/finance/ - Finance

>>4 (OP) 
> Is this the beginning of the world of finance being split in two?
Maybe? Hopefully?

I wonder if this is what The Book of Revelations was referring to, actually.

>>4 (OP) 
I really hope so. That would greatly help segregate western and/or developed countries versus every other country on earth. The less influence backward country has over western ones, the less problem the latter have to deal with.
But for that to happen, the west should decouple itself from Chinese cheap labour + money and energy suppliers from Middle East and Russia.

Also, as far as I know banks using Union Pay are still required to use SWIFT, so this change won't be any effective soon.

>>4 (OP) 
The Indians have already have their own payment system called RuPay in  2012, mostly works in parts of the middle east, Singapore and Korea. I don't think India will take this siting down if Unionpay becomes a success.

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>>27
RuPay is a card network, and many countries have those, not to mention that there are all kinds of alliances between them. This is one of those cases where the best quick-and-dirty guide is wikipedia:
https://en.wikipedia.org/wiki/Card_reciprocal_agreements
CIPS is more interesting in this case, because this is pretty much a copy of SWIFT that is meant to deal only with renminbi. SWIFT is a messaging system for international wire-transfers, not for card payments. Yurop has SEPA, which is also a similar deal, but it's obviously meant to help sending Europesos between European countries. India doesn't need anything like this, because they don't really send rupees to other countries in such large quantities, so they can just rely on SWIFT for their international transactions. And that is also true about China, but they want to slowly replace the dollar with the renminbi, and so they have their own transaction system to help with that.

And I nearly forgot, but Russia also has their own payment system for credit and debit cards, it's called MIR. It's a bit strange that they switched to UnionPay instead of developing it further, but I assume they want to use Shina as sort of a shield, because sanctioning Mir is quite easy, but sanctioning UnionPay means sanctioning Shina.

>>17
>The less influence backward country has over western ones, the less problem the latter have to deal with.
LOL. The 'problem', the evil, is less likely to come from the 'backward country' during current year, and much more likely to originate from the West. The JewSA, for example is sort of a penultimate example case of the evils of ZOG over the earth.

I'd rather live with a bunch of friendly aboriginals, than with a bunch of evil kikes in Manhattan today.

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Russia warns it may be forced to pay FX debt in roubles due to sanctions
https://archive.ph/NzB0b
>March 14 (Reuters) - Russia's finance ministry said on Monday it had approved a temporary procedure for repaying foreign currency debt, but warned that payments would be made in roubles if sanctions prevent banks from honouring debts in the currency of issue. Western sanctions over events in Ukraine have cut Russia off from key parts of global financial markets, triggering its worst economic crisis since the 1991 fall of the Soviet Union. "Claims that Russia cannot fulfil its sovereign debt obligations are untrue," Finance Minister Anton Siluanov said in a statement. "We have the necessary funds to service our obligations." The government is due to pay $117 million on two of its dollar-denominated bonds on Wednesday. The ministry said it had approved a temporary procedure to allow banks to make payments in foreign currency, but said the possibility of those payments going through would depend on sanctions. Several Russian banks have been banned from the SWIFT international payments network, hampering efforts to move money outside of Russia. If payments are not possible, the finance ministry said it would make Eurobond repayments in roubles, which is tantamount to a default. The rouble has dived to record lows in recent weeks. "The freezing of the central bank and government's foreign currency accounts can be seen as a desire from several Western countries to organise an artificial default," Siluanov said.

>>45
What would Russia defaulting on their debt spell for Europe? Didn't Brazil do it just fine?

>>46
Nearly all of their foreign assets are frozen anyway, so they could tell their creditors to take up the issue with all those governments. Otherwise a country going bankrupt depends on how much they rely on foreign trade, and so I think it wouldn't make much difference at this point for the Russians. You'd pretty much end up with some investors who are upset over that lost money,  but again, they could just petition various governments for those Russian assets, and I can already see lengthy legal battles ahead.

