The conflict following the ouster of president Viktor Yanukovich and the secession of Crimea has all the ingredients to do harm to both Russia and the West and to even unhinge the world financial system. Not because of the sanctions themselves, but because of the surrounding circumstances.

It goes without saying, that another ruble crisis and the outflow of foreign capital would be bad for russian individuals and corporations, who are indebted in dollars or crave for funding of sound investment projects. (Nobody would really shed a tear over the lack of “hot money” though).

But the sanctions will hurt the petro-dollar as well, which is de facto “backed” by crude oil.

Until a few years back everyone who wanted to buy oil in the open market (or any other commodity) would have to come up with US dollars.

But some years ago this system started to disintegrate, as one critic of the dollar system explains: “Hardly a week goes by without some senior official in an up-and-coming country rich in natural resources or with competitive labor costs criticising US monetary policy (…)”  

By now there are dozens or even hundreds of agreements on currency swaps and barter to facilitate trade between nations and blocs, trying fervently to avoid the detour of using the dollar (and thereby forcing their central banks to buy US government bonds).The sanctions against Russia seem to be another nail in the coffin of the world reserve currency. They have provided Moscow with a perfect excuse to go for an outright replacement of the dollar as a means of payment for its oil, gas and metals. Andrey Kostin, the boss of the second largest russian bank VTB says that Russia should start

“transitioning to ruble payments with all its trading partners, including China and Western Europe, adding that export companies should lead the way in adopting the change.”

This  is of course a difficult undertaking and nobody knows if Moscow is serious about it. But if so, this would be another death knell for the dollar and a loud one at that.

“Accidentally” there there was a fitting Reuters report on a planned barter deal between Russia and Iran, enabling Tehran to swap one fourth of its oil exports to russian goods and to boost is energy exports despite of Western sanctions.

In the jingoistic western mainstream media nobody seems to have this development “on the radar”, especially not in the german language press. Maybe with the exception of the small and marginal austrian paper Wirtschaftsblatt.