to check the survivors after 2 people were killed and several injured from the weather system in texas and louisiana forecasters say 5000000000 people. a 5000000 pardon me, are still at risk from tornadoes, extremely high winds and large hailstones. or you can hear the wind coming through when i put my family in a bad a bad i know, you know, you know what it was with what you know, just bear with me. so hell, robert, reminder of our top stories keeps man says ukrainian forces are re taking territory on the outskirts of the capitol, pushing back russian troops. russia appears to be relying on be silent, rocket attacks as its ground forces struggle to seize control of ukraine's major cities from the width of the grain from the mart in their behinds

alluded. and her there is through a big bottle and from official sources. where is the information right now? there are small city mckyrie hamper almost whole air being already in the control is ukrainian soldier. u. s. president joe biden has arrived in brussels to meet europe in the doesn't talk through new sanctions. but they said that there's a real threat that russia could use chemical weapons against ukraine. he'll be meeting with nato g 7 and you leaders on his 4 day trip. the un security counsellors just rejected a resolution drafted by russia, all the humanitarian crisis in ukraine. the draft made a reference to its attacks on ukraine. any russia and china voted in favor of the resolution french car make a reno, has halted operations at his planted moscow. this comes after ukraine's president french companies to stop doing business in russia. an aide to the russian president

vladimir putin has quit his post and left the country. sources of told reuters news agency that anatoly shoe vice resigned because of war in ukraine. vice has served the kremlin, sits or is the else his rule. in the 1990s, the for me, you a secretary of state, madeleine albright has died at the age of 84. miss albright made us political history in 1997 when she became the 1st woman to serve a secretary of state. she helps de western foreign policy the aftermath of the cold war. her family says she died from cancer and government have stormed a military basin somalis, capital killing it, be 6 people can't be inside the highly fortified international airport. in mogadishu, that security forces say they kill 3 of the attackers beyond group. out above have claimed responsibility. those with atlanta be back with bodies and half law here on al jazeera, but next it's counting the cost to stay with us. frank assessment,

what are the political risks of banning rushmore? the gas for western leaders, full sanctions on russian energy, sports research in depth analysis of the days headlines inside story on al jazeera . ah, i hello, i am sammy's a dan. this is counting the cost and al jazeera. you look at the world of business and economics this week. the war in ukraine could severely impact the global economy and the i, m. f also warns the consequences could be lasting. so which countries are most at risk. this, the world heading into a new financial crisis. also this week cut off from the international financial

system. russia has turned to the chinese you want to survive sanctions. could other governments shift away from the u. s. donna, this the greenback dominance in danger. crypto currency purchases in roubles have been rising, and governments are worried. russia could evade sanctions using virtual coins. so is unregulated money, really a fix for russia's financial woes? the war in ukraine is obviously hurting the economies of russia and its neighbor with both countries expected to experience shop for sessions this year. but the economic consequences of the wall not only be felt by parties to the conflict, sweeping sanctions imposed on moscow and the soaring price of energy supplies, or they could inflict pain on other nations to. that's all of course, while the world economy is still recovering from that corona virus pandemic, the international monetary fund says the war could have

a severe impact on the global economy. it expects to carpets growth forecast globally. b, i m f is also reduced its estimated global growth rate for 2022 to 4.4 percent in january. that's down from 4.9 percent last year. the most serious threat to the world economy is soaring, inflation, which is already at levels that haven't been seen in decades. that's mainly driven by the sharp rise in commodities and food prices. europe, with its heavy dependence on russian energy could be particularly hit. the ukraine war is expected to reduce your zone economic growth by as much as 2 percentage points consume of prices in the 19 countries that use the euro zone currency hit record highs for 4 months. in a row, reaching 5.8 percent in february, while the us is also at risk, it is expected to outperform european countries. in the conflict is also putting

a fresh strain on that overs stretched. global supply chain pushing up the prices of many metals. both russia and ukraine export laundromats of steel, palladium, platinum, and nickel, among others. some common cause of idle factories due to a lack of components. and it is poor and developing nations that could suffer the most among the challenges ahead of trade shocks, a reduction in remittances, and financial instability. but food security could be the most imminent threat. russia and ukraine, both main exporters of weights and parts of africa and the middle east could suffer severe shortages. well, to discuss all of this now i'm joined from new castle in the u. k. by klaus this destiny is the chief. you're as an economist with pantheon macroeconomics, good to have you with us. so many experts now comparing the current situation to the $900.00 seventy's energy crisis to the come up. so the lehman brothers,

