In the past two days, many readers have been shocked by Russia's sudden all-out attack on Ukraine, and many of them have also felt extremely excited.
Some people say that if your boyfriend is excited about Russia's invasion of Ukraine, he must not have bought stocks. It is not difficult to understand that when Russia and Ukraine go to war, the global stock market and futures market have entered a plunge mode.
But someone immediately retorted, maybe he bought gold, dollars, oil, gas? That's right, since the dollar and gold are safe-haven assets, while oil, gas, and wheat are commodities that Russia and Ukraine have a comparative advantage in, prices have soared in these areas.
Within a week, the situation took a sharp turn for the worse, with unprecedented unity between Europe and the United States, not only escalating sanctions and increasing military aid, but also removing Russia from SWIFT and turning Putin's country into an "international pariah."
Natural gas prices entered a sharp rise mode, at the same time, the US Federal Reserve issued a statement: the situation in Russia and Ukraine does not affect the Fed's interest rate hike in March, many European countries announced subsidies to maintain the new crown epidemic, Chinese Bank of China to continue to maintain loose monetary policy, hedge the impact of the international economic situation, to ensure that the economy [steady word] does not deviate...
For a time, some people were happy and some people were sad, shells and planes flew wildly, stocks and futures turned green, and different asset allocations had different lives.
In this chaotic and inconsistent moment, you have to listen to the tiger to break it down for you:
How will this war in Europe subvert the international order, impact global capital flows, and affect China's policy trends?
No.1 The financial nuclear bomb SWIFT is coming, how powerful is it?
Tiger real estate
After the announcement of sanctions to exclude Russian banks from SWIFT, the ruble plunged against the dollar. It can be seen that panic has caused a run.
The ruble plunged against the dollar.
The Central Bank of Russia announced a sharp increase in deposit rates to 20 percent. This is a very amazing level of interest rates. This is a financial wartime state, a measure taken to hedge against the risk of depreciation.
According to estimates by the former governor of The Central Bank of Russia, the current sanctions policy will shrink the Russian economy by 5%.
The impact is so big, where is SWIFT sacred? SWIFT, full name for the Association for Worldwide Banking Financial Telecommunication, is headquartered in Europe but is largely controlled by the United States.
Simply put, every international remittance in the world needs a SWIFT code, and only after foreign banks obtain this code can they cash in.
The so-called exclusion of a country from SWIFT means to cut off all international banking transactions in that country, so that all governments, enterprises, and individuals in this country cannot import goods and export goods through banks, and there is no way to make the most basic international payments.
Because Russia and Europe have close energy transactions, therefore, the SWIFT sanctions are not aimed at all banks and financial institutions, but it must be noted that the current international sanctions against Russia, in addition to excluding a number of banks from the SWIFT system, there are also freezes of all Russian overseas assets, prohibiting Russia from trading with using dollars, pounds, yen and other currencies, etc., in fact, it is very close to completely excluding Russia from SWIFT.
Since the trade between Russia and the United States is minimal, if the United States uses financial nuclear bombs against Russia, it will not harm the interests of the United States too much.
Correspondingly, in terms of trade, Russia has suffered a small loss, because since 2014, Russia has begun to de-dollarize, and the current foreign exchange reserves have all been changed to gold and other currencies, even the US dollar, which has been exchanged for tons of cash.
However, the loss of Europe is relatively large, and europe is highly dependent on Russian natural gas, so it will definitely choose a new payment channel to replace the dollar payment channel for Russian-European trade. According to this analysis, this is why SWIFT is applied only to the main Russian banks, not to all Russian entities.
Blocking all payment channels across Russia and Europe will force Europe to build a separate payment platform to accelerate the collapse of SWIFT.
For China, the problem is similar. The United States is deliberately planning to encircle China, and the final king bombing that cannot be triggered is to exclude China from the SWIFT system.
It must be noted that the situation in China is very different from that in Russia. Because China is currently the main pillar of global production capacity, if the United States excludes China from the SWIFT system, the impact on China will be huge.
Many people think that China's CIPS payment system can replace SWIFT, this view only considers China's side as a supplier, the problem is that most of the demand side of China's foreign trade is European and American countries, all use SWIFT. The cost of exchanging payments is very high.
