Consequences of Ruble crashing and SWIFT ban on Russia?
Updated
We can continue to expect Ruble to crash further over the coming days and react to the sanctions. The current level of momentum is extreme, and this move isn't going to stop suddenly.
However, this all makes me think, what are the short-term and long-term consequences of the SWIFT ban of Russia/Ruble? There are a couple of obvious ones, so let's go through those here:
- Energy prices will climb, especially in Europe.
- We all know the consequences of that; inflation will continue to skyrocket (everything uses energy, from food to our homes).
- China and Russia could be forced into an even stronger alliance.
Things that may not be so obvious:
- Regional countries that heavily depend on the Russian economy that got a firm grip by Russia would be forced to transact primarily with Russia to keep their economy afloat.
- This will cause the velocity of the dollar to decline
What are the consequences of the velocity of the dollar exchange dropping?
- Ultimately, I think this is bad news for the dollar and the western economies.
- Trust in SWIFT could deteriorate, and this very well might be the blow to resetting the financial system as we know it today.
Could this be very good for Crypto?
- People will for sure try and move towards Crypto. I think we see that already (coindesk.com/markets/2022/02/28/ruble-denominated-bitcoin-volumes-surges-to-9-month-highs/)
- Could the government embrace Crypto and start to transact in Crypto? It's a long shot but a possibility.
These are just a few of my thoughts about what's happening. I'm not an economist, and this is not trading advice. I just wanted to share and see what everyone else thinks about this.
However, this all makes me think, what are the short-term and long-term consequences of the SWIFT ban of Russia/Ruble? There are a couple of obvious ones, so let's go through those here:
- Energy prices will climb, especially in Europe.
- We all know the consequences of that; inflation will continue to skyrocket (everything uses energy, from food to our homes).
- China and Russia could be forced into an even stronger alliance.
Things that may not be so obvious:
- Regional countries that heavily depend on the Russian economy that got a firm grip by Russia would be forced to transact primarily with Russia to keep their economy afloat.
- This will cause the velocity of the dollar to decline
What are the consequences of the velocity of the dollar exchange dropping?
- Ultimately, I think this is bad news for the dollar and the western economies.
- Trust in SWIFT could deteriorate, and this very well might be the blow to resetting the financial system as we know it today.
Could this be very good for Crypto?
- People will for sure try and move towards Crypto. I think we see that already (coindesk.com/markets/2022/02/28/ruble-denominated-bitcoin-volumes-surges-to-9-month-highs/)
- Could the government embrace Crypto and start to transact in Crypto? It's a long shot but a possibility.
These are just a few of my thoughts about what's happening. I'm not an economist, and this is not trading advice. I just wanted to share and see what everyone else thinks about this.
Note
To sum it all up, the action by the US/EU feels like a massive earthquake in the sea of the financial system, and a slow-rolling massive tsunami might be the consequence... We are a global economy, one major move like this will have an equal and opposite reaction. It's just physics ;-)
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