Russian firms rush to open Chinese bank accounts
reuters.com
reuters.com
They are not in a position to demand anything because if they do, the dependency will soon be resolved. Europe is already working with the assumption that this is not future-proof, so alternatives will be found, rendering any demand useless.
Not even almighty China can lay heavy "demands" on the West or build dominant international alternatives. China needs the world far more than the world needs China. Just a few decades ago, we didn't depend on anything coming from China. We can dial that back.
The opposite is not true. China has a useless geography making them heavily dependent on many external geographies just to acquire the very basics to sustain their population.
The world wants the western model, even if imperfect. People migrate to the west, nobody wants to live in Russia or China. When given a choice, every former Soviet territory wants to join the EU, not Russia. I think that says enough.
However, at this point, China is extremely dependent on imports of commodities including food and other raw materials.
>China needs the world far more than the world needs China. Just a few decades ago, we didn't depend on anything coming from China. We can dial that back. A lot changes in decades, dialing back will take decades in the mean time there's mutual dependancy but PRC along with US are least dependant major economies in terms of trade:gdp and indigenous production. PRC hasnt been export driven for a while. China needs US and US needs China for the foreseeable future, neither needs anyone else.
> China has a useless geography As does most of west, OECD countries that can be self sufficient in energy is like US/CA/NO/NX. Most of west EU apart from France imports net calories. Granted there's major western producers for both but also many none west producers especially for critical minerals for PRC to tap. It's an issue if there's war when SLOCs are blocaded. But that's war and PRC produces enough of almost everything domestically for indefinite war economy. PRC is not Japan who needs to supply reources outside to maintain war economy. Of course no one is as blessed as US.
> world wants the western model Democracy index is declining globally, including in post soviet states, majority of whom are not even flawed democracies. Countries seem to be converging more towards PRC model if anything, including recent EU censorship and west broadly re-adopting PRC tier industrial policy.
> People migrate to the west Rich west with migration driven economies good at brain draining sure, but MENA authoritarian states get plenty of expats as well.
>former Soviet territory wants to join the EU For security not governance model. They've remained authoritaran/hybrid and general trend on democracy index in last few years have been decline.
The Russian stock market still hasn't even opened this week. They are basically going to have to start over economically. They are not going to build back the same way as they did the past 20 years. We have basically left them no choice other than to build back with China.
I think history will view this decision to completely cut them off from the Western financial system as a huge mistake. A completely myopic decision.
Hell I am pretty sure that even if it were public people would still not call it a "crypto currency".
It exists today.
Also probably just semi-public.
The Chinese government most likely can already see virtually all transactions made by the common Chinese folk, since WeChat/AliPay is very popular there.
Now when you have a cryptocurrency that uses an encrypted blockchain where the transactions are private and are only known by the sender and the receiver, then you know that the Chinese government will not like such a thing to be used since they know that the criminal gangs and scammers are most exactly going to use something like that with Signal E2EE and MobileCoin for their illegal activities.
Certainly, it is very easy to hide your laundered digital cash on MobileCoin than it is on Bitcoin, or a stablecoin.
-- Typically when I've seen authoritarian things it's authoritarian across most, but nice little exceptions for the "special" people.
There's no such thing as a backdoor for some limited group of people. If there's a backdoor then it's for anyone who can discover it and chooses to use it. This is the flaw in the thinking of every single politician who ever talks about encryption and crypto. You can't compromise the security in something and expect it to remain a secret. Things are either secure by design, or they're not secure.
This wouldn’t be done at the protocol level, in the same way one can get around TLS via MITM without sabotaging the encryption algorithms.
Still... I think the speculative scenario is unlikely. I myself am speculating massively here. But what I think is far more likely to happen with respect to crypto is that an international agreement akin to the Bretton Woods System is negotiated that mandates central banks hold a store of value such as Bitcoin. This will provide some foundation of measure for all currencies to be valued against. But the current financial system layer on top will remain intact.
Note, I'm an early Bitcoin hodler and have remained strongly suspicious of Putin's interest in Ethereum with agreements between the foundation and VEB like this one (https://www.coindesk.com/markets/2017/08/31/misunderstanding...), its handling of the DAO event, and Eth2.0's coincidental timing (its delays too) with the Ukraine invasion.
My somewhat speculative paranoia follows, but I strongly suspect Ethereum will NOT play a part in this new system because of the above issues. I think Putin calculated that Ethereum might be a viable alternative to a widespread financial system replacement that could have provided a means of bypassing any sanctions, which is why he went ahead with the Ukraine invasion.
In the end, if this Bretton Woods 2.0 system comes into effect, bitcoin will have failed to become the libertarian financial tool many people hoped it would. But its utility as a store of value can't be ignored and so it will have been co-opted/integrated into the existing financial system. It'll be another example of techno-utopianism naiveté like the 90s style vision of the web.
I also think there will be digital dollars issued by central banks. In that respect, I don't see Bitcoin being used for day to day financial transactions. I see it being used as a backing value store for these digital dollars though.
I think economists and central banks throughout the world are reluctantly coming to grips with the effects of going off Bretton Woods:
- There is more influence over financial cycles so they can be smoothed over to help with the functioning of day to day life. This is desirable.
- The above influence has gone too far and has created an epic asset bubble and economic disparity that is even concerning to many of the world's most powerful and wealthy (i.e., it's creating an existential risk to them). Obviously this is undesirable and even worse, the central banks have no potential solutions to deal with this in their existing toolchain.
Why do I think bitcoin will win out? Somewhat for the same reasons I'm skeptical of that backdoor scenario. The major national governments have little trust amongst themselves, this trust is getting worse, and we're seeing an adversarial situation play out.
