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.
Russia Sanctions Study Recap
- Sanctions would destabilize financial markets
- Magnitude and scope of upheaval is unknown
- Effects on Russia and US investors and businesses
- Sanctions would lead to retaliation
- 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
Steve From VA: The balance of trade deficit creates the foreign demand for US treasuries, allowing the government to run the deficits that fund the programs that buy the votes. Don’t expect anything to be done about it. It will go on until it doesn’t. That day will be a very bad one for everybody.
HMK: The fundamental reason that Putin is hated is the same as the fundamental reason for Trump. Neither one buys into the NWO one world government one world market bullS#!T. Good for both of them.
Let the world’s bad boys come up with their own credit. Fat chance countries like Russia, China, Iran, Turkey, North Korea, etc. etc. etc. can come up with their own. It’s stupid for the US to continue to fund our adversaries even if some crooked bankers get rich from it.
US needs to stop exporting credit.
Russia Russia Russia.
Government reports about sanctioning Russian debt IS an attack, although very minor and indirect. Such a report puts an idea of doubt in investors heads. Those investors don’t even have to be American. Investors either sell or not buy, which ultimately increase borrowing costs for Russia.
I was unaware of how good Russia’s balance sheet was and I am wondering if this is the reason the morons in our govt are so anti Russian. I am sure their interference in world affairs pale in comparison to the malevolent interventions we undertake worldwide. Not that the Russians are choir boys but we are hypocrites pointing the finger at them. I wonder if the US is afraid of losing hegemony to a country with better finances if the SHTF here in the US.
http://www.independent.co.uk/news/world/middle-east/syria-russian-warplane-shot-down-pilot-captured-rebel-sarqeb-latest-observatory-human-rights-a8192846.html
https://www.youtube.com/watch?v=KDMs2TOHGKM
Russia pays off balance of Soviet Union’s foreign debt Last year around August. Russia must be a real threat… Maybe that’s why the Syrian Rebels (cough, cough) shot down that Russian MIG yesterday.
Perhaps the US would then be forced to return to the gold standard but at a much higher gold price (and lower dollar). This might benefit those in debt although interest rates would probably skyrocket.
Russian gold reserves are nearing 1900 tonnes so they are pretty closer to being able to go on a gold standard. They have debt to gdp of about 11% compared to 100% in the UK and US.
I have a fantasy that the USG will try something like this and the Russians will respond by going on to a gold standard, backing the ruble 100% with the gold their CB has acquired – larger in proportion to Russia’s GDP than ours. The IMF would kick Russia out but would have to return more gold to Russia. I don’t know what this would do to financial markets but, regardless, I’d like them to try. But things like this just don’t happen (sigh).
Aside from saving the east Ukrainian separatists and Syria’s Assad (both of which I favored), what has Russia done that is so terrible?