Stupid Shit in Kyiv

[Jmsuttr]

The stock answer in context of the future of the dollar for years has been, 'Yes, long-term it's all bad, but there's no place else to go. ' Anyone who's spent anytime in the industry knows this. And now we've reached the point where it's the linchpin openly behind US foreign policy. Question is will this battle with Russia lead to the endgame.

How it came to this should be general knowledge. See Michael Hudson, Super Imperialism (updated from your edition back in undergraduate economics).

Or his take on current situation: https://michael-hudson.com/category/articles/.

Of course Putin needs income, which is why he's not giving oil to belligerents that have frozen Russia's accounts. Sanctions have blowback -- in this case so obvious it can only be assumed to have been intentional to, as like the Nuland woman said, eff the E. You. Meanwhile, China will buy Russian oil and gas and pay in yuan which won't be frozen (stolen). The US confiscated Venezuela's foreign holdings, and they even stole poor Afghanistan's. And now Russia's..

Is that they rely on multiple variables that may not play out in the ways envisioned by the predictive models. There are plenty of opinions out there, and I'm happy to let them argue the issues in their ivory towers. And predictions about the impending demise of the US are the most popular of all.

I'm much more interested in the pragmatic, empirical, and observable. The plain fact of the matter is that, prior to the invasion, Russia had a higher position in the world, politically and economically, than it does now. No matter how the war turns out, Putin has shown himself to be a barbaric war criminal. There's no coming back from that. And there's no coming back from the tens (hundreds?) of thousands of young Russians who have fled to make a future elsewhere.

Similarly, the image of a strong Russian military has been exposed and destroyed. Sure, Russia has their Soviet-legacy nukes, but their conventional forces have been exposed as a paper tiger. That's one reason why, IMO, Sweden and Finland are unmoved by Russian threats over NATO membership.

War is an uncertain and dynamic beast. Looking at a snapshot in time, or even a series of snapshots, and trying to extrapolate a prediction, is a tricky business. The sanctions regime, and any effects thereof, is similarly a dynamic beast. I find predictions as to who will prevail in the end, and how things will turn out, to be mostly exercises in vanity by people anxious to show off how much they know. And I generally find them to be reluctant to admit how much is unknown and how easily something that comes out of left field could screw up their predictions.

Here's just one example: All of the discussions I've seen re sanctions have assumed that China will continue to support Russia. What if that changes? I'm not saying it will, but I would observe that China isn't in a happy place right now, with having to lock down Shanghai (plus other cities, ports, factories, etc.) in their efforts to keep COVID from wreaking havoc. So, while I'm not predicting, I can envision a scenario in which a combination of China's vulnerabilities and Western pressures could have a material impact on support for Russia. My sole reason for laying out this scenario is to point out the hubris of those who make predictions without accounting for, or even discussing, variables that would skewer their theories.

It is, however, possible to lay out possible scenarios and, with an appropriate degree of humility, point out the rough probabilities of each one. But such discussions should also contain plenty of caveats as to how things could drastically change if the landscape of variables shift.

For example, I've continued to assert that there's unlikely to be any scenario in which Russia truly wins. Assuming, for the sake of argument, that they can occupy much or even all of Ukraine. That is likely to be a Pyrrhic victory as it's clear the Ukrainians don't see Russia as a liberator and don't want to be occupied or assimilated. Russia would be viewed as an aggressive occupier, perhaps having to brutally suppress insurgents, and the sanctions regime would continue.

Meanwhile, since oil and gas are fungible, most of Russia's former energy dependents will have switched, or be actively looking to switch, to other suppliers. The recent deal Italy signed with Algeria is a case in point. That would be a permanent loss of income for Russia and a corresponding reduction in leverage.

Again, I'm not in the prediction business and, historically speaking, most people who thought they had it all figured out ended up being wrong more often than right. But I am in the business of making observations. And one clear observation is that the state of Russia today is weaker than the state of Russia before February 24th. It's hard for me to see how a weakened Russia, having been devalued on a number of fronts, turns these deficits into a winning position. Much like chess, at some point the loss of material + poor positioning = a loss. I think Russia will play to the last pawn, unless something happens internally to tip over the king, but I find arguments for a Russian win to be singularly unconvincing.

[Xpartan]

Guess what. I give away 100% of what I earn, all of it.

So, not only are you a delusional crackpot, you're also a bum.

Figures.

