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A quick breakdown of what SWIFT is and why it matters

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Re: A quick breakdown of what SWIFT is and why it matters

#111

Post by legalcorrection »

s_dev wrote: post #80
nimbius wrote: post #44

quite a few commenters have pointed out SWIFT as a hand of soft power and i think its important to understand the twitter post doesnt mention an important fact: SWIFT was created in order that Europe may resist Kissingers increasingly capricious hand of soft power as it emerged as a lead sap in an increasingly arbitrary US foreign policy. 40 years ago the US had become effectively drunk on soft-power moves against st…

Nah -- Bill Browder seems to be a expert on this exact topic. He's saying to pull Russia from Swift. His experience suggests he is intimately familiar with the financial world and the consequences. He's the genesis of the Magnitsky Act -- the one thing that actually scares Putin. I know this because Putin even said if Russia was removed from Swift he would consider it an act of war. https://twitter.com/Billbrowder/st…

Him thinking that, however qualified he is, does not mean he's right. Being the CEO of a hedge fund, with a personal grudge against Russia, does not make you infallible.

The US benefits enormously from owning the reserve currency and running the world financial system, and the ultimate effect of our trigger-happy approach to sanctions is to push countries away from those, especially with the US becoming a smaller percent of the world economy every year. Even the Europeans are sick of it. The Europeans only play along still because they are militarily dependent on the US, in part because their populations have, under the comfort of the US security umbrella, developed irrational political beliefs against building up their own militaries.

Re: A quick breakdown of what SWIFT is and why it matters

#112

Post by bpodgursky »

nimbius wrote: post #44

quite a few commenters have pointed out SWIFT as a hand of soft power and i think its important to understand the twitter post doesnt mention an important fact: SWIFT was created in order that Europe may resist Kissingers increasingly capricious hand of soft power as it emerged as a lead sap in an increasingly arbitrary US foreign policy. 40 years ago the US had become effectively drunk on soft-power moves against st…

> Cuba to this day still enjoys endless sanctions for resisting regime change.

I mean, I suspect we agree that the embargo should be lifted, but that's a really poor way of saying "communist dictatorship with a penchant for, among other things, lining up homosexuals against a wall and shooting them".

Hopefully the last few days have reinforced that even if one country does things wrong sometimes, it doesn't mean the other side is a good guy.

Re: A quick breakdown of what SWIFT is and why it matters

#113

Post by stef25 »

nimbius wrote: post #44

quite a few commenters have pointed out SWIFT as a hand of soft power and i think its important to understand the twitter post doesnt mention an important fact: SWIFT was created in order that Europe may resist Kissingers increasingly capricious hand of soft power as it emerged as a lead sap in an increasingly arbitrary US foreign policy. 40 years ago the US had become effectively drunk on soft-power moves against st…

> in 2022 sanctions are to international diplomacy as a tantrum is to a toddler. theyre effectively meaningless

Earlier today a report on BBC said existing sanctions on Russian already made their economy suffer to a significant extent. I forgot the percentage points they mentioned but it was surprisingly high. Applying even more sanctions will unfortunately hurt the Russian people the most and the discontent that will create among the people over the many years to come should not be underestimated.

Re: A quick breakdown of what SWIFT is and why it matters

#114

Post by ajross »

nimbius wrote: post #44

quite a few commenters have pointed out SWIFT as a hand of soft power and i think its important to understand the twitter post doesnt mention an important fact: SWIFT was created in order that Europe may resist Kissingers increasingly capricious hand of soft power as it emerged as a lead sap in an increasingly arbitrary US foreign policy. 40 years ago the US had become effectively drunk on soft-power moves against st…

> in 2022 sanctions are to international diplomacy as a tantrum is to a toddler. theyre effectively meaningless

I don't see how this follows from your (correct) description of US influence in the cold war. Soft power works now the same way it always has, all it requires is coordination on a "pool of influence" large enough. It's absolutely true that the US can't unilaterally do what it did in the 70's. But the e.g. USA+EU+Japan+Korea? That's pretty dominant, still.

Russia's only out from something like that would effectively mean becoming a sattelite state to the PRC. And... maybe that's where we're headed. But it's surely not where Putin wants to head, so it remains leverage.

