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Russia warns could 'reduce to zero' economic dependency on US

Can Russia financially hurt the USA?


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Is this a bunch of threatening rhetoric, with no legs?


Russia warns could 'reduce to zero' economic dependency on US

Russia could reduce to zero its economic dependency on the United States if Washington agreed sanctions against Moscow over Ukraine, a Kremlin aide said on Tuesday, warning that the American financial system faced a "crash" if this happened.
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"We would find a way not just to reduce our dependency on the United States to zero but to emerge from those sanctions with great benefits for ourselves," said Kremlin economic aide Sergei Glazyev.

He told the RIA Novosti news agency Russia could stop using dollars for international transactions and create its own payment system using its "wonderful trade and economic relations with our partners in the East and South."

Russian firms and banks would also not return loans from American financial institutions, he said.

"An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system," he added.


According to the below article, it's highly improbable.


So Russia is going to abandon the dollar as a reserve currency? Good luck with that one – Telegraph Blogs

I've written before about the inevitability of decline for the dollar as the world's major reserve currency, but this process is on a very long fuse and basically depends on China eventually displacing the US as the world's largest economy.

That's not going to happen any time soon. In the meantime, the dollar remains overwhelmingly the currency of choice for international transactions, and is the middle currency in virtually all transactions. For instance, if you were looking to buy Singapore dollars with Russian roubles, you would typically first buy US dollars with your roubles and then swap them into Singapore dollars. The US dollar is also the pricing currency for virtually all commodity transactions, including crucially, oil. Repeated attempts to set up alternative pricing arrangements have all come to nothing.

Then finally, more than 60 per cent of the world's central bank foreign currency reserves are held in dollars. The euro, the next biggest reserve currency, comes nowhere close. This is not about to change. In other words, Russian threats are as vacuous as Western ones. Hey ho.
 
Well, that's a measured response from Russia. Of course they would and could replace any transactions that involved the US and Russia in the light of sanctions. Especially since any sanctions would not come from a group of nations but unilaterally from the US. They could indeed hurt the US a bit by abandoning the dollar as trade currency for them and their trdaing partners/ Wouldn't ruin us, but wouldn't make our future of mholding the default trading currency any brighter.

Thank god China is the decider here. If it were any other nation we'd be boned. The moment China decides the default currency is no longer the dollar, the US falls to it's massive debt.
 
Any major player in the global economy can cause issues for others but, there are a finite number of producers and consumers at any one time
 
I don't believe that cutting Russia off would create a big issue for the USA; though this whole situation is just another proof that we should not be involved in foreign entanglements.
 
Any major player in the global economy can cause issues for others but, there are a finite number of producers and consumers at any one time

Russia is far from a major player they are barely above 3rd world status and that is because of oil and gas reserves.
 
Is this a bunch of threatening rhetoric, with no legs?





According to the below article, it's highly improbable.

Russia has $200 billion in US bonds and could dump them to drop US Dollar value. Russia is the World's largest energy exporter and could price its' energy in Rubles and reduce demand for the US Petrodollar. Russia runs a surplus not a debt as the USA does. I think Putin usually does what's best for Russia and gives the World the finger regarding
hypocritical accusations of Imperialism, expansion, etc. We are the ones that screwed Russia after the breakup of the USSR by encroaching upon Russia with NATO, missile bases and economic interference (a la Ukraine). If you check the inputs for all those pipelines bottlenecked through Ukraine, you will observe that the pipelines are filled with Russian petro. I wonder who controls the valves at the input? It's the typical Russian bear and do you want to poke the bear with a short stick in the bear's own badkyard? It doesn't require rocket science to analyze the problems and solutions for the Ukraine. I, for one, trust Putin and see in all the dealings since the USSR breakup that the USA has been dealing from the bottom of the deck.

Russia has $200 billion in US bonds and could dump them to drop US Dollar value. Russia is the World's largest energy exporter and could price its' energy in Rubles and reduce demand for the US Petrodollar. Russia runs a surplus not a debt as the USA does. I think Putin usually does what's best for Russia and gives the World the finger regarding
hypocritical accusations of Imperialism, expansion, etc. We are the ones that screwed Russia after the breakup of the USSR by encroaching upon Russia with NATO, missile bases and economic interference (a la Ukraine). If you check the inputs for all those pipelines bottlenecked through Ukraine, you will observe that the pipelines are filled with Russian petro. I wonder who controls the valves at the input? It's the typical Russian bear and do you want to poke the bear with a short stick in the bear's own badkyard? It doesn't require rocket science to analyze the problems and solutions for the Ukraine. I, for one, trust Putin and see in all the dealings since the USSR breakup that the USA has been dealing from the bottom of the deck.



According to the below article, it's highly improbable.[/QUOTE]
 
Then why haven't they done so already?
 
Especially since any sanctions would not come from a group of nations but unilaterally from the US.

Why on earth would you say that?
 
Russia has $200 billion in US bonds and could dump them to drop US Dollar value.

