The West's Plan To Drop Russia From SWIFT Hilariously Backfires

Tyler Durden's picture




 

Submitted by Simon Black via Sovereign Man blog,

If Vladimir Putin is remotely capable of laughter (the jury is out on that one…) then he’s probably doing so right now.

Russia is once again Arch-Enemy of the United States. It’s like living through a really bad James Bond movie, complete with cartoonish villains.

And for the last several months, the US government has been doing everything it can to torpedo the Russian economy, as well as Vladimir Putin’s standing within his own country.

The economic nuclear option is to kick Russia out of the international banking system. And the US government has been vociferously pushing for this.

Specifically, the US government wants to kick Russia out of SWIFT, short for the Society of Worldwide Interbank Financial Telecommunications.

That’s a mouthful. But SWIFT is an important component in the global banking system because it lays the foundation for banks to communicate and transfer funds with one another.

It’s a network protocol of sorts. Whenever a bank in Pakistan does business with a bank in Portugal, the funds will clear through the SWIFT network.

According to the SWIFT itself, they link over 9,000 financial institutions worldwide in over 200 countries, which transact 15 million times per day.

Bottom line, being part of SWIFT is critical to conducting business with the rest of the world. And if Russia gets kicked out of SWIFT, it would be a disaster.

Now, SWIFT is technically organized as a ‘Cooperative Society’ and governed by a board of directors.

There are 25 available board seats, and each seat is allocated for a three-year term to a specific country.

The United States, Belgium, France, Germany, UK, and Switzerland each hold two seats. A handful of other countries hold just one seat. And of course, most countries don’t hold any seats at all.

Here’s what’s utterly hilarious—

On Monday afternoon, not only did SWIFT NOT kick Russia out… but they announced that they were actually giving a BOARD SEAT to Russia.

This is basically the exact opposite of what the US government was pushing for.

Awkward…

But this story is even bigger than that.

Because at the same time that the US government isn’t getting its way with SWIFT, the Chinese are busy putting together their own version of it called CIPS.

CIPS stands for the China International Payment System; it’s intended to be a direct competitor to SWIFT, and a brand new way for global banks to communicate and transact with one another in a way that does NOT depend on the United States.

We’ll talk about CIPS in more details in a future letter. But in brief, it addresses some serious weaknesses, inefficiencies, and technological challenges of SWIFT.

And it should be ready to go later this year.

Make no mistake, this is the beginning of the end of the US dollar’s global hegemony. It’s time to stop hoping that it won’t happen and time to start preparing for it.

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Thu, 03/12/2015 - 16:33 | 5882891 no more banksters
Thu, 03/12/2015 - 16:44 | 5882928 cossack55
cossack55's picture

"Must stop moose and squirrel"

Thu, 03/12/2015 - 16:44 | 5882936 Nafets93
Thu, 03/12/2015 - 16:54 | 5882947 maskone909
maskone909's picture

im pretty sure tyler durden blew up the swift servers in the end of Fight Club.  atleast, thats the extent of the message i received. 

edit

 

have you guys ever experienced what it is like to be in "Check Systems"?  its a fucking nightmare.  it is basically the swift network for slaves like you and i.  if you owe the bank money, and you default, you go to check systems, and for other various reasons.  well, try to function in everyday life on a cash basis.  as i found, its extremely difficult. it has come to the point that you must have a checking account to accomplish day-to-day activities.  this imho is in direct violation of our constitution.  any how stay tuned for more of "maskone909's checks systems adventures"

Thu, 03/12/2015 - 17:01 | 5883001 Philo Beddoe
Philo Beddoe's picture

Create a joint checking account with someone you would never fuck over. Or, if you have really earned someone's trust....open an account in their name.  The trick here is not to detonate every bridge you cross. Not as easy as it sounds...believe me. 

