There are three reasons to wonder if Putin’s Russia is as much on the ropes as is being reported out of Washington and London. This is not to say the Russian people themselves are in a good place; just that their uncrowned czar has prepared a pretty decent fortress for himself and his court.
** Russia has amassed $620bn in reserves since it annexed Crimea in 2014.
** Russia has consciously reduced its engagement with the financial system in which the US has leverage. Since 2014, Moscow has been diversifying its markets, with China now set to become one of Russia’s largest gas buyers.
** Also, since 2014, Russia has been de-dollarising with a vengeance. Almost a fifth of its central bank reserves is now in Chinese renminbi.
Wiser people than I have been calling the Russian (and Chinese) moves the new Great Game – in global currency.
China wants to bring all the countries that are cheesing off and being cheesed off by the US within its political orbit. The new financial world order would bolster Beijing and diminish the dollar from its perch as the sole global reserve. This would severely constrain America’s capacity to threaten (or place) sanctions on rogue nations (Russia, Iran, North Korea…) or indeed, to manage its own debt load. This would naturally have implications for America’s global influence.
The rich de-dollarised Russian bear matters more than on the border with Ukraine.