- China and some other economies outside the G7 want off of the USD as a reserve currency
- The G7 are reluctant to accept a world in which China exerts the financial influence they give up
All will realize something in the world's financial system has to change and for the sake of world peace a new arrangement is worth a shot. But none of these adversaries trust each other in such a way that a nationally derived crypto would be acceptable as the basis for a value backing store. Furthermore, existing assets will inherently be untrustworthy too because they're in a bubble. Nobody knows the true value of a house any more. Step in crypto...
- I don't think it will be Ethereum because as I said, reputation has been tarnished (there may be Russian influence). But it also tries to do too much and that may be undesirable for a value backing store.
- I think it will end up being Bitcoin simply because it's a lot more simple. It does less. And furthermore, nobody really knows who invented it so it is inherently not tied to any given nation. Or at least there's plausible deniability about it having been invented by a particular state.
- Other cryptos are distant runners up to these two main players so I don't see any other viable alternatives
Bitcoin is a speculative asset like housing and used cars currently are in 2022. But the similarities end there. All the other speculative asset classes have been triggered precisely due to quantitative easing policies. Their current prices have been derived from this fiscal policy. As ridiculous as it sounds, bitcoin’s price is quite literally a bet against the future performance of these world currencies. As the speculative asset classes have their foundation in current fiscal policy, Bitcoin is a bet against their performance too.
Bitcoin has minimal carrying costs as an asset. The same can’t be true of other speculative assets like homes which have become financial instruments due to investors pouring their wealth into anything besides currencies in a desperate attempt to hold value over time. In many countries now, and increasingly so, the only way to profit off housing is through appreciation. Rent will not cover the carrying costs of the mortgages taken out against these homes. These assets have entered bubble territory, decoupling from any rational metric like average incomes.
Holding Bitcoin costs essentially nothing. Sure, there are idiots who invested through leverage. But there are many more who haven’t who can afford to hold on through all sorts of adversity. That makes it quite unlike these other speculative assets.
As a backing store for central banks, it holds value because it’s auditable. Bretton Woods fell apart in no small part due to countries becoming sceptical that other countries actually held the gold they said they did. The amount of Bitcoin each central bank holds would easily be auditable by others and that makes it valuable.
It only sounds foolish because we are used to thinking of measuring Bitcoin against the dollar. Rather, view the amount of Bitcoin each central bank would hold as an auditable hash of all its assets. Then view the digital currencies these central banks would issue as denominated in fractional units of this.
In the world where we value Bitcoin against USD, it sounds foolish because we don’t have enough Bitcoin to act as a foundation for all of it. But what if we have too much money in the world? Bitcoin’s fixed 21 million limit provides a means of truly measuring the rate at which currencies are inflated. Some inflation is of course desirable and Bitcoin could be an inherent regulator ensuring a healthy amount of inflation.
Note, this perspective equally pisses off Bitcoin skeptics and libertarian die hard hodlers. I have a very good chance of being wrong of course. But it’s not as farfetched as we’d initially suspect either. The biggest reason against this scenario isn’t the financial aspect, but the incredible shift in power that would result.
Current Bitcoin investors would find themselves suddenly incredibly wealthy and powerful. We don’t typically see shifts in power like this. But it happened to Saudi Arabia and other people who struck it suddenly rich (and powerful) with oil. So it isn’t unprecedented.
One thing I did want to reply to is the idea that house rents will not cover carrying costs of mortgages.
I think this is a telling point and focus on it because I think it's very telling regarding the mindset of crypto investors vs housing or traditional value investors.
The key difference is housing is a get rich SLOWLY system, not a get rich QUICKLY system. But crypto has been a flame for the moths of get rich quickly schemes. Previously this was the domain of ponzis, MLM schemes, various fake investments, tulips etc. While some people in Crypto may not all be of this ilk, the majority mindsets of it seem to be. I don't see many talking about HODLing for a lifetime, but only until they strike it rich somehow, generally with a minimum of work and minimum of value provided back to society in exchange for somehow getting rich, quickly.
With this in mind you say house rent does not cover holding costs such as mortgage payments (and repairs, government costs, management fees, insurances etc etc). That statement is only true when looking with a short term perspective. Which is the perspective of most people attracted to get rick quick schemes. However the statement on housing income vs costs is actually incorrect, is wrong, when looked at in with a long term mindset. This is because over time inflation increases rent while shrinking the mortgage which gets eventually paid down (in the average mode of housing investment outcomes). So when you see the fullness of time, housing investments can more than pay for their costs, while also providing capital gain. This is actually by design, it's structured, to share value between the investors for good management over the long term, and between society which gets the provision of housing provided, and managed, for the long term. This is an outcome of government policy, by design.
With that in mind, it may be that the fact that you've considered the short term perspective, may be an important insight into your thinking, may be an opportunity for you to expand the range of your thinking, should that provide you value in the fullness of your life! Anyway, just some thoughts to share!
The Russian Oligarchs are named because (see Red Notice) - they weren't entrepreneurs. During Privitization, they colluded to buy companies for literally 100ths of a penny on the dollar.
Chinese Oligarchs would be people that benefitted massively via corruption from privatizing state-owned companies.
Yes, a lot: https://www.scmp.com/week-asia/asia-buzz/article/2140667/its...
Seems they've been popular since the early 2000s - as far back as Google trends goes.
I don't understand how more people are not catching up to this simple fact that central bank "digital currencies" are nothing more than a by-pass of distributed private banking (brick and mortar + online banks). It's just moving more levers closer to central authorities.
It is especially towards those part of the ISO 20022 [0] standard which the technologies will be based on some cryptocurrency technologies like Stellar [1][2], XRPL [3][4], Algorand, etc.
[0] https://finance.yahoo.com/news/iso-20022-cryptos-5-compliant...
[1] https://www.coindesk.com/policy/2021/12/14/ukraine-commercia...
[2] https://resources.stellar.org/stellar-for-cbdcs
[3] https://ripple.com/insights/bhutan-advances-financial-inclus...
[4] https://ripple.com/insights/ripple-joins-the-digital-pound-f...
