Bloomberg reports Treasury Warns of Upheaval If U.S. Sanctions Russian Debt.

A Treasury report obtained by Bloomberg concluded that expanding sanctions to new Russian sovereign debt and derivatives could destabilize markets and spread beyond Russia to have “negative spillover effects into global financial markets and businesses.”

But Treasury undersecretary for international affairs David Malpass said the department hasn’t ruled out sanctioning Russian debt.

“Treasury would consider all options,” Malpass said in an emailed reply to questions. “The report is an analysis of possible effects, not in any way a roadmap for or against sanctions. We don’t telegraph our future actions.”

Congress ordered the report on the impact of potential sanctions on Russian sovereign debt in legislation passed in August. Though the report was submitted to Congress on Monday, its findings hadn’t previously been disclosed.

The U.S. law required that the report on potential sovereign debt sanctions be unclassified, but allowed a “classified annex.” It was submitted to Congress on Monday but no portion was made public. Bloomberg obtained the unclassified report, though not the classified annex to the study.

Sanction Madness

Inquiring minds are diving into the Sanctions Report. Section III is where to look.

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Russia Sanctions Study Recap


  1. Sanctions would destabilize financial markets
  2. Magnitude and scope of upheaval is unknown
  3. Effects on Russia and US investors and businesses
  4. Sanctions would lead to retaliation
  5. Would cause disunity with Europe

Not Ruled Out by US!

Duh! How much did that study cost?

Did you spot the irony? To maintain unity on sanctions, you can't impose them!

The report failed to mention this key item: Sanctions don't change behavior, they may reinforce it by having the population rally around sanctioned leaders.

And what about the madness of considering such actions anyway?

Mike "Mish" Shedlock

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