American Politics 3.0 - Back to Brunch

[JohnnyB]

Originally Posted by Mr.Coffee

Too lazy to go get the articles but Japan has decided to say “nah” to the US price cap on purchasing Russian crude oil (not good, possible floodgate opener move?) and meanwhile a few other (large) countries are starting to shift in purchasing with the US dollar. Russia and China the notable ones but India putting pressure on others to use the Rupee as well. Not enough of an expert to understand the ramifications of these moves, however.

ASEAN is also moving towards trade using their own currencies instead of the dollar. Saudi will also be trading with China in the yuan for oil. India had previously used the yuan for some energy purchases from Russia, but obviously doesn't want to keep doing that while not having a great relationship with China. BRICS+ had been discussing moving towards something like what ASEAN is doing, but I'm not sure where that stands now. I remember Indonesia recently also talked about getting rid of Visa and Mastercard to avoid having their domestic payment systems running on US-controlled rails. I think a lot of the trade between China and LATAM is also going to be taking place in yuan. While the US is wanting to move away from globalization and towards regionalization of supply chains, they've given much of the world reasons to move away from dollar dependence and towards regionalization of currency regimes.

Fwiw, I think Japan basically asked America's permission to buy Russian oil above the cap and the US approved, so not sure it's much of a big issue. Most of the world outside the Global North isn't paying attention to sanctions on Russia anyways.

[Dion]

Originally Posted by Sliver

Dion.......you're facebooking up the place, dude.

Guilty as charged.

[timun]

As a point of comparison, the "opened floodgates" are so far a <3% takeup of the yuan as a reserve currency; slightly more than use of the Canadian dollar. Almost 60% of the world's reserves are still in US dollars, and more than 20% in euros. In the last ten years the US dollar's share has dropped about 3% and the euro's by about 3.5%, while the yen has gone up about 1.5%, pound has gone up about 1%, Canadian dollar up about 1%, and Australian dollar up about 0.5%. It's frankly not unexpected, as anyone dealing with Russia is essentially frozen out of using all of the other aforementioned currencies.

[KootenayFlamesFan]

34..........yes, 34.......felony counts.

https://twitter.com/user/status/1643047084692590594

[The Fonz]

Got him this time, boys

[Maritime Q-Scout]

Originally Posted by The Fonz

Got him this time, boys

I'm not saying it's a slam dunk, but in fairness this is farther than ever before.

[nik-]

Originally Posted by Mr.Coffee

Too lazy to go get the articles but Japan has decided to say “nah” to the US price cap on purchasing Russian crude oil (not good, possible floodgate opener move?) and meanwhile a few other (large) countries are starting to shift in purchasing with the US dollar. Russia and China the notable ones but India putting pressure on others to use the Rupee as well. Not enough of an expert to understand the ramifications of these moves, however.

https://www.reuters.com/business/ene...-2-2022-12-05/

Japan has an exception, but carry on.

[activeStick]

34 counts is um quite a lot of counts

He'll still walk because this is America, but I guess at least he's getting charged?

[nfotiu]

They better get him this time.

A big circus leading to a not guilty verdict or dismissal would be a disaster.

[activeStick]

They won't get him, it'll lead to further polarization in the US and they'll continue down their current path of eating itself up while the majority of the world's population moves on and leaves the US behind...

[nik-]

I would trade Trump not being charged for never hearing about him again in a second.

[MoneyGuy]

Yeah, he’ll get charged, his supporters will be riled up, there will be demonstrations (mostly tame) and he’ll never see the inside of a prison cell. He’ll skate as he always does. It’ll have little effect on the next election and Biden will win again. Idiots like Trump, Marjorie Traitor Greene and Kari Lake will continue to cry “stolen election.”

[Harry Lime]

There was once this dude who tried to violently storm the capital and overthrow the government, leading a group of political extremists. He failed and went to jail for a year, where he wrote a book. I'm mostly glad that Trump is older than dirt.

I'm pretty sure he's happy for a short sentence to make himself a martyr to his own cause.