Thu, 03/12/2015 - 17:48 | 5883195 Ruffmuff
Ruffmuff's picture

Fuck it. Get a cap one card. It paid my stay in cozemel.  Cash system. WTF are you fucks dinasaurs?  No checking account?  IT is only for cash transfers without having to be there in person. What a bunch of retards.

Move the fuck forward or be left behind.  How the fuck do you pay the cable bill to go on the internet?  OK, go to the library. Fuck you I pay 200 bucks a year for the library for assholes to use free internet?  

My dad likes to do everything cash. Fuck him too.

Thu, 03/12/2015 - 17:52 | 5883209 Pladizow
Pladizow's picture

What Putin thinks:http://youtu.be/MPWBqnYVTws

Thu, 03/12/2015 - 18:11 | 5883279 Self-enslavement
Self-enslavement's picture

Swift only benefits the Jews and their parasitic criminality. Fuck that. Cips benefits and facilitates trade. Good for BRICS.

Thu, 03/12/2015 - 18:33 | 5883366 Gazooks
Gazooks's picture

sad it will take an emp

 

just to silence some dickwads

Thu, 03/12/2015 - 20:09 | 5883632 mvsjcl
mvsjcl's picture

And anyone else notice that most movie and tv show villians are now Russian? Weird eh?

Thu, 03/12/2015 - 20:20 | 5883663 strannick
strannick's picture

Putin laughs his ass  off at a MSMedia a hole

https://m.youtube.com/watch?v=8ux3oiWELIQ

Fri, 03/13/2015 - 08:26 | 5884611 Truthseeker2
Truthseeker2's picture

Journalist makes Putin laugh, almost to tears.

 

This video provides the context

Thu, 03/12/2015 - 20:18 | 5883664 strannick
Thu, 03/12/2015 - 21:21 | 5883824 The_Dude
The_Dude's picture

Flipping channels I see that they play 'Rocky 4" on CMT about every 3 days now.....need to get those boys from the Midwest to get with the program(ming).

Fri, 03/13/2015 - 00:28 | 5884219 TheReplacement
TheReplacement's picture

Da

Fri, 03/13/2015 - 03:42 | 5884359 pendragon
pendragon's picture

caution! fluffers at work

Fri, 03/13/2015 - 04:12 | 5884371 TheFourthStooge-ing
TheFourthStooge-ing's picture

Thanks for the warning, Mister Kittycat. So who are you and the rest of the Kiev Kartofel Korps slurping today? Jean-Claude Juncker? Tony Cameron? I'll bet it's the manly man's man, General Philatio Manlove.

Thu, 03/12/2015 - 17:56 | 5883226 Stoploss
Stoploss's picture

Well, lets hope he doesn't read ZH and let's you in during the next blackout.

Thu, 03/12/2015 - 18:30 | 5883350 f16hoser
f16hoser's picture

When it comes to Russia, Obama is like a "One-Legged Cat trying to bury Shit on a Frozen Pond!" You can't help but laugh...

Thu, 03/12/2015 - 21:26 | 5883835 pgroup
pgroup's picture

You're the most popular fucktard at parties, right? Everybody wishes they could be like you, right?And you can't keep up with all the pussy throwing themselves at you, right?

None of the above. You're just an azzhole. Of course if there is someobscure joke buried in your comment, then let me say ... you're still an azzhole.

Fri, 03/13/2015 - 00:27 | 5884217 TheReplacement
TheReplacement's picture

Apparently you do not read or comprehend what was said.  The word default was used.  WTF are you blind?

Thu, 03/12/2015 - 23:40 | 5884165 roddy6667
roddy6667's picture

Some people burn every bridge before they cross it.