Those accounts are still annoymous to both parties in transaction, not to the central bank. I would say it's much more annoymous than a traditional account, a credit card or debit card, but probably not as annoymous as cash.
Also, it's naturally fee-free, you don't pay ridiculous account maintenance or transaction fee.
https://en.wikipedia.org/wiki/List_of_the_largest_trading_pa...
China is a large economy but it's nothing like the dominant force many people seem to think. China is 16% of US trade, 22% of EU trade, 22% of Japan's trade, 22% of South Korea's trade, etc... the numbers are the same for just about everyone.
If you add up all the West-aligned countries (including Vietnam, Philippines, etc - they're already in a cold war with China over the South China Sea), you're looking at 80-90% of China's total trade volume.
Without some kind of major political split in the dollarized world, China just doesn't have that kind of leverage. We're currently seeing the opposite of that split.
I say that the current currency and banking sanctions are a one use tool - it is effective in the short term at hurting the russian economy, but the west will be paying a future price for it, one where the west's currency and institutions are trusted less than it would have been had they not done this.
You can argue that these sanctions are preferable to war. After all, any war with russia and the west will be nuclear, without a doubt. So the west is choose the lesser of two evils to deploy. But i'm not so sure that nuclear war is not averted.
You seem to think of those percentage as small - they represent the largest trading partner of each of those country/entity.
https://www.census.gov/foreign-trade/statistics/highlights/t...
-----
A guy walking along the beach finds a bottle. He pulls out the cork, and a genie appears and tells him he has three wishes. "But," the genie says, "I have to warn you, whatever you receive, your worst enemy will get twice as much as you."
"OK," says the guy, "first, I want ten million dollars." The genie grants the wish and reminds him that his worst enemy now has twenty million dollars.
"Next wish, I want a thirty-room mansion in the Bahamas." The genie builds the mansion for him, and lets him know that his worst enemy now has a home twice as big.
"Fine. For the last wish," the guy picks up a big stick and hands it to the genie, "beat me HALF to death."
-----
The countries that trade with China can survive 15-25% of their trade evaporating, albeit with some pain. Maybe less than we think - most of what China exports is available from other nations. On the other hand, China's economy cannot weather 80% of its trade market disappearing.
I certainly hope it never comes to this. Military adventurism in Taiwan could trigger it. Mass civilian casualties in Ukraine could trigger more severe "no trade with anyone that trades with Russia" sanctions. I'd like to think that the Chinese would be just as disgusted as we would be and join the coalition voluntarily, but who knows.
This is true in food, this is true in semiconductors.
This is true in food, this is true in semiconductors.
Based on what we see today, what would be the economic consequences for that kind of adventurism? Who wants to hold the currency of a nation that is one jingoistic decision away from receiving the Russia treatment?
That said, I do think the world's strong reaction to Russia - whether or not it ultimately makes a difference in Ukraine - has made the Taiwanese a lot safer. Unlike Putin, the CCP does seem to care about China's place in the world.
I'm not sure where you get this idea that they are US aligned. This is specifically against their policy. They play a very balanced game as they should given their big neighbour...
https://thediplomat.com/2019/01/vietnams-defense-policy-of-n...
https://www.reuters.com/article/us-vietnam-protests-idUSKBN1...
How about % of goods. How many % of our everyday goods are produced in China? Can we even live a normal life if China stop sending those products to us for a week, a month?
Imagine kicking China out of Swift as did to Russia. Dollar is doomed and inflation is going beyond the roof.
My phone was made in Vietnam. My solar panels were made in Taiwan. My automobile was made in Japan. My clothes were made in Bangladesh. My lumber comes from Canada. My food comes domestically (the tomatoes are from Mexico, though that will change in a couple months). I can't tell where my laptop was made, but there are plenty of options from Korea and Taiwan.
And I'm by no means anti-China. I like cheap flashlights and wrenches like everyone, but almost everything has alternative sources. If I had to go China-free, maybe I'd have the equivalent of 10% less disposable income? I doubt it would be even that much.
Funny, I could not imagine this happening
Two weeks ago they'd just pull out their Visa/MasterCard, and since the restaurant and the Russian's bank are both in the Visa network, it gets taken care of that way. Visa and MasterCard are blocking service to sanctioned Russian banks, which explains why Russians are busy going to the ATM to pull out cash.
China has their own network called UnionPay, so those banks have probably been calling them to join this last week.
I can imagine that Russians will also install AliPay or WeChat.
VISA and MC has nothing to do with lines to the ATM for cash. We have MIR system that works without any problem within Russia and works with Apple\Google\Whatever Pay too.
People just afraid their money can be taken away.
>>> how someone with a Russian bank account can pay for a meal in Shanghai or Mumbai
Edit: I wonder if China greenlit the invasion precisely because they understand that this will hand them total control of Russia. Putin is a fool who may have been played.
Russia's elite may actually fare very well in the long term, since it'll be similar to how the USA props up the Saudi royal family in exchange for their ability to pump oil and regulate the market price. Russia's people will find themselves more and more disempowered and the country will continue to suffer massive brain drain.
> Commodity prices soar to highest level since 2008 over Russia supply fears (...) With exports from Ukraine and Russia at a virtual halt, wheat soared, with Chicago futures at the highest levels since 2008, when a spike in grain prices triggered protests and riots in Africa, Asia and Latin America.
didn't see that many journalists and opinion pieces mentioning this side of the sanctions, i.e. what negative effects they will have on us.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_wheat_exp...
https://en.wikipedia.org/wiki/Renminbi#Managed_float
https://en.wikipedia.org/wiki/Renminbi_currency_value#Intern...
https://en.wikipedia.org/wiki/European_Exchange_Rate_Mechani...
If the population was educated enough to know they were being stolen from, ‘Office Space’-style, they would throw their leaders out.
This is one reason the great firewall of China is so important, and I expect Russia to embrace that umbrella soon.
