What is SWIFT and why it might be the weapon Russia fears most

[El Presidente]

I only post this to show how effective being exluded from the world financial system is as a means of state punishment.  

 

 

What is SWIFT and why it might be the weapon Russia fears most

Some are calling it the "nuclear option".

As Western governments threaten Russia with a package of unprecedented sanctions aimed at deterring President Vladimir Putin from ordering an invasion of Ukraine, there's one measure in particular that appears to strike fear at the heart of the Kremlin: cutting the country off from the global banking system.

US politicians have suggested in recent weeks that Russia could be removed from SWIFT, a high security network that connect thousands of financial institutions around the world.

Senior Russian lawmakers have responded by saying that shipments of oil, gas and metals to Europe would stop if that happened.

"If Russia is disconnected from SWIFT, then we will not receive [foreign] currency, but buyers, European countries in the first place, will not receive our goods — oil, gas, metals and other important components," Nikolai Zhuravlev, vice speaker of Russia's upper house of parliament, said Tuesday, according to state media outlet TASS.

The Society for Worldwide Interbank Financial Telecommunication was founded in 1973 to replace the telex and is now used by over 11,000 financial institutions to send secure messages and payment orders. With no globally accepted alternative, it is essential plumbing for global finance.

Removing Russia from SWIFT would make it nearly impossible for financial institutions to send money in or out of the country, delivering a sudden shock to Russian companies and their foreign customers -— especially buyers of oil and gas exports denominated in US dollars.

"The cutoff would terminate all international transactions, trigger currency volatility, and cause massive capital outflows," Maria Shagina, a visiting fellow at the Finnish Institute of International Affairs, wrote in a paper last year for Carnegie Moscow Centre. Excluding Russia from SWIFT would cause its economy to shrink by 5 per cent, former finance minister Alexei Kudrin estimated in 2014.

 

FULL ARTICLE

[NSXCIGAR]

Not gonna happen.

Senior Russian lawmakers have responded by saying that shipments of oil, gas and metals to Europe would stop if that happened.

Europe, particularly Germany, has become extremely dependent on Russian resources. They've got them by the Hoden. 

[Fosgate]

I would not underestimate Russia and her capabilities. Especially if two to three others chomping at the bit to settle scores want to run their own campains while U.S. and Eu are busy. 

 

 

[El Presidente]

25 minutes ago, NSXCIGAR said:

Not gonna happen.

Senior Russian lawmakers have responded by saying that shipments of oil, gas and metals to Europe would stop if that happened.

Europe, particularly Germany, has become extremely dependent on Russian resources. They've got them by the Hoden. 

They have a couple of sticks that they can use. 

Cuba has none 

[Fuzz AI]

Oh, my mistake. I thought the acronym was: "Sh*t, We In F****** Trouble"

[Kaptain Karl]

This has been a diplomatic disaster. Europe appears weak, divided, and unsure while Putin is running circles around them. The EU nations need to stand up so the US can focus on countering China, not splitting our responsibilities on other sides of the globe. 

[NSXCIGAR]

4 hours ago, Kaptain Karl said:

Europe appears weak, divided, and unsure while Putin is running circles around them.

No doubt--because they have become dependent on Russia and don't want to come down on them too hard. No surprise. And I don't recall Europe ever really giving too much of a hoot about Ukraine anyway.

I'm a little confused though--most eastern Ukrainians are pro-Russia and most Western Ukrainians are pro-Ukraine/Pro West correct? Does Putin really want to occupy Western Ukraine? Doesn't he just not want the missiles in eastern Ukraine?

I think it's time to split this country down the middle. Wouldn't everyone be happier that way? 

[nKostyan]

Greetings to all from Russia!
I will not arrange a political educational program, anyone who knows how to get objective information will figure it out for himself - usually the truth is somewhere in the middle.
As for SWIFT, it is a FAST payment tool. Disabling it is just a transition to slow payments. Russia has never stopped supplying gas to its customers, never.
I will just quote the answer of one of the politicians so that you understand that this will be a problem for the buyer "If they do this, the Europeans will have to bring payments to Russia in cash in suitcases".

Personally, it will be a problem for me to buy cigars online, but thanks to FOH, I have a stock that will allow me to hold out for some time ;-)

[Bijan]

3 hours ago, NSXCIGAR said:

I'm a little confused though--most eastern Ukrainians are pro-Russia and most Western Ukrainians are pro-Ukraine/Pro West correct?

