Sanction History
Sanctions did not topple regimes in Cuba, Iran, or Venezuela. Nor did Trump’s sanctions on China or his much ballyhooed trade deal accomplished anything.
Why will sanctions do the trick here?
De-Westernizing Russia
Please consider De-Westernizing Russia by Eurointelligence founder Wolfgang Münchau.
Yesterday’s news was that MacDonalds, a totem of US culture, will temporarily close its restaurants in Russia. Visa and Mastercard already left, as did many western fashion brands Russians got so used to. Foreign correspondents left. Outside Russia, western companies will think twice before doing business with Russia today. Russians are encouraged to settle their debt with western creditors in much-depreciated roubles, a quid-pro-quo response to the central bank freeze of Russian reserves. What if the war in Ukraine, as painful and violent as it is, is only the catalyst for a much bigger operation: the de-westernisation of the Russian society?
The rouble payback encouragement is reminiscent of what Hjalmar Schacht, Adolf Hitler’s central banker did with reparations payments. There are eerie parallels with the pre-world war two era. We may ridicule this now, but the Nazi invocation has a psychological impact that could soon grow to have its own life. It taps into old resentments and memories, and fosters a war mentality. It prepares people for the sacrifices that are necessary to emerge victorious out of this.
Our sanctions may help Putin spin this narrative further. Russia can survive, and even thrive, isolated from the west. Economically, politically and socially, it has enough resources to do so in the long run. Our sanctions allows Putin to sever the links with our economies and seek new alliances. It allowed him to impose emergency laws at home, and to purge the opposition. He already controls most of the information flow and the narratives of the war. Most Russians are unaware that a war is already happening in Ukraine and that Russia is the aggressor. The media portrays the military operation as a response to Ukrainian and western aggression.
Increasing the sphere of influence internally and externally is what Putin is after. We may think that our sanctions and boycotts will hurt him as he stands isolated from the west. But it strengthens his power with all those who are on his side. Syria is already in his debt and supports him politically and physically, including with soldiers for urban warfare. Then there are historic allies such as Cuba and South Africa. There is Venezuela. And there is China, which is looking at how to play this new economic opportunity to its advantage. Then there is India calibrating a neutral position, while Israel and Turkey are both eager to mediate in this war. Autocrats in the Middle East are on stand by mode. Then there are tactical moves like the one in Saudi Arabia, which refused the US request to increase its oil production, securing higher oil prices that comes to benefit Russia. What unites those autocratic leaders in the Middle East/North Africa region is an anti-US sentiment and a desire to end or at least curtail US dominance.
Can Russia Thrive?
Iran, Venezuela, and Cuba survive but don’t thrive. But none of them have ample food supplies and none of them share a border with China.
Russia has surplus grain, surplus energy, and surplus metals that every country wants, especially China.
China will gladly take Russia’s natural gas, oil, and food. In return, Russia gets superior 5G technology and parts from the US, Japan, or EU via China.
Thrive is an overstatement, but perhaps not by much.
Numerous countries have dictators who outlived major sanctions for years despite those countries lacking the natural resources of Russia and also lacking a border with a country willing to ignore US sanctions.
More Sanctions
The EU announced more sanctions yesterday, mainly on banks an oligarchs.
So what?
After the Fed effectively confiscated Russia’s foreign reserves, there are no more meaningful economic measures the US or EU can take that do not hurt the EU more than Russia.
The EU still has not followed the US in banning Russian oil. Germany and Hungary won’t cooperate.
The US made a mockery of Poland but telling the country to get MIGs to Ukraine then backpedaling when Poland said OK.
Increase Energy Supply? Where?
Green asininity is such that Biden prefers other countries to produce more rather than the US.
It’s a mystery how we are supposed to get LNG to Germany with the Greens wanting to shut down natural gas development immediately.
Elizabeth Warren’s solution is a windfall profits tax on oil. That will surely help supply, right?
Dictators Don’t Worry About Elections
Unlike US politicians who have to keep everyone happy every two to six years, dictators have no such concerns.
Biden cannot even take a modest increase in gas prices without begging Venezuela and Saudi Arabi to pump more oil.
What If?
It would have been better for everyone involved for the US to not have gotten tangled up in this mess in 2014.
It would have been better for Ukrainian President Volodymyr Zelensky to rescind NATO a year ago than two days ago.
“As far as NATO is concerned, I cooled down on this issue after we realized that NATO is not ready to accept Ukraine. The Alliance is afraid of contradictory things and confrontation with Russia,” Zelensky said in ABC interview.
Now What?
Russia cannot hold all of Ukraine. But it can take and hold pro-Russia regions closest to Russia.
But it’s very difficult at this stage for the US, Putin, and Ukraine to all simultaneously back down now, especially given Putin’s recent attacks on civilians.