do you see any of those similarities? well, i mean, if we're very lucky, it could be a combination of both, right? because you have the specter for russian default that could be like li men and you certainly have the, the 1970 style supply side driven inflation. i mean, at the moment i would say we're more sort of towards the $900.00 seventies in the way that, you know, demanding the economy strong. and then we've had pretty much since coven hit, we've had a string of supply side shops in the economy. the one ukraine is now an additional supply shock rusher is one of the biggest, if not the biggest commodity corner in the world. so, but i mean, you can't, you just said, if i'm lucky, this could be both. that's huge. all we on the verge of another major global financial crisis, that's not our baseline, but certainly we are now dealing with events where things can get out of hand very

quickly and where i think no one knows exactly what the ramifications will be. right? so a russian servant. busy default could, could obviously send other markets in a tailspin, we already have stressed financial markets. so we're certainly now in the, in a, in a, in a rather precarious situation. obviously, policies being tightened, although again, that could change. but at the moment, you know, policy support has been withdrawn because of high inflation. so we have a downside risk to growth. inflation is very high. which constrains policymakers at least in the near term. so yeah, know, suddenly the risk of something adverse happening is suddenly rising. i would say, you mentioned inflation, then the i m f is expected to reduce its full costs. are we heading towards the perfect scenario for stagflation or we are in speculation now, i think, i mean, if you look at for costs in general over the last 3 months,

and i would say this is going to continue for the next 3 months. also with reference to your comment now, and i'm f inflation forecast will be ratcheted up because as you, as we economist start to factor in and quantify what, what the increase in commodity prices mean for inflation over the next sort of 6 months. if you will, inflation forecasts will have to go up, but growth forecasts will have to go down. so again, whether we're staring up into a global recession, we don't think that. so of course, that's probably sort of miles deflation. but in so far as goes. busy the idea that inflation is growing up or growth is slowing. and you know, that's what's happening and you know, that is back pollution. while that's huge. will that mean for less developed countries for countries which are already struggling, jordan lebanon to new jersey. i mean, countries which subsidize the basics of life, like electricity prices and so on. how they deal with this challenge. while economies like that are in a very tight spot now because they will be hit very hard by the kind of inflation we're seeing now. and food prices basic commodities,

whereas it developed economy. so a little bit more shield towards that a because they're richer but, but also because their consumer price indices are not sensitive to towards these kinds of a price increases. so i would say that, you know, we do know them the consequences of effectively if you will, shutting the russian economy in this case, out of the global economy. and the ramifications that have on, on different commodity most in an environment where it commodities and inflation already was kind of holding out. yeah. that could have quite significant consequences for, for some of the economy. you mentioned there was lead to lots of depend on, on, on, on imported goods in some food stuff. of course, the economy also produce a lot of their own stuff. but again, some of them are still dependent on, on inputs. what about china? china is gross full costs, so going down it costs the least of energy going up. how's this going to impact

shooting pings, policies, while thing for china as a sort of a balance? the situation are politically, of course, they will feel that the extent to which there is now a winding rift between the east and west. they feel that they might, will be able to, to become sort of a center point and in the east and in the eastern part of this they will trial because to, to politically exploit that situation. but economically, yeah, i mean, chinese growth is already on the pressure they, they have a huge issue. the problem 2nd, which is affecting large part of their economy at the moment. and so in that context, the fact that global growth now seems to be, seems to be slowing in the context of, of, of an inflationary shock. and, and withdrawal of support in general. that's certainly not a favor, certainly not a benefit for china. but generally, in terms of the sort of view politics, i think maybe, you know, china will feel that they have opportunity to, to, to, to make, make a few points. you mentioned developing, you mentioned, developed countries a moment ago as talk about europe,