This is basically the same argument used by cryptobros and libertarians to criticize inflation.
I think there are pretty obvious tradeoffs with letting your currency amass purchasing power: probably it would shrink the amount of exports (which means that a lot of people might find themselves without a job) and it would make it harder to get a mortgage.
How do you propose that these negative effects would be mitigated?
I don't think the Chinese are subsidizing the world for no reason; and I don't think they are the smartest person in the room either.
https://www.theguardian.com/business/2019/apr/17/deutsche-ba...
Further the rules for whether you can or how much you can repatriate the proceeds from this bonds changes ~yearly at the whim of an opaque bureaucracy and they are very new instruments comparatively.
All that’s to say the yuan needs to be liberalized or companies have to invent new finance operations before China takes over the finance sphere. That doesn’t happen fast.
No it doesn't. That's a fantasy held primarily by people that dislike the US, the present world order, and want it all rearranged to their bias. You can instantly spot a person's bias by how quickly they whip out the premise that the USD global reserve is going to be damaged by xyz (it seems to practically be a fetish for some people). Typically there's no actual argument presented, just a statement that of course xyz will happen now, finally. You'll see that throughout the Russia war threads (here or elsewhere). Throughout my lifetime I've seen it repeatedly claimed: well of course, now the USD global reserve standard will begin to decline (the Euro was supposed to severely damage it; whoops).
The vast majority of the world isn't going to have a strong interest in holding Yuan and that'll define the global reserve status. There are no other major competitors to the USD other than potentially the Yuan, and it's not a serious competitor because of the nature of the CCP. As it is, the Yuan has a smaller presence globally than the Yen and that says a lot given the size of China's economy (ie there's no trust in China and they haven't made much progress in that respect over the past decade).
Yeah. I really wonder about this: The Chinese are doing everything possible to undermine their Yuan as a reserve currency. You can't freely move money. You can't open a Yuan denominated bank account easily. Their cards are hard to get/use (although some places are opening up). They didn't make a Stripe/Processing equivalent and open it to the rest of the world. You can't incorporate a Chinese company online and opening a Chinese company is a ridiculous process. English is still not widely used.
And has anybody checked the ICBC online-banking solution? These guys are still living in the 90s?
Most people think China is advanced in payments because they have wepay. But they seem to have just that and everything else (under State control) is still in the Soviet Era.
There is a decent argument for dollar hegemony hurting America [1]. China has no need to pursue reserve status for the yuan.
[1] https://www.wsj.com/amp/articles/how-the-reserve-dollar-harm...
My personal tipoff is how quickly someone mentions "petrodollar".
No, idiot, countries don't use the US dollar to buy and sell oil because the US military points a gun at them. They use the dollar because they, their trading partners, and everyone else prefer having dollars to rubles, renminbi, or bolivars.
I don’t see how this is any different than what the US has already done. The US has now cut off Iran and Russia from SWIFT in political moves. Any nation state is likely already doing the calculus.
Who from "the West" is going to consider major investments in China now? If by some miracle you manage to keep your IP secure, you risk losing your entire investment if/when the world gets tired of their support for the facists in Russia.
[edit] since I wrote this comment....
People have been saying this for more than 10 years. As long as interest rates remain low and China continues to grow, there will be plenty of western money flowing in.
double-digit growth is great until it ends in zero.
Who? Those who want to make money.
But everyone is showing their hands now.
And at the moment, it sure looks like China is supporting a dictator on the march to a major war. Trillion dollar funds are writing off their Russian investments at the moment. How long before China is seen in the same way?
Meanwhile in China, inflation is less than 1.5%, interest for money market fund is 2.4%.
You earn risk-free 0.9% if you hold them in CNY. You lose 7% if you hold them in USD.
Your choice now?
This is false, you are exposed to risk in changes in foreign exchange rates.
The yuan is pegged to the dollar, so it has the same exposure to fluctuations in fx that the dollar has. (Not to mention the fact that the Chinese government periodically adjusts its exchange rates)
1 year? 5 years? 10?
Your comment amounts to “yuan appreciation against the dollar is a sure thing”. Which in finance seems like a suspect statement.
This was an unstated policy goal. Russia as a regional power is provably dangerous. As a Chinese vassal, at least it’s contained.
Add to that the significant costs to the American economy dollar hegemony has brought [1], and this is broadly a win-win-win.
[1] https://www.wsj.com/amp/articles/how-the-reserve-dollar-harm...
Russian bank -> disposable temporary bank -> permanent chinese bank
That way the disposable temporary bank is the one that's blacklisted, while the permanent one never did business with the sanctioned entity (directly).
The Friend of my enemy is my enemy.
Ultimately, I don’t think that’s necessarily a bad thing. Democracy would be ideal, but I’d rather see Russia utterly dependent on Beijing than autocratic and warmongering as they are now.
I still fail to see the existential threat to China though. Even if Russia launches nukes, any retaliation is going to be hitting Eastern Europe which is very far away from China.
For all its bluster, North Korea isn’t invading anyone. China’s leash has kept the peace. Contrast that with Russia. It’s a fair bet that Putin (and his successors) will behave better under Beijing’s thumb.
As for why China doesn't give two hoots about Russia's military escapades, Russia's military focus is far enough away that this is significantly less problematic. Russia is also a much more serious player on the world stage than North Korea - they have a significantly more important economy, military, more technologically advanced, and not as isolated (not to mention one of the largest nuclear arsenals with ostensibly functional ICBMs). China can't just threaten to overthrow the Russian government if it doesn't behave like they do with North Korea.
None of that matters though since what I said is that an aggressive Russia benefits China well enough in terms of the problems it causes the US.
Which is why I think concerns about their aggression in the future are just propaganda. Russia can barely bully the poorest country in Europe. It definitively can't fight NATO.
The ressentiment is mostly from Chinese ultranationalists that have been censored by the government.