[dobbles]

Originally Posted by Mr.Coffee

Too lazy to go get the articles but Japan has decided to say “nah” to the US price cap on purchasing Russian crude oil (not good, possible floodgate opener move?) and meanwhile a few other (large) countries are starting to shift in purchasing with the US dollar. Russia and China the notable ones but India putting pressure on others to use the Rupee as well. Not enough of an expert to understand the ramifications of these moves, however.

I've meant to ask this for a while, but question for you guys far more knowledgeable than I am...

Is there really any point to not buying Russian oil right now aside from optics? It seems to me the idea of economically isolating Russia has completely failed due to things like the above issue. The fact that Russia can still sell to China and India seems to defeat any alliance western nations have. It just seems to me that a lot of countries are putting their people through tough times for not much gain. Am I missing something?

I do realize there is a nice long term benefit of European energy independence from Russia. Helps them act more firmly in future conflict not having that hang over their head.

[Street Pharmacist]

Originally Posted by dobbles

I've meant to ask this for a while, but question for you guys far more knowledgeable than I am...



Is there really any point to not buying Russian oil right now aside from optics? It seems to me the idea of economically isolating Russia has completely failed due to things like the above issue. The fact that Russia can still sell to China and India seems to defeat any alliance western nations have. It just seems to me that a lot of countries are putting their people through tough times for not much gain. Am I missing something?



I do realize there is a nice long term benefit of European energy independence from Russia. Helps them act more firmly in future conflict not having that hang over their head.

This is why there's a price cap and not a Russian oil ban. Most western countries have signed their own bans, but it's the price cap that's really doing what is supposed to: keeping oil flowing into the global market to avoid price spikes, while severely cutting Russia's margins. Russian oil is flowing to China and India to keep global prices stable, while trimming $10-30 off per barrel. At current prices Russia is now barely above break even

[dobbles]

Originally Posted by Street Pharmacist

This is why there's a price cap and not a Russian oil ban. Most western countries have signed their own bans, but it's the price cap that's really doing what is supposed to: keeping oil flowing into the global market to avoid price spikes, while severely cutting Russia's margins. Russian oil is flowing to China and India to keep global prices stable, while trimming $10-30 off per barrel. At current prices Russia is now barely above break even

But even at the reduced price, is it really impacting Russia's ability to make war? It seems like lack of competence and outdated gear has been the problem for them. Do we know if reduced revenue has impacted their strategy or plans at all?

[burn_this_city]

Originally Posted by dobbles

But even at the reduced price, is it really impacting Russia's ability to make war? It seems like lack of competence and outdated gear has been the problem for them. Do we know if reduced revenue has impacted their strategy or plans at all?

This probably belongs in the Ukraine thread, but they are quickly burning through their rainy day fund. Sanctions don't work immediately but are slowing wearing away at the Russian economy and are definitely impairing their ability to replace lost weapon systems.

[calumniate]

Most counts by a former sitting president of all time!

[Yoho]

https://twitter.com/user/status/1643275645668007936

No such thing as bad press.

[Monahammer]

Originally Posted by dobbles

I've meant to ask this for a while, but question for you guys far more knowledgeable than I am...

Is there really any point to not buying Russian oil right now aside from optics? It seems to me the idea of economically isolating Russia has completely failed due to things like the above issue. The fact that Russia can still sell to China and India seems to defeat any alliance western nations have. It just seems to me that a lot of countries are putting their people through tough times for not much gain. Am I missing something?

I do realize there is a nice long term benefit of European energy independence from Russia. Helps them act more firmly in future conflict not having that hang over their head.

Can you point out what metric you would be using to qualify this? An isolated purchase of their oil by Japan is not going to improve the financial situation of Russia, which is becoming more dire by the day. 3.9% GDP reduction in 2022 and forecast to decline by 5.3% in 2023, in spite of global inflation (which by nature increases GDP). OECD numbers.
https://www.consilium.europa.eu/en/i...ssian-economy/

Their exports have really fallen off a cliff since sanctions began. They had rougly 14% inflation last year, 9% projected this year. Their capital market was hit by 33% immediately on sanctions, and though stabilized has been on steady decline since the sanctions hit. Add to that the expected massive decline in productivity of labor over the next decade due to straight up missing workforce (death or fleeing from war) and I think it is pretty safe to project massive economic pain in Russia over the next 5 years, regardless of if the situation changed immediately, today.