not
| being able to afford heating[0] (something like 30-50k). I
| think it's not quite so bad in other EU countries but some
| (like Germany) are still extremely reliant on Russia for
| energy. Due to strategic shortsightedness, cutting off oil and
| gas exports is simply not an option.
|
| [0]:
| https://www.theguardian.com/commentisfree/2020/feb/27/dying-...
| namdnay wrote:
| 30-50k is just the excess mortality in winter months. Further
| in the article they estimate the number of people who die
| whilst having difficulty paying for heating to be 3k, and
| even that is only a correlation - poorer people die earlier
| for many different reasons
| sega_sai wrote:
| I absolutely agree (I live in the UK), but in the end it's a
| question of money I believe. Somebody has to bear the cost of
| more expensive fuel/gas. I am sure if UK wanted it could have
| subsidised those costs till the next winter. I don't know how
| expensive that would be, but I doubt it's astronomical. On a
| balance of costs between squeezing Russia more or saving that
| money they (and Europe it seems) decided to save the money
| and go for measures like prohibiting Aeroflot flights or
| throwing Russia out of Eurovision.
| nine_k wrote:
| The frozen accounts if the Russian perpetrators could be
| used to offset the cost of the subsidy!
| dragonwriter wrote:
| > All these sanctions are a bit of the joke when you are
| dealing with an insane leader in a country without elections
|
| Russia has elections, but even having an unelected autocrat
| doesn't mean that governments are immune to popular opinion.
|
| Ask Louis XVI of France or, perhaps more relevantly here, Tsar
| Nicholas II of all the Russias.
| sega_sai wrote:
| I know that technically they have elections (I'm a Russian
| living abroad), they just count in a 'special way' so they
| get the result they want.
|
| And yes I agree popular uprisings is a possibility. But in
| the case of Germany in 1930-1940s that didn't quite work.
| stickfigure wrote:
| That's because Hitler kept winning. He militarized the
| Rhineland in 1936, the allies did nothing. He took over
| Austria in 1938, the allies did nothing. He occupied
| Czechoslovakia later the same year, the allies did nothing.
| With every win, Hitler's popularity increased at home. He's
| reported to have been quite surprised when the allies
| finally declared war after Poland.
|
| We have a word for this:
| https://en.wikipedia.org/wiki/Appeasement
|
| Neville Chamberlain negotiated with Hitler over handing
| Germany large swaths of Czech territory critical for border
| defense. The Czechs weren't invited to the conversation.
|
| https://en.wikipedia.org/wiki/Peace_for_our_time
|
| We know how that turned out.
| dmingod666 wrote:
| Hitler didn't have nukes and super-sonic missiles -- you
| cant do to Russia what you would want to do to Hitler..
| at least not without a very heavy price..
| stickfigure wrote:
| And when Putin threatens nuclear first strike unless the
| west removes sanctions, or abandons the baltic republics,
| what next?
|
| At some point you have to just call their bluff. Earlier
| is better than later. Putin himself knows that he'll be
| the first casualty in nuclear war, and I doubt very much
| that Putin's deputies would go along with a plan that
| results in the annihilation of the Russian people. He's
| playing a high-stakes game of chicken.
| morelisp wrote:
| > Hitler didn't have nukes and super-sonic missiles
|
| While relatively late in the war so it didn't have too
| much strategic impact, the Nazis literally invented the
| supersonic missile.
| dmingod666 wrote:
| I meant to say 'hypersonic' nuclear icmbs
| [deleted]
| tshaddox wrote:
| Didn't seem to end particularly well after the overthrow of
| the Romanov dynasty either. Adding nuclear weapons doesn't
| make the prospect of political upheaval (let alone violent
| revolution) in Russia sound any more desirable.
| CommanderData wrote:
| The sanctions are theatre and will be lifted in a year or so.
|
| If the West really cared Swift would have happened long ago.
|
| The reality is they do not care for Ukraine.
| stef25 wrote:
| > The reality is they do not care for Ukraine.
|
| I've been thinking about this all day and feel incredibly
| upset when I see what's going on.
|
| What can we do? Have you seen what the Russians did to
| Grozny?
|
| It all boils down to the fact that EU simply can't start a
| war with a maniac that has thousands of nukes. I'd say let
| him have it and Ukrainians refugees are welcome here by the
| millions.
