Russian Financial Sanctions, SWIFT, interest rates at 20%, Ruble plunging, and the play for XRP (…

You know that Russia invaded Ukraine. In this video, I want to walk you through the implications of the financial sanctions on Russia. The ruble dropping over 20% today. They're barring them from SWIFT system. What that means for Ripple and other cryptocurrencies and a different play there, and what the entire economic results of this is. It should be a pretty fun call today. So, and by the way, it's a live stream. Drop in the chat if you guys are here. Whatever. I'd love to hear from you. Okay. I got a bunch of news articles here that we're going to pull up and look at. So EU and US agree to cut Russian banks out of the virtual SWIFT system. So just if you don't know, SWIFT is a messaging system between banks. Now, it is the backbone, though, of transferring large amounts of money between countries and central banks or large institutions around the world. SWIFT was the first system ever put in place that allowed us to send money to Germany or China or whoever it is that's on the SWIFT system, In a very fast, reliable way. Now, the other side of this coin is that's very interesting about SWIFT that we'll talk in a minute. Everything that goes through the SWIFT system has to be denominated in US dollars. This is back to the— after World War II, the Bretton Woods Agreement. And again, this goes back to other videos we put out. The greatest export of the United States is US dollars, and we want to protect that export. More than anything else. The SWIFT system is a way that if you're buying oil from Germany and Saudi Arabia, Germany's buying oil from Saudi Arabia, they have to use the SWIFT system that goes to the Fed and it transacts into US dollars and then takes those US dollars and then goes and buys oil. It creates demand for US dollars. So them removing SWIFT, number one, then the implications, we'll talk about my theories on this. I'm going to give you little seeds. They're planning to, and I think they've already announced sanctions to remove Russia from SWIFT, which has done crazy things to their economy. You can look right here. Um, Russians' credit was put to junk bonds by S&P and other agencies, Moody's and other things like that. I keep getting these pop-ups here. They all put them to junk ratings, um, and they barred their central bank. This put the ruble down 20% yesterday, and I believe this morning I looked, it was up to 26%. Drop on the ruble versus the U.S. dollar in two days. So if you owned rubles, you just lost. If that's maybe you have your savings account and you're in Russia, you just lost a quarter, a 25% of its value overnight. Just wild. In addition to this, they have economic sanctions there. They banning from the SWIFT system, which has locked money, so they cannot transact. Russian banks or Russian oligarchs or whoever it is. can't move money outside of Russia to other places. It's all been locked up, and which is a huge— there's a big run on the bank right now. A lot of people, you saw these big lines of people trying to get other currencies, US dollars or euros or something, Bitcoin, whatever it is. They wanted to get out of euros because of these economic major sanctions that's going on. The other thing, um, that we can, we can step through here, and again, I'm going to tell you my, my, uh, my little theories in just a minute of what I think is going on. This really has, in a sense, at least short-term, crippled Russia's economy very immediately. They've stopped the oil transactions. Russia, by the way, is the number 3 largest producer of oil in the world. All these Western countries coming together and saying, hey, we're not going to trade oil with you anymore, is a major, major hit to their economy. Again, we, as the United States and Western countries, are nervous about stepping into a World War III situation, but we're not nervous at all about putting on major economic, essentially having economic, and we've seen as well a cyber war going on. It's very interesting, this new age. And it's actually, this is in the past as well. Typically, economic wars start long before there's guns ever shot. And by the time guns or missiles are fired, There's a long strain of economic conditions that have seeded the roots for this. You look at actually right now with Ukraine, Russia looking at the energy supplies and production that it can allow if it owned and controlled Ukraine. Ukraine has access to more ports, river systems that would allow access to the rest of the world and give a buffer between Ukraine and Russia. And so the energy play is massive for Russia to take over Ukraine. I think it's one of the main reasons they want Ukraine, especially with NATO keeping them out, all that kind of stuff. Back to this. So we've got big US sanctions, we've got downgrading, we've then removed them from the SWIFT system. Let's actually talk about that for a second before we go any further. Removing Russia from the SWIFT system is a very interesting play. When you remove Russia from the SWIFT system, and again, this is the system