USD BANNED in Russia–Putin’s War Economy in Crisis?

moscow’s Central exchange has been forbidden from using euros and dollars this is a significant blow to the average Russian but just what does it mean for Putin’s economy I’m Paul US Army Combat veteran let’s talk about it okay so this is a really interesting story because due to sanctions that went into effect uh two days ago the Russian stock market has suspended trades in US Dollars and Euros uh this is as part of a sanctions package directed against Moscow for its Ukraine Invasion now this has had the effect uh of really damaging at least the dollar to Rubble exchange rate um but it’s not really seeming as dramatic as one might think right and while this the uh Moscow exchange is considered the the default or the main currency exchange Hub um you have to also remember that uh for a lot of Russians holding their wealth in currencies other than the ruble is seen as just a prudent decision right they saw the ruble was extremely unstable for basically most of uh Russia’s uh history since the fall of the Soviet Union and so a lot of uh Russians prefer to hold their wealth in dollars and Euros currencies that they see as more stable and less likely to collapse again if you’ve ever been through one period of hyperinflation you basically remain scard for for life um I remember when I lived in Brazil uh any Brazilian over 40 often would ask me when they realized I was Americans if I American if I could pay in dollars um because they wanted to hold US dollars because they remember the time when inflation was so high that in the course of a year uh you know uh what used to be the price of a new car could become the price of bread the next year a loaf of bread so that’s why this is a a a fairly difficult blow to the average Russian but we’re going to talk in a second about why I think this isn’t actually that bad a deal uh for the Russian economy as a whole but of course first guys if you are interested in boosting your own person economy maybe you want to push a little 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those reviews the better off it is for those Amazon customers so thank you guys now here’s why I’m a little skeptical that this is going to have a really significant effect on the Russian economy Now CNN as they point out CNN business points out that many Russians do hold Savings in dollars a Euro mindful of periodic crises in recent decades when the rubles crashed in value the Central Bank though the the Russian Central Bank has said funds are secure and that’s because the Russian Central Bank is taking over for the Moscow Exchange they’re saying listen you are going to have to uh trade through the Moscow Central Bank if you want your currency but the central bank has has assured citizens that they’re going to keep this price the exchange rate relatively stable and the reason is because the bank can still purchase currencies from other Banks right one of the largest holders of US currency foreign currency reserves is what they’re officially called is the Chinese Central Bank so Russia can at least purchase enough to meet domestic demand for dollars and due to the sanctions demand for dollars because remember if you want to buy us Goods you have to pay in US currency if you want to buy European Goods you have to pay an European currency if you are an importer or exporter so in order to do that right in order to get those sort of uh uh think about it if you were if you wanted to import iPhones from the United States and sell them in Russia you’d have to take dollars purchase give them to a retailer in the United States purchase 10 iPhones go to Russia sell them for rubles and then exchange those rubles for dollars to purchase your next round of iPhones right and so the central bank is stepping in ensuring price stability and to meet that demand they’re purchasing dollars from likely central banks like China’s but here’s the real problem is that the sanctions have meant that there’s no one importing iPhones or very few people importing you know iPhones is my generic example of consumer goods there’s a lot less consumer good importing and so that means when you look at the actual volume of exchange the Chinese Yuan has actually ousted the dollar to become Moscow exchange’s most traded currency 53% of all currency traded of all the global currencies in the Moscow exchange were you on for Ruble trades dollar trading volume tends to be about $1 million a day right while Euro Rubble trading is around $3 million a day but youan Rubble trading daily volumes 90 million so for every one time a musite or a a Russian citizen needs to exchange uh you know whatever it is 86 rubles for $1 they do nine times transaction that transaction happens nine times for the uan so right there should tell you that between the Moscow Central Bank stabilizing prices and the fact that the the the the you know sinification of the US currency US exchange rate that is why you’re seeing um that this is not having that much of an effect and when you look at the Moscow exchange uh stock price you see exactly what we’re talking about here is the one-year View you could see that actually it’s slightly up year-over-year over the 5-year course right you could see uh right here is 2021 you have moscow’s Invasion February 2022 the economy looks real bad sanctions are hit and then slowly Moscow makes deals right it makes deals with any country that’ll do business with it finds ways around the sanctions and continues to grow the Moscow economy now you can see that in the last 3 months that this has hit you know this this exchange rate um sanction has hit the economy a little bit taking it from about a 35 to about a 32 a 10% fall which is significant but that is a far cry from a total collapse or a disaster for Putin’s economy so the the the Russian war economy is unfortunately firmly intact and this is a little troubling because it’s showing that the Yuan which remember China has been committed like committed for decades to keep the Yuan um uh stable in terms of price and stable and Export friendly um and so China spends tremendously to do so but it also ensures that it makes the uan a desirable currency for other countries right they’re banking you know the uan is ultimately backed by the size and stability of the Chinese economy which is near the US economy in terms of size and again govern by a stable government that’s not that understands the value of a stable currency and that’s very appealing uh to uh muscovites and other International Traders so anyway guys that’s all I had thank you to the colonel tier members of combat news.com if you guys are members you might notice the site’s under construction don’t worry about it uh we’ve got uh we’re we’re totally revamping the site going to make it way more user friendly I know it’s been kind of Chao um but understand that that you might see the login screens change a little bit again we’re going to try to keep it stable until the um until the new roll out but I really appreciate you guys thank you so much for your support I appreciate it and I’ll see you guys in the next one cheers

