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Posts Tagged ‘sanctions’

Exclusions And Sanctions Help ‘Enemies’ To Build Their Own Capabilities

Posted by M. C. on July 27, 2022

The International Space Station is losing the Russian modules it needs to maneuver. The U.S. will immediately have to build new propulsion modules if it wants to save it.

Without the Russians thruster modules the station will continuously slow down and sink towards earth until it breaks up and burns in the atmosphere.

https://www.moonofalabama.org/2022/07/exclusions-and-sanctions-help-enemies-to-build-their-own-capabilities.html#more

Moon of Alabama

The hostile behavior the ‘west’ is showing towards China and Russia has consequences.

The International Space Station is losing the Russian modules it needs to maneuver. The U.S. will immediately have to build new propulsion modules if it wants to save it.
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Russia to withdraw from International Space Station after 2024

Russia has said it will withdraw from the International Space Station (ISS) after 2024 to focus on building its own orbital outpost.

Yuri Borisov, who was appointed to lead the state-controlled space corporation Roscosmos earlier this month, said during a meeting with Russian President Vladimir Putin that Russia would fulfil its obligations to other partners before it leaves the project.

Mr Borisov said “the decision to leave the station after 2024 has been made.”

The U.S. had planned to operate the station until 2031:

Earlier this year NASA published plans for the ISS which could see the 444,615kg structure taken out of orbit in January 2031 and crashed into a “spacecraft cemetery”.

It said the laboratory would continue operating until 2030 but its long-term future is unsustainable.

The end date will now likely be earlier than NASA had planned. As an earlier report explained:

Russia provides the propellant and thrusters needed to periodically reboost the station, a critical capability NASA cannot currently replace. Maneuvering is provided by thrusters built into the Russian Zarya and Zvezda modules and aboard visiting Progress supply ships.

A Northrop Grumman Cygnus cargo ship that arrived earlier this week is the first U.S. vehicle after the space shuttle to be capable of reboost, but it cannot on its own replace the Russian capability.

NASA astronauts are not trained to operate Russian systems and vice versa for the cosmonauts. Neither side can safely operate the lab on its own.

Without the Russians thruster modules the station will continuously slow down and sink towards earth until it breaks up and burns in the atmosphere.

For the U.S. to build its own thruster modules would very likely take more than two years. They would probably arrive too late to rescue the station.

Russia has plans to build a new space station. An alternative for it may be to hook up with the Chinese space station which was launched last year. Yesterday it received its second large module, a laboratory. A third large module will be added later this year.

China build its own space station because the U.S. had excluded it from participating in the ISS:

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The Brain-Dead Fanatic

Posted by M. C. on July 11, 2022

By Llewellyn H. Rockwell, Jr.

Professor Mearsheimer insisted that Moscow was not interested in making Ukraine part of Russia, but in making sure it would not become a springboard from Western aggression; and that Russia could not feel safe, develop and exist while facing a permanent threat from the territory of today’s Ukraine. He insisted that despite the Western narrative about NATO, the determinant aspect to understand the root causes of this conflict is how Moscow sees the alliance’s actions.”

According to a recent New York Times article, increasing global oil and gas prices have enabled Russia to finance its war on Ukraine. US sanctions did not bring the Russian economy to its knees, as Biden promised. They actually brought the American economy to its knees while Russian profits soared.

The philosopher George Santayana said that fanaticism “consists in redoubling your efforts when you have forgotten your aim,” and by this definition, brain-dead Biden and the gang of neocons who control him certainly count as fanatics. Their policies have failed but they won’t stop. They go on with disastrous ideas that don’t work.

Biden wanted to choke off Russia’s economy through sanctions, but his policy has aided the Russian economy and hurt the American economy. As the great Dr. Ron Paul says, “Last week a New York Times reporter asked Biden how long he expects Americans to pay record gasoline prices over his Administration’s Ukraine policy. ‘As long as it takes,’ replied the president without hesitation.

‘Russia cannot defeat Ukraine,’ added Biden as justification for his Administration’s pro-pain policy toward Americans. The president has repeatedly tried to deflect blame for the growing economic crisis by claiming Russia is solely behind recent inflation. ‘The reason why gas prices are up is because of Russia. Russia, Russia, Russia,’ he said in the same press conference.

Brian Deese, Director of President Biden’s National Economic Council, was asked in a recent CNN interview, ‘What do you say to those families that say, listen, we can’t afford to pay $4.85 a gallon for months, if not years?’