the continent risking recession right now. guess the it is, i mean that again, we don't think years will fall recession, but we suddenly we've recently bounded our full cross for the 2nd half of the year, reflecting high inflation, a hit to real incomes, less monetary policy support as the suddenly that's a risk i mean, i would say that the, the upside in euro's when they start fiscal support governments are after. busy covered in particular where of course they've helped the economy a lot. i think that will be quicker to, to rush to support economy here. you know, i think we will see direct subsidies for especially low income households in the context of, of protecting them from, from higher energy prices. i think we'll see big investments front lower than defense spending, which also, you know, has boost suits that also boost u. p. growth in short term, we'll see big investments in energy infrastructure, which also could be front loaded. so i think the private sector suddenly now will probably face lower have to grow at a slower pace because inflation, cindy is gonna sap some of that and momentum. but i think governments are going to

try to offset that. of course, that's just going to give any more, just gonna push even more on in place. so in some sense, you know, if there's one thing i'm certain about is that inflation will continue to go higher . everything else is sort of a little bit uncertain. what about the us? we can't talk, we can't not talk about the world's largest economy. how resilient is the u. s. economy through all of this? some say, well it would take all price is going north of $200.00 a bow before the u. s. is pulled into refreshing. what do you think? well, that's the good news. we think the us economy is relative or silly into this, you know, consumers have bought for stored up savings. they are little bit further away from, from, from the situation in europe in general. so yes, they will import, obviously inflation by higher energy prices. but also remember, this is a really, really important point. the u. s. economy is different now because the u. s. economy has a big oil producing such itself are shale, which means that as all prices go up, yes, it affects the u. s. consumer negatively, but they have a lot of savings,

but it also boosts and energy, carfax, so this old story in which, you know, all prices go up and, but immediately his us growth is not necessarily the same anymore. we think that, you know, there, there could be even be a positive correlation between high prices and capital investment and growth in the u. s. because you'll see all production spot pick up. so the u. s. is resilient, that's very good news for the global economy, because obviously that will become, i mean, if the u. s. economy does well, you know that already there means, but the global economy is on a relatively decent footing, even if you have witness elsewhere. all right, thanks so much and good talking to you. thank you for talking. the sanctions imposed by the west on russia are reviving an old debate home by the countries should hold dollar base central bank reserves. if the, the worry is they may lose access to those reserves when they need them, the most favorable fall of the west, the russian government has been at risk of defaulting on its debt. now,

because moscow doesn't have the money, actually, it does, but it can't access almost half its foreign reserves, which have been frozen by western capital's. russia says it's made $117000000.00 in interest payments. it owes to investors. but the money could be blocked by the u . s. the russian finance ministry says the nation would try to pay in roubles if this happens. moscow has a 30 day grace period in which the government should pay out. if it doesn't, that would constitute a default. it would be the 1st time the country failed to meet its financial obligation since the $917.00 bolshevik revolution. while russian banks and firms are increasingly turning to china's currency, the won as they faced isolation from the west land v t. b, bank is offering a chinese currency savings account with a maximum interest rate of 8 percent. others are also looking to start using

china's union pay system for credit cards off the visa, mastercard suspended operations in russia. the dollar has been the world's reserve currency since the bretton woods agreements. in 1944, russia held $100000000000.00 or 16 percent of its foreign reserves in us dollars. as of june 2021. another 32 percent was held in euro's and the country's been trying to reduce its holdings of us dollar denominated assets. in recent years, it sold off all of its us treasuries. in 2018. moscow also held over a $120000000000.00 worth of gold, more than its actual dollar denominated holdings. the commodity is effectively its primary holding, given the loss of access to dollars in euro's. the u on is the world's 5th largest reserve currency. central banks held at least $319000000000.00 us dollars worth of

you on reserves. in the 3rd quarter of 2021. some economists say there's an effort on the way to build an alternative financial system to that dominated by the us. they say that you are together with golden crypto currencies are likely to gain market share at the expense of western currencies. well, to discuss this, i'm joined now by timothy. ashy. is a senior emerging market sovereign strike just that blew by asset management. join us now from london. good, heavy with us. so has the one become russia's new dollar, or is it becoming rushes new door? i don't buy i think what's interesting about this crisis is the unwillingness of, of the chinese to bankroll russia to kind of help the russian circumvent sanctions. and we've seen that kind of across the board. i mean, you know, lots of criticism sanctions from the west and there in effectiveness. but actually the financial sanctions that have been lobbied sofa and the energy is not really