[WyattEarp]

Then WTF are you doing on this website? It's one thing to post your pro-Russia political thoughts, but you are trolling American men who travel abroad to meet foreign women on here the International Sex Guide of all places.

Pull your head out of your ass and look around at where you are.

Uncharacteristically strong words from me on social media. However, I think you owe the entire Board an apology.

[WyattEarp]

About the dollar, I'm certainly not a general defender of US monetary or economic policies (although I'm not an indiscriminate basher of same), but the relevant question with respect to dollar dominance is what currency (ies) are realistic candidates to replace it? Any such currency would need to be backed by a country willing to endure the Reserve Currency Paradox (aka Triffin's Dilemma).

https://www.investopedia.com/financi...urrencies.aspx

According to that concept, a reserve currency's issuing country needs to accept a permanent trade deficit condition. Correct me if I'm wrong, but I'm not aware of any sizeable world economy, other than the US, that perennially runs a trade deficit. So, while it's always in fashion to bash the dollar, it's hard to see what will move the needle in any substantial way.

This is kind of a follow-up to my last post regarding global trade and currency.

Jmsuttr, I was impressed that you brought up the Triffin Dilemma. Most financial journalists have no clue what this well-accepted economic principle is. It's very common to generalize that the Dollar's reserve currency status is purely a benefit. It's often brought up in anti-American rhetoric as an unfair geopolitical advantage.

For obvious reasons, Wall Street is one benefactor of surplus Dollars accumulated around the globe and directed back to the United States assets. Wall Street is an important lobby for policies that protect the Dollar as a reserve currency.

For similar reasons as the Dollar, the British Pound acts a reserve currency in a smaller degree of magnitude. For the size of its economy, the you. K. Runs fairly large trade deficits perennially to absorb the inflow of capital from around the world. You. K. Policies protect capital rights and the free movement of capital in and out of the country.

[WyattEarp]

It's too soon to tell how this will play out. The Russians have pegged the ruble to gold. They will accept only rubles for their oil and gas -- so far. Whether they extend this to accept only rubles for all their exports and move to make their ruble an asset backed currency remains to be seen. When Quaddafi made a similar move, the USA Had no answer in response except to take him out. Libya, of course, had no nuclear arsenal.

The USA Meanwhile has been shorting gold for years, and has a currency backed by -- nothing. Well, backed by its military and its ability to control the oil market via the petro dollar. For how much longer is this strategy sustainable? Remains to be seen, however it is pure hubris to think artificially propping up the dollar is an act of strength.

This is actually a fairly good take, but only half the story. I've heard some of this with young tech guys who trade and hold crypto. Basically, their prognosis is that the Mideast oil producers will eventually refuse the Dollar as payment and cryptocurrency will be validated as a major global currency.

It misses the bigger issue. How do chronic trade surpluses eventually wind their way through the global economy and converted into reserve assets? The medium of exchange is not really important from an economic perspective. Whether one talks about paying in Gold or Bitcoin, some exporter has to inevitably circulate the Dollars, Euro, Yen, Renminbi back into their respective countries. If Saudi Arabia only accepts Bitcoin, a USA Petro enterprise has to buy Bitcoin to buy Saudi oil. Even if the Saudis choose to hold Bitcoin, the party selling Bitcoin has to direct their Dollars. So Dollars must keep circulating in the global economy until they find their way back into imports from the United States, assets domiciled in the United States or Treasuries.

China and the Mideast oil producers tend to accumulate United States assets and treasuries to sterilize their chronic trade surpluses. Trade surpluses generally find their way back to countries with political stability, strong laws protecting capital and its free movement. Freezing Russian assets presents a new precedence.

Which brings us to the Russians accepting Chinese Renminbi for oil and gas. In the short-run, the Chinese will likely allow the Russians to hold Renminbi reserves. More likely the Chinese will prefer to sell them goods. Believe me for those of us who have studied the global trade system and balance of trade mechanisms, China does not currently want to be a reserve currency and they are not prepared to do so. One of the big things is that the Chinese would have to eliminate their strict capital controls. See Jmsuttr's note about the Triffin Dilemma. Contrary to popular belief, hosting a reserve currency presents difficult economic challenges.

[Golfinho]

Then WTF are you doing on this website? It's one thing to post your pro-Russia political thoughts, but you are trolling American men who travel abroad to meet foreign women on here the International Sex Guide of all places.

Pull your head out of your ass and look around at where you are.