His answer? ‘This is about the future of the Liberal World Order and we have to stand firm.’

Has there ever been an Administration more out of touch with the American people? If you asked working Americans whether they’d be happy to suffer poverty for the ‘liberal world order,’ how many would say ‘that sounds like a great idea’?

The strangest part of this idea that Americans must suffer to hurt the Russians is that these policies aren’t even hurting Russia! On the contrary: Russia has seen record profits from its oil and gas exports since the beginning of the Ukraine war.

According to a recent New York Times article, increasing global oil and gas prices have enabled Russia to finance its war on Ukraine. US sanctions did not bring the Russian economy to its knees, as Biden promised. They actually brought the American economy to its knees while Russian profits soared.

As Newsweek noted last week, Russian television pundits are joking that with the financial windfall Russia has seen since sanctions were imposed, ‘Biden is of course our agent.’

Washington’s bi-partisan foreign policy of wasting trillions on endless wars overseas has finally come home. Biden is clearly out of touch, but there is plenty of blame to go around. The only question is whether we will see an extended recession…or worse.”

Biden wants to support the Ukraine against Russia, but Russia is winning, The great military historian and friend of the Mises Institute Martin van Creveld says, “Like almost all other Westerners, at the time the Russian-Ukrainian War broke out in February 2022 I was convinced that the Russians would fail to reach their objectives and lose the war. . . Since then four very eventful months have passed. As they went on, the following factors have forced me to take another look at the situation.

First, the Ukrainians are not fighting a guerrilla war. Instead, as the list of weapons they have asked the West to provide them with shows, they have been trying to wage a conventional one: tank against tank, artillery barrel against artillery barrel, and aircraft against aircraft. All, apparently, in the hope of not only halting the Russian forces but of expelling them. Given that the Russians can fire ten rounds for every Ukrainian one, such a strategy can only be a sure recipe for defeat.

Second, a change in Russian tactics. Greatly underestimating their enemies, the Russians started the war by attempting a coup de main against the center of Ukrainian power at Kiev. When this failed it took them some time to decide what to do next; they may even have replaced a few of their top ranking generals. But then they regrouped and switched to the systematic reduction of Ukrainians cities and towns. Much as, in 1939-40, Stalin and his generals did to Finland. As in both that war and World War II as a whole they resorted to what has traditionally been their most powerful weapons, i.e, massed artillery. It now appears that the change enabled them to reduce their losses to levels that they can sustain for a long time. Perhaps longer than the Ukrainians who, by Zelensky’s own admission, are losing as many as 100-200 of their best fighters killed in action each day.

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Weekly Update — Foreign Policy Fail: Biden’s Sanctions are a Windfall For Russia!

Posted by M. C. on July 8, 2022

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Coal Emerges Victorious As Sanctions And Green Policies Backfire Spectacularly

Posted by M. C. on July 7, 2022

By Tyler Durden

Zero Hedge

Shipments are soaring as the region scrambles to replace missing Russian product amid fears of continued declines in Russian nat gas exports – and a freezing winter- said Matthew Boyle, lead analyst for dry bulks, gas and LNG at Kpler Insight. Helping to fill the gap is more coal from the US, Colombia and Australia — countries that tend to produce better-quality or so-called high-calorific value material that releases more heat and energy when burned. Of course, the high quality product is also priced accordingly, and as shown in the chart above, Australian coal just hit a record high price, something which has led to Europe’s record 29.1% PPI.

When historians look back on this chaotic and turbulent period, they will find that few individuals inflicted as much damage on the environment and promoted the interests of the “dirty fossil fuel” lobby as Greta Tunberg, who by shaming and forcing “serious” politicians to pivot toward green energy at a time when there was nowhere near enough green capacity to replace existing sources of energy, sparked what may be the most spectacular self-own in history. And today, the WSJBloomberg and Reuters all wrote about it.

We start with the WSJ which concedes what was obvious to most long ago (see “Will ESG Trigger Energy Hyperinflation” from last June), namely that “an energy-starved world is turning to coal as natural-gas and oil shortages exacerbated by Russia’s war against Ukraine lead countries back to the dirtiest fossil fuel.”

Yes, contrary to the intentions of Green fanatics everywhere, their push to accelerate away from “dirty” fossil fuel has not only backfired spectacularly, but also exposed the hypocrisy and empty promises of so many virtue-signalers, as “from the U.S. to Europe to China, many of the world’s largest economies are increasing short-term coal purchases to ensure sufficient supplies of electricity, despite prior pledges by many countries to reduce their coal consumption to combat climate change.”

