Sanctions have shown that currency reserves accumulated by central banks can be taken away. With China taking note, this may reshape geopolitics, economic management and even the international role of the U.S. dollar.

#The Most Important Thing 
https://www.wsj.com/articles/if-currency-reserves-arent-really-money-the-world-is-in-for-a-shock-11646311306?mod=e2fb&fbclid=IwAR2KqkXLr-eUCt5vihyPxCXmRbgC7wlOlSJPtMEKB3re3jmQU7muTTrxVrM

If Russian Currency Reserves Aren’t Really Money, the World Is in for a Shock

The Most Important Thing

Sanctions have shown that currency reserves accumulated by central banks can be taken away. With China taking note, this may reshape geopolitics, economic management and even the international role of the U.S. dollar.  #The Most Important Thing  https://www.wsj.com/articles/if-currency-reserves-arent-really-money-the-world-is-in-for-a-shock-11646311306?mod=e2fb&fbclid=IwAR2KqkXLr-eUCt5vihyPxCXmRbgC7wlOlSJPtMEKB3re3jmQU7muTTrxVrM

Sam Mendoza

Interesting. Dalios new book is New World Order?

I was shocked that even Switzerland quickly got onboard - financial/economic nuke is on full display: https://www.nytimes.com/2022/02/28/world/europe/switzerland-russian-assets-freeze.html

I do believe that this will hasten China’s urgency to require commodity exporters to deal in renminbi. 

According to Dalio’s new book, China import/export accounts for something like 30% of world trade, but only 4% of world trade is settled in RMB. As the largest importer of many commodities, and a monopolist exporter of several critical inputs for high tech finished goods (processed rare earths for example) it would seem they have leverage to require that gap to close

I was shocked that even Switzerland quickly got onboard - financial/economic nuke is on full display: https://www.nytimes.com/2022/02/28/world/europe/switzerland-russian-assets-freeze.html  I do believe that this will hasten China’s urgency to require commodity exporters to deal in renminbi.   According to Dalio’s new book, China import/export accounts for something like 30% of world trade, but only 4% of world trade is settled in RMB. As the largest importer of many commodities, and a monopolist exporter of several critical inputs for high tech finished goods (processed rare earths for example) it would seem they have leverage to require that gap to close

Alex

TechCrunch Social

Chris Nheu

Jerome Cody

The decision came amid mounting public anger at Russia’s invasion of Ukraine.

Switzerland says it will freeze Russian assets, setting aside a tradition of neutrality.

I am not a geopolitical expert, so I will not pretend to be one. I will point out that the financial sanctions being put on Russia by the West come in two flavors: 
(1) Government sanctions, and 
(2) Company sanctions. 

While the first type are clearly impactful, the second type is very impactful - VISA and Mastercard no long work for domestic Russians attempting purchased outside the country; within the country companies like McDonalds, P&G, Microsoft, Apple, Disney, Netflix, and Samsung ave all limited product options or pulled out entirely. 

What is interesting is that none of these companies were required to do so by their governments - they have taken that initiative on their own. Some of this is just a “strategic credit” (Apple has kept open their app store, but shut down purchases of new iphones - is this to support Ukraine, or because they don’t want to sell expensive hardware in a depreciating currency? The answer is both). But how many Netflix subscribers would really cancel their service if they knew it was still available in Russia? I expect not many. But Netflix executives still need to take action, because it is important for their EMPLOYEES.

I am not a geopolitical expert, so I will not pretend to be one. I will point out that the financial sanctions being put on Russia by the West come in two flavors:  (1) Government sanctions, and  (2) Company sanctions.   While the first type are clearly impactful, the second type is very impactful - VISA and Mastercard no long work for domestic Russians attempting purchased outside the country; within the country companies like McDonalds, P&G, Microsoft, Apple, Disney, Netflix, and Samsung ave all limited product options or pulled out entirely.   What is interesting is that none of these companies were required to do so by their governments - they have taken that initiative on their own. Some of this is just a “strategic credit” (Apple has kept open their app store, but shut down purchases of new iphones - is this to support Ukraine, or because they don’t want to sell expensive hardware in a depreciating currency? The answer is both). But how many Netflix subscribers would really cancel their service if they knew it was still available in Russia? I expect not many. But Netflix executives still need to take action, because it is important for their EMPLOYEES.

Sam Mendoza

A group of likeminded people in The Most Important Thing are talking about this.