New US sanctions force end of dollar and euro trading on Russia’s main exchange

a reply to: RussianTroll

Current Russian interest rate is 16% with their inflation running about 7% which would give a real interest profit of about 9%.
US corporate bonds top out near 5.75% with US inflation running near 3% with higher shelter cost appreciation.

I'm an amateur economist who studied Keynesian economics back in the day, but Bitcoin and the modern tools they use in the Forex markets to govern the Y chromosome bottleneck are a complete mystery.

a reply to: Skinnerbot
The policy of the Central Bank now is to increase the investment attractiveness of the ruble and increase investments in the real sector of the Russian economy. Hence the high interest rate.

a reply to: RickyD

Petro dollar is a meme... the world's economies agreed to us the USD as the reserve currency, not to back it by oil specifically. I mean, if that was the case, then the US is still king as they produce the most oil and gas on the planet.

originally posted by: charlest2

It's all fiat. If a currency goes down, another will take it's place sooner or later and the cycle restarts all over again. Life will forge ahead as it always has. Boom and bust is an inevitable, unavoidable fact of life.

Buy gold.

You can't eat gold... Buy land

The point is Russia will revert back to pre-USSR as far as their currency is only worth something internally. Might as well build a wall around the country again as people will have zero money to travel outside of it.

originally posted by: RickyD

You do know Saudi Arabia just dumped the dollar as the trade currency for oil right...that means the rest of OPEC is right behind them. I know which one I find more important as an American...and its sure not what Russia does with dollars or euros...

Yes, I know that, but this OP is about Russia, so do you want me to rename the OP?

originally posted by: RussianTroll
The policy of the Central Bank now is to increase the investment attractiveness of the ruble and increase investments in the real sector of the Russian economy. Hence the high interest rate.

So, what do you do if you want to travel? It is a serious question.

a reply to: Xtrozero

Putin is having to increasingly bow down to Xi for help but China won't do business with Rubles and only takes Chinese yuan, which doesn't help the Russian economy.

www.washingtonpost.com...

“Russia is still dependent on using Western currencies for trade with all countries except for China,” said Janis Kluge, an economist at the German Institute for International and Security Affairs. “There is huge demand for trading these currencies.”

The new sanctions, Kluge said, “will increase costs for importers and exporters” and add new “layers of complexity” to Russian business transactions. “The impact is initially psychological,” he said, and further increases Russia’s isolation...

The huge increase in government spending on Russia’s defense industry, which is further driving inflation, will eventually become untenable, the former senior official said. Signs are growing that the Kremlin was aware of this, which is why tax increases for next year have already been adopted into law.

originally posted by:

Putin is having to increasingly bow down to Xi for help but China won't do business with Rubles and only takes Chinese yuan, which doesn't help the Russian economy.

Of course China will take Russia for all they can. China also needs to be careful not to get the same sanctions treatment as Russia, they can’t afford that with how bad their economy is right now.

probly no coincidence that Putin offered a cease-fire in exchange for a chunk of Ukraine.

www.abovetopsecret.com...

he sees stuff that we don't we know about so maybe its worse than we realize.

if he makes better offers soon we'll know he's spooked.

originally posted by: charlest2
a reply to: Xtrozero

It's all fiat. If a currency goes down, another will take it's place sooner or later and the cycle restarts all over again. Life will forge ahead as it always has. Boom and bust is an inevitable, unavoidable fact of life.

Buy gold.

Oh yeah,then the GOV takes it from you to cover the lossses and gives you a IOU from uncle sam. You people dont remember the confiscation of GOLD/silver during WW1,and 2 right? They will go down the list of who bought GOLD/SILVER and Exchange it for BONDS/AKA IOU.

a reply to: strongfp

XPD

originally posted by: xuenchen

XPD

They should have gone to the Petrodollar 3 decades ago, today it has little to no power in anything and will tank against the US dollar. The US will say TY for that 10% discount in conversation. BTW the US gets most of its oil from Canada...

a reply to: strongfp

Its a meme thats afforded us a lot of power and control over world economies...but more importantly gave levers to improve our own economy. There are already attacks on our reserve currency status through BRICS which ties right back into our sanctions. Sanctioning one of the countries in BRICS and opposing anothers actions in the south china sea (keep in mind we haven't pivoted really from manufacturing in china), what do you think those countries want to do? They intend to usurp the US as the premeir currency/economic block.

I live in the US and I would not like to see any of those things occur in my lifetime or after...hence why I try to point out our own misteps when I see them. It is my opinion just as you and others hold their own opinions. I guess time will tell who's opinion was correct.

a reply to: RickyD

The reserve currency status, again, wasn't agreed upon to back it by oil specifically. The petro dollar became a thing simply because oil and gas were the main resources that the world ran on, and OPEC wanted to use the most stable currency. For example, why would OPEC do deals work Zimbabwe in their broken currency?

Back to the reserve currency thing, just as OPEC wanted to trade only in a strong global currency the USD at one point was THE only stable global currency, and the US prolonged that status beyond its sort of natural course.
No currency stays king forever.

The petrodollar is a meme in the sense that the idea of the USD being backed by specifically oil is a more of physiological thing than an actual set I stone currency, it's about trust or lack of trust.