Adding insult to injury, the global competition for coal which is now also in short supply after years of declining investment in new mines and resources, has driven benchmark prices to new records this year. Spot coal prices at Australia’s Newcastle port, a key supplier to Asia, topped $400 a ton for the first time last month.

Hilariously, the push for coal is being led by Europe, ground zero of the “green movement” which finally realized that one can’t burn fake virtue or melt posing in front of camera in the winter to keep warm, and is boosting coal purchases to ensure it can keep power flowing to homes and factories after Russia cut gas supplies to the continent. Germany, which not long ago promised to eliminate coal as a power source by 2030, is among the nations now importing more. Economy Minister Robert Habeck called the increased reliance on coal bitter but necessary. Spoiler alert: Germany will not eliminate coal as a power source by 2030, if anything it will be more reliant on it than ever unless it also restarts its nuclear power plants which it, idiotically, shut down not long ago.

Never one to admit it was dead wrong, however, Europe has a response to everything: “Right now the sentiment is that more coal is better than more Russia,” said Alex Msimang, a London-based partner at law firm Vinson & Elkins LLP specializing in the energy sector.

Whatever dude.

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Why Sanctions Always Fail

Posted by M. C. on June 27, 2022

The Enemy Always Adapts.

Andrew Cockburn

 The misplaced belief in the efficacy of sanctions as a weapon may partly be traced to what is generally considered to have been their greatest triumph, the British blockade of Germany in world war 1 that supposedly starved the Germans into submission, a “very perfect instrument” in Keynes’ words.  But as the late great Norman Stone pointed out, German food shortages were almost entirely due to government mismanagement, although the blockade, as usual, provided a convenient scapegoat.

https://spoilsofwar.substack.com/p/why-sanctions-always-fail

 Early in the Ukraine war, President Biden boasted on twitter that thanks to “unprecedented” sanctions, the “Russian economy is on track to be cut in half” and the ruble had been reduced to “rubble.”  All instruments of economic warfare had been deployed against Ukraine’s invader, from the freezing of central bank reserves to sanctions on Russian cats. Today, the cats may be still at home, but the ruble is at a seven year high, Russian interest and inflation rates are headed downwards, and industrial production is ticking up. Meanwhile Russian forces steadily advance in Ukraine. 

Objective: “Hunger, Desperation, Overthrow of Government.”

         All this represents a much larger defeat for sanctions than is usual in such offensives.  In a memo on Cuban sanctions back in 1960 a state department official named Lestor Mallory described the purpose of such measures with unusual frankness (the memo was of course secret.) The aim, he wrote, was  “..to bring about hunger, desperation and overthrow of government.” Twenty years later, again cloaking honesty in classification, the CIA intelligence directorate studied the record and concluded that “economic sanctions…have not met any of their objective” and had furthermore strengthened the regime, providing Castro with “a scapegoat for all kinds of domestic problems.” That pattern has endured: hardship for the sanctioned population, as exemplified by the half-million toll on Iraqi children during the 1990s, or the ongoing mass hunger in Afghanistan, while the ruling elite escapes unscathed and diverts any possible local disaffection among the immiserated populace in the direction of the sanctioning powers.  This time around, the effect of sanctions has of course been double-edged. Not only has the Russian economy not collapsed, the sanctioneers, principally the Europeans, are themselves in an accelerating economic downslide, marked by rising inflation, in particular the catastrophic energy costs consequent on sanctions against Russian oil and gas.

Sanctions Work Just Like Bombing – Badly.

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Russia Is Winning the Financial War

Posted by M. C. on June 24, 2022

By Alasdair Macleod

Goldmoney

The ending of the petrodollar era

https://www.goldmoney.com/research/russia-is-winning-the-financial-war

Sanctions have backfired on those described by Vladimir Putin as the unfriendly nations. It is setting in train a series of events likely to undermine the whole Western financial system, as prices rise driving interest rates higher, and economic activity shrinks. These developments alone are leading to contracting bank credit, crashing stock markets, and sharply higher bond yields.

Last week, I wrote about the impact on the banking system and the likely consequences. Russia, China, and associated nations who depend upon them for trade and economic development are now moving to protect themselves from what is emerging as a full scale systemic and fiat currency crisis for the dollar and the entire Western financial system. 

These developments are hastening the end of the petrodollar era and the dollar’s role as a reserve currency.  A central Asian replacement is planned to be a new super-currency used for cross-border payments, based on an index of a basket of commodities and currencies of the participating nations. Including currencies is a mistake, but otherwise the proposition has merit. 

