"Mild Sanctions"

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Russia penetrated Ukraine through 4 sectors with troops that are not elites.

This says something important, that not taking control of Kiev was planned, waiting for the right moment to find a negotiation with favorable terms.

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Now, ?What could Russia look for with its foot on the accelerator on Ukrainian soil?

A negotiation in Belarus, which contained the proposals by the US and NATO, which are not part of what the Kremlin is looking for in the first instance, but which serves to let the capitalist system that it hates so much “bleed” for a few more days .

Russia has control of Ukraine without its capital, something that with its elite troops it would achieve in a short time.

But if the negotiation is based on sanctions, what the fine print of the Coalition's proposal requires is that the armed conflict cease with a "ceasefire".

If Russia accepts, ?Would it do so within Ukrainian territory?

Then win.

If the sanctions were withdrawn, ?Then what would be the result?

Then win.

But if an agreement is not reached, spilling more blood is not a setback for Russia, as it was warned, it has no problem dealing with it.

?Prypyat Gathering

The nature of the meeting was about the cessation of the conflict, but not the withdrawal of Russian forces. For that, Putin knows that they have to get him out, something that the US and Europe have not decided to do. Putin knows that.

Among the conditions for the resolution of the conflict raised by Russia are:

*The recognition of Crimea as Russian territory.

*The demilitarization of Ukraine.

*The "denazification" of the Ukrainian state.

*The promise of neutral (country) status by Ukraine.

“But surprisingly he does not talk about giving an inch of Ukraine”

?Thought Sanctions

Yes, they believed that a former Russian spy would not contemplate in his strategy, the disciplinary measures that they were going to adopt as in 2014.

"Then the West did not learn anything and was wasting time inflating the pi?ata, full of all the financial bubbles of recent times."

Instead, they struck back against Swift sanctions, with Russia's Central Bank ordering market players to "reject" offers from foreign clients to sell Russian securities from 0400 GMT on Monday, via a document sent to Bank for International Settlements.

?Experience

In the Russian Central Bank is Elvira Nabiúllina, twice Economist of the Year in 2015 Euromoney named her Central Bank Governor of the Year in 2015 for her work in the Crimea conflict and in 2017 The Banker awarded her as Central Banker of the Year, in Europe.

*In addition, it is the only cabinet in the world that already lived through this experience 8 years ago and grew up under a war economy. It would be good if we start thinking seriously, that we are entering an unknown game created by Russia.*

?Russian BC Activity

?Since 2014 Russia (after the Crimean conflict) has been shedding its assets in dollars, to the point of reducing from 41% to 17% in 2021.

?? So far this year, it has reduced it by 10%, leaving only 7% of its reserves in dollars.

??Your reserves are made up of different currencies in addition to the dollar, euro, pound sterling, gold, yuan.

??The war began with reserves of US$643,000M

??3% of your bookings in Canada, 3% in Austria, 5% in UK, 7% in USA, 10% in Germany, 10% in Japan and 12% in France.?In addition, it has 14% in China and 22% in gold.?Which adds up to 50% of the reserves, here the countries that blocked financially through Swift.

?International Repercussions

?? The Ruble lost 22% in one day and the volatility generated a contagion effect to the rest of the currency market.

?Goal Accomplished for Russia.

?Many said that in a desperate measure the Russian BC drastically raised the rate to 20%.

??Russian bonds plummeted 50% YTD. But for investors, not for Russia, it is important to tell it like it is.

"But everything indicates that it was premeditated by Russia long before, than the analysts who read blackboards."

?Who believes that with these sanctions Russia is going to pay those bonds??

Naive!

??? The market sees serious risks of imminent default. Yes, for the market, not for Russia, which had an 8-year plan, maintaining the same cabinet that strengthened its reserves by 650 billion.

"The problem lies with the false analysts and their investors, not with the market," they say from Wall Street, tired of analysts who these days sell yields of 64% of the Russian debt of 2023??.

"Those who sell fear are the analysts who sell unpayable debt and in the face of loss they climb to the next debt with the best smell."

Strategic Agreements

But Russia was making strategic agreements with countries with ideological affinity. *China, Iran, Arabia, Kazakhstan, Venezuela, Turkey, India, South Africa, Brazil.*

Expected Sanctions

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Sanctioning Russia via SWIFT is not a smart thing to do, say the world's top analysts, as it is something the Kremlin contemplated before starting.