Yes wikipedia has a map of Ukraine section by section by percentage of Russian or Russian speakers.

https://en.m.wikipedia.org/wiki/Ukraine#/media/File%3AUkraine_census_2001_Russian.svg

Russian will likely pick off and absorb the most Russian areas.

[Fosgate]

I still believe NATO should have been dissolved within 10 years after the wall in Berlin fell and responsibilities for protection transferred to each individual nation and the UN for it's sovereignty. Some say the UN is a walking cluster f#$k trying to communicate and each nation wants to lead it's own soldiers but can't communicate well with everyone else when it comes down to brass tacks. I went on NATO and UN run deployments and as a communications specialist around upper and middle management I can say they are equally as bad. But really like the first video I posted. It was recommended NATO expansion into the eastern block states would be a huge mistake in foreign policy and so far it is proving them right. 

As nKostyan mentions, "If they do this...." Seeing how much our blundering leadership has done the last 20 years, and the last 5 years "Russia, Russia, Russia" I believe they think they are smart and slick enough to pull "it" off and make millions for themselves in the process. I really hope they are not. About 4 years ago a friend and I were out snowmobiling up in the Black Hills of SD (my back yard). Yes we have Russian soldiers here since the late 80's as an exchange for monitoring each others nuclear arsenals. After a quick snow storm dumped on us and came across a couple Russian soldiers that had their vehicle stuck. One stayed with the truck with my buddy and I gave a ride to the other back to their barracks and then them back to the site, helped get it unstuck and they let us warm up back up before leaving. In the process one of their officers and the two guys all loved cigars and we met up a few times later at the local cigar lounge until they rotated back to Russia. We had the conversation a couple times when the news would pull up accusations about Russia interfering and we'd all roll our eyes.

With relations doing well, why would the U.S. risk this approach unless our politicians were under the influence of someone else. We all agreed, if crap started between the US, Europe and Russia, it would be a perfect opportunity for China to take Taiwan (and Hong Kong at the time), North Korea to invade South Korea (again) and Iran to take over Iraq. Really, why not? Just thinking of the logistics of multiple fronts between multiple countries may just work for those wanting to take them over. Now after seeing how quickly the U.S. pulled out of Afghanistan is either a Panic move because they suddenly realized what may be coming, or they want one of those 4 countries to salivate in making a move in order to pick a fight with one of them. Or at least the threat of it for some sort of kickback coming to them. I just look at politicians from the local level on up to the top in Federal Govt as extortionists. At the local level, they squeeze businesses for contributions in favor of not passing laws that make it tougher for that business and they spread word in the local press. They do it all the way to the top. I think this is the game these extortionists are playing and at a level with very dangerous consequences that we will pay for. I hold a special place of disgust for politicians. 

[Trapper99]

17 hours ago, NSXCIGAR said:

I'm a little confused though--most eastern Ukrainians are pro-Russia and most Western Ukrainians are pro-Ukraine/Pro West correct? Does Putin really want to occupy Western Ukraine? Doesn't he just not want the missiles in eastern Ukraine?

I think it's time to split this country down the middle. Wouldn't everyone be happier that way? 

I think Putin would be happy, and 35-40 million Ukrainians would be very pissed. A 15% minority can't be used as justification to split up a country. If they have that big of a problem, they can move to Russia. 

14 hours ago, Bijan said:

Russian will likely pick off and absorb the most Russian areas.

Most of those areas are already under Russian control. Any new areas are going to be majority Ukrainians.

Since this is a cigar forum, me and the FIL enjoying some Trinidads a few weeks ago, in Ukraine, 2 hour drive from the Donetsk. 

[Fuzz AI]

22 hours ago, nKostyan said:

Greetings to all from Russia!
I will not arrange a political educational program, anyone who knows how to get objective information will figure it out for himself - usually the truth is somewhere in the middle.
As for SWIFT, it is a FAST payment tool. Disabling it is just a transition to slow payments. Russia has never stopped supplying gas to its customers, never.
I will just quote the answer of one of the politicians so that you understand that this will be a problem for the buyer "If they do this, the Europeans will have to bring payments to Russia in cash in suitcases".

Personally, it will be a problem for me to buy cigars online, but thanks to FOH, I have a stock that will allow me to hold out for some time 😉

Yes, Europe wants Russian gas... but in tankers, not tanks!

[nKostyan]

Yes, Europe wants Russian gas... but in tankers, not tanks!