Thu, 03/12/2015 - 17:03 | 5883009 davidalan1
davidalan1's picture

This !!

experienced it first hand when i found myself and my wife in Billings Mt. of all places-- and couldnt rent a fucking car with cash...pissed me off to the max. However, on a brighter note I called a local cab company and they said they would take cash and drive us to Bozeman Airport. The Cabbie had a nice van and smoked...go figure. Ten times better than a rental. God is good...go with the flow

Thu, 03/12/2015 - 17:12 | 5883049 maskone909
maskone909's picture

thanks bro's.  yeah it was quite the nightmare. i filed for bk when i was 20.  32 now.  although it was along time ago, i can still remember how frustraiting it was.  everytime i swipe my debit card i am thanking god i dont have to go through that agian- and thats the worst part!  it makes you realize how dependent you really are on their products.  to actually be thankful to have the privilage to use a bullshit plastic card...  what a world

Thu, 03/12/2015 - 17:44 | 5883170 disabledvet
disabledvet's picture

I find it interesting that a Judge...in New York City no less...refuses to let Citigroup loan to Argentina.

 

How else is the country suppose to pay the already exorbitant interest on the exorbitant debt?

 

One day New York City is going to find out what that means.  "Sorry, no credit for your financial system.". Those clowns wouldn't even exist were it not for the American taxpayer.

 

Indeed...destroying said taxpayer (aka Whitney Tilson) seems to be their specialty.  I mean who wants to publicly short a retailer let alone sue them?

 

These businesses employ tens of thousands, pay property taxes and to my knowledge do not knowingly engage in harmful behavior...unlike say...CBS.

 

Maybe its time someone started suing the media now that we know what side of the recovery they are on...

Thu, 03/12/2015 - 20:55 | 5883756 Ranger4564
Ranger4564's picture

The intent is clearly to force Argentina into a Greek style default.

Thu, 03/12/2015 - 23:04 | 5884108 willwork4food
willwork4food's picture

Indeed...destroying said taxpayer (aka Whitney Tilson) seems to be their specialty.  I mean who wants to publicly short a retailer let alone sue them?

He is short LL stock. He wants them to crash, which would be a huge mistake for workers around here.

Fri, 03/13/2015 - 02:06 | 5884302 7.62x54r
7.62x54r's picture

The intent was to try to make Argentina pay full value to some speculating retards who bought that bad debt up at pennies to the dollar, by not allowing Argentina to settle the debts with a partial payment.

Which leaves them no choice but to default on everyone now.

Not that I have a bit of sympathy for bankers who loan money to known deadbeats, and the shareholders who let them

Just sympathy for the depositors who's deposits are now backed with bad paper.

Fri, 03/13/2015 - 00:37 | 5884227 TheReplacement
TheReplacement's picture

Is it not a law that they have to accept legal tender, aka, cash?  If really true, one smells a lawsuit.

Fri, 03/13/2015 - 02:09 | 5884306 7.62x54r
7.62x54r's picture

The federal reserve act doesn't apply to other countries. A federal judge simply forbade them to accept partial payments of federal reserve notes in return for debt forgiveness.

Which will now drive hem to default, and now no one will get paid.

Thu, 03/12/2015 - 18:30 | 5883344 Oldrepublic
Oldrepublic's picture

In Los Angeles it was not possible a couple of years ago to pay in cash for the airport shuttle from the local subway. I asked the bus driver what happens if someone did not have a credit card, he replied that the non credit card carrying passenger would have to ask someone on the bus as a favor to use their credit card!

Thu, 03/12/2015 - 18:39 | 5883389 Solio
Solio's picture

Go wit the pho!

Thu, 03/12/2015 - 19:10 | 5883462 mc225
mc225's picture

pho! and a spring roll! (or three). you tried bun bo hue?

Thu, 03/12/2015 - 20:29 | 5883698 Crash Overide
Crash Overide's picture

SWIFT all of a sudden kissing Russia and China's ass because they developed a competitive system they don't control.

 

Ut ohh, Happy learned how to putt...

Thu, 03/12/2015 - 20:55 | 5883754 edotabin
edotabin's picture

or they are all in on it....  I was never convinced there is any real division. That stupid headline "Russia to put Nukes in Crimea" really made me suspicious.

