MCViewPoint

Opinion from a Libertarian ViewPoint

Russia’s Invasion of Ukraine Is Creating a Financial World War

Posted by M. C. on April 13, 2022

A prominent central banker warned that the US’s continual weaponization of the dollar demonstrates a need for the global community to find something new.

This call came not from the Bank of Russia or the Bank of China, but the Bank of England—one of Washington’s closest allies.

https://mises.org/power-market/russias-invasion-ukraine-creating-financial-world-war

Tho Bishop

Over a month after Russia invaded Ukraine, the military conflict has remained a regional conflict. While Russia has been able to fortify its claim in eastern Ukraine and has made advances in the south, recent counteroffenses by the Ukrainians have pushed Vladimir Putin’s military away from Kyiv. Meanwhile, allegations of war crimes committed by Russian forces during the conflict have given Ukrainian president Volodymyr Zelenskyy new ammo in his campaign to increase pressure from the international community against the Russian Federation.

The situation on the ground has fueled a narrative popular in America and Europe that Putin vastly underestimated the difficulty of conflict with Ukraine and that the Russian regime is suffering from the “authoritarian trap” of government bureaucrats prioritizing placating their president over accurately reporting the state of Russia’s military affairs. While any degree to which Russian military failures push the countries to a ceasefire is a cause of celebration, overestimating Russian weakness could serve to undermine peace negotiations. Hopefully, the United States and the North Atlantic Treaty Organization’s analysis of this conflict is better than it has been in other situations in recent history.

Putin’s aspirations, however, go well beyond territorial conquest in former Soviet nations. At its core, the aim of the Russian regime is to challenge the post–Cold War order of a unipolar America-dominated global order.

On that front, Russia’s actions—and the West’s response—have now sparked a global conflict.

Since the 1970s, the dollar has been as vital a tool for American global supremacy as any military weapon. America’s war on terror not only transformed the Middle East into the main theater of US foreign policy but fueled Washington’s desire to militarize the American financial sector. What began as debanking al-Qaeda conspirators evolved into the primary tool used against rogue nations such as Iran and North Korea. In recent years, Western nations have also wielded these tools against domestic political dissidents.

In response to Putin’s aggression against Ukraine, America and the West have responded with some of the most extreme sanctions yet deployed. While these measures have forced severe financial pain on Russian oligarchs, who had become used to a certain quality of life outside of their homeland, Russia’s own counteroffensive is revealing the limits to Washington’s favorite weapons.

Global demand for Russian energy, food, and other vital resources has allowed Putin’s regime to provide support to the ruble by demanding purchases be made in Russia’s currency—Putin’s investments in various European “green” causes were well made. The result has been the value of the ruble returning to its postwar standing and stabilizing a financial sector bearing the brunt of Western sanctions.

See the rest here

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