Russia threatens to dump the dollar

[Jukai]

This is the problem though...

If Russia says "We want Euros, no more US dollars." Can Europe just say "fine, we'll just stop buying oil and natural gas from you" when considering those pipelines?

Yes, yes they can. Russia would collapse very, very quickly just like the USSR. Then Europe would no longer have to worry about Russia trying to annex former satellite states like they are doing with Ukraine.

The problem with Russia is that they don't have an ally in this game. Not Europe, not the US, not even China.

 

[ben236]

Yes, yes they can. Russia would collapse very, very quickly just like the USSR. Then Europe would no longer have to worry about Russia trying to annex former satellite states like they are doing with Ukraine.

The problem with Russia is that they don't have an ally in this game. Not Europe, not the US, not even China.

Do you have any idea what would happen to oil prices in Europe if they did that? Would it really be worth it to them when they could simply pay for it in Euros?

Do you honestly believe that not having to worry about Russia trying to annex former satellite states would be the only consequence that would come as a result?

 

[Jukai]

Do you have any idea what would happen to oil prices in Europe if they did that? Would it really be worth it to them when they could simply pay for it in Euros?

Do you honestly believe that not having to worry about Russia trying to annex former satellite states would be the only consequence that would come as a result?

I think it would be very bad for everyone, but I think Russia would collapse extremely quickly and whatever leader took over the country that was Russia would likely restore the gas and oil trade with Europe.

And too be honest, I doubt it would ever happen, because Russia would surely be gone and Europe would likely be able to ride it out. It's not even comparable to nuclear assured destruction, it's more akin to a suicide attack just to damage the other side.

The THREAT of sanctions by the US had a ridiculous monetary effect on Russia. Russia is not as strong economically as it likes to paint itself--- hell, no nation really is, but Russia is so isolated on this issue that they have no recourse.

 

[Darkballs]

Do you have any idea what would happen to oil prices in Europe if they did that? Would it really be worth it to them when they could simply pay for it in Euros?

Oil prices in Europe would rise as nations there moved to secure oil and gas from other sources. At the same time, the Russian economy would tank from a dramatic lack in oil revenues.

Essentially, Russia would be threatening to commit economic suicide in order to inflict a moderate harm on Europe. Europe could easily call Russia's bluff on this one.

 

[crowded]

They don't have crystal balls,

I guess we're in agreement. Since economics is in large part psychology, or group psychology (sociology), its predictive value is going to be limited by the predictive value of the other disciplines it relies upon.

 

[ben236]

I think it would be very bad for everyone, but I think Russia would collapse extremely quickly and whatever leader took over the country that was Russia would likely restore the gas and oil trade with Europe.

And too be honest, I doubt it would ever happen, because Russia would surely be gone and Europe would likely be able to ride it out. It's not even comparable to nuclear assured destruction, it's more akin to a suicide attack just to damage the other side.

Europe would go into a depression if they got into a trade war with Russia without a doubt. Russia would to. Of course, if Russia was truly keen on not wanting US dollars, do you honestly believe that Europe would tank their economy just for the Ukraine?

Once again, Russia's threat is a response to the threat of imposing sanctions on them. This is all most likely political posturing in order to appeal to the ignorant masses, but the most logical outcome is that there will be no sanctions. But for some reason, the ignorant masses seem to be under the impression that Russia is basically North Korea and that there would be no consequences in getting in a trade war with them.

 

[ben236]

Oil prices in Europe would rise as nations there moved to secure oil and gas from other sources. At the same time, the Russian economy would tank from a dramatic lack in oil revenues.

Rise is an understatement. They would skyrocket which would most likely trigger a panic and cause them to skyrocket even further.

 

[ben236]

Europe

 

[Jukai]

Europe would go into a depression if they got into a trade war with Russia without a doubt. Russia would to. Of course, if Russia was truly keen on not wanting US dollars, do you honestly believe that Europe would tank their economy just for the Ukraine?

Once again, Russia's threat is a response to the threat of imposing sanctions on them. This is all most likely political posturing in order to appeal to the ignorant masses, but the most logical outcome is that there will be no sanctions. But for some reason, the ignorant masses seem to be under the impression that Russia is basically North Korea and that there would be no consequences in getting in a trade war with them.