that connects you to all the banks and financial institutions in the entire world. It puts you on an island. And what we've seen, it's had huge ramifications for Russia's economy, which is awesome. But Russia, I don't believe, is going to die or go away from this war with Ukraine. Russia's still going to be around. And there's a lot of money and oil and other resources from Russia. If they're removed from SWIFT for too long, let's call this 6 months, a year, 2 years, Russia's gonna— they're gonna have to figure out their own system. And ideally, what I think they're gonna come up with is something similar to Ripple or XRP. Now, this gets into the crypto world a little bit. Ripple or XRP, if you followed Ripple, Ripple was a direct competitor of the SWIFT system. Whenever you compete with the US dollar or with SWIFT, Usually some really bad things happen. Me and my dad talk about this all the time. He had a speech last night, and he talked about this. There's 2 people we know of that did not trade oil, large amounts of oil, in US dollars. Again, the SWIFT system makes you use US dollars. After Bretton Woods, the entire world has to use US dollars. The first person is Umar Qaddafi, and the next one is Saddam Hussein. Both those individuals, a few years after they started transacting large amounts of oil without US dollars, they were some way or another killed by the result of the United States. This is— the United States' greatest export is US dollars, and you do not want to meddle with messing up the SWIFT system or the Fed and our greatest export of US dollars. So back to them barring Russia from the SWIFT system, I believe short term it's a smart move. Long term though, I believe you have to add them back on because Russia's smart and they will want to get back on a similar system. Ripple back to Ripple. Ripple was a direct competitor with the SWIFT system. Ripple allows someone. This is years ago they launched it. I believe Ripple came out 2016, 2017. Fantastic blockchain, one of the most efficient blockchains ever built. You can send tens of millions, if not billions of dollars, in a blink of an eye for very, very low transaction fees across the globe without using SWIFT. And I believe, this is me getting into my theories, okay? And again, this is just probabilities. I'm not saying this is how it is. I believe this is a probability that the SEC and the Fed saw saw Ripple and said, this is a threat to the SWIFT system, let's lock them up in court. Ripple has been in court from litigations. We don't really understand why they're in litigation with the SEC. There's just— there isn't really a rhyme or reason for it. For over— right now, what is it, 4 years? We're going on 3 or 4 years right now of litigation with the SEC, and everything's slow. And I believe it's because it was a direct threat to the SWIFT system. Whenever you have— we had a call with our Black Card group You want to have products that are typically evolutionary, not revolutionary. If you have a product that evolves, people accept it and tend to like it. If you have a revolutionary product that absolutely changes the world order, like Ripple could have, typically you have a lot of problems with that. We saw this with electric car inventors. From the 1920s, we've had electric cars. The '20s. We've had some in the '70s, '80s. We had hydrogen cars in the '80s and '90s. But one way or another, all those companies went bankrupt. The owners died. They were killed. Something happened because they were revolutionary products. And I believe the oil industry, whoever the big dog is, didn't want to squash those projects. That kind of makes sense. And you see Elon Musk had to tear, he had to crawl out to make Tesla even profitable for decades. And now Tesla's a huge success. But for the first 10 years, Tesla did not make any money. It was a terrible— everyone was like, man, Tesla, I can't believe they're still around. It's just, they keep losing money every month. For a decade. Okay? So I think, I believe, back to this, Russia, I believe, will be added back onto the SWIFT system very soon because they don't want Russia and/or China to use other systems outside of SWIFT. It threatens the US's greatest export of US dollars. Is that kind of making sense? All right. Let's go through here as well. So the other rate hikes in Russia, over 20%. They hiked the interest rates up like crazy to fight what's going on. And one of the biggest factors right now is the repayments of debts. Let's see. Evergrande is another one out. We made another video about Evergrande. They're out of China. $300 billion they're looking to potentially, and it sounds like they are defaulting on. These are bonds guaranteed by Evergrande that they are seeming like they are not going to be able to repay. A lot of the bag holders are US companies, other ministers, whoever it is around the world. that owns these will not get paid back. The same thing's true with Russia being off the SWIFT system and this whole decline and their economic sanctions. All the bag holders of Russian bonds will now have defaults and not be paid