|
| Putin's now threatening Finland and Sweden should they dare
| join NATO and there's talk of the conflict spilling over in
| to Moldova and Georgia. That would change things drastically.
| As soon as EU or US forces take military action against
| Russia we have to assume he'll retaliate and then it's
| basically WW3. If that's what it takes to get rid of this
| maniac then so be it but the consequences for everyone will
| be severe.
| chasd00 wrote:
| > Putin's now threatening Finland and Sweden should they
| dare join NATO
|
| do you have a link i can read up on? I would imagine
| everyone is running to the safety of NATO now and i can
| totally see Putin saying "if you try then you're next".
|
| > ...then it's basically WW3. If that's what it takes to
| get rid of this maniac then so be it but the consequences
| for everyone will be severe.
|
| "severe" would be the mildest term possible to describe
| what would happen heh
| stef25 wrote:
| It was on the Guardian news feed, can't find it again but
| here's another link
|
| https://www.newsweek.com/russia-threatens-finland-sweden-
| nat...
|
| Sweden and Finland probably don't feel the need to join
| Nato but the threat that was made is enough to put EU on
| edge. Scandinavia is much "closer" than Ukraine.
|
| Severe indeed.
| kevinventullo wrote:
| https://mobile.twitter.com/g_mastropavlos/status/14972378
| 568...
| jonny_eh wrote:
| The only people that can realistically help Ukraine right now
| are the Russian people.
| infamouscow wrote:
| The inescapable fact is Germany intentionally put themselves in
| a position to be more dependent on Russian oil/gas with their
| shutdown of nuclear power. The previous US president made a
| point about how Germany's decision contradicts the purpose of
| NATO.[1]
|
| 1: https://twitter.com/Cernovich/status/1496917092351692810
| tadfisher wrote:
| The decision doesn't contradict the _purpose_ of NATO, which
| is a fairly straightforward military alliance. It does impact
| the _effectiveness_ of NATO, because one of its member states
| is economically dependent on a non-member state with a high
| likelihood of conflict.
|
| Trump is saying that NATO shouldn't exist because of this
| intertwinement, and there's a sentiment going around that
| NATO caused the conflict by existing and forcing Putin's
| hand. Saying things like "the purpose of NATO is
| contradicted" plays into that narrative.
| myko wrote:
| Interestingly, trump hated NATO and wanted to leave it. I
| firmly believe that his griping about issues like this,
| while accurate, was really a move to weaken the alliance
| and make the relationship between the US and European
| nations worse.
|
| He even planned on withdrawing from NATO in his second
| term, had he won the election:
| https://www.independent.co.uk/news/world/americas/us-
| politic...
| danbruc wrote:
| Mutual economic relationships have been seen for decades as
| means to lower the risk of military conflicts with Russia. I
| am not sure how much this was considered for the nuclear
| exit, but in general Germany has more consciously chosen
| closer ties with Russia over seeking independence than it
| accidentally stumpled into them.
| bakuninsbart wrote:
| There hasn't been a large change in imports of russian gas in
| Germany since the start of the Energiewende. [0] Gas is
| largely used for heating, electrical heating was never
| widespread and would not have been a viable alternative, even
| with keeping more nuclear power online, since it is
| uncompetititve without major subsidies.
|
| Anyway, gas consumption as a percentage of the total mix has
| been stable since before the start of the Energiewende. [1]
| Germany replaced some coal and nuclear with renewables and
| kept the rest stable while also substantially increasing
| total energy demand.
|
| Since your are quoting one of the worst people I've ever had
| the displeasure of having to listen to, it is curious that
| you ignore that the US is a major importer of russian
| resources, too, and is now silent now about boycotting
| russian imports. [2] It was all fun and games when the trade-
| off was that Germany would have to import expensive American
| natural gas, but biting in the sour apple yourself doesn't
| seem to be on the table, at least for now.
|
| [0] https://tradingeconomics.com/russia/exports/germany/miner
| al-...
|
| [1] https://www.cleanenergywire.org/factsheets/germanys-
| energy-c...
|
| [2] https://www.spglobal.com/platts/en/market-
| insights/latest-ne...