This article explains why and how a properly constructed scheme would work. I demonstrate why it could act as a de facto gold standard.

Its designers intend this new trade currency to appeal to other important nations, such as Saudi Arabia, into using a commodity-linked currency for settling their trade payments, replacing the dying petrodollar. But its success could prove to be fatal for the fiat dollar and other Western currencies. With the demise of the dollar, the new super-currency can be expected to lead eventually to some national currencies adopting gold standards.

The ending of the petrodollar era

Put Ukraine to one side, it’s not the major issue. We should realise what really matters to us all is the real war, which is Russia’s attempts to banish American hegemony in Europe. While in the West we have an image of President Putin as an evil despot determined to take Ukraine back under Russian control, in a speech at St Petersburg’s International Economic Forum this week, Putin’s diagnosis of the West’s problems was more to the point than anything you will hear from our own Dear Leaders: Joe, Boris, Emmanuel, Olaf, et al. It is worth citing relevant extracts from the official English translation of Putin’s speech to highlight his economic understanding of the pickle we in the West have got ourselves into:

“Surging inflation in product and commodity markets had become a fact of life long before the events of this year. The world has been driven into this situation, little by little, by many years of irresponsible macroeconomic policies pursued by the G7 countries, including uncontrolled emission and accumulation of unsecured debt. These processes intensified with the onset of the coronavirus pandemic in 2020, when supply and demand for goods and services drastically fell on a global scale…

“Because they could not or would not devise any other recipes, the governments of the leading Western economies simply accelerated their money-printing machines. Such a simple way to make up for unprecedented budget deficits…

“I have already cited this figure: over the past two years, the money supply in the United States has grown by more than 38 percent. Previously, a similar rise took decades, but now it grew by 38 percent or 5.9 trillion dollars in two years. By comparison, only a few countries have a bigger gross domestic product. The EU’s money supply has also increased dramatically over this period. It grew by about 20 percent, or 2.5 trillion euros.

“Lately, I have been hearing more and more about the so-called – please excuse me, I really would not like to do this here, even mention my own name in this regard, but I cannot help it – we all hear about the so-called ‘Putin inflation’ in the West. When I see this, I wonder who they expect would buy this nonsense – people who cannot read or write, maybe. Anyone literate enough to read would understand what is actually happening.

“The rising prices, accelerating inflation, shortages of food and fuel, petrol, and problems in the energy sector are the result of system-wide errors the current US administration and European bureaucracy have made in their economic policies. That is where the reasons are, and only there.”[i]

Putin shows that he has at least a superficial understanding of where the West has erred with its neo-Keynesian monetary and economic policies. While some of the economic and monetary elements in his address can be criticised, Putin’s grasp of these subjects puts him head and shoulders above his opposite numbers in the G7.

It is from this disadvantage that the US is trying to impose dollar hegemony on Russian interests in the financial and currency war. We must consider the geopolitics of the matter. 

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You Don’t Know Whether to Laugh or to Cry. The EU Now Has a Masterplan to Hit Putin Where It Hurts

Posted by M. C. on May 6, 2022

Given that some EU member states have made it pretty clear that they don’t have the means or resources to look for alternative sources of gas, for example, it’s hard to see how an EU directive is going to make any differences.

By Martin Jay
Strategic Culture

Hit Putin where it hurts? He’s more likely to hurt himself from laughing. Try harder, Ursula.

The EU is about to unveil its own sanctions plan to wean its own member states off Russian oil. But getting backing from all EU governments might be harder to push it through. Try not to laugh.

On the foreign policy circuit the EU doesn’t have an impressive track record. For anything. More, if anything, for leaving a trail of havoc in its wake when it dabbles in international politics. The problem is simply that the EU, while quite capable at agreeing on new directives for the size of your windscreen wipers, or the size or shape of a given piece of fruit, struggles with the big stuff. There simply isn’t the support from member states yet to hand over to Brussels how those same governments unilaterally deal with conflict around the world. The result is actually quite comical as who can forget Federica Mogherini’s offer to both President Assad of Syria and opposition fighters of cash from the EU to stop the war? Or for the same office to suggest using British frigates off the coast of Libya to literally blow out of the water smuggler boats laden with African migrants trying to get to Europe. Or that unforgettable foray into conflict resolution on the Chad border in 2001 where French officers under a so-called peacekeeping mission from the EU fled for their lives when rebels actually started firing live rounds at them? Imagine. Live rounds.