I don't think you have any understanding about how quickly Russia would go through regime change if they dropped the dollar and demanded that their oil and gas only be traded via other currencies. Europe wouldn't have to wait for long. The THREAT of sanctions sent Russia's stocks dropping tens of billions of dollars. Now they are suddenly stable enough to drop the dollar?

It would be the end of Russia. The next leader would likely immediately reestablish trade with Europe.

 

[ben236]

I don't think you have any understanding about how quickly Russia would go through regime change if they dropped the dollar and demanded that their oil and gas only be traded via other currencies. Europe wouldn't have to wait for long.

Why would they wait at all and simply pay in Euros instead?

 

[Jukai]

Why would they wait at all?

Europe's history of constant appeasement didn't turn out well for them.

You seem to think that Europe is fighting the US's battle for them.

It's the opposite: This is Europe's fight, and the US is helping Europe out here. The Ukraine issue is a European issue. I just don't see Europe caving on this oil and gas issue.

 

[ben236]

Europe's history of constant appeasement didn't turn out well for them.

You seem to think that Europe is fighting the US's battle for them.

It's the opposite: This is Europe's fight, and the US is helping Europe out here. The Ukraine issue is a European issue. I just don't see Europe caving on this oil and gas issue.

If you think that Europe is going to tank their economy just for the Ukraine then you're out of your damn mind.

 

[IDL]

I believe they simply don't care. If you follow the comments on international news sites (as I do), it would seem that 80% of the world's population is convinced that somebody holding a foreign debt obligation can "call it in" at any moment and "demand repayment," like an evil landlord seeking to enforce a judgment against an insolvent debtor. Thus China will "demand repayment" and "cripple the US."

Why do people misunderstand so badly? Because They Want To Believe, which is the governing principle behind nearly all human beliefs, only sporadically punctuated, against the grain, by reason.

No I just look at the problem from a very different angle.

I think most of the 'competition' between countries is smoke and mirrors. Just look at how China is benefiting from all the trade policies and is allowed to buy up so many strategic assets in the West.

No long term strategist would allow that happen unless deals had been made. It makes more sense once you see the global financial network as a type of global influence. That's where the real power lies.

I prefer to look at the world like a big chess board and understand that most of what we see is just propaganda. Actions speak louder than words.

 

[Jukai]

If you think that Europe is going to tank their economy just for the Ukraine then you're out of your damn mind.

They won't have to, because Russia isn't going to destroy itself for the Ukraine.

 

[Jukai]

No I just look at the problem from a very different angle.

I think most of the 'competition' between countries is smoke and mirrors. Just look at how China is benefiting from all the trade policies and is allowed to buy up so many strategic assets in the West.

No long term strategist would allow that happen unless deals had been made. It makes more sense once you see the financial system as a type of global influence.

I prefer to look at the world like a big chess board and understand that most of what we see is just propaganda. Actions speak louder than words.

None of this remotely makes sense, haha

 

[Lead]

This was talked about in the book Currency Wars. It's an interesting idea to consider how it would affect the world. I don't think they will do it.

 

[ben236]

They won't have to, because Russia isn't going to destroy itself for the Ukraine.

They won't have to. Because they'll do what they want and no sanctions will be imposed.

 

[Jukai]

They won't have to. Because they'll do what they want and no sanctions will be imposed.

Hahaha, that is why Putin had to come out with a statement about how he was gonna work with American and Europe on resolving the Ukraine crisis to stop his country from having to prop up the country with reserves after just a THREAT of sanctions.

 

[IDL]

None of this remotely makes sense, haha

Don't play dumb with me, I know you better than that :icon_lol:

 

[Jack V Savage]

It reduces demand for US dollars when they can't be used to buy things from what is essentially the largest natural resource producer in the world.

This is predictably vague. Can you attempt to put some numbers out here and go into the mechanism a little further? Could be a bit of work so if you've seen anyone else do it, a link would be fine.

I guess we're in agreement. Since economics is in large part psychology, or group psychology (sociology), its predictive value is going to be limited by the predictive value of the other disciplines it relies upon.

Well, we're in agreement if you're spouting platitudes and staying away from making positive claims, but if you're saying that this flunky's "threat" would have any large impact on the American economy or that the minimal effect there would be would be negative, we're not.

If you think that Europe is going to tank their economy just for the Ukraine then you're out of your damn mind.

I think you greatly overestimate Russia's power here.