back, which then, as a domino effect, hurts those companies and institutions. Does that kind of make sense? It is. That has major ramifications. A few months ago, we talked about the Evergrande situation, which is still— they're calling it a train wreck in slow motion. It's still happening. This could be a Lehman Brothers type of moment. Evergrande is, I believe, the largest real estate holder in China, has $300 billion right here, as you guys can see, and it's pretty crazy. If that defaulted, all the builders, they're building, I believe, 3 million homes right now in China. All those contractors, all those suppliers, everything, all the people that are trying to buy homes lose all their money. Everyone loses. It's a big trickle-down effect through an entire economy. So Russia is seeing a similar factor right now with their bonds and they might default. They defaulted the last time back in the late '90s. Okay. 1998, Russia defaulted on their bonds and there was a massive fund. Again, we talk about funds here, Investment Fund Secrets, called Long-Term Capital Management. They were the biggest, one of the biggest, baddest funds on Wall Street. Long-Term Capital Management was trading the 30-year and 29.75-year treasury bonds against each other, and they found an arbitrage. What they didn't underwrite for was Russia defaulting on that. Let's actually look it up right here. The Long-Term Capital Management, I want to see how much they had. $3.6 billion they lost almost overnight. And that was quite a collapse on Wall Street of a huge, huge firm. So anyways, we have that situation going on, which is kind of interesting. Additionally, so Russia has quite actually a good reserve. Let's pull up this chart right here. So Russia's reserves are actually very, very good. Russia has been a major buyer of gold and Cryptocurrencies actually around the world. Russia and China together have been one of the biggest buyers of gold over the last two decades, and I believe they're trying to stockpile a lot of gold for a time like this so they can have access to a big reserve and maybe shift away from the U.S. dollar as the world dominated currency. Interesting, interesting point. But anyways, here we are. These economic sanctions what it does. So right here you can see gold in the Bank of Russia vault. So this is gold they still have access to. We believe China will still trade with them, but everything else all the way down here, about half of their portfolio, which is about, I think about $400 billion of their almost $780 billion reserves, will be illiquid, is being held and not— they don't have access to any of this money with Japan, Germany, France, United States, United Kingdom. And so that is all held up. So about half of their— because people keep saying, well, Russia has this big stockpile. Half of it now has been essentially frozen from these economic sanctions on Russia, which is pretty interesting to see as well. Now, let's see here. Now, I think this is an interesting play. I'll just turn my screen off for a second for China as well. So China right now has signaled for the last while, we have this Taiwan crisis. Now, I lived in Taiwan for 2 years. I love Taiwan to death. It's a great spot. China has repeatedly said Taiwan is ours. We claim Taiwan, and it seems like China is going to potentially prep an invasion similar to Ukraine. That was what a lot of people, geopolitical people, have been talking about for months. We had the Beijing Olympics, so they didn't want to do it then, but it seems like they are prepping this a similar type of thing that happened with Russia and Ukraine. I believe. Western countries, number one, we do not want to go to World War III. However, they're signaling to Russia and now to China, especially China, if you want to invade Taiwan in a similar fashion as Russia, the similar results are going to play out. You're going to have major sanctions. You already have an economy with Evergrande that's a $300 billion default. In a blink of an eye, we can put sanctions on you And cripple your economy. Now, China is a way bigger player than Russia as far as an economy goes. I understand that. But this is, I think, one of the biggest questions in a Chinese leader or Russian leader's mind right now is the economic sanction that's going on. And is that worth the risk of us? And I believe they whacked them so hard, Russia, and they're trying to whack them as hard as they possibly can. And cripple their economy. They don't want to fire missiles because we don't want World War III, but the next best thing is to absolutely cripple a currency, cripple an economy. And I think the reason they whacked so hard was also to signal to China, hey, the same thing will happen to you. You're going to lose 25% of your value of your currency is going to drop overnight. We're going to lock up half of your reserves. We're going to shut you off from the rest of the world, essentially. It's pretty interesting. And so I think that's the reason for such a big whack is because the China situation could happen tomorrow. I mean, we really could have an