been sanctioned. it's quite incredible that companies just do not want to transact with russia, including for energy because of the financial sanctions. the bottom line is the dollar is still king. alright, but regardless of how willing the chinese are on not, is this trust global disc destruct growing in the us dollar. because russia is not the 1st country that's been deprived access to its assets. we have, we've had iran, north korea, the tati bomb and so on. i don't think so. i mean, you know, what's again notable is ofac, the us treasury in the western sanctions machine is just so so powerful. the shows is you may, you may find alternative ways to transact, but in the end, western sanctions will find you in all these companies, the chinese bank, et cetera. the desperate to avoid been caught in secondary sanctions. so even if

there are these authentic payment mechanisms, you know, the ofac will find you eventually you will be hit by the secondary sanction. so it doesn't really solve the underlying problem that you, you evidence to live with. sanction, because of its bad behavior. ofac is going after you and companies simply do not want to be caught in the fiery line of oh fuck, maybe we should focus a little bit now on the sanctions and just how unprecedented all the sanctions now in russia. but think film, it's reserved, it's foreign currency reserve. well, pretty remarkable. i mean, you know, no one expected the cpr to be function central bank. it's kind of unheard of. you know, when it came so quickly, i mean, i remember the week, you know, that week there was a research paper i think on the wednesday or thursday, highlighting that this was an option. those intense negotiate or intense discretions. i know on the saturday in washington around it, and then it was done on the sunday. i mean, utterly remarkable, but devastating for russia. russia thought it was in this, this untouchable position with 640000000000 of f x resist. it could withstand

anything, the west through it and then then oh fuck dropped the bombshell sanctioning the cb, our reserves, and it put a huge weight of those reserves beyond their reach that got gold, i guess in, in the vaults they've got physical cache. there was obviously some, some sweat lines with the chinese, but even the chinese, i think, are reluctant really to help them out very much again, this idea, you know, they don't want to be caught in secondary sanctions for helping out russia. so, you know, it's put, rush really incredibly difficult place on the bridge. brink of default, the financial markets of all totally collapse. it's extraordinary. you know, 95 percent loss in, in value across the board, equities bombs, and the currencies come under massive pressure. so russians, because of these sanctions, are a lot poorer today than they were a month and a half ago because the putins actions and notable i think there is they did not expected. you know, the phone is generally reduced exposure to russia. the biggest holders of russian

assets are since himself. they believe the rhetoric. let me tell you that despite that, despite the unprecedented nature of targeting a central bank has you just explain trust you don't think you don't agree with those. analysts say this could be a turning point, this could be the birth of a new monetary order. i don't think so. you know, i mean, what are russians dashing for? what does the guy, what does the guy in the street moscow want to get his hands on? it just want to get his hands on the wire. or, you know, he wants to get his hands on dollars. you know, these are come maybe crick, co counsel vegetable currencies use of currencies shot up on february 24th. well maybe, but you know, it's hard still to, to track transact and in anything you know significant with crypt. so i think, oh fuck is coming off the crypt. so in the crypt so it's going to be used to break sanctions crit, so we'll feel the weights of western financial sanctions as well. all right. what

about gold? you mentioned gold. there was the possibility that the russian ruble becomes, well, even at least the facto backed by gold now, well, you know, it doesn't, it doesn't result the underlying problem that even if you come transact, even if it's legal to transact with russia and trade with russia, people do not want to, people do not want to take the ethical risk of transacting with with kootenai, russia because of what is done in ukraine. i think good talking to you. thanks so much timothy. my pleasure. as another asset seen as an alternative medium of international exchange to the dollar is crypto currency. many governments are worried, the digital coin could provide a hidden brute for sanction russians to preserve their wealth. the virtual money is unregulated and it bypasses the international banking system, which of course is key to enforcing those sanctions. and the exchanges have come