Re: A quick breakdown of what SWIFT is and why it matters

#115

Post by legalcorrection »

aluminum96 wrote: post #93
nimbius wrote: post #44

quite a few commenters have pointed out SWIFT as a hand of soft power and i think its important to understand the twitter post doesnt mention an important fact: SWIFT was created in order that Europe may resist Kissingers increasingly capricious hand of soft power as it emerged as a lead sap in an increasingly arbitrary US foreign policy. 40 years ago the US had become effectively drunk on soft-power moves against st…

> in 2022 sanctions are ... effectively meaningless as most capable, observant countries have managed to sidestep in part or in whole the once dominant US hegemony This is only true to the extent that the US unilaterally imposes sanctions. The proposed sanctions involving SWIFT are multilateral, with the support of the entire EU. That's around double the economic power of the US alone, and roughly half of the entire…

The EU would only go along with this because the US has them by the proverbial balls. European militaries are a joke and there is no domestic political support for building them up.

Re: A quick breakdown of what SWIFT is and why it matters

#116

Post by tobylane »

gruez wrote: post #7

>Russia has also been building an in-house system since 2014—the last time SWIFT cutoff was threatened—which may mean they are able to temper some of the impact a cutoff would have on its economy. If they're building a replacement, doesn't that also mean we should use "cut off SWIFT" now, rather than later when it'll be ineffective?

That applies to a lot of known future sanctions. Eg clearly Germany would like to not need any gas pipeline, and Russia will aim to build more pipelines to China before German governments can say no more Russian gas. However, could excluding them from Swift at some point between 2014 and this week be justified?

Re: A quick breakdown of what SWIFT is and why it matters

#117

Post by stef25 »

gruez wrote: post #7

>Russia has also been building an in-house system since 2014—the last time SWIFT cutoff was threatened—which may mean they are able to temper some of the impact a cutoff would have on its economy. If they're building a replacement, doesn't that also mean we should use "cut off SWIFT" now, rather than later when it'll be ineffective?

They seem to be planning to use the CIPS, the Chinese alternative.

Re: A quick breakdown of what SWIFT is and why it matters

#118

Post by isodev »

legalcorrection wrote: post #115
aluminum96 wrote: post #93

Earlier quoted context omitted.

> in 2022 sanctions are ... effectively meaningless as most capable, observant countries have managed to sidestep in part or in whole the once dominant US hegemony This is only true to the extent that the US unilaterally imposes sanctions. The proposed sanctions involving SWIFT are multilateral, with the support of the entire EU. That's around double the economic power of the US alone, and roughly half of the entire…

The EU would only go along with this because the US has them by the proverbial balls. European militaries are a joke and there is no domestic political support for building them up.

You are assuming the US is leading the effort, which is not the case. Also EU and US are partners and allies and so mutual support is expected.

Re: A quick breakdown of what SWIFT is and why it matters

#119

Post by ajross »

legalcorrection wrote: post #111
s_dev wrote: post #80

Earlier quoted context omitted.

Nah -- Bill Browder seems to be a expert on this exact topic. He's saying to pull Russia from Swift. His experience suggests he is intimately familiar with the financial world and the consequences. He's the genesis of the Magnitsky Act -- the one thing that actually scares Putin. I know this because Putin even said if Russia was removed from Swift he would consider it an act of war. https://twitter.com/Billbrowder/st…

Him thinking that, however qualified he is, does not mean he's right. Being the CEO of a hedge fund, with a personal grudge against Russia, does not make you infallible. The US benefits enormously from owning the reserve currency and running the world financial system, and the ultimate effect of our trigger-happy approach to sanctions is to push countries away from those, especially with the US becoming a smaller per…

> The US benefits enormously from owning the reserve currency and running the world financial system, and the ultimate effect of our trigger-happy approach to sanctions is to push countries away from those

That seems belied by actual history. The US has been a "trigger happy" sanctioner for basically the entirety of the post-war era, and the dollar has been dominant throughout. What would change now that didn't when we sanctioned Iran, or Iraq, or Cuba, or Yugoslavia, or...

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