>>45
https://archive.md/r2JJn
>As JPMorgan sought the okay from regulators, the U.S. Treasury Department was also working to clarify its own stance on the payments. The agency said Wednesday its restrictions on dealings with Russia’s central bank and other Russian institutions don’t bar that country from making payments on its dollar debt. Still, that carve-out will expire: U.S. persons are only authorized to receive interest, dividend, or maturity payments on debt or equity from Russia’s central bank, national wealth fund and finance ministry until May 25.
tl;dr is that Russia is still allowed to pay for her government bonds until the 25th of May, and we have to wait until then for something interesting.

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I have very little financial knowledge so take what I say with a grain of salt and please correct me.
https://archive.ph/vV4IL
>France impounded 22 million euro's worth of Russian Central Bank account funds and 150 million euro's worth of "private citizen" investments, plus another 700 million worth of private real estate.
Don't know how much of these investments are from Russian oligarchs, but even so, is this normal for sanctions?

>>17
>The less influence backward country has over western ones, the less problem the latter have to deal with.
Isn't it more lucrative the more countries, whether they be backward, western, or both, use a financial system? I was told that plenty of countries all around the world hold and trade in dollars which contribute to its value. The less people that use it, the less value it has. I don't know how things are going to play out, but with how hard China and Russia are trying to make the petroyuan and the gasruble into a reality makes me think that having more countries use your own currency and financial systems ends up being more beneficial than whatever influence a country using it might have on you.

>>27
>>28
From what I have found, the poos are pretty adamant about jumping on the bandwagon. I had the assumption that this whole fiasco would sow distrust in a centralized and/or global financial system, but I didn't think it would happen so fast. I mean, I have already been hearing talks about a national parallel economy here in burgerland so having a global one doesn't seem out of the picture with the way things are going.

'Find roubles' if you want Russian oil, grain or metals, top lawmaker says
https://archive.ph/NkVEp
>Register now for FREE unlimited access to Reuters.com LONDON, March 30 (Reuters) - Russia's top lawmaker warned the European Union on Wednesday that if it wanted Russian natural gas then it would have to pay in roubles, and cautioned that oil, grain, metals, fertiliser, coal and timber exports could also soon be priced in roubles. After the West imposed crippling sanctions on Russia after the invasion of Ukraine, Russian President Vladimir Putin has ordered that natural gas exported to Europe or the United States be paid for in roubles.

>>61
>Don't know how much of these investments are from Russian oligarchs, but even so, is this normal for sanctions?
In a total war this much is to be expected. But considering how they are not in a war with Russia, this really is way too hostile, to the point that Putin is right to take it as a declaration of war.

>having more countries use your own currency and financial systems ends up being more beneficial than whatever influence a country using it might have on you.
Let's say that you are the strongman of a third world country (third world in a sense of not being part of either block) during the first half Cold War, and you export oil and minerals. If you ask your trade partners to pay you in dollars, then you can spend those dollars in America to buy more and better machines so that you can mine minerals and drill oil a lot better. You can also buy fancy and expensive 'merican cars for your family members, or just convert it to pure gold at a rate of $35 for an ounce. At this point the US really is the world's strongest economy, so you get some very good value for your dollars. 

Now, let's say that your country has very little timber, but you have access to the sea, so you can buy it from an other third world country. Said third world country also concludes that getting those sweet, sweet dollars is a good thing, so they tell you that you should pay for their timber with dollars. And that is fine, because you have $$$$, so you pay them. Not a single American is involved in this exchange, yet you are spending their money. After a while everyone outside the commieblock start asking for dollars, and it means that if a burger shows up anywhere, he can exchange his dollars to the local currency at a very good rate, and buy whatever he wants or needs. This is good if he is a tourist looking for cheap booze and cheaper whores, but it's even better if he is a businessman looking for raw materials, or finished goods, or manpower, or anything else. 

