This is not the sort of self harm Europe is prepared to contemplate right now. Indeed, thanks to the indiscretion of a UK official, who was snapped going into Downing Street with his briefing documents on display for all the world to see, we know this to be the case. Trade and financial sanctions have already been ruled out.Whatever. This doesn't seem to have stopped the Russians threatening retaliatory action against the threat of the non sanctions. One possibility, says the Kremlin economics aid Sergei Glazyev, is for Russia to abandon the US dollar as a reserve currency, or to figure out a way to use a new payments system that was not reliant on US dollars for international transactions. Good luck with that one.

I've written before about the inevitability of decline for the dollar as the world's major reserve currency, but this process is on a very long fuse and basically depends on China eventually displacing the US as the world's largest economy.

That's not going to happen any time soon. In the meantime, the dollar remains overwhelmingly the currency of choice for international transactions, and is the middle currency in virtually all transactions. For instance, if you were looking to buy Singapore dollars with Russian roubles, you would typically first buy US dollars with your roubles and then swap them into Singapore dollars. The US dollar is also the pricing currency for virtually all commodity transactions, including crucially, oil. Repeated attempts to set up alternative pricing arrangements have all come to nothing.