This was a good podcast on the Russian sanctions. Freezing such a large amount of central bank reserves of a belligerent country is the big change.
This CS analyst makes good distinction between inside money and outside money with FX reserves. Inside money is reserves held elsewhere that are ultimately another party’s liabilities. These are Euros, Yen, Swiss Franc etc that are held by other central banks and are getting seized.
Outside money is essentially gold. It’s no one else’s liability. Russia’s gold is all held in vaults in Moscow. He didn’t mention my favorite asset, but it falls in the realm of outside money.
You can expect to see a gradual move by some countries to accumulate more “outside money” as reserves given the two recent Episodes of reserve confiscation with Afghanistan and Russia. Bearish for the USD obviously.
Cohost is UT grad btw
https://podcasts.apple.com/us/podcast/odd-lots/id1056200096?i=1000552671226