Thu, 03/12/2015 - 17:14 | 5883055 stacking12321
stacking12321's picture

why not open a company, and use its checking account?

fairly cheap to do, $99 through legalzoom, even cheaper if you do a bit of legwork yourself.

 

Thu, 03/12/2015 - 17:25 | 5883087 maskone909
maskone909's picture

when you do that, who's SSN# will you use?  or do they require tax ID instead?  that just might be a great idea.  what i actually did was open a trading account through E-trade.  i deposited funds and they let you use a visa credit card as your debit card.  not sure if you can still do it tho.  took me a few years to figure that one out lol (i was a broke college student anyways)

edit

if i remember correctly i dont think the etrade card let me use debit only credit.  that must be how it bypassed checks systems

Thu, 03/12/2015 - 17:51 | 5883206 cheech_wizard
cheech_wizard's picture

tax id... I've gone that route through legal zoom for my "custom furniture" company. Taking a loss this year as we placed some furniture in a store, and little did we know that the couple running the store was using the chain's name apparently without it's permission, and the FBI got involved, and the banksters decided that everything in the store was now theirs. Despite handing the bank photographic evidence they still refuse to return the furniture we had on display there. So, let the bank deal with moving the merchandise, while we take a tax loss and get refunded by fedgov...

The whole incident is all the talk of the local tax accountants whenever they get together for drinks or one of their "cpa" meetings.

 

Fri, 03/13/2015 - 02:11 | 5884312 7.62x54r
7.62x54r's picture

The corporation files for a tax ID number. The bank gets that.

Thu, 03/12/2015 - 18:22 | 5883325 Jack Burton
Jack Burton's picture

 

 

"it has come to the point that you must have a checking account to accomplish day-to-day activities"

 

I was going to enroll in a Swedish University Online Course, offered by a large Swedish University in Lund Being an American, I thought it would be easy to enroll, and be easy to pay for my first semester. WRONG!  Europe uses SWIFT, every person with a bank account in Europe is part of SWIFT. All I need do is contact my bank via e-banking, and transfer the fee in Swedish Kronor to the University SWIFT number given and all was set.

But I bank in America, the only banks that are integrated into SWIFT are the big banks. Wells Fargo was the nearest branch for me. I had to go to Wells and open some accounts and deposit money to them, then and only then, and for a sickeningly high fee, could I transfer money to the Swedish University's SWIFT number.

Problem is. I hate fees! I hate big banks! I will never dpeosit any money in a big bank. Thus I had no way to use SWIFT. In Europe, SWIFT is the basis for everything. You pay everything through SWFIT transfers. Every business or entity has it's SWIFT numbers, and all bank account holders have their SWIFT numbers. Paying anything anywhere is simple fast and secure and instant.

SO YES! I could not, on any account, take university classes without a BIG BANK account, checking and savings. Pay all those fucking fees, and give NSA access to all my accounts. Otherwise, the world is out of your reach.

Thu, 03/12/2015 - 21:41 | 5883875 pgroup
pgroup's picture

Well then, the world can't reach my $7.94 account balance. The pain of it will bring the world to its knees someday, begging me to spend. The world can FOAD; I'm an American. .

Thu, 03/12/2015 - 21:53 | 5883913 Lore
Lore's picture

Check out similar courses or programs in BRICS countries. The jobs are going in that direction anyway.  Might as well learn their way of doing things.

Fri, 03/13/2015 - 07:00 | 5884470 tonyw
tonyw's picture

Jack, just a point of clarification, only banks (and a few large corporations) have Swift addresses. A Swift code (or SWIFTBIC, as it’s sometimes known) is a code that helps overseas banks identify which bank to send money to. For example, if an overseas bank is sending to a payment to say Barclays bank UK account, they’ll need to know the Swift code = BARCGB22   BARC = mnemonic for bank, GB = ISO country code, 22 = location code  

CITIUS39   CITI = citibank,  US = you guess,  39 = New York

There has been an attempt to make european cross border transfers easier and cheaper by introducing a standard for account numbers, this is known as IBAN which stands for International Bank Account Number. Your IBAN doesn’t replace your account number ? it’s an additional number that contains extra information to help overseas banks identify your account for payments and is quoted on statements. some non-european countries have also adopted it.

