Russian finance flows slump after US targets Vladimir Putin's war machine

[DJ Synikus Makisimus]

Source: Financial Times

A US crackdown on banks financing trade in goods for Vladimir Putin’s invasion of Ukraine has made it much more difficult to move money in and out of Russia, according to senior western officials and Russian financiers.

Moscow’s trade volumes with key partners such as Turkey and China have slumped in the first quarter of this year after the US targeted international banks helping Russia acquire critical products to aid its war effort.

Getting around the restrictions now requires a growing network of middlemen to avoid regulatory scrutiny even if the transactions have nothing to do with Russia’s war machine, the officials and financiers said, while increasing currency conversion and commission costs.

“It’s getting harder and harder every month. One month it is dollars, the next month it is euros; within six months you basically won’t be able to do anything. The logical endpoint of this is turning Russia into Iran,” said a senior Russian investor, referring to strict financial sanctions against Tehran.

Read more: https://www.ft.com/content/b4a556b0-0402-4114-9428-869bd49cf23c

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It's probably important to note that the effects of sanctions in this article are before the last round of sanctions that targeted more trans-shippers, brokers and bankers getting various things to Russia's military industrial complex.

I thought the line about turning Russia into Iran to be interesting. The difference between the official rate of the Iranian rial (about 42,000 to the dollar) and the black market rate (over 600,000 to the dollar) says a lot about what the future could bring in Russia. It may also provide context as to why Trump has been calling for the dollar to be devalued, but it's hard to say who whispered that idea into his head.

No paywall: https://archive.is/20240506075553/https://www.ft.com/content/b4a556b0-0402-4114-9428-869bd49cf23c#selection-2281.0-2281.306

[Irish_Dem]

1. China is paying close attention.

To see if starting a war is worth it.

[DJ Synikus Makisimus]

3. A noise in the back of my head says China wants Siberia.

Chinese folks have been "colonizing" Siberia since the privatization of the collective farms. Most of the Russians doing the actual work fled west (where they might not freeze solid) after the farms were sold into an uncertain future, and absentee landlord-oligarchs have been more than happy to lease the land to Chinese farmers and companies. Most of the farmer-workers are from Manchuria, and most of their produce is exported to China, of course. But the far north of Siberia is where the oil and gas are (as well as gold, platinum, palladium, diamonds, etc.), and China doesn't have enough domestic fossil fuel production to meet its internal demand. I suspect, but cannot at this time prove, that as Putin weakens Russia, China's Xi salivates.

[Irish_Dem]

4. I think the same.

Xi has a sharp eye out for weakness in Putin.
If that happens, Siberia is in play.

[ArkansasDemocrat1]

6. China and America face off over the Diomede Islands?

China does seem to like claiming islands.

[Irish_Dem]

7. I have not heard about any disputes about these islands.

What is the story?

[ArkansasDemocrat1]

9. There isn't one. Just snarking about the Chinese propensity to claim islands as theirs and what if they get Siberia.

The US island once belonged to the Czar until he sold Alaska

[Irish_Dem]

10. Yes China wants control of the South China Sea.

They must get regional control before they can claim global control.

[ArkansasDemocrat1]

11. They already have a "Treaty" with the Solomon Islands

A US Coast Guard ship was denied docking privileges on Guadalcanal.

[Irish_Dem]

12. Yes they also have some islands in the Caribbean?

They are gradually making progress obtaining power bases all around the world.
They have had military stationed in Africa for decades.

[ArkansasDemocrat1]

13. The Sun never sets on the Chinese Empire -- Slogan in 2055

[Irish_Dem]

14. Yes this is their goal.

To rise to power and diminish the western democracies.
The global autocrats will have all the power.

[ArkansasDemocrat1]

15. Maybe we should stop buying so much stuff from them. Shades of "We will bury you with the shovel you sold to us". n/t

[Irish_Dem]

16. Exactly, do we really need all the stuff we buy from China?

[LiberalLovinLug]

2. Turning Russia into Iran. ???

Gee, that's swell. Because its clear that what we turned Iran into is probably the biggest supplier of money and arms to Hamas, and other middle east terrorist organizations. As well as a big supplier to the Russian army in their fight to take Ukraine. Iran is doing just fine.

What I never have gotten, is why do we hear, every six months or so, how THIS time we are going to increase the sanctions to levels that will hurt. Uh.....firstly why didn't you implement tough sanctions RIGHT FROM THE START? and secondly, please explain how this is any different than all the other "crippling" sanctions that is supposed to stop Russia in its tracks. Even slow them down?

[moreland01]

5. Here's hoping that Russia is way too busy

to pay attention to our November election. At least I hope that they don't have money laying around to pay for hackers, trolls, bots and fake news.

[Bayard]

8. I read again this morning,

That Putin wants to take back all the old Soviet Union countries. There's no way he could afford it!