Of course, sanctions themselves will also have a huge impact on the SWIFT regime. Compared with Russia, china's exclusion from SWIFT is more likely to lead to the collapse of the entire international financial system.
Therefore, using Sino-Russian trade to partially sanction China with SWIFT, maximize the damage to China, and reduce damage to the United States is the next possible measures for the United States.
No.2 Short- and medium-term impacts, and changes in wealth
1. Risk aversion has driven the rise of highly liquid assets
The short-term impact is of course brought about by the risk aversion, and the dollar and gold have soared. Usually in times of global turmoil, money seeks highly liquid assets, such as the dollar and gold, which remain international hard currency even though the dollar has depreciated beyond recognition.
Gold soared on the 24th, but gold fell back on the 25th, in addition to the factors of chasing high and falling, mainly because the Fed announced that the Interest Rate Hike in March, superimposed on Europe's emphasis on the stimulus economic policy in response to the epidemic was suspended. The higher the yield of the US dollar, the heat of gold has declined.
Under the risk aversion, global funds competing for dollars will force global central banks to raise interest rates and compete with the dollar for liquidity, so that the cost of obtaining funds for enterprises and residents will increase, and investment and consumption will be suppressed, which will play a role in delaying economic recovery after the epidemic.
2, shrinking production capacity has brought about a surge in commodities
As we all know, war will bring about shrinking production capacity, so what the two sides produce, what the two sides will produce, the price will soar. Russia produces natural gas, and Europe suspends approval of Nord Stream II, meaning that natural gas has skyrocketed; Ukraine produces wheat, and the current situation, wheat futures are also rising. As a result of panic, oil prices have peaked for years.
As commodity prices tend to be "contagious" upstream and downstream, the price of related assets rises, potentially exacerbating current levels of global inflation.
3. China has become one of the safe havens for funds
In recent times, the renminbi has continued to jump, with the onshore and offshore renminbi spot exchange rates touching their highest intraday highs at 6.3095 and 6.3016, respectively. On February 28, according to the china currency network quotation, the onshore yuan rose above 6.31 against the US dollar, continuing to hit a new high since April 2018.
It shows that under the panic psychology, RMB assets have become the "fragrant food" of global funds.
Under the panic mentality, RMB assets have become the "fragrant food" of global funds.
Since last November, "steady words" have "overridden".
On Friday, February 25, the People's Bank of China launched a reverse repurchase operation of 300 billion yuan in the form of interest rate bidding, and the open market achieved a net investment of 290 billion yuan, further significantly increasing the volume, and the central bank of the open market last week achieved a total net investment of 760 billion yuan.
When the United States raised interest rates, China cut the RRR, cut interest rates, and invested net money, which fully shows that China is hedging with financial policies and the United States. Since China is still the only manufacturing base in the world, China's production can still be guaranteed in the face of international inflation, raw material jumps, and supply chain disconnects. Therefore, China's loose monetary policy is more competitive under the global tightening monetary cycle.
No.3 Long-term shock: China faces a more intense international competitive environment
Does that mean that Russia attacks Ukraine and wins the most?
Don't be blinded by short-term gains, and in the long run, China faces more pressure.
Russia's all-out assault on Ukraine, with tanks carrying the flag of the former Soviet Union reappearing on the european continent, completely broke through the bottom line of European security.
In this way, France and Germany, which had planned for European independence, turned around and hugged the thighs of the United States, and from a geopolitical point of view, China was caught in a dilemma rather than saying that China was a strategic beneficiary.
In the past two days, the United States has called out to China to condemn Russia has become a daily operation. The most worrying trend is that the United States has used the trade relationship between China and Russia to demand that China choose either or the other. In this way, russia's extreme repression will be extended to China.
Because in the official statement of the United States, Russia and the former Soviet Union can only challenge the Opponents of the United States at the military level. China, on the other hand, is a country that can comprehensively challenge the United States at all levels, both militarily, politically, and economically.
Therefore, the biggest concern of the United States is that it will not be able to focus all its attention on China.