Thursday, April 03, 2014

SWIFT Wars - America Blinks First

America's attempt to use SWIFT (letting JPMorgan block a Russian payment for Sogaz, part-owned by sanctioned Bank Rossiya) as a means of pressurising Russia into backing down in the Crimea dispute has fizzled out, as America has blinked first.

JPMorgan will now, "following consultation with our regulators", process the payment.

Whilst this little financial skirmish, on the face of it, appears to have fizzled out there will be long term ramifications. Russia and other countries (eg China, those in the Middle East etc) will not accept having their economies threatened by US actions such as this, the Dollar will not remain the reserve currency of the world for much longer.

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