invasion, which I would assume if I was a— if I was, you know, China and Russia are pretty good allies. Hey, let's spread these Western countries thin. Let's have 2 fronts. Let's both invade. We've wanted Taiwan and Ukraine for a long time. We've wanted to— we've kind of tested the waters. It feels like right now we have a pretty, with COVID everyone's kind of scattered. We have a relatively not active, weak president in office. You saw they go, we watched Afghanistan. We watched that mess. The US seems like it's not on the ball as much with being this world defender. And these guys are long-term, by the way, they are long-term leaders. In the United States, we have presidents who serve for They're short-term, they're short part-time, short-term employees. They're 4 to 8 years. Putin, Xi, these other leaders, they are 20, 30-year, 40-year leaders. And they can map out 20 to 30-year plans. That's why Russia, I believe Russia and China have been stockpiling gold for the last 20 years. They've actually been stockpiling Bitcoin, other cryptocurrencies. And right now they're looking at the world and saying, well, this is a Of all the time we have to invade and take assets that we want, Hong Kong was kind of a mess when Trump was in office. We took back Hong Kong a little bit. The protests didn't really happen. We saw Afghanistan. This might be a good time to grab these Ukraine and Taiwan as countries that we want to bring in, which is— again, this is doctrine according to Bridger, but anyways, one way to look at it, which I think is pretty interesting. The other side of the note, which is pretty cool, and we can talk back about Ripple again, is the cyber war. This has been one of the most— and I'm not an expert on cybersecurity or cyber wars by any means, but it's been very interesting to see the cyber war going on. Russian television was, I believe, according to my data, was all hacked the other day by Anonymous. Anonymous is going in and hacking Russia databases, Russian government sites. It's been really interesting and showing Russian citizens What's actually happening in Ukraine? Really interesting, the cyber warfare that's going on. Something else that's very kind of another note: Did you guys see the Elon Musk Ukraine situation? So Ukraine's president tweets out, "We want we need internet." So all their internet communications were shut down by Russia. Again, the cyber warfare. He tweets on freaking Twitter. The president of Ukraine is on Twitter making tweets this whole time. We live in a freaking day of age that's just insane. But he tweets on Twitter, Elon Musk, please, instead of like going to Mars, can you give us— use Starlink and give us internet access? Elon Musk says, uh, we're gonna have for— in 48 hours, we'll have all terminals set up. For you in Ukraine, they've already done it. They've given full high-speed internet to Ukraine. Just so cool. I just think that's awesome. I just love entrepreneurs and technology and just freaking Twitter in the middle of a war happening, which is pretty fun. So anyways, I believe Swift will be added back onto Russia relatively soon. I believe though they use such a big stick to whack them economically. They the U.S. right now it seems like. Everyone does not want World War III. Putin is now threatening nuclear firepower. I mean, we do not want a World War III. No one wants World War III. So let's whack them in other ways that isn't an F-35 dropping a bomb on Moscow. Let's whack them economically. Let's whack them in cyber attacks. And if we whack them hard enough, it may keep China in bay. of what's going on. So there you have it. That's my thoughts for today on— well, I'll read some questions here, but that's my thoughts for today on that. And then the play for Ripple and other cryptocurrencies, I mean, this, I believe it is, the US is seeing right now the rise of crypto. I'm just going to say cryptocurrencies in general, away from the US dollar, and the need for them. Because it decentralized. And I believe the US will not want to give up that power. And they're going to do one of two things. They're either going to sanction and try to regulate like Ripple, bring it down, or they're going to launch their own coin. And actually, I think the US, it might be smart for them to just partner with Ripple. I think that might've been the litigation. Hey, can we just partner with you? We'll use your technology and we will create the Fed coin or the US dollar coin. And it's ran by the government and they can tax everybody. I've made other videos about this, but I believe that's Anyways, I think that's the whole thing. Yep, it's pretty cool. You guys are awesome. Swift system, cool. Yeah, that's my thoughts. You guys are awesome. Let me know your comments below in the chat. If you guys can like this video, it helps push this out to more people. It's just that if you guys liked today's content, that's all I'm gonna say. Hit the like button. You guys are awesome. We'll have this posted so you guys can watch this later if you see it as well. Thank you guys so much, and we'll see you later. Bye. Thanks, Jeff.