And then there was the EU police force in Afghanistan which was so terrified of the streets of Kabul that they simply decided it would be safer for them, even though they were armed, to stay in their barracks. And then the fiasco of Covid where the EU couldn’t even get an agreement from its own governments on how to proceed with a rescue plan and so did nothing, while thousands of its own citizens died. Even Brexit was a catastrophe for the EU, given that after all that drama over the negotiations and the empty threats by Brussels, Britain turns out to be not merely a survivor but a champion with economic growth the envy of the 26-member bloc.

The list just goes on and on. Someone really should write a book about the EU’s comical attempt to be a superpower and how it fails every single time.

And it will be the same with the latest escapade from the European Commission’s own President who seems to have set a new record for being especially ineffective – even for European Commission presidents. Ursula von der Leyen, an unremarkable German politician, bereft of any real dynamism and a particularly obscure foreign minister when she held the post, is grasping the nettle and facing Russia head on. Oh yes she is. Dear Ursula has a new draft directive which will ensure that all EU member states will abandon their deals with Russia oil, or at least phase them out over a period of time. We don’t know what the timeline is but the ambitious plan will have to have the support of all member states and this where it might run into some obstacles. Given that some EU member states have made it pretty clear that they don’t have the means or resources to look for alternative sources of gas, for example, it’s hard to see how an EU directive is going to make any differences. Some might argue that an EU directive is a by-product of a lack of unity in the first place and so the failed superstate needs to look to the bureaucrats to find a fix. But contrary to popular belief, the EU Commission isn’t as powerful as it likes to believe and cannot impose draft legislation on member states or the European parliament for that matter.

Realistically, the Russia move is an act of desperation following the EU’s grotesque support for U.S. and British objectives in Ukraine, i.e the toppling of Putin. The announcement shouldn’t therefore be taken seriously and given the recent Covid ordeal which lost von der Leyen considerable credibility it’s hard to see how she can galvanise opinion across 26 member states. What’s more likely is that this latest ruse will be a rod for her own back as more independently-minded EU member states who have made the headlines of late for not getting in line, will use it as a political tool to hit back at Brussels. And time is also a factor. If, say, it takes a year to be adopted – which is fast tracked – has the Commission president considered the present financial hardship that many EU citizens themselves are facing due to the Ukraine war and the political blowback that this directive would have, if adopted? While Joe Biden says remarkably stupid things like the U.S. is looking to Qatar for a solution to Europe’s energy dependency (they haven’t got any spare capacity to ship to Europe), it seems the EU is duty bound to follow the trend of talking nonsense and producing fake news. Hit Putin where it hurts? He’s more likely to hurt himself from laughing. Try harder, Ursula.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.

Copyright © Strategic Culture Foundation | Republishing is welcomed with reference to Strategic Culture online journal http://www.strategic-culture.org.

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Biden Admits That Sanctions Don’t Work and They Make Us Poorer | Mises Wire

Posted by M. C. on March 30, 2022

“Hey, food shortages are just the price you little people gotta pay!”

https://mises.org/wire/biden-admits-sanctions-dont-work-and-they-make-us-poorer

Ryan McMaken

President Biden on Thursday made two big admissions about the US-led economic sanctions on Russia. The first is that the sanctions will lead to food shortages for many countries other than Russia, and that this is simply the price that Americans ought to be forced to pay. 

The second admission was that sanctions haven’t worked to change Moscow’s policies, and that “sanctions never deter” the targeted regime from carrying out aggression. 

So, Biden has helpfully now explained this week not only that sanctions haven’t actually deterred Moscow, but that the people of the United States ought to pay more for food in order to maintain sanctions that don’t work.

These admissions come after repeated claims from the White House and Biden supporters claiming that sanctions would deter Russia from carrying out or sustaining an invasion of Ukraine. 

Moreover, the White House has repeatedly downplayed the effect that sanctions would have on the cost of living for American households. (The fact that sanctions may have a devastating effect on poor countries is, of course, ignored.) 

So, Biden has now made it clear: sanctions don’t work, and they’ll make you poorer. But we must keep them in place anyway.

What Exactly Did Biden Say about the Cost of Sanctions? 

After attending a meeting of G7 and NATO leaders on Thursday, Biden said food shortages “are going to be real.” He then added “The price of these sanctions is not just imposed upon Russia, it’s imposed upon an awful lot of countries as well including European countries and our country as well.” 