under pressure to address violation. cern's, they've resisted several calls to block russian uses as a whole and are not yet legally obliged to do so. however, major crypto currency exchanges like by man say they will comply with sanctions and abide by the law. but there are thousands of smaller, less strict exchanges, which could step in and allow the transactions, the crypto currency research firm chi co says the average trade sizes bitcoin ruble transaction. he to 10 months high on february 24th and russia invaded ukraine. it's estimated more than 17000000 russians, all 12 percent of the population invest in crypto currency. russia ranked 18 worldwide in terms of crypto currency adoption. it had the 3rd largest share of overseas transfers off the turkey and ukraine. russian entities that are under

sanctions have been accused of using ransomware attacks for revenues. the block chain tracking firms analysis says around 74 percent of that income, all $400000000.00 went to entities that could be affiliated with russia last year. or joining me now is kind of part of the chief investment officer at credit link dot a. i an artificial intelligence enabled credit asset management company. she joins me from singapore. good, happy with us. so kyra, can crypto car sees, provide an alternative to the us dollars? do you think at this point, the centralized crypto currency definitely want to not provide them? as soon as seen for us daughter, your daughter is still backed by the world's most largest and powerful economy, as well as the trade and financial flows. crypto does not provide such backing at this point. i think it did you said i currencies and perhaps via like keep though could replace usc to some extent and we have seen some tests already rolled out in

china with by the p. b o. c has issues digital. i do. and that has been injected into digital. well, that's the use case for such money. could make sense in the event, the natural that there are even with the current premium prices, or can it go any distance in helping countries like russia to evade sanctions? i think it's difficult to use crypto to the sanctions because if we look at the, is a freshly economies for renting a 1.7 trillion, whereas the entire market capitalization of crypto is 1.8 trillion. so crystal does not have the capacity or the death to allow russia to evade sanctions, or maybe not all the sanctions. can it be helpful? i mean, obviously, as you pointed out, the volume does simply doesn't cover all of russia's needs, but can it go some length? to some extent, i would say yes. and if we look at russia decision to allow crypto transactions earlier this year, although there was a lot of debate around bending crypt though,

we could insinuate that perhaps that decision was influenced by the ukrainian invasion. and we can't rule out. maybe there was some sort of tip of to oligarch close a boots in that, and you may want to move some of your assets to crypto markets. what can governments do to monitor activities with crypto currency they considered to be illegal? it's a bit tricky to monitor. i mean, of course, governments can deal what they always do, which is imposed more regulation b in the form of transaction reporting or transaction, or a taxation, or even straight down bending. but generally, the marketplace as we're crypto is trade that are already regulate that one way or the other. meaning that those marketplaces operate in heavy li, regulated jurisdictions such as the u. s. or the u, and the end points are regulates as meaning. if you want to do crypto transactions, you have to use a nature currency such as the euro, or the u. s. the, against it. or i, we saw a huge optic in crypto transactions on february,

the 24th from russia. what are people using it for? if, as you said, there is, it's kind of limited in terms of how far it can go to help with sanctions evasion. i think we could be seeing the 1st real use case for crypto with this side, ukrainian crisis as a lot of individuals, as the less entities are moving some of their money and some of their assets into crypto. so crypto could be proved to be a store of wealth at this point in time, although we can't really do any actual transactions in crypto yet. so this could trigger individuals just average savers increasingly looking towards crypto currency, not just sanctioned oligarchs. i would say so and looking at the comments coming from, let's say, coin base and some of the other markets they have said pretty, pretty straightforward. the they are not going have been russian individuals doing transactions on their markets because they feel they can't penalize individuals and

others agree with that. but having said that, limited access to the end points, let's say the dollar and the euro definitely puts a bit of hold on entering crypto for regular russians or it's been great talking to you. thanks so much kyle. thank you so much. that's our show for this week, but remember, you can get in touch with our fire twitter. use the hash tag a j, c, c c. when you do or drop us in a mouth, county, the cost down to 0 dot net. it's our address is more for you online at al jazeera dot com slash ctc take you straight on page, which has individual reports, links and entire episodes for you to catch up on that's it for this edition of counting the cost. i'm sam is a ban from the whole team here, thanks for joining us can use and al jazeera is next a sanctuary for journalists. it was a haven,

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