| chrisco255 wrote:
| By your own [2] above, Germany still consumes more than 67%
| of its energy from oil, gas and coal. Had it chosen to
| scale up nuclear instead of scale down nuclear, it would be
| less dependent on that 67%. France famously gets over 75%
| of its electricity from nuclear, and has plans to expand
| capacity by adding 6 more reactors [4]
|
| U.S. is not a major importer of Russian energy. U.S. is a
| net exporter of natural gas.[2]. Foreign imports for energy
| fell 30% under the previous admin [1].
|
| Russia only accounts for 6.6% of our foreign imports [1].
| And foreign imports have become less important for the U.S.
| as it has become a net exporter of oil & gas [3].
|
| Under previous admin, our natural gas exports doubled [2].
|
| [1] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PE
| T&s=M... [2] https://www.eia.gov/energyexplained/natural-
| gas/imports-and-... [3]
| https://dailyenergyinsider.com/news/29194-united-states-
| expo... [4]
| https://www.euractiv.com/section/energy/news/macron-
| presents...
| layer8 wrote:
| > Had it chosen to scale up nuclear instead of scale down
| nuclear, it would be less dependent on that 67%.
|
| In my understanding, it wouldn't change much for the
| natural gas portion, because that can't be replaced by
| electricity for the most part (heating).
| diognesofsinope wrote:
| They are signaling. Push came to shove and the unfortunate
| reality is that Ukraine isn't that important to most countries
| and the risk of a greater war is worse.
|
| The lesson here is that every country should learn to defend
| itself.
| myko wrote:
| I think the lesson is Ukraine should have joined NATO years
| ago and countries should only elect leaders who respect the
| alliance and want to keep it strong.
| ChildOfChaos wrote:
| So bitcoin is going to go up? Asking for a friend.
| rglover wrote:
| It's very likely. It would be an effortless switch to Bitcoin
| for Russia and give them access to a currency/network
| completely invulnerable to nation state controls.
|
| Blocking SWIFT for Russia would be a very, very, very stupid
| idea because it would precipitate the collapse of the U.S.
| Dollar. Which, I'd bet, is intentional because the central
| banks want to push out CBDCs they control and populations are
| primed to support it willfully (in opposition to Bitcoin)
| thanks to several years of anti-Russia propaganda. It's a
| perfect mousetrap.
|
| All Russia has to do is tell European countries reliant on its
| energy exports that they'll only be accepting Bitcoin moving
| forward. This would force those countries to scramble to get
| Bitcoin (if they don't have it already), forcing the price up
| rapidly.
| ausbah wrote:
| and Russia can switch it's entire economy to be largely
| reliant on Bitcoin at the drop of a hat?
| User23 wrote:
| Interestingly SWIFT was used to effectively depose a Head of
| State already, specifically Pope Emeritus Benedict XVI. The
| Vatican's Bank was banned from the system and allowed back on
| after Benedict's resignation.
|
| The lesson was not lost on Russia or China and they have been
| building an alternative system called BRICS.
|
| Edit: Here's a contemporary source[1] from a "reputable"
| newspaper. It doesn't mention SWIFT by name but that's what it
| was. There were other "reputable" sources covering the story more
| explicitly back in 2013 as well, but web search's extreme recency
| bias leaves me unable to find them. Perhaps visit your local
| university library and they can help you search the periodicals.
|
| [1] https://www.washingtonpost.com/world/europe/pope-
| struggled-t...
| pmontra wrote:
| Maybe this? https://www.bbc.com/news/world-europe-20903443
| mschuster91 wrote:
| The only reference I could find about that is an obscure
| Italian blog with the comment section filled with absurd
| conspiracy theories. Do you have some credible sources?
| mdiesel wrote:
| The timing would imply that Benedict XVI resigned (at least in
| part) due to the scandal involving blackmail of homosexual
| members of the church. The wiki page on the resignation doesn't
| go into that at all, but does link to the scandal in the "See
| Also" section.
|
| > On 17 December 2012, the Pope received a report on "Vatican
| lobbies" ... . The same day, the Pope reportedly decided to
| resign, a decision he made public in February 2013
|
| It's possible that multiple factors added up to make the job
| too overwhelming for one man of his age, but the "vatileaks"
| scandal appears to be far more significant in coverage from
| what I can see.
| mohanmcgeek wrote:
| BRICS is not an alternative to SWIFT. Russia, India, China --
| the RIC -- in BRICS are each working on/have their own SWIFT
| like system.
|
| There's a BRICS bank though.
___________________________________________________________________
(page generated 2022-02-25 23:00 UTC)