China has long been suspected of holding bonds offshore to shield it from scrutiny and engaging in what the US believes is illegal currency manipulation. Might Russia be doing the same?

Steil told me he thinks so. He believes the Russian central bank made deposits with the PBoC, which in turn instructed state-owned Chinese banks to buy US Treasury bonds on deposit in Belgium and in the Cayman Islands. 

If Steil’s financial sleuthing is correct, Russia could have at least $80bn in dollar assets squirrelled away in offshore accounts that no one knew about.

If Moscow needs greenbacks, the Chinese banks could sell their Treasury holdings, pass the dollars back to the PBoC who would credit them to the Russian central bank’s account. 

With so many intermediaries, and as long as the Chinese central bank is willing to play ball, it would be very hard for US or European financial authorities to do anything about it. President Xi Jinping is on record saying the financial sanctions are “harmful to all sides” and this form of financial pass-the-parcel would be one way for Beijing to help Moscow under the table.

It’s not the only hole in the financial net that the West has thrown over Russia in recent weeks. Earlier this month, the Russian government was able to make interest payments on its sovereign debt through US banks. 

It is possible that Washington allowed this because it was worried about the repercussions of a Russian default on the global financial system.

Western governments are also still making payments for imports of Russian oil and gas – although Moscow has started to demand these payments be made in roubles, which would potentially help prop up the currency. 

On Wednesday Germany indicated it is thinking about rationing gas in case neither side flinches before the deadline for this particular game of chicken at the end of the week.

Western financial sanctions against Russia were executed with lightning speed and extraordinary co-ordination. But their efficacy is now being tested. In recent days the rouble has recovered much of the ground it lost since the invasion.

The financial sanctions that have been imposed on Russia are certainly causing economic harm to the country. “But we shouldn’t kid ourselves that the Kremlin’s neck is in a financial noose,” says Steil.

“If we’re right about the money flows we’ve tracked, the Russian central bank has at least $80bn in Treasury bonds – as well as renminbi and gold – it could liquidate to pay its bills without much difficulty.”

We could be in for the long haul.