That is good to know, thank you! I'd like to say though that until recently annexing Crimea not to say bombing Kyiv was something only ultranationalists in Russia would call for. And as far as I can see from the outside, official rhetoric in China is getting more heated and nationalist, pretty much like it was in Russia.
Obviously false.
> in fact I wonder if the US even cares about Europe at all at this point
Your bias is showing.
> Leave a mess in Europe while they pivot to Asia.
The mess in question is something created by Europe. What's happening with Ukraine is a vestige disease of former European empire & conquering mentality, the ideology of past centuries that used to be omnipresent among the major powers and their cultures, and is now an ideology primarily only prevelant in Russia (although Macron pines for the French empire a bit as an extension of his egomania).
The US has spent 3/4 of a century holding the line against Russia in Europe. It's a very expensive line and it shouldn't be our responsibility.
Very obviously it's time for the Europeans to pick up more of that burden (I'm glad Germany is maybe finally waking up to that need, it's in their own self-interest to do so). The US should remain a core part of NATO and should continue to participate, just with the Europeans carrying more of that security burden and the US carrying less.
What are Italy and Spain doing at present to stop Russia? Not much (insert comment about how, but but but Italy waved their hands in the air furiously and Spain sent 27 tank busters to Ukraine and they agreed to sanctions, wow). Those are major EU+NATO nations, let them deploy a hundred thousand soldiers along NATO's eastern flank, instead of the US having to do it this time (at the peak the US had 400,000+ soldiers protecting the rest of Europe from the USSR in the late 1950s). See how they like the cost and stress it puts on their societies. Few countries will be willing to tolerate those very long-term deployments and costs.
Maybe the EU can build a significant defense force so the US doesn't have to play that role again. It's a nice thought. The Europeans are not going to like the cost of it all (which, given the net zero economic growth in the EU over the past 15 years, the increased military cost will come directly in the form of a lower standard of living and weaker social safety net for the people, which is where the social rebellion against an EU defense apparatus begins).
I think that is shaping up right now. This whole thing is bigger than Ukraine and Russia in the sense that it's really about autocracy vs. democracy. Forces in America like Peter Thiel, who say that they “no longer believe that freedom and democracy are compatible”, would love nothing more to set up an autocratic regime here where they are in charge, the way Putin has control in Russia, or Xi has control in China. 2016-2020 saw much of the political establishment here in the US side with authoritarian ideals, to the point where the President and Senators were even parroting Russian state propaganda straight from the Kremlin. There's a whole lot of people here in America who believe what Putin is doing is smart and savvy, and they would love nothing more to have the kind of unilateral power that he has, but with the American government, economy, and military at their whim. There are groups in Germany, France, and the UK who have the same feeling about democracy. This is truly the test of our generation.
I hope so.
I share your concern about Trumpism and Kremlin-sympathizing in the United States, but it's a mistake to think that authoritarianism is exclusively a right-wing phenomenon considering the last decade saw unprecedented attacks on free speech, racial egalitarianism (i.e., what the left pejoratively refers to as "colorblindness"), and unjustifiable overreach with respect to COVID protocols (and prior to 2021-01-06, left-wing groups had a monopoly over anti-democratic, revolutionary rhetoric).
Moreover, populism on the left and especially on the right is a symptom and not a cause in and of itself, and we should tread lightly so as to not exacerbate the root cause and inadvertently create more populists (e.g., by trying to "crack down" on populism). Personally, I think we need to re-establish our "civic religion" with respect to western democratic values and anti-authoritarianism and to emphasize an American identity rather than racial or partisan identities. For those of us on the left, this probably implies a course correction from hyperbolic criticisms of the US and the West toward a narrative which acknowledges that for all its faults, we could do a lot worse than western democracy and egalitarianism. For both sides, we need to stop looking at "the other side" as the cause of all our woes and start building bridges or western superpowers will become too weak to keep authoritarian superpowers in check.
I think we have to draw a distinction between authoritarianism and illiberalism. The American left is highly illiberal, which is one thing. But I don't think they are authoritarian yet because they don't have their own Trump -- authoritarianism revolves around the authoritarian. Joe Biden isn't a Trump and neither is Bernie Sanders for that matter. Even AOC. They have a more pluralistic message even if it is illiberal. The message of the authoritarian is "I alone can fix it". I think Trump unironically said literally those exact words. I mean, he sang all the authoritarian tunes including such hits as "the media is the enemy of the people" and "what you're seeing and what you're reading is not what's happening", quotes that could have come straight from Stalin and 1984. It's not subtle. For this reason, I don't see the left as an authoritarian threat right now. The right has metastasized and has all the elements necessary to go the rest of the way.
> Personally, I think we need to re-establish our "civic religion" with respect to western democratic values and anti-authoritarianism and to emphasize an American identity rather than racial or partisan identities.
Yes, I'm with you there.
Fair enough. I'm less sure about the specific technical distinctions, and I'm more concerned about the magnitude of the illiberalism rather than the particular way it is organized. I.e., I'm not convinced that one illiberal president is worse than the institutional illiberalism in the media, the academy, entertainment, public education, etc. So long as we can maintain liberal, democratic norms, the checks on the President's power remain robust; however, the left and the right both frequently work to degrade those norms.
However, I am pretty sure that (while it wasn't always this way) right-wing illiberalism is largely a response to left-wing illiberalism for the last decade or so. The left sets the precedent and the right responds in kind, often with years of delay (although I think the lag time is decreasing quickly). I'm thinking of things like:
* January 6th couldn't have happened if politicians, the media, celebrities, etc hadn't breathlessly defended, justified, and/or fanned BLM riots for the better part of a decade.