So, to make a transfer from the US into say a Swedish university account you would normally be given two pieces of information, the Swift address of the university's bank and an IBAN which is the university's account "number".

I have forgotten the similar system used in the US,  ACH ??

Anyway, your problem as you say is that smaller US banks are not geared up for international payments. They should have a correspondent relationship with a larger bank that offers that service but have probably found it's not worth their while.

The actual charge to a bank for a Swift message is low, maybe ten cents, the rest is the (extortionate) amount the bank adds.

 

Fri, 03/13/2015 - 13:48 | 5885908 sarz
sarz's picture

Why don't you offer them Bitcoin?

Thu, 03/12/2015 - 20:17 | 5883660 Lost Word
Lost Word's picture

Check Systems ?

Banksters Tyranny of Absolute Power in which the Banksters are Always right and the customer is Always wrong and has no real rights of mediation appeal.

Lost my banking ability after Bank's Error in my checking account, which they would not admit. The appeal process was just legal pretense, totally useless to the customer.

Bank's error cost them a very small amount of money, but totally messed up my life for Five years.

I will never forget those Banksters when Judgement Day arrives.

Thu, 03/12/2015 - 20:47 | 5883735 Heavy
Heavy's picture

Doesn't snapswap or some ripple company do debit cards?  I forget the name of the card, sorry.

Also: ARR matey, the currency of the high seas now bees electronic sea shell beads, arr, they're relatively reliable, arr arr arr

Fri, 03/13/2015 - 03:10 | 5884347 stacking12321
stacking12321's picture

don't know about that one, but i belive xapo (xapo.com) allows you to deposit bitcoin into your account and withdraw $usd on your xapo debit card - last i heard it wasn't available to usa customers, however

 

Thu, 03/12/2015 - 20:54 | 5883745 Urban Redneck
Urban Redneck's picture

"Check Systems" rings a bell somewhere in the memory hole, but with different connotations.  

However, I just wrapped up a four month trip around the world that I began by leaving my house without my credit or debit card... so I just had a non-debit Swiss ATM card, a few thousand CHF, and my bankers cell phone number along with my passport & driver's license.  

Europe is not really a problem, other than the fact it seems NOT A SINGLE FUCKING AIRPORT is setup to take cash for excess baggage at the ticket counter anymore...  

The Banana Republics aren't really an issue either, with the right friends and owing to their large cash economies.  

The USSA, however, was a FUCKING NIGHTMARE.  You go into a bank to make a withdrawal (because the largest bills at many ATMs are 20s) and you still get an impractically thick pile of hundreds that you can't fit in your wallet (and probably SAR'd to the Treasury Department terrorist watch list).  I finally broke down and got a prepaid debit card at a convenience store, since so many places are not really to setup to take cash or make proper change like in a civilized country.  At least with internet access I could by my airline tickets with some random string of numbers and avoid being added to probably the only terrorist watch list I'm not already on (and being groped twice instead of once by the TSA).

...

More seriously, Hernando de Soto's research on the grey economy is required reading for both the Chicago Boys and the MIT nerds, and the people they task to destabilize, shore up, or clamp down on the locals... but something seems to have been lost in translation post 9/11/2001.

Of course, there is something worse than being marginalized by the modern financial system (unless you are happy hiding out in some rural reduit or hillbilly hovel and never venture far from home)... being without a government issued ID card.  In which case - you are a nobody, a terrorist, or a spook (not that those three are mutually exclusive...), and regardless... persona non grata.

Thu, 03/12/2015 - 16:50 | 5882961 DollarMenu
Thu, 03/12/2015 - 17:02 | 5883008 McMolotov
McMolotov's picture

"He's in Ukraine eating puppies and babies." --Vicky Nuland

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