Back in June of 2013 China and Japan between them dumped about $40 billion in Treasuries.

By November we were up to about $120 billion in net outflows, the biggest Exodus from U.S. bonds since 1977.

During that period the DYX feel by ~3%.

Did you notice?

I didn't.

My wife and I bought two new cars, she got a new job, I got a raise, nothing but good economic stuff happened.

Now, explain to me why Russia dumping $200 million worth of bonds matters?
 
Back in June of 2013 China and Japan between them dumped about $40 billion in Treasuries.

By November we were up to about $120 billion in net outflows, the biggest Exodus from U.S. bonds since 1977.

During that period the DYX feel by ~3%.

Did you notice?

I didn't.

My wife and I bought two new cars, she got a new job, I got a raise, nothing but good economic stuff happened.

Now, explain to me why Russia dumping $200 million worth of bonds matters?

That would be $200 BILLION of US bonds. Russia is the World's second largest producer of oil. Pricing maybe 6,000,000 barrels per day in Rubles instead of dollars would also have an impact. I wouldn't hold my hand over my ass waiting for another new car if they do that.
 
Instead of talking about Russia-US relations, a bigger question may be,

How many European countries will rethink the benefits of fracking?
 
Back in June of 2013 China and Japan between them dumped about $40 billion in Treasuries.

By November we were up to about $120 billion in net outflows, the biggest Exodus from U.S. bonds since 1977.

During that period the DYX feel by ~3%.

Did you notice?

I didn't.

My wife and I bought two new cars, she got a new job, I got a raise, nothing but good economic stuff happened.

Now, explain to me why Russia dumping $200 million worth of bonds matters?

There were some who's lot improved during the depression, too. I think the risk is the point. And for what, a country in which half the citizens are pro Russian anyway.
 
That would be $200 BILLION of US bonds.

Right, roughly equivalent to the recent sell-off, a little less but still in the same church.

We're not talking about numbers large enough to have a significant effect the economy.

It'll have an effect, sure, but it's not a game-changer by any means.

Keep in mind that "dumping" bonds just means that you sell them to someone else.

The U.S. would itself pick up a lot of that slack (the FED would force banks to buy them) but you also need to bear in mind that the $ is far and away the largest component of global currency reserves (roughly 65%).

That means that a LOT of places other than the U.S. have a very vested interest in ensuring that the bottom does not drop out of the $.

You really think $200 billion in U.S. Securities are going to have THAT hard of a time finding a new home?

I don't.

Again, a bunch of Chicken Little nonsense by the media to skeer folks into tuning in.

Russia is the World's second largest producer of oil. Pricing maybe 6,000,000 barrels per day in Rubles instead of dollars would also have an impact. I wouldn't hold my hand over my ass waiting for another new car if they do that.

Assumes that everyone is going to get on board with Russia's plan and agree to trade with Russia in RUB.

Who are Russia's biggest oil buyers?

Germany, Netherlands, the U.S., China (who already trades with Russia in RUB).

Well, we're certainly not going to agree to the new plan.

Germany and the rest of the EU?

Maybe.

They need Russia's oil, sure.

But economically Russia is largely a one trick pony.

The U.S. and EU CAN get oil elsewhere.

If the U.S. and EU stop buying Russian oil they'd be pretty hard pressed to sell it to anyone else and wouldn't have the infrastructure to do so even if they wanted to.

They'd effectively cripple themselves.

See, just because Russia threatens that it's going to do something (that will necessarily hurt them infinitely more than it'll hurt us if things go south on them) doesn't mean it's a credible threat.

But, again, they're scare mongering too because they know that most Americans aren't even financially savvy enough to live month-to-month on their minimum wage paycheck successfully, never-mind having the ability to parse threats to global finance.

Make a threat, make a claim, and next thing you know 500,000 Americans who have no idea WTF is happening are standing on the National Mall like Pavlov's dogs threatening (yapping) to vote their incumbent representatives out of office unless those people fix this mess, stat!!!!
 
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Then why haven't they done so already?

Because the threat of the nuclear option is more valuable than actually nuking the American economy. They can only actually screw us once. They can threaten to screw us many times, and get many concessions.
 
I still think that with the EU/US economies suffering as they are, we don't need to be adding any additional trouble, just because we don't like what Putin did in the Ukraine.
 
Right, roughly equivalent to the recent sell-off, a little less but still in the same church.

We're not talking about numbers large enough to have a significant effect the economy.

It'll have an effect, sure, but it's not a game-changer by any means.

Keep in mind that "dumping" bonds just means that you sell them to someone else.

The U.S. would itself pick up a lot of that slack (the FED would force banks to buy them) but you also need to bear in mind that the $ is far and away the largest component of global currency reserves (roughly 65%).

That means that a LOT of places other than the U.S. have a very vested interest in ensuring that the bottom does not drop out of the $.

You really think $200 billion in U.S. Securities are going to have THAT hard of a time finding a new home?

I don't.

Again, a bunch of Chicken Little nonsense by the media to skeer folks into tuning in.