Got your panties in a twist? Keep it real and get some self-awareness. As much as we enjoy our currency's buying power, it wouldn't be worth going anywhere if The Empire of Lies spread its globohomo corruptions to Russian girls and to the remaining fun spots of the world.

[WyattEarp]

Well, as long as you have the USA Passport and USA Currency and like to spend it like a little king lording it over poor, foreign girls........

Then WTF are you doing on this website? It's one thing to post your pro-Russia political thoughts, but you are trolling American men who travel abroad to meet foreign women on here the International Sex Guide of all places.

Pull your head out of your ass and look around at where you are.

[WyattEarp]

Pedro, can you disclose a little bit about yourself? Like approximate age, citizenship. I am just trying to get an idea where ideas like yours are popular.

That's a good question. Pedro, your ideas and words don't sound like a Latin to me.

It might seem like a personal question. Some of us are quite open about our backgrounds. I can also often tell when I am conversing with an American or a European based on their references and their use of written English.

I think most would agree people's backgrounds and life experiences affect the way they look at the world.

[Jojosun]

It's here in the Title https://www.politico.com/newsletters...nning-00024373.

Whizzing through sources, the above caught my attention and read it more than once.

;If you think Russia isn't winning from its invasion of Ukraine, consider this: Moscow's monthly gas export receipts have tripled from a year ago; Marine LE Pen leads a Russian-sympathizing political bloc that is within reach of the French presidency; and from today, Western leaders will once again start arriving in Moscow to court President Vladimir Putin into a Ukraine settlement.

In other words: You can win even when you're being humiliated on the battlefield.

On the European front, Putin's supporters win elections in Hungary & Serbia https://edition.cnn.com › europe › h.

Pro-Putin leaders win two elections in Europe, reminding the Kremlin it has friends in high places. CNN.

https://www.cnn.com/2022/04/04/europ...cmd/index.html

But its not all Win, Win for Putin https://www.thetimes.co.uk/article/f...test-7m8bn6mf8.

He wins some and loses some!

[Golfinho]

https://hungarytoday.hu/dispute-betw...sia-in-rubles/


Not sure how China and India are paying, but it doesn't seem like it's happening anywhere in Europe. That could certainly change but it's premature to assume it's already a done deal or will definitely happen on a broad scale. Putin can demand rubles but he also needs income,

About the ruble being pegged to gold, I agree that it's too soon to tell as it's a new development that only happened after Putin invaded Ukraine. When the value of the ruble plummeted it was one of the
About the dollar, I'm certainly not a general defender of US monetary or economic policies (although I'm not an indiscriminate basher of same), but the relevant question with respect to dollar dominance is what currency (ies) are realistic candidates to replace it? Any such currency would need to be backed by a country willing to endure the Reserve Currency.

The stock answer in context of the future of the dollar for years has been, 'Yes, long-term it's all bad, but there's no place else to go. ' Anyone who's spent anytime in the industry knows this. And now we've reached the point where it's the linchpin openly behind US foreign policy. Question is will this battle with Russia lead to the endgame.

How it came to this should be general knowledge. See Michael Hudson, Super Imperialism (updated from your edition back in undergraduate economics).

Or his take on current situation: https://michael-hudson.com/category/articles/.

Of course Putin needs income, which is why he's not giving oil to belligerents that have frozen Russia's accounts. Sanctions have blowback -- in this case so obvious it can only be assumed to have been intentional to, as like the Nuland woman said, eff the E. You. Meanwhile, China will buy Russian oil and gas and pay in yuan which won't be frozen (stolen). The US confiscated Venezuela's foreign holdings, and they even stole poor Afghanistan's. And now Russia's. What kind of a message does that send to anyone who noticed?

US balance of payments, or trade deficit is the underlying situation-issue-problem that's being exposed. The outcome of the present war determines whether there'll a new world economic order.

[Jmsuttr]

https://www.oryxspioenkop.com/2022/0...plied.html?m=1

Obviously there will be a lot of things happening behind the scenes, and not announced publicly, but this site aims to keep track of everything it can and keep the list updated as new info comes in. For those still present in Ukraine, or anyone interested in this kind of war-related info, this would be a good site to bookmark. And it should also show which countries are keeping their commitments and which are just mouthing empty promises.

[Jmsuttr]

An other thing to which the Potemkin label applies: the USA Economy.

As I noted in my other post, I'm neither an indiscriminate supporter or basher of US economic and monetary policy. But I would note that, with all the demographic challenges around the world (declining birth rates, aging populations, etc.), the US still tends to attract more immigrants than many countries, which should have a generally positive effect on growth going forward. Obviously there are many countries in Africa and Asia with robust birth rates, but they tend to be poorer and less developed. That's not a defense of any specific US policy but rather a broad observation that the tide is still moving in a growth-positive direction.

