Quote (Bazi @ Feb 25 2022 09:37pm)
Reading through this is so painful
I think a huge underlying issue is not being given enough attention
Ukraine primary exporter of neon/PD semi conductors to US
Taiwan primary exporter of rare semis to the entire world
Semi conductors will fuel all modern economies, it is quite clear Russia will concede losses in their market for this agenda. Not to mention their major assets are oil , gas , gold and what is happening to each of these? The sanctions and even cutting them from swift will hurt but Russia has contingencies with SPFS and probably even CIPS if it came to it.
Russia won’t expand passed Ukraine so reinforcing Germany and NATO nations is just theatrics
And aside from Ukraine semi conductors, the US doesn’t have much skin in the game and isn’t as vulnerable to gas /oil energy crisis that Europe is going through.
The real question is what next? If China chooses to take Taiwan, then the US is in a very precarious semi conductor position. Furthermore what happens with rate hikes with energy costs increasing.
^dro94
Too much garbage to sift through so idk if u have already commented, if you have I’m sorry. I would be interested in your thoughts particularly as a neutral resident European
@ bolded, neon supply can be easily replaced, so it shouldn't be too impactful
Palladium is a big one that Russia dominates world exports of that will cause high inflation in cars
Semiconductors are a priority for US/China/EU to have much stronger domestic production of and it's increasing rapidly already. Taiwan's share will decrease over time and become less strategically important to China (not that it'll stop them from attacking them eventually)
1) SPFS only works in Russia (pretty much anyway), so there would still be huge economic pain for Russia if they couldn't use SWIFT. 2) Higher transaction costs, but less impactful than 1)
@ green. That is true, but baltic states are fearful of an invasion due to Russian aggression, so want to feel safe. Can you blame them?
Rate increases will happen at a faster rate than anticipated across the world to curb inflation, I don't think it'll be significant compared to historical averages, but post-08 it will be. Russia are almost certainly going to have to raise interest rates to 12-15% to curb inflation and a further erosion of the ruble. They only increased it to 9.5% 2 weeks ago. Russia will certainly have a minor recession of about 1% GDP contraction in the next year but not a major recession due to high cash reserves, high brent crude and efforts of 'fortress kremlin' policies
Investors will be flocking to mining companies, pharmaceuticals, and producers of other price inelastic goods that are somewhat inflation proof. You can see that with investors flocking to dinosaur indeces like the FTSE100
The US will barely be impacted by sanctions on Russia. The EU will have roughly a 0.5% GDP growth hit in 2023 from the sanctions, the UK is forecasted to be slightly less than that as we trade less, and are therefore less reliant, on Russia
As I said earlier, the biggest ramifications of these sanctions are going to be the West looking for long term alternative suppliers of key resources. Investment in renewables will pick up significantly in the coming years, ramp up LNG production and have closer ties with Middle Eastern countries that can bridge the gap on energy supplies over the coming years