Yet short of someone in Putin’s inner circle taking Putin out, this sorry state of affairs can simmers for six months, six years, or even a decade.
Let’s backtrack. It’s important to understand the Real Background Story Behind Russia’s Invasion of Ukraine.
Please click on that link to better understand why what’s happening now is happening now.
That background no way justifies Putin’s actions.
Regardless, Ukrainians are nothing but pawns in an East-West power struggle the US certainly helped simmer.
As usual, US misery is temporary, and there will be no lives lost on US soil. For Ukrainians and Russians who needlessly lost their property and lives, the loss is permanent.
Looking ahead, everyone needs to stop the delusion that more sanctions will solve anything.
Please note US Sanction Policy Drives China Into Russia’s Loving Arms
Finally, blowback from misguided US foreign policy never ends. This time Ukraine is the unfortunate recipient.
This post originated on MishTalk.Com.
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Mish
Just to let you know that inspection during the morning showed nuclear power plant attack was more than burning of the training Center building. The reactor structure and one of the support buildings (“dirty pipe corridor”) also received damage.
one of the plant’s reactor units, causing a localized fire that was
later extinguished.
The safety systems of the plant’s six reactors had not been affected and there has been no release of radioactive material.
…
Two people were reported injured.”
“Fundamentally, the problem is that the American elite is delusional. While the rest of the world knows that in a multipolar world, the United States’ capacity to force its will on other countries is inexorably in decline, the American elite shut their eyes to that reality. The present ridiculous situation was only due to this arrogance and self-deception.
The strategic defeat that Washington has suffered will dent US prestige worldwide, weaken its trans-Atlantic leadership, unravel its Indo-Pacific strategy, and accelerate the drain of American influence in the 21st century. The Biden presidency will carry this heavy cross.”
The downside of all the sanctions is the threat to the US dollar world reserve status. Will this event be the push to Russia, China and others to challenge this favored status? Just last week fed chair Powell made an eye opening comment about the potential to have more than one reserve currency. Down the road are we inadvertently diminishing our status?
potential to have more than one reserve currency. Down the road are we
inadvertently diminishing our status?”
Haha
He decided to toss the dice and see what would happen. If he failed, at least he tried. If he succeeded, then Russia and his legacy lives on longer than he does.
It’s unfortunate when dictators toss the dice with the lives of real people.
“All the Kremlin’s Men: Inside the Court of Vladimir Putin.”
more isolated than it has ever been. The economy is under sanctions and
international businesses are withdrawing. The news media has been even
further restricted; what remains spouts paranoia, nationalism and
falsehoods. The people will have increasingly less communication with
others beyond their borders. And in all of this, I fear, Russia
increasingly resembles its president.
I have been talking to high-level businessmen and Kremlin insiders
for years. In 2016 I published a book, “All the Kremlin’s Men,” about
Mr. Putin’s inner circle. Since then I’ve been gathering reporting for a
potential sequel. While the ongoings around the president are opaque —
Mr. Putin, a former K.G.B. officer, has always been secretive and
conspiratorial — my sources, who speak to me on condition of anonymity,
have regularly been correct. What I have heard about the president’s
behavior over the past two years is alarming. His seclusion and
inaccessibility, his deep belief that Russian domination over Ukraine
must be restored and his decision to surround himself with ideologues
and sycophants have all helped to bring Europe to its most dangerous
moment since World War II.
Mr. Putin spent the spring and summer of 2020 quarantining at his
residence in Valdai, approximately halfway between Moscow and Saint
Petersburg. According to sources in the administration, he was
accompanied there by Yuri Kovalchuk. Mr. Kovalchuk, who is the largest
shareholder in Rossiya Bank and controls several state-approved media
outlets, has been Mr. Putin’s close friend and trusted adviser since the
1990s. But by 2020, according to my sources, he had established himself
as the de facto second man in Russia, the most influential among the
president’s entourage.
institute headed by the Nobel laureate Zhores Alferov. But he isn’t just
a man of science. He is also an ideologue, subscribing to a worldview
that combines Orthodox Christian mysticism, anti-American conspiracy
theories and hedonism. This appears to be Mr. Putin’s worldview, too.
Since the summer of 2020, Mr. Putin and Mr. Kovalchuk have been almost
inseparable, and the two of them have been making plans together to
restore Russia’s greatness.
For Russians, it is a sacred obligation to make sure the next war is not fought on Russian soil, again.
link to reuters.com
“The West’s united response to Russia’s invasion of Ukraine is splintering over whether European countries are willing to take a severe economic hit and stop buying the oil that fuels the Kremlin’s war effort.
While the U.S. is set to link to politico.com, it looks increasingly unlikely that its European allies will agree to sanction President Vladimir Putin’s energy exports because of fears about runaway inflation and retaliation from the Russians.”