Economic effects of the Russo-Ukrainian War

dicknixon72

Pelican
Boom time for short actors.



I would paste the article in, but it's too boring.

Is this sponsored by Raytheon and Lockheed-Martin?
 

nicolahcm

Sparrow

And that index is not even accurate now. The rates are very different from banks to bank right now.

Here in Russia you can exchange through various banks and every bank has different exchange values. Sometimes considerable differences among them right now.

For example, SberBank (which is not even the best for the rates of exchange), now
let you buy 1 USD for 59,75 Rubl.
and sell 1 USD for 51,43 Rubl.

This large spread between buy and sell is due to Russian decisions to protect the ruble since the first sanctions.
Since there is this large spread, also differences between bank rates can be also huge. Indeed, this large spread will make sure that these big differences between banks do not create any arbitrage opportunities.

Rosbank, on the other side,
is something like sell 1 usd for 45 rubl
and buy 1 usd for 61 rubl at the time of writing.

And still no arbitrage opportunity comes in.
 

911

Peacock
Catholic
Gold Member
Bottom line on forex is that the Ruble value is driven by the Russian trade picture, and Russia has carried a high trade surplus.

The Russian authorities are overreacting because they understand that their currency is under attack, but going forward you're going to see a smoother market and lower interest rates. They actually don't want the Ruble to get too valuable aka catch the "Dutch disease", which would handicap their exports. The Ruble looks like it's currently in the sweet spot, in the 40-55 range.
 

Samseau

Eagle
Orthodox
Gold Member
Bottom line on forex is that the Ruble value is driven by the Russian trade picture, and Russia has carried a high trade surplus.

The Russian authorities are overreacting because they understand that their currency is under attack, but going forward you're going to see a smoother market and lower interest rates. They actually don't want the Ruble to get too valuable aka catch the "Dutch disease", which would handicap their exports. The Ruble looks like it's currently in the sweet spot, in the 40-55 range.

Russia can print all the Rubles they want, their currency is increasing in value so fast that anything they print today will be worth more tomorrow. Literally they are growing money on trees right now, the war is making them trillions.
 

Belgrano

Hummingbird
Gold Member

India's top cement maker paying for Russian coal in Chinese yuan

India's biggest cement producer, UltraTech Cement, is importing a cargo of Russian coal and paying using Chinese yuan, according to an Indian customs document reviewed by Reuters, a rare payment method that traders say could become more common.

UltraTech is bringing in 157,000 tonnes of coal from Russian producer SUEK that loaded on the bulk carrier MV Mangas from the Russian Far East port of Vanino, the document showed. It cites an invoice dated June 5 that values the cargo at 172,652,900 yuan ($25.81 million).

Two trade sources familiar with the matter said the cargo's sale was arranged by SUEK's Dubai-based unit, adding that other companies have also placed orders for Russian coal using yuan payments.

The increasing use of the yuan to settle payments could help insulate Moscow from the effects of western sanctions imposed on Russia over its invasion of Ukraine and bolster Beijing's push to further internationalise the currency and chip away at the dominance of the U.S. dollar in global trade.

The sources declined to be identified as they are not authorized to speak to the media. UltraTech and SUEK did not respond to a request seeking comment.

"This move is significant. I have never heard any Indian entity paying in yuan for international trade in the last 25 years of my career. This is basically circumventing the USD (U.S. dollar)," a Singapore-based currency trader said.



 

SlickyBoy

Hummingbird
I don't know if anyone posted this yet, but this lecture a couple of weeks ago by Professor Mearsheimer from U Chicago (author of The Israel Lobby) vindicates him many times over. He was right in 2015, and he is correct today. Not that it will matter, the administration will pretend to value diplomacy while doubling down on the failure:

 

SlickyBoy

Hummingbird
People are going to be dreaming of the days when gas was cheap at $5 bux a gallon.
I was on Martha's Vineyard recently and regular gas was already $6.29 per gallon. Everything is more expensive on the island, but even that was a shocker.

And no, not everybody who lives there is rich like the Obamas. In fact they have a food drive for some of the poorer residents - a food drive on an island where you can't get any property for less than $600k-?! You can be sure those people don't own any property unless it was inherited.

As for broader economic effects, the biggest fail is the nations choosing to go with Russia and an alternative to the US-backed SWIFT system. This bifurcation will be the beginning of the end for US dollar supremacy and it was completely preventable. All we had to do was stop weaponizing our financial system. Black Pigeon covers this and other aspects in his most recent vid:

 

chance vought

Woodpecker
Protestant
As for broader economic effects, the biggest fail is the nations choosing to go with Russia and an alternative to the US-backed SWIFT system. This bifurcation will be the beginning of the end for US dollar supremacy and it was completely preventable. All we had to do was stop weaponizing our financial system.
This was already happening, Iraq and Syria just didn't have nukes, and dollars for oil was enforced with bombs. African leaders who tried to leave the CFA system were all assassinated by the French.
Russia divested most of their US assets since 2013, bought gold, has oil, and has nukes.
As much as I hate violence, this needs to happen. US dollar hegemony is as much a poison for America as it has been for the rest of the world.
In the end, I think a commodity backed BRICS currency will fail before the US dollar fails, but we need a far weaker US government.
 
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This was already happening, Iraq and Syria just didn't have nukes, and dollars for oil was enforced with bombs. African leaders who tried to leave the CFA system were all assassinated by the French.
Russia divested most of their US assets since 2013, bought gold, has oil, and has nukes.
As much as I hate violence, this needs to happen. US dollar hegemony is as much a poison for America as it has been for the rest of the world.
In the end, I think a commodity backed BRICS currency will fail before the US dollar fails, but we need a far weaker US government.
Bitcoin?

Sorry couldn't resist.

In all seriousness the Bank of International Settlements just allowed its participating banks to hold up to 1% of their reserves in bitcoin.

Also resource poor countries in the third world have neither commodities nor dollars to play in this new bifurcated system, so either gold or bitcoin should start to make sense with them and I think that transition is already happening.
 
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