Assumes that everyone is going to get on board with Russia's plan and agree to trade with Russia in RUB.

Who are Russia's biggest oil buyers?

Germany, Netherlands, the U.S., China (who already trades with Russia in RUB).

Well, we're certainly not going to agree to the new plan.

Germany and the rest of the EU?

Maybe.

They need Russia's oil, sure.

But economically Russia is largely a one trick pony.

The U.S. and EU CAN get oil elsewhere.

If the U.S. and EU stop buying Russian oil they'd be pretty hard pressed to sell it to anyone else and wouldn't have the infrastructure to do so even if they wanted to.

They'd effectively cripple themselves.

See, just because Russia threatens that it's going to do something (that will necessarily hurt them infinitely more than it'll hurt us if things go south on them) doesn't mean it's a credible threat.

But, again, they're scare mongering too because they know that most Americans aren't even financially savvy enough to live month-to-month on their minimum wage paycheck successfully, never-mind having the ability to parse threats to global finance.

Make a threat, make a claim, and next thing you know 500,000 Americans who have no idea WTF is happening are standing on the National Mall like Pavlov's dogs threatening (yapping) to vote their incumbent representatives out of office unless those people fix this mess, stat!!!!

The EU depends on Russia for natural gas.

Natural gas requires infrastructure, it's not like they can "get oil from somewhere else" like you laughably say. You need things like pipelines and distribution networks. Right now, Europe's only option is Russia.

Russia has Europe by the balls. That's why I've been saying from day 1 that Obama's economic threats are hollow and were a dumb idea to begin with.

What a joke this administration is.
 
I still think that with the EU/US economies suffering as they are, we don't need to be adding any additional trouble, just because we don't like what Putin did in the Ukraine.

Let's just roll over and let Russia do whatever they want. Can't see the harm in that...
 
Seems to me we've plenty of resources on our own, if we'd just get off our political dairy-aires to exploit them properly. Let's go out and build our oil and natural gas resources as we ought, putting what, some estimated 50,000 people to work in the process, and drive down the price of oil and natural gas - prices Russia NEEDS to be as high as possible to fund their government - and let's bring them to their knees economically (again), while kick-starting our economy, making us independent on foreign oil and put a stop to this nonsense.
 
Let's just roll over and let Russia do whatever they want. Can't see the harm in that...

Ok, well it appears your not in favour of punishing him economically, so what do you favour, a military response? I just don't think what Putins done is a big deal at all.
 
Ok, well it appears your not in favour of punishing him economically, so what do you favour, a military response? I just don't think what Putins done is a big deal at all.

We should have put reinforcements in Kiev yesterday. Negotiate from a position of strength.

Obama is a wimp and Putin knows it. He's a chicken**** coward, too scared to confront Putin. Obama throws out an ultimatum and Putin throws it back in his face, because he doesn't respect Obama and knows his threats are hollow.

It's ridiculous.
 
Seems to me we've plenty of resources on our own, if we'd just get off our political dairy-aires to exploit them properly. Let's go out and build our oil and natural gas resources as we ought, putting what, some estimated 50,000 people to work in the process, and drive down the price of oil and natural gas - prices Russia NEEDS to be as high as possible to fund their government - and let's bring them to their knees economically (again), while kick-starting our economy, making us independent on foreign oil and put a stop to this nonsense.

WE are fine, WE don't need Russia at all, the EUROPEANS are not. THEY need Russia. Get it?
 
WE are fine, WE don't need Russia at all, the EUROPEANS are not. THEY need Russia. Get it?
I get it. But if WE took advantage of our plentiful and abundant resources, like oil and natural gas, WE could sell them to the Europeans and then they'd be less dependent on Russia for them - which would force the Russians to drop their prices - who, btw NEED Europe to be buying their oil as much as Europe needs Russia at the moment to supply it.
 
I get it. But if WE took advantage of our plentiful and abundant resources, like oil and natural gas, WE could sell them to the Europeans and then they'd be less dependent on Russia for them - which would force the Russians to drop their prices - who, btw NEED Europe to be buying their oil as much as Europe needs Russia at the moment to supply it.

Yes, and that's in the works, but delivering oil and gas takes serious infrastructure. Long story short, it will be a couple years before we can sell gas to the Europeans. Russia can cut off their pipelines tomorrow. What's Europe gonna do in the meantime?
 
And I see this as another factor now added to the Keystone XL decision .
I get it. But if WE took advantage of our plentiful and abundant resources, like oil and natural gas, WE could sell them to the Europeans and then they'd be less dependent on Russia for them - which would force the Russians to drop their prices - who, btw NEED Europe to be buying their oil as much as Europe needs Russia at the moment to supply it.
 
Yes, and that's in the works, but delivering oil and gas takes serious infrastructure. Long story short, it will be a couple years before we can sell gas to the Europeans. Russia can cut off their pipelines tomorrow. What's Europe gonna do in the meantime?
No argument there. It's something we should've (could've) been working on for years now - and would've were it not for the yahoo in the WH now.
 
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