[Jmsuttr]

It's too soon to tell how this will play out. The Russians have pegged the ruble to gold. They will accept only rubles for their oil and gas -- so far. Whether they extend this to accept only rubles for all their exports and move to make their ruble an asset backed currency remains to be seen. When Quaddafi made a similar move, the USA Had no answer in response except to take him out. Libya, of course, had no nuclear arsenal.

The USA Meanwhile has been shorting gold for years, and has a currency backed by -- nothing. Well, backed by its military and its ability to control the oil market via the petro dollar. For how much longer is this strategy sustainable? Remains to be seen, however it is pure hubris to think artificially propping up the dollar is an act of strength. For all holding dollars, the people running USA Policy seem to realize this which is why they're willing to keep increasing the stakes -- from Iran, Iraq / Syria, Venezuela, Libya, and now finally it has come to Russia. Should we hope the USA Succeeds and realizes the Hitlerian dream to control Russia's resources? Well, as long as you have the USA Passport and USA Currency and like to spend it like a little king lording it over poor, foreign girls you have to hope the American policy of brinksmanship pays off.

https://hungarytoday.hu/dispute-betw...sia-in-rubles/

Not sure how China and India are paying, but it doesn't seem like it's happening anywhere in Europe. That could certainly change but it's premature to assume it's already a done deal or will definitely happen on a broad scale. Putin can demand rubles but he also needs income, so it might come down to who blinks first. And it's worth noting that, as the weather warms, Europe's energy needs should be less. Not sure how much impact that has on total demand, but the depths of winter have passed.

About the ruble being pegged to gold, I agree that it's too soon to tell as it's a new development that only happened after Putin invaded Ukraine. When the value of the ruble plummeted it was one of the measures Russia adopted to try to stabilize the currency. Whether it will be effective over the medium to long term remains to be seen. Here's one article that discusses some of the issues, including potential downsides:

https://theconversation.com/why-russ...to-last-180632

About the dollar, I'm certainly not a general defender of US monetary or economic policies (although I'm not an indiscriminate basher of same), but the relevant question with respect to dollar dominance is what currency (ies) are realistic candidates to replace it? Any such currency would need to be backed by a country willing to endure the Reserve Currency Paradox (aka Triffin's Dilemma).

https://www.investopedia.com/financi...urrencies.aspx

According to that concept, a reserve currency's issuing country needs to accept a permanent trade deficit condition. Correct me if I'm wrong, but I'm not aware of any sizeable world economy, other than the US, that perennially runs a trade deficit. So, while it's always in fashion to bash the dollar, it's hard to see what will move the needle in any substantial way.

[Golfinho]

In futile partnership with a Potemkin economy that's been hollowed out by systemic kleptocracy. And the armed forces are in the same leaky boat.

As time goes on, and stresses increase, we'll see to how many other things the Potemkin label applies.

An other thing to which the Potemkin label applies: the USA Economy.

[Golfinho]

That's all it is. A propaganda strategy.
It's hubris to think artificially propping up the Ruble is an act of strength. Historically, countries with weak currencies that attempted to prop it up by limiting free exchange and implementing monetary controls have harmed the economy beyond what fragility already existed.

It's too soon to tell how this will play out. The Russians have pegged the ruble to gold. They will accept only rubles for their oil and gas -- so far. Whether they extend this to accept only rubles for all their exports and move to make their ruble an asset backed currency remains to be seen. When Quaddafi made a similar move, the USA Had no answer in response except to take him out. Libya, of course, had no nuclear arsenal.

The USA Meanwhile has been shorting gold for years, and has a currency backed by -- nothing. Well, backed by its military and its ability to control the oil market via the petro dollar. For how much longer is this strategy sustainable? Remains to be seen, however it is pure hubris to think artificially propping up the dollar is an act of strength. For all holding dollars, the people running USA Policy seem to realize this which is why they're willing to keep increasing the stakes -- from Iran, Iraq / Syria, Venezuela, Libya, and now finally it has come to Russia. Should we hope the USA Succeeds and realizes the Hitlerian dream to control Russia's resources? Well, as long as you have the USA Passport and USA Currency and like to spend it like a little king lording it over poor, foreign girls you have to hope the American policy of brinksmanship pays off.