Quote:
Originally Posted by Rutuu
You hold foreign currency reserves and gold so that you can buy your own currency when you require it ("backing it").
Fiat currencies are essentially worth what people think they are worth.
Sanctioning a central bank hasn't happened since 1979, so they might not have anticipated this level of cooperation on sanctions. The Swiss broke a 200yr+ tradition of neutrality to do it, as an example.
If you control your energy, your food supply, your water supply and have a sovereign currency you can deal with your currency plummeting, and just print money as some sort of accounting method. Russia relies on food imports, so they will import inflation and most likely hyperinflation.
Hyperinflation toppled the Weimar Republic, and recently put Venezuela in the toilet.
|
I think it will be interesting to see if anyone is prepared to sell anything to them anyway, if you're a Chinese company you have very little surety of being paid