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Comment by oxff | Hacker News Reader

I was told the `sanctions` would turn Russia into rubble, instead they ended up improving Ruble's performance, Russia's trade balance & current accounts.

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Amazing recovery on the rubble vs the dollar. It is trading at the best of it’s 2020 performance and it had been on decline since then. Now it is actually going back to pre-pandemic levels.

I wish I had bought some back when the news were claiming Russia’s economy is finished. I would have doubled my money.

As a general rule, when the news say something, people will overcompensate so it's in your interest to act on the opposite.

On the other hand, it's not enough to just be on the right side of the trade: after all, the markets can remain irrational for longer than you can remain solvent.

It’s not just about how much money you can make though - buying rubles helps Russia continue policies (hopefully) considered ethically wrong, such as waging war in Ukraine.

I have yet to see the evidence that not-buying-rubles / sanctions have had an effect on the strategical and tactical goals Russia government and its armed forces have placed for themselves in Ukraine. This just seems to be assumed for some reason, as if Russia would see themselves as MBA Consulting Firm and simply drop the conflict when they get financially sanctioned.

iow. the sanctions are ineffective in their stated / assumed purpose (deterring, that is, modifying Russia's behavior wrt. the war, I do not believe they've discouraged or hampered Russia in their war at all).

Russia has to halt their tank production as they cant source the right components anymore.

They were already struggling with military nets production before the 2022 sanctions, just based on the post-Crimea ones; a number of buyers refused to take delivery as jets came without key equipment that Russia could no longer make. It only got worse for them now.

You would have to provide some argument and evidence that (i) Russia has to stop tank production, and that (ii) this was due to sanctions, and that (iii) this will alter their strategic and tactical goals in Ukraine.

The third part is the most important part. Showing that these sanctions somehow have deterred Russia in its military posture. I find the idea ridiculous.

It’s not just about their ambitions but also about their ability. It seems so far that they are barely capable of winning against a much smaller force.

First two points: https://www.reuters.com/business/us-official-says-export-cur...

Russia seems hell-bent on going through with this war. Their losses already justify withdrawing, sanctions or not. The calculus for them is clearly not about a net cost-benefit calculation. PerhPs because it is a despotic kleptocracy? So an immediate reaction is not really the goal.

My point is that the Rubble/USD trade pair was used by the media as an indicator of Russia’s economic weakness, and it rebounded just like nothing.

Also, if you look at some of the top American financial institutions, they continued trading with Russia and you bet they made cash on a Rubble/USD pairing trade. Nevertheless, nobody is calling these financial institutions unethical or amoral. However, a middle class person trying to make a buck on the opportunity is somehow amoral.

https://www.reuters.com/business/finance/us-banks-will-keep-...

I absolutely call these financial institutions amoral.

See, that’s a difference between someone born in the USSR and someone born elsewhere. I, as person from the USSR, remember well how the offical rate of the ruble was a meaningless number. In theory, you could sell rubles at that rate. In practice, there would be a strict limit on the amounts, number of transactions and people allowed to execute these trades. You, my friend, would have lost all your money.

There are money markets that guarantee the trades at the market maker specified rates.

If I have a currency that has an 'official' rate different from it's rate on most markets, how does the market you mentioned replenish it's euros when I buy them with roubles?

You do not buy actual rubbles or sell rubbles for dollars. Instead you buy/sell some financial artifact that represents the trade pair. Those end up trading at the official market maker rate.

Try to transfer 30000 euro to some account in Germany... I did it once when I tried to buy some expensive domain. You will have the biggest troubles in your life and financial authorities will ask endless questions regarding your transaction and the money involved. Even in russia I think you have more financial freedom than in western. In Germany I also have to spend at least 20x more time for taxes than any developer from asia.

Lol, jesus. You are trolling so hard.

That's a KYC (know your customer) process and it has existed in all modern countries, Russia included, for a decade+ as a part of anti-laundering measures. If you were trying to transfer 30k from a country that doesn't implement KYC, you got exactly what it is designed for.

>I was told the `sanctions` would turn Russia into rubble, instead they ended up improving Ruble's performance, Russia's trade balance & current accounts.

It makes sense in retrospect.

Right now, it is more or less impossible for any Russian to a) use the US dollar to buy anything from outside Russia, and b) travel outside Russia to buy anything in the first place. That greatly reduces the demand for exchanging rubles for dollars, whether via official or unofficial means.

Amongst other multiple things which happened, this has helped Russia to move away from USD payments to their local currency. Given the chain of events like 40% of all USD printed in 2020, countries moving away from Petro-Dollar to their local currencies - It is a big red flag for USD (in my opinion)

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