* The ranks of far-right groups didn't swell until woke race ideologies were preached for years in the media, classrooms, DEI departments, etc
* "cancel culture"[^1] was a left-wing innovation before the right eventually (and half-heartedly) adopted it
Note that this isn't to ascribe guilt to the left, but rather to observe how the system works because it hints at some solutions. Off the top of my head:
1. Work to restore the aspirational neutrality and objectivity of epistemological institutions
2. Hold the left accountable to liberal standards, just like we hold the right accountable
3. Denounce narratives which seek to deprecate our American identity in favor of racial, sexual, religious, or political identities.
[^1]: Cancel culture: campaigns to petition someone's employer to terminate the employment relationship (and thus access to income, healthcare, etc) for speech which the in-group finds objectionable, but which is otherwise well-within the Overton Window. Especially with respect to ordinary people (as opposed to celebrities and others who are mostly symbolic targets).
Yea these this ping pong back and forth. The recent surge of the left was a response to years of drug wars and don’t ask don’t tell. We got our win with gay marriage and just kept going, so we need to go back now a little. And we will and we will go too far back only to turn around yet again.
The difference between institutional authoritarianism is at least we know institutional authoritarianism, and at least that is more stable and rational. Like, you might not agree with people who want to restrict your speech, but under institutional authoritarianism they at least try to justify it. And if you don’t like it you can work in the system to change it. Like, change does happen. Jim Crow did end for example, without some dictator having to keel over and die. Apartheid die end in South Africa lawfully and by choice of the government.
When authoritarianism is organized under a single man, everything becomes about assuaging his ego. It’s a fundamentally unstable proposition because the ego of a narcissist is never assuaged. The enemies list always grows longer and the list of grievances is unending and always the number one priority - even at the expense of national security.
You want to know how Jan 6th could have been prevented? If one man hadn’t instructed his followers to be there and to stop the activities going on at the Capitol. That’s the danger of an ego right there. He did that for selfish reasons, and it hurt us all. Seriously stop blaming BLM for what happened that day. It was planned far in advance by people who want what Putin has in Russia to come here to America. BLM has nothing to do with that. Think long and hard about this, because he told us he wants (President for life) and he told us Putin is a genius for what he’s doing in Ukraine. Think about that. Do you want that man near power again? He wants it.
What BLM did over the summer was awful but you can’t use that as an excuse anymore after what the 1/6 committee has uncovered so far.
I strongly disagree with you there. Plenty of the right-wing illiberalism is a direct response to left-wing liberalism, e.g.
* LGBT rights
* Obama being president (including the birther lie, the muslim lie, and general racial reactionary behavior)
* Planned Parenthood
All of these things "swelled the ranks" of increasingly far-right groups long before BLM or "woke" hysteria. The majority of Republicans to this day think that Obama was a Muslim, I don't see how your mental framework explains this.
I do think the two sides feed on one another, in general. I just don't think that broadly blaming the left for the existence of the illiberal right makes any sense at all.
The right had always been somewhat illiberal, but they had been kept in check by principled liberals and progressives. When right-wing racists was the norm in the 60s (and earlier), liberal colorblind antiracism overcame. When the right tried to censor ideas in the 70s and 80s, liberal free-speech ideals changed the landscape.
Liberalism effectively moderated right-wing racism for decades, and nothing significantly changed in right-wing illiberalism which could explain left-wing illiberalism.
Putin literally represents the last great hope. And even soon enough, liberals will be disillusioned by liberal policies - you can see this happening in places like San franscisco.
where you can buy a luxury apartment, but have tents and human shit at your front gate. Soon enough, a fascist will come around and they will say I will fix all your problems - from looting, excessive taxes, nimby laws etc if you allow to me chip at some laws / regulations getting in the way. Libertarians like Peter Thiel mixed with fascists is a complete disaster. And remember libertarians run rampant in SV circles. Trump wasn't smart enough to get it done. But he's provided the playbook.
I'm a liberal leaning black dude. But I can see what's coming a mile away.
I think it's dangerous to believe being a good fascist/authoritarian takes smarts. What it really takes is cunning, a huge ego, lack of a conscience, and the ability to make a million people follow you while plugging their eyes and ears to anything else except the words of the authoritarian. Being smart has nothing to do with it. Well, maybe that can play into it but the worst authoritarians in the world's history were narcissistic psychopaths, not smart, rational tactical geniuses. The West's biggest mistake with Putin was buying into his own propaganda, that he's a tactical genius rather than an abject psychopath. Being a psychopath, he may make moves that seem tactical to others, but really they are just never considered because those moves are so psychopathic; good people with consciences don't do what Putin does because they're dumb, but because they have souls. People like Putin and Trump see that restraint as a character flaw and a sign of weakness. It's why everyone was so sure he would never invade Ukraine. And then he did, leaving them dumbfounded. "But it's such tactical mistake!" Yeah, because it was never about tactics, it was bout killing Ukrainians and feeling like a big boy while he does it. That's the whole goal.
Lying your ass off and then being ruthless when people believe you is the name of the game. I was hoping the the whole idea that "Oh sure, Trump is crazy but he's not that dangerous because look how dumb he is" would have died on 1/6. On that day we were perilously close to Trump kicking off his authoritarian ambitions.
Smarter people usually don't have the charisma or lack of conscience to pull authoritarianism off. A charismatic authoritarian is far more dangerous than a smart one.
Having said that I don't think they have a plan really. They just do what they can and see how it goes. I believe there are going to be two trends: one of sanctions slowly gaining in effect, and another one of Russia adapting to sanctions. We'll see which one is stronger.
Also as I understand many in Russian government believe that current hard sanctions are due to Ukraine's pressure and intel, and once it's gone (which they hope to be solved with military) sanctions will become weaker and/or easier to circumvent.
It isn’t about things being better or worse. After being cut off from the rest of the world, China’s financial system is the only other option. So, instead of looking for the best partner, it’s about working with any partner.
And this was predictable — who else could they turn to? But even though they have a new trading partner, the fall in the value of the ruble will extend to these new transactions. This all serves to reinforce the asymmetry in the relationship between China and Russia.
But again, the Russians don’t have many choices here.