The problem is that at some point the dollar stopped being backed by the economic might of the US, and instead it is valuable simply because people want to use it for international trade. And the FED uses and abuses this fact to finance the US Federal Government's unwholesome spending habits. The value of the dollar is still inflating, but it's basically nothing compared to what would happen if all the world stopped syphoning out excess money from America. If a regional power is smart, it should want its currency to be accepted by weaker countries around it, and be recognized as all-around valuable globally, but without being the actual reserve currency of the world, lest it transitions to the second phase. At that point it is too divorced from the real economy, and it will encourage policies that are destructive in the long term, leading to their eventual collapse.

>that vid
Poos are going wild, and I love them for this. It really feels like we are seeing the world being shattered in real time.

>>62
Gold backed ruble soon. Or, atleast hopefully. It might end up causing bit of a shitshow when the sacred petrodollar-tree gets shaken up.

==Russia proposes SWIFT alternative to India for Ruble payments=

>India’s government is considering a proposal from Russia to use a system developed by the Russian central bank for bilateral payments, according to people with knowledge of the matter, as the Asian nation seeks to buy oil and weapons from the sanctions-hit country.

>The plan involves rupee-ruble-denominated payments using Russia’s messaging system SPFS, the people said, asking not to be identified discussing confidential deliberations. No final decision has been taken and the matter will probably be discussed when Russian Foreign Minister Sergei Lavrov arrives in India for a two-day visit Thursday.

>A finance ministry spokesman wasn’t immediately available for a comment.

I>ndia is keen to continue bilateral trade due to its dependency on Russian weapons and the prospect of buying cheaper oil as global prices surge. Prime Minister Narendra Modi’s government has been pushing back against pressure from Western nations by arguing that arms purchases from Russia are needed to counter China’s growing military assertiveness.

>Under the proposal, rubles will be deposited into an Indian bank and converted into rupees and the same system will work in reverse, one of the people said. Undecided elements include whether the exchange rate will be fixed or floating.
Russia also wants India to link its Unified Payments Interface with their MIR payments system for seamless use of cards issued by Indian and Russian banks after Visa Inc. and Mastercard Inc. suspended operations, one of the people said.

T>he U.S., along with the European Union, cut off seven Russian banks from SWIFT -- the Belgium-based cross-border payment system operator -- including state-controlled VTB, Bank Rossiya and Bank Otkritie. Following the sweeping sanctions, Russia has been looking for alternate mechanisms to continue its trade hit by its war in Ukraine.
India has not outright condemned Moscow’s attack on its neighbor, saying only that Russia and Ukraine should end hostilities and seek a diplomatic solution through dialog. However, New Delhi is under pressure from fellow members of the Quad grouping, which includes the U.S., Australia and Japan, to take a stronger stand against Russia as the U.S. and its allies try to isolate Moscow. 

https://www.moneycontrol.com/news/world/russia-proposes-swift-alternative-to-india-for-ruble-payments-8295541.html