SWIFT is the backbone of the global financial system. It stands for Society for Worldwide Interbank Financial Telecommunications, it has been in operation since 1973 and is used by 11,000 banks in 200 countries or territories to be able to make transfers. Headquartered in Brussels but with a data center in Virginia, the Cooperatively-Owned Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is a "financial panoptic" that allows Washington to monitor cross-border fund flows.?However, real surveillance often comes to light.?New York, where 95% of the world's dollar payments are irrevocably settled.

?What are Chips?

The Clearing House Interbank Payments System, or CHIPS, is a private club of financial institutions.?Its 43 members settle $1.8 trillion in claims every day using a prefunded account at the Federal Reserve. All with offices in the US and subject to US law.

?China could benefit from SWIFT leaving Russia

“CIPS is not SWIFT or CHIPS?”

A circuit similar to the Swift of the West has been brewing for some time.?To shake off the yoke of CHIPS, China has set up its own Cross-Border Interbank Payment System. CIPS settles international claims in yuan and may operate its own courier network.

CIPS (The Cross-Border Interbank Payment System). It is an important financial market infrastructure in China and has grown rapidly.

But 40% of international payments in the world are in dollars. This is where e-CNY, the digital yuan, comes into the picture. The token is "technically ready" for cross-border use, although it is currently "primarily being used for domestic retail payments". That could change these days, as what if a Chinese partner country, company or individual were faced with the threat of not being able to send money abroad because CHIPS does not authorize the payment or SWIFT does not transmit instructions. Something that is happening today.

"This is why for some analysts like Jamie Dimon, China could benefit from the SWIFT ban, by intervening with its own payment messaging system and gaining more power in global finance". Since it is warned that Western sanctions on Russia could have "unintended consequences" and that market volatility is here to stay, given the high levels of uncertainty provided by the conflict in Ukraine.

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Can CIPS and e-CNY be the solution?

Beijing and Moscow may have already known the answer before they started after Russia's semi expulsion from SWIFT, it may be time they want to use it.

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A Ghost “Called Inflation”

Future deficits in supply, stock markets and raw materials are beginning to be seen, based on the sanctions imposed by the Western world in retaliation against Russia.

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But this really affects Russia or the world?

Both Russia and Ukraine are important players in grain, gas and oil exports, so the current rally in these assets generates even more concerns about higher inflationary pressures that may occur both in the US and in the world.

Price hikes punctually affect those who do not have the resources that Russia has and also those who cannot cover their dependent consumption, that is why the world will go through; Great inflation provided by the shortage that Vladimir Putin is going to generate. More fuel, food and the greater contraction in consumption.

?International Analysis

?The White House is looking for solutions and it seems that they are closer to the current President, where he is not even supported by his own party. Finding a way out is one of the issues being considered.

In Europe it is not much better, they are going to fully experience the crisis and differences in the European Union as a block.

?A light of hope at the end of the road??

Yes, Magdalena Andersson does not rest and is active to occupy the empty space of Merkel. And she sure seems to do well that she found the support of Christine Lagarde, Ursula Von der Leyen and now also Roberta Metsola. What powerful team will Europe have in those women, but will it be enough to get out of this great crisis?. They will definitely need them!

?Reflections on Light Sanctions

?The US treasury applied a series of sanctions to Russia in all orders. But at the request of the FED, it completely exempted Russian exports from: Fuels, Gas, Oil, Uranium, Nuclear Fuels, Wood, Coal and all Oil derivatives for the Plastics, Fertilizers and Petrochemical industry supplies, pharmaceutical, automotive and a number of essential elements such as X-ray tubes and the international space station aerospace cooperation.

That is, "There are no sanctions, great"

The intervention of the Republicans in this decision was crucial and that of the Democrats to save the White House more.

"This panic scenario is a problem for investors, not for the US" (phrase of some financial gurus).

"We must recognize that this is also capitalism, the weakest always lose."

The problem is that we are almost all capitalists on this planet and our society is going to fall into a domino effect.

That's why the “Great Reset”q and the “Neo Communism” are the same (although Klaus Schwab gets angry).

"A Great Reset" but not to continue the party of eternal debts (the Occidentalism) and the other to control everything (Communism).

*Somehow it would be positive, to say sometime, that the world will understand each other.*

After all, this is an “Open Society, Not So Open…”

"Open Society, Not So Open"

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Author: Diego Balverde

Senior Economist at International Monetary Fund & Fernando Graciano Rossi Research Analyst External for GLG.

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