There is a Soviet joke: a journalist interviews an elderly man.
- How do you prefer to travel to Europe, by air, sea, railway?
- Hmm... The last time it was: on the tank's armor

In fact, it is surprisingly cynical that Europe is always talking about the "Russian threat", while since the 18th century European states have regularly waged wars on the territory of Russia, destroying tens of millions of people....

[Fosgate]

https://www.military.com/daily-news/2022/01/27/troops-these-bases-are-alert-deployment-over-ukraine-crisis.html  🙄 Now I know the leadership is bluffing. 8,500 troops put on alert is nothing. Barely a single Brigade size.

[nKostyan]

https://www.military.com/daily-news/2022/01/27/troops-these-bases-are-alert-deployment-over-ukraine-crisis.html   Now I know the leadership is bluffing. 8,500 troops put on alert is nothing. Barely a single Brigade size.

These forces are "psychological support".
For today, the alignment is as follows:
- The Ukrainian rebels have 35,000 fighters on their territory
- Ukrainian army 125,000 on the border with the rebel territories
- Russian troops on the border with Ukraine 125,000
Open any textbook on military affairs and you will learn that a 3-4-fold superiority is needed for a successful attack.
In this solitaire, we see that Russia has not formed a shock army of 400-500 thousand. But Ukraine has formed a shock army against the rebels with the necessary superiority. Even if Ukraine launches an attack on the rebels, the Russian group will only be able to defend itself effectively.

[NSXCIGAR]

11 hours ago, Trapper99 said:

A 15% minority can't be used as justification to split up a country.

If the 15% is ready to fight the other 85% and is located in a separate geographical area bordering a superpower ready to support it I would think separating is certainly an idea worth considering. 

Do the pros of separation outweigh the cons at this point? Is having a unified Ukraine with a passive Russia really sustainable long-term? 

[MrBirdman]

On 1/26/2022 at 10:22 PM, NSXCIGAR said:

I think it's time to split this country down the middle. Wouldn't everyone be happier that way? 

This has little to do with liberating ethnic Russians - it is about reasserting Russia’s geopolitical presence on the continent and stopping any further expansion of NATO.

Part of Putin’s calculation in interfering in US politics is that it will elect leaders hostile to NATO and sow internal doubt about its value. So far, mission accomplished 

[NSXCIGAR]

10 hours ago, MrBirdman said:

This has little to do with liberating ethnic Russians - it is about reasserting Russia’s geopolitical presence on the continent and stopping any further expansion of NATO.

I'm not suggesting that it is about that. But if Russia invades don't the chances of Ukraine joining NATO increase? If eastern Ukraine broke off Russia would have a buffer zone and Ukraine would feel a lot less threatened as well not having to worry about Russia in the east. I'm just asking what are the actual pros and cons of splitting the country and also asking whether remaining intact is a realistic long-term proposition.

10 hours ago, MrBirdman said:

Part of Putin’s calculation in interfering in US politics is that it will elect leaders hostile to NATO and sow internal doubt about its value. So far, mission accomplished

How exactly is Putin interfering in US politics? I hope you're not talking about some Facebook ads...

And I'm not aware of any prominent US politician that is even close to hostile to NATO. NATO has expanded under every US administration. It seems like the Europeans are far less enthusiastic about it. Tying yourself economically to the nation you're supposed to be worried about seems a bit contradictory.

[HarveyBoulevard]

2 hours ago, NSXCIGAR said:

“Tying yourself economically to the nation you're supposed to be worried about seems a bit contradictory.”

 

It’s worked for the U.S. at it relates to China…

 

Edit:  That being said, I agree with your statement.

[Chas.Alpha]

2 hours ago, NSXCIGAR said:

I'm not suggesting that it is about that. But if Russia invades don't the chances of Ukraine joining NATO increase? If eastern Ukraine broke off Russia would have a buffer zone and Ukraine would feel a lot less threatened as well not having to worry about Russia in the east. I'm just asking what are the actual pros and cons of splitting the country and also asking whether remaining intact is a realistic long-term proposition.

How exactly is Putin interfering in US politics? I hope you're not talking about some Facebook ads...

And I'm not aware of any prominent US politician that is even close to hostile to NATO. NATO has expanded under every US administration. It seems like the Europeans are far less enthusiastic about it. Tying yourself economically to the nation you're supposed to be worried about seems a bit contradictory.

The US is very much economically tied to China...

 

27 minutes ago, HarveyBoulevard said:

Tying yourself economically to the nation you're supposed to be worried about seems a bit contradictory.