>>64
https://anon.cafe/k/res/30354.html#31042
Russia's 3-Step Program To Put The Ruble On A Gold Standard
https://archive.ph/kFb0u
>On March 25, the Bank of Russia announced that it would start buying gold from Russian banks at 5,000 Rubles per gram. At current exchange rates, that’s a steep discount, at least at first glance. What's the point of the Bank of Russia buying gold at a discount from its member banks, and why would its member banks sell gold at all at these rates unless forced to do so? You could try to say that the Bank of Russia is forcing the sales. Perhaps, but I don't think it's necessary to say so.
>This is the price differential between Brent crude and Urals crude, in other words the difference between the price of oil outside Russia and oil inside Russia. True, the two grades of oil are not exactly the same, but the arbitrage has clearly exploded since the Ukraine invasion began. The extreme differential is obviously because of sanctions that cut off much of the Russian oil market to the rest of the world, and so whatever Russian oil can get through the firewall is offered at a major discount.
>But the United States and its allies also are sanctioning Russian gold. And what does that do? It creates the same sort of price differential and arbitrage opportunity. Russian gold is much cheaper than non Russian gold now because Russian gold is cut off from the rest of the gold market and there's risk of retaliation if you get caught buying it from Russia. The London Bullion Market Association has already banned Russian gold from its registries.
>And so if you're a Russian bank and you have some gold and you can't sell it to someone out of the country except at a steep discount, and the Bank of Russia is offering to buy it from you at less of a discount, that's still a premium for you, and the Bank of Russia splits the difference, increases its gold reserves, and in that way stabilizes the Ruble. Below is the Ruble/Dollar exchange rate since the beginning of the year.
>The next step in this process is to strengthen the Ruble internationally. To do that, Russia has announced that it will only sell energy for Rubles to unfriendly countries, in other words countries sanctioning Russia. By doing so, demand for the Ruble picks up, which could eventually turn the 5000RUB discount internationally into a premium, encouraging more gold flows into Russia internationally as well, and further draining the West of its gold reserves in favor or Russia.
>This would stop the domestic flow of gold into the Bank of Russia, but it would encourage international flows, the logical next step after domestic supplies run dry.
>Why can the West not see what is happening? Because they're myopic. The mainstream financial press is so focused on the "Russia selling gold" angle because they're deeply Keynesian that they do not understand that gold is money, rather than the paper that they print, and that the paper only has value because it is still exchangeable for gold. This entire article from the Wall Street Journal for example is completely focused on Russia selling gold, rather than Russia buying it, which is what they are actually doing.
>True, Russia eventually needs to "sell gold" at some point to get stuff it needs. But Russia can do this without actually moving any of its gold. How so? It can simply declare the Ruble a hard gold substitute at a fixed exchange rate. In other words a gold standard. But before it does that, it first must make sure it has the required reserves if tested, which it's now doing by splitting the arbitrage offered by Western powers that have sanctioned its gold and cut it off from global markets.
>The Bank of Russia must also make sure its monetary policy is tight enough (now at 20% interest rates) to hold the line. Then it can insist on payment for Russian commodities in Rubles, now hard gold substitutes.
>That's the beauty of a money substitute, AKA a gold substitute in a gold standard system. The currency takes the place of gold, so you don't have to physically move the stuff, which is a pain and expensive.
>Western financial thought has this idea that if they cheapen Russian gold by sanctioning it, they're hurting Russia by lessening the amount of stuff they could potentially buy with that gold. In fact, they're actually helping Russia by encouraging gold inflows into the country and making it much cheaper for the Bank of Russia to amass much more gold to back the Ruble at a credible rate when the time comes.
>When is that time? Nobody knows for sure, or if it will ever indeed come, but the 5,000RUB/gram gold window closes June 30. What happens then? Does the Ruble become a fully backed gold substitute?
>Rather than speculate on the Ruble itself, it's easier, safer, and more practical just to buy gold and let the Bank of Russia decide what it wants to do with its own paper.

tl;dr-
>Step 1: Offer a premium fixed price for gold to domestic Russian banks who can't sell their gold internationally due to sanctions, encouraging domestic gold flows into Bank of Russia.
>Step 2: Strengthen the Ruble internationally by insisting on energy payments in Rubles, turning fixed price into a premium internationally as well, encouraging international gold flows into Russia.
>Step 3: Turn the Ruble into a credible gold substitute at a fixed rate.
>The 5000RUB window closes June 30. Does Russia declare the Ruble convertible to gold after that? At what rate? Rather than speculate on the Ruble, just buy the gold.

I've no idea they'd really do this or not, but it's true that being backed by gold only means something if you can just walk into a bank and exchange the money for gold without any problems. Otherwise it's just a pinky promise that means nothing, as convertibility will be suspended at the first sign of trouble. Th is is exactly what happened with the US dollar. In this sense, there is not that much difference between trusting the economy of a country to be strong and healthy enough so that its fiat money is worth something, and trusting a government to actually keep the gold-backed money convertible come hell or high water.