It's one thing before you close the deal, another one after.
Let's see how cooperative they will be once this is their only choice
what's the alternative? does the West care about Russia?
Why should it?
Better and bigger trade deals is definitely a benefit for China.
EU is still paying Russian corporations for oil and natural gas and the existing pipelines keep running and will keep running as long as the Russian oil fields have supply. This is an essential input to EU based corporations especially manufacturing and heavy industry. Chinese corporations work closely with their American corporations using a single global financial system that's been around for over 75 years. These corporations compete fiercely in markets but their boards and officers are best friends and know each other by first name basis.
US/EU/UK are the maintainers of this global financial system and bear the costs of maintenance and regulation. This works for Chinese companies as China doesn't have to take the costs of maintenance and can enjoy the benefits for free. It's a gift from US/EU/UK to China and they appreciate it and love Dollars/Euros to buy nice mansions, yachts and other luxuries.
China and USA governments engage in political theatre to keep their people motivated to work and further corporate interests which benefit them mutually. War is very bad for business and the Chinese government especially Xi is very disappointed with Putin's stupid and reckless activities.
Did you read this? https://www.airuniversity.af.edu/CASI/Display/Article/292349...
And I don’t think anyone knows what will happen if they do liberalize the yuan. The Chinese authorities are terrified of it though.
We're entering a period of increasing insulation. Countries that can feed and house their people will be stable. Countries that can make their own industry and weapons will thrive.
But what else do you do? Particularly against a powerful country that can produce its own food and energy. The effects are going to be predictably limited.
Any sanctions are going to be a profit incentive for someone else to circumvent them. We've seen this time and time again with oil embargoes in the Middle East, layers of Hong Kong companies to bypass North Korea sanctions [1] and so on. It's clear at this point that China has decided to stay neutral, so much so that a story came out yesterday where the Chinese asked the Russians to delay the invasion until after the Olympics [2].
Other countries will serve their primary interests and weaken any sanctions, such as the UK bowing to banks to quietly give a 30 day exclusion to Russian banks [3].
So the rich and powerful will be squeezed temporarily but will manage to bypass a lot of restrictions through intermediaries that may well include China and other regimes, all while things are probably going to get real bad for normal Russians who don't agree with the invasion and can't do anything about it either.
I would at least consider it a positive if the developed world started clamping down on oligarchs hiding money in luxury real estate.
All of this is known and predictably ineffective, which is why it was so important to at least try and avoid this situation diplomatically. It's now so much more difficult now that Putin has royally screwed up and completely miscalculated with an unthinkable, unjustifiable and unwinnable invasion. But this will end diplomatically regardless at some point because the alternative is nuclear war. It's just that Ukraine is going to get wrecked in the meantime.
The US would never accept a hostile military in its backyard. It almost provoked nuclear war in Cuba 60 years ago in exactly that situation. This idea that Russia should just accept a hostile military alliance (from their perspective) on their doorstep is completely inconsistent and insane.
And before anyone brings up self-determination, let me ask where that principle is when it comes to Palestine.
[1]: https://www.wsj.com/articles/how-hong-kong-makes-evading-nor...
[2]: https://www.nytimes.com/2022/03/02/us/politics/russia-ukrain...
[3]: https://inews.co.uk/news/government-accused-of-absurd-sancti...
Russia has plenty of nukes. The idea that NATO is going to launch a land invasion is flat out goofy. The idea that having Ukraine join NATO opens the door to nukes on Russia's doorstep is also silly given the number of nuclear equipped submarines in NATO.
Yet again, it's just a war for oil. China is more or less silent because they're hoping to be the purchasers of that oil. China has been having energy shortages and needs the natural gas to replace dirty coal.
Don't forget wheat and fertilizer. Between Belarus, Russia, and Ukraine you have like 25% of global wheat and a significant portion of fertilizer production.
The US does. It's been a foundation of US foreign policy for 200 years [1]. The US went right to brink of triggering a nuclear war over a breach of this in Cuba. So why are we surprised Russia doesn't believe this?
> Putin is paranoid but he's not an idiot.
Prior to a week ago I thought so too but it's difficult to see a scenario where Putin "wins" here.
> This war is about resources plain and simple.
This is a contributing factor, for sure.
Russia pays Ukraine billions for the the rights to pipe natural gas over their land. But this was a "solved" problem in the sense that Russia has been busy building pipelines through Belarus and the Baltic to avoid this that were on track to cut Ukraine out of these fees by 2024 or so.
That leaves the issue of oil and gas deposits that have been found in Ukraine. The first is in the Black Sea and these are within the territorial waters of Crimea. Crimea is essentially a "solved" problem after the annexation in 2014.
That leaves two regions that have (IIRC) shale deposits. The first is in the West of the country. It seems like that would be difficult for Russia to control as it would require occupying the whole country.
The other is in the Donbas and is covered by the "republics" of DPR/LPR.
So if Russia had launched a limited invasion to carve out the Donbas they may have gotten away with that (IMHO). Like there'd be a period of sanctions and blowback but they could've "won" eventually (IMHO).
But this? This is just unwinnable and completely unjustifiable.
> The idea that NATO is going to launch a land invasion is flat out goofy.
You're viewing this through the lens that US and NATO are benign, maybe even that NATO is a defensive alliance (which it isn't). Even if it is truly defensive, there's very little that separates a defensive military alliance and an offensive one, particularly when that alliance has strategic nuclear weapons.
Remember that all the ploys that Putin has done like justifying military action in Georgia on protecting Russians can be turned around on Russia. Imagine a Ukraine in NATO that decides they need to protect persecuted Ukrainians in Belarus and carve off a piece.
Whose to say that Ukraine emboldened by NATO membership doesn't take military action to reclaim Crimea? Again, this is from the Russian perspective.
You might say that's crazy and it may well be but not if you're Russia.
