A SWIFT Cut, but Not a Deep One

Fisher Investments throws cold water on the idea that (some) Russian banks being ejected from the SWIFT (Society for Worldwide Interbank Financial Telecommunication) banking network will trash that nation's economy:

This hardly pulled the plug on Russia's ATM. (Image by Eduardo Soares, via Unsplash, license.)

Those who argue the SWIFT expulsion will kneecap Russia’s economy point to the deep economic pain in Iran after US sanctions effectively barred all Iranian banks from SWIFT. Thing is, those sanctions included measures targeting Iran’s oil and gas exports, which is what actually crippled Iran’s economy. So far, the West has done no such thing to Russia—the SWIFT ejection applies only to some (heretofore unspecified) banks, meaning there are other banks that still have access and can process oil and gas transactions. Some officials told the press Monday that they are doing so to avoid interfering with the oil trade.

This, of course, is to ensure Russian oil and gas continues flowing to Continental Europe, which relies on that supply. But it also ensures the source of half of Russia’s government revenues is alive and well, which limits a lot of the potential economic damage. Beyond that, SWIFT isn’t technically a money transfer system; rather, it is a messaging system...

The analysis goes on to explain other factors that limit the harm that move will do to Russia, as well as what Putin can do to stabilize the Ruble.

Europe's need for fossil fuels -- coupled with its own self-crippling "Green" anti-energy policies -- are together already undermining whatever war effort there is.

Once this becomes more and more apparent, look for Greens to blame the need rather than their policies, and to call for Europe to overcome its "addiction" to fossil fuels even faster.

-- CAV

Updates

Today: Corrected a typo.