>>52
Russia says it sent $650 million bond payment in rubles after US Treasury blocked dollar transfers
https://archive.ph/QlCZf
>Russia on Wednesday said it had transferred $650 million worth of bond payments in rubles, raising fresh questions about whether the country is heading for an official default. The move came after the US on Monday banned Russia from making dollar debt payments from accounts at American financial institutions. Russia's Finance Ministry on Wednesday confirmed foreign banks had refused to process the $649.2 million payment in dollars, which were due Monday. It said it had instead sent the money to the country's National Settlement Depository in rubles. 
>The Ministry said it believes its obligations "have been fulfilled in full." However, ratings agencies have said they would consider Russia to have technically defaulted if it resorted to paying dollar-denominated debts in rubles. Credit ratings agency Fitch said in March that a "forced redenomination of payment obligations" would indicate "that a default or default-like process has begun." Fitch has since withdrawn all Russian ratings. Although some of Russia's foreign currency bonds specify that investors can be paid back in rubles in certain circumstances, the 2022 and 2042 bonds are not amongst them, according to JPMorgan. Analysts are highly doubtful about whether foreign holders of Russian dollar-denominated bonds would accept rubles, given that they signed up to be paid in dollars and global sanctions. 
>The US Treasury's Monday-night move was aimed at ramping up the economic pressure on Russia. It came as the US and Europe weighed up applying more sanctions to the country after reports emerged of possible war crimes in Ukraine. Bondholders can still receive dollar payments if Russia can find a way to send them without using immobilized funds in US accounts, a person familiar with the Treasury's thinking told Insider. But the Russian Finance Ministry's announcement suggested the country was not willing to find new avenues through which to send dollars, and instead was resorting to paying in its domestic currency.
So instead of actually paying top dollar, they have just deposited roubles on a Russian account and told the bond holders to sort things out if they want it. That is certainly not what was agreed upon, and now Russian bonds might be de facto worthless in the west. Yet one more crack appears.

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>>61
>Isn't it more lucrative the more countries, whether they be backward, western, or both, use a financial system?
Yes the system still should be able to block malicious state actors from accessing their own markets. 
Letting China access US markets is a mistake. China buys up US companies and technologies in addition to making cheaper & inferior copies of western products. It slowly took over US markets worldwide and now it's proposing its own financial system. This could've been avoided if China weren't trading with US in the first place.

>>70
>that map
I'm not calling it bullshit, but it's hard to believe that all the commblock countries traded more with the US than with each other. Or it does not count trade between COMECON countries as ˝real˝ trade?

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>>71
It looks like the map only cares about USA and China, and China while still were a communist country, it was always an outlier, so I can imagine countries actually traded more with USA than China. Also note that the Chinese economy only really took off 20-30 years ago, while USA were mostly stable during this timeframe (image from kikepedia, so take it too with a grain of salt). An USA vs USSR in the 80s and USA vs China now comparison probably would make more sense.
But on the other hand, Romania is like the whitest country on the map, while they were the most (along with Yugoslavia) fuck Moscow, we're doing things our own way country in the bloc, so who knows.

>>72
>It looks like the map only cares about USA and China
I see, I guess ˝A map that shows if a given country traded more with the USA or the PRC in a given year˝ does not have the same ring to it. 
>An USA vs USSR in the 80s and USA vs China now comparison probably would make more sense.
It seems to be one of those things that are hard to cram on a map, even if you use a fancy interactive one, because to do it properly you would have to include a chart or list that shows all trade partners by percentage for every country, and that is overwhelming enough so that you really could not see the forest from the trees.

wire service he had used for years to pay vendors in Ukraine had suddenly stopped working.

He contacted AmEx for an explanation. A representative told him that the company had suspended service in the country. “I understand Russia, but why Ukraine?” Mr. Nayandin, who is based in Fairfax County, Va., said he told the AmEx rep.

Like many American companies, AmEx suspended operations in Russia and Belarus after Western governments bombarded the two countries with sanctions. But AmEx went a step further by shutting down a service in war-torn Ukraine that businesses use to make cross-border payments.

“In light of the war in Ukraine and the changing sanctions environment, which has made it difficult to provide a reliable customer experience, we have suspended a wire transfer service, FXIP, which is used by a small number of companies to make vendor payments to recipients in Ukraine,” an AmEx spokesperson said in a statement.

AmEx’s better-known card business remains fully functional in Ukraine, the spokesperson said.