It’s worked for the U.S. at it relates to China…

Wow! We typed the same thing at the same time!!! 😀

[NSXCIGAR]

1 hour ago, HarveyBoulevard said:

It’s worked for the U.S. at it relates to China…

I don't recall the US ever being occupied or having a reasonable fear of invasion by China. There's no military alliance specifically geared towards protecting the US from China. 

And I think people are starting to realize the US economic relationship with China is becoming problematic. I expect that relationship will diminish significantly over the coming years. 

[Trapper99]

On 1/28/2022 at 4:01 AM, NSXCIGAR said:

If the 15% is ready to fight the other 85% and is located in a separate geographical area bordering a superpower ready to support it I would think separating is certainly an idea worth considering. 

Do the pros of separation outweigh the cons at this point? Is having a unified Ukraine with a passive Russia really sustainable long-term? 

The dominant areas of leaning Russian areas are under Russian control. Some areas may be at best a plurality, but most in dominant pro Ukrainian, and they have no interest to put back under the Russian thumb. The babuskas remember the stories from their parents about Holodomor (nice it’s telling me it’s a misspelled word). But Putin saying he is just trying to rescue ethic Russians is a load of BS. What his true intentions are is hard to say. I think it’s water for Crimea short term, and choke Kyiv long term and get a pro Russian president. Hard to predict a former KGB authoritative dictator.

Putin will take as much as he can for as little as it cost. The best thing the Ukrainian can do is draw the line, and make the cost to great. That’s the only way to back down a bully. 

 

[NSXCIGAR]

1 minute ago, Trapper99 said:

But Putin saying he is just trying to rescue ethic Russians is a load of BS. What his true intentions are is hard to say.

I'm not even aware that Putin was selling this as rescuing ethnic Russians. That justification seems highly dubious to me as well. I think Putin is just going to take Ukraine if he thinks he can and consequences and losses will be minimal which at this point it seems will be.

My only observation was that both eastern Ukraine and Russia would be happy together, so perhaps let them have it. I'm just curious as to why splitting the country isn't being discussed as a viable option. I think it would bring the temperature down on the whole situation. Everyone would get what they want. I suppose western Ukraine wants to keep the east but it may not be feasible to do so. Is it practical to hold on to an area that doesn't like you and doesn't want to be part of you and has a big friend that is willing to fight you? 

[HarveyBoulevard]

1 hour ago, NSXCIGAR said:

My only observation was that both eastern Ukraine and Russia would be happy together, so perhaps let them have it. I'm just curious as to why splitting the country isn't being discussed as a viable option. I think it would bring the temperature down on the whole situation. Everyone would get what they want. I suppose western Ukraine wants to keep the east but it may not be feasible to do so. Is it practical to hold on to an area that doesn't like you and doesn't want to be part of you and has a big friend that is willing to fight you? 

If I had to guess it would natural resources...mainly made of fossils...

[nKostyan]

I'm not even aware that Putin was selling this as rescuing ethnic Russians. That justification seems highly dubious to me as well. I think Putin is just going to take Ukraine if he thinks he can and consequences and losses will be minimal which at this point it seems will be.
My only observation was that both eastern Ukraine and Russia would be happy together, so perhaps let them have it. I'm just curious as to why splitting the country isn't being discussed as a viable option. I think it would bring the temperature down on the whole situation. Everyone would get what they want. I suppose western Ukraine wants to keep the east but it may not be feasible to do so. Is it practical to hold on to an area that doesn't like you and doesn't want to be part of you and has a big friend that is willing to fight you? 

Ukraine is a corrupt country with a ruined industry. It has to be sponsored by someone. Until 2014, Russia was the sponsor: cheap gas, duty-free trade and rent of a base in Crimea. If there had been a need, Ukraine could have been captured completely at the end of 2014, when its army suffered a complete fiasco in the Donbass. But Russia didn't need it. Instead, the "Minsk agreements" were concluded, which ensure the integrity of the country, two regions are given the opportunity to self-government (approximately the same as US states). However, so far Ukraine has not fulfilled the Minsk agreements. At the end of 2021, Ukraine assembled a shock army on the border with Donbass to resolve the issue by force. To warn Ukraine against a military solution, Russia has made it clear that its army is ready to support the rebels.

As for Europe, for the USA it is the same competitor as China. Blocking SWIFT and depriving the European industry of cheap Russian gas, thereby reducing the competitiveness of European goods, is one of the goals.