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Original Video:
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https://www.understandingwar.org/backgrounder/ukraine-conflict-updates

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42 comments

  18. Gotta give that bastard Putin credit, he did a good job anticipating the sanctions. He really prepared the economy over there for the worst

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  25. China's Forex reserves are around $3.2 trillion. However only about 25% is held as USD (so that is about $750 billion). Plus the Chinese are not stupid and are not about to exchange USD for Russian Rubbles at artificial rate. The Chinese might be willing to sell the Russians dollars but they are going to squeeze hard whilst doing so. How long the Russian can then maintain that is probably not that long.

  28. 😂😂😂 delusional yanks 😂😂😂 ……. laughing at Russias economy……. while your own economy is built on debt, 34 trillion in debt, and rising 1 trillion every 100days, hope you're ready for that bubble to burst 😂😂😂

  31. Hey dude, Brazilians asked you to pay in dollars because then they change the dollars into the local currency and in that change they get more profit. Basically if something costed 100 reals, and you pay that in dollars, they get 120 reals. Basically they were cheating you. They don't ask you for dollars in order to keep them, or because the dollar is more stable.

  33. Saudi arabia abandoned petrodollar, whats going to happen next? Would love to hear your analysis on this matter.. imterestingly enough american mainstream news channels aren't reporting it, but have seen quite a few videos on it from indians and some american youtubers.

  34. Petro dollar is done. Our small banks are going to collapse. Hell with them, we got our own shit to worry about. Our credit rating went down. Inflation and intrest rates are shit. 34 trillion in Dept. We're on the titanic

  35. Something set the crypto-bots goings nuts again tonight. Looking at the economy in question , I don't think it will be able to survive the hit in the long run as it isn't in a strong place and the Chinese economy is more or less in a crisis of its own therefore it probably won't be able to subsidize the Russian government by accepting anything other than dollars. China wants to become an alternative currency to the dollar but it is still a very long way from becoming it. The whole sordid story of oil and sanctions is basically proof of it. Look up Joe blogs if you want the long story of the economics involved.

  40. Stick to combat mate, the chineese economy would need to grow 41% to match the U.S economy. That isnt parity or "near the size of the U.S", also you are not considering second order effects of the treasury sanctioning chinese and russian banks. While not wat ending, in terms of living standards for russians who evetually will get sick of the war, will take a drastic hit. There will be second order political effects among putins support base.

  42. I wonder just how diverse the Russian stock market is last time I checked it was based on global trade and the all mighty dollar runs the show in that cash flow LoL

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