Sprawling sanctions meant to cripple Russia’s financial system sometimes trip people and businesses out of their reach, even in Ukraine, the country they were meant to help.

Financial firms often take an overzealous approach to interpreting penalties due to the harsh penalties for violations. The potential extension of sanctions to new targets may also make companies cautious about who they do business with.

“From a business perspective, if the deal size is small, why take the risk? said Robert Clifton Burns, senior counsel at the law firm Crowell & Moring LLP.

AmEx’s decision stems in part from concerns that the payments could end up in the hands of sanctioned people and companies in Russia-backed breakaway regions in Ukraine, a person familiar with the matter said.

In February, President Biden ordered sweeping sanctions blocking transactions with breakaway regions, known as the Donetsk and Luhansk People’s Republics. But the regions don’t have clearly defined borders, making it difficult for companies to ensure they don’t run afoul of sanctions, Mr Burns said.

AmEx hasn’t blocked card payments in Ukraine because it has more details about the parties to those transactions, which makes it easier to come into compliance, the person said.

Global money transfer services such as MoneyGram,

Western Union and Wise continue to allow payments to Ukraine, even though war has forced branch closures and other disruptions. Many of the major remittance senders have either waived or reduced fees on transfers to Ukraine, where remittances have soared.

FXIP represents less than 1% of AmEx’s total revenue, the AmEx spokesperson said. Ukraine is a small market for FXIP, accounting for just 0.1% of the platform’s volume over the past 12 months, the person familiar with the matter said.

Mr Nayandin, of flower delivery company cyber-florist.com, used other services, including Western Union, after FXIP went out of business.

The consequences of the harsh economic sanctions against Russia are already being felt around the world. The WSJ’s Greg Ip joins other experts in explaining the significance of what has happened so far and how the conflict could transform the global economy. Photo illustration: Alexandre Hotz
Eugene Gordiyenko was also exasperated to learn that AmEx had suspended FXIP in Ukraine.

Mr. Gordiyenko runs a small design, communications and IT consulting firm in Vienna, Va., and used FXIP to pay his eight Ukraine-based employees. In March, he discovered that the templates with his employees’ saved account information no longer existed.

He thought it was a mistake, until an AmEx representative told him otherwise. The rep put him in touch with a vice president of AmEx’s foreign exchange division.

“Do you understand that this country needs money? Mr. Gordiyenko remembers telling him. The vice president expressed sympathy for Ukraine, Gordiyenko said, but told him the decision came from above and was based on an internal risk analysis.

Morgan Williams, chairman of the US-Ukraine Business Council, blasted AmEx’s decision. “We don’t think Ukraine deserves this kind of treatment from American Express,” he said.

AmEx has committed $1 million to support humanitarian efforts in Ukraine, the company spokesperson said.

In 2014, some US banks cut services to Ukraine after the United States sanctioned Russia for its annexation of Ukraine’s Crimean Peninsula, Williams recalled. His trade group contacted the banks to explain that they were misinterpreting the Crimean sanctions to target the wrong country, and they resolved the issue, Mr Williams said.

“The ignorance of this part of the world in American financial institutions surprised us,” he said.

https://goodwordnews.com/russian-sanctions-led-american-express-to-cut-ukraines-financial-lifeline/

>>79
I cannot find anything about how this FXIP thing works from a technical perspective, but what makes international wire-transfers somehow complicated is that the national banking systems are not directly connected (hence SWIFT and everything else discussed ITT). The usual solution is that a bank opens an account at a foreign bank, and use that as an ˝access point˝ to the banking system of that country. I suspect AmEx also has at least one bank account in every country where it's available, in order to deal with card payments, and this system piggybacks on that. So instead of using the normal method of sending funds from a bank account in one country to a foreign bank account, they credit the sender's money on the AmEx bank account in the sender's country, and then the once receiving the funds gets them from the AmEx bank account in his country. 

In short, it really has nothing to do with the technological side of things, instead they simply decided that they won't use their Ukrainian bank account to send money to individuals and businesses.