jhungary
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What about natural resources such as gold, silver, tin, copper, gemstones, oil, natural gas etc? Money itself without resource backing it doesn't mean much. That is why the US dollar is based on the petroleum sales through OPEC. So in this instance, Russia is a major producer rare earth minerals, natural gas, oil, and other minerals. Internally Russia should be fine with some squeeze on the petroleum exports, but over time, it should weather those sanctions as well.
Actually, US dollars that based on oil is a myth, first of all, US is the largest Oil Production country in the world, at 11.3 billions barrel a day, Trumping the next 2 by 2 billions a day (Russia at 9.8Billions and Saudi at 9.2) so even if USD is based on OPEC, that's still controlled by the US.
But no, because compare to Oil Production. USD itself is a much more valuable commodity, because it has been traded ! 5 Trillions a day, At a whopping 25 quadrillion dollar a year rate with roughly 250 trading day (SWIFT don't trade on the weekend), That 25000 trillions (1 quadrillion = 1000 trillion), Oil market on the other hand, is a 134 Trillion dollar market annum (That's very impressive by the way, that's 6 times of US GDP, but only about 1/200 of what SWIFT Traded a day). And we know US Dollar is 61% of World reserve, which mean 61% of those 25000 trillion transaction would be in USD. And that is just SWIFT, (international bank-bank transfer) I am discounting Currency trade, settlement, and domestic trade, which I have no idea how much of a market those.
How Much Money Does Swift Banking Handle? - TheCornerStoneBank.com
SWIFT - the systemically important financial institutions - can handle about $5 trillion in transactions daily, approximately 250 business days each year,
www.thecornerstonebank.com
Problem with commodity like gold, oil, silver, tin etc, is that you need a buyer to buy them or it virtually worth nothing but a lump of tin sitting at your desk. Which is what the sanction is about. You have have 300 tons gold sitting in a bank, but with nobody buying it, it worth nothing, not sure does that make sense to you?
But then you will probably ask, how about China? Or other Allies of Russia? Well, specifically speaking, they don't have any trading partner that can have much purchasing power vis-a-vis the west, except China, but then China also have their limit. IT's not like they can swallow the entire Russian economy on their own, even with country like Cuba, Venzuela, Belarus, Kazakhstan, Uzbekistan help. And then China would also need to consider whether or not it's to their advantage to break the sanction and help Russia. Because yes, US cannot hold China responsible if they break the Sanction and trade with Russia, but US Treasury department and EU can stop their own company trading with Chinese company. That is the risk China will take if they decided to help Russia.