Do you really believe NATO will accept Ukraine without having Crimea or the Donbass explicitly excluded?
Putin can win by keeping Ukraine in a state where it is not stable enough to supply resources to the west. Oil extraction requires a certain level of political and physical security and if he can fight a drawn out war by sending his undesirable young men to die in a Ukrainian meat grinder for the next decade he may, depending on the lack of will and perseverance of the rest of the world, "win".
> it would require occupying the whole country.
https://www.theguardian.com/world/2022/mar/03/ukraine-war-re...
"Moscow aims to take ‘full control’ of Ukraine capital by diplomatic or military means, according to Elysée"
> NATO is a defensive alliance (which it isn't)
Going to need some evidence before I can believe that claim. Can you point to offensive action by NATO in recent history?
> Imagine a Ukraine in NATO that decides they need to protect persecuted Ukrainians in Belarus and carve off a piece.
This is a fantasy and not really worth discussing.
> Whose to say that Ukraine emboldened by NATO membership doesn't take military action to reclaim Crimea?
Outside of paranoid Russian fantasy land I don't think anyone is even suggesting this is likely.
1. NATO bombing of Kosovo. This is offensive military action;
2. NATO invasion of Libya. This is offensive military action; and
3. NATO having strategic nuclear weapons. The US deploying nuclear weapons to Turkey is really what precipitated the Cuban Missile Crisis.
The one the UN Security Council, on which Russia and China each have a veto, ordered [1]?
[1] https://en.m.wikipedia.org/wiki/2011_military_intervention_i...
The only reason people don't label that as offensive military action is because they've bought into view that the US is a benign hegemony.
You may agree that the US is benign. That's not the argument. The argument is that global powers (notably Russia and China let alone anywhere in the Middle East) do not view the US as benign. Now you can say they're wrong but that doesn't matter. Being right or wrong on this is irrelevant.
Failing to account for how other people might not view it this way is a big part of what led to this crisis even though it is still 100% Putin's responsibility in starting an unjustifiable war. This isn't an either-or situation. Even though Putin is 100% wrong, the US can also be wrong.
I believe that Russia made a big mistake by invading Ukraine but that doesn't mean they did not have something to fear from NATO.
Maybe things would have been different today if NATO gave Russia a guarantee they will not accept Ukraine as a member. Maybe it wouldn't matter. We won't know for a long time but I think it would have been worth a try.
3. Solved with zero deaths in less than two weeks, and removed missiles fron Turkey. Nothing to do with NATO.
Meanwhile I'm 100% sure that NATO has already avoided a bloodbath in Lithuania, Estonia and Latvia, in the light of current events. Ukraine handed nuclear weapons to Russia in exchange of a promise to never invade them, and look where we are.
Wrong [1]:
> NATO countries attempted to gain authorisation from the UN Security Council for military action, but were opposed by China and Russia, who indicated that they would veto such a measure. As a result, NATO launched its campaign without the UN's approval, stating that it was a humanitarian intervention.
> Nothing to do with NATO.
Not according to NATO [2] (emphasis added):
> ... furthermore, in the early 1960s, NATO was authorised by Ankara to station medium-range Jupiter missiles near Izmir for a short period of time.
[1]: https://en.wikipedia.org/wiki/NATO_bombing_of_Yugoslavia
[2]: https://www.nato.int/cps/en/natohq/declassified_191048.htm?s...
People killed in [2]: 0. Mistake recognized, turkish missiles removed, Cuba never invaded.
It doesn't sound like a terrifying force that keeps anexating countries and setting puppets or war lords. NATO is terrifying if you plan to go hunting small countries without nuclear weapons.
1) War. This affects poor people, a lot.
2) Sanctions. This affects poor people, but at least bodies shouldn't pile up by the thousands.
3) Do nothing. It might work, but in this case it seems that it will affect millions of poor people in Ukraine, and just kick the problem four years into the future.
I'd read a lot of "this sanctions affects the poor" lately, but I fail to see other alternatives that doesn't.
I give you Russia is in a hard geopolitical position. But Europe in the last 70 years has been unusually calm. Russia had nothing to fear, but they spiralled into a mix of imperialist nostalgia and KGB paranoia. Small countries feared just that, and rushed into NATO, which fed the Kremlin paranoia...
Is NATO crawling an enjoyable situation for Russia? No. But also Russia anexating and puppetering neighbors if they are not NATO members isn't the smartest move. Mexico and Canada doesn't live in fear of the US; Lithuania, Estonia, Latvia, and now even Finland and Moldova... not so much.
You menctioned Cuba crisis: that crisis was solved negotiating, and the US dismantled what the soviets wanted. We don't even know what Putin wanted: ban Ukraine fron NATO? He would have got that negotiating. But right now, as they keep talking, it's clear that they want the old empire.
About half of Ukraine is more Russian ethnically and supported Russia friendly candidates in previous elections. A win for Putin would not necessarily mean attacking and taking all of Ukraine. He can win by taking back the ethnically Russian parts. And he's not likely face an insurrection in those regions.
Visa and MasterCard are payment processors, facilitating debit and credit cards issued by banks. If you're upset at credit card interest rates (and you probably should be), your ire is best directed at the bank and not the processor.
What would have been the alternative (after the invasion started)? Targeted complete sanctions against the government and all enablers for sure, but would that be enough?
If Russia wants to be China’s pet like NK is, that is their decision.
The aim of all-encompassing sanctions is to turn people against the government by making life difficult for the average person. Russian propaganda is going to blame NATO/the West - this also would have happened with or without sanctions. Sanctions are a tool to show the Russian people how much worse life can be as an isolated pariah state. Even if the Russian government pivots to China, that is a future promise that living conditions can be restored to their previous state. In return for that promise, China will make demands that amount to Russia becoming a vassal state.
i would not be so sure - russia being subservient to china just means you have china pulling the strings but with more resources in play. And it's not as if china doesn't want to become a superpower.