Of course, these “costs” extend beyond food into energy prices and the prices of many other goods as well. Oil prices remain near a ten-year high. 

It is notable that Biden admits the sanctions themselves are a key factor in the coming shortages. On the other hand, it has been common practice for supporters of sanctions to claim that it is only the Russian invasion that has curtailed food availability. Yes, the invasion naturally lowered food production in Ukraine, but it’s clear the US-led sanctions will diminish food availability for dozens of African countries, many of which are heavily dependent on Russian grain. 

Fortunately for Americans, North America is a food exporting region, and the US itself is a net food exporter, even in spite of the fact that Americans consume more calories than any other country. In other words, Americans are a long way from subsistence levels when it comes to their diets. Obesity, not malnutrition, is the order of the day in America. But the American cost of living will nonetheless be negatively affected. We should expect food prices to increase beyond even what we might have expected due to the central banks inflationary policy which drove overall price increases—pre-Ukraine War—up to nearly eight percent. 

This is because even though Americans are food exporters, the sanctions will further drive up global prices of food commodities while ensuring that many of our trading partners must devote more of their resources to acquiring food. That means lowered productivity and investment for trading partners in the goods that Americans buy. In turn, that means lowered supply and rising prices for American consumers.

If Sanctions Don’t Work, Why Bother? 

Biden’s admission that sanctions “never deter” contradicts weeks of claims by White House officials who have insisted that sanctions would force Russia out of Ukraine. For example, Kamala Harris claimed “the deterrence effect of these sanctions is still a meaningful one” and Deputy National Security adviser “Daleep Singh said “Sanctions are not an end to themselves. They serve a higher purpose. And that purpose is to deter and prevent.”

Moreover, in February, National Security adviser Jake Sullivan said, “The president believes that sanctions are intended to deter…. [a]nd in order for them to work—to deter, they have to be set up in a way where if Putin moves, then the costs are imposed.”

The fact that White House has been forced to change it’s story has highlighted in a short period of time how the sanctions have already failed to achieve their goals. In an effort to explain away the failure, Biden then claimed in a rambling response that he never said sanctions deter anything: 

Let’s get something straight. If you remember, if you have covered me from the beginning, I did not say that in fact the sanctions would deter him. Sanctions never deter. You keep talking about that…. Sanctions never deter. The maintenance of sanctions. The maintenance of sanctions. The increasing the pain, and that’s why I asked for this NATO meeting today, is to be sure after a month we will sustain what we’re doing not just month, the following month, but for the remainder of this entire year. That’s what will stop him.

So, the new party line is that sanctions didn’t deter Russia from anything, but they’ll some day cause enough pain to force Russia out of Ukraine. This is just more wishful thinking from the White House, and the abysmal success record of economic sanctions makes this clear. 

As we noted here at mises.org, sanctions have a terrible record of achieving the stated goals of forcing policy changes in targeted regimes. This is because targeted regimes tend to double down on sanctions rather than comply with sanctioning states. In other words, nationalism is more powerful than the economic hardship imposed on the targeted states. A second barrier to success is this: if the US wants to impose truly effective sanctions, it will need to get nearly universal cooperation from other states. Without that sort of cooperation, other states will provide multiple lifelines to the targeted regime. 

In the case of Russia, we’ve already seen this in spades. Germany has refused to cut off Russian energy exports. Mexican legislators from the ruling party are forging a new “Mexico-Russia friendship” caucus. India is now in the process of working out a new rupee-ruble trade arrangement to get around US sanctions. China, of course, says it will do what it wants. 

This all follows the usual script of economic sanctions and helps illustrate why they fail. What is remarkable is that the White House has been so quickly forced to admit both that sanctions have failed to achieve the clearly stated goal of deterrence, and that the White House thinks it’s fine to shrug and say, “Hey, food shortages are just the price you little people gotta pay!” Given the impotence of sanctions, and the damage being done to third parties, it’s time to admit the reality and move on. 

If Washington really wanted to end the bloodshed—instead of actively discouraging peace as it is now doing—it would be aggressively pursuing a negotiated settlement and ceasefire. 

Author:

Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor’s degree in economics and a master’s degree in public policy and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

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Surprise! Biden Says Sanctions Will Cause Food Shortages

Posted by M. C. on March 26, 2022

President Biden alerted us that, as a result of sanctions on Russia, food shortages for Americans are “going to be real.” So, for a fight on the other side of the world, that doesn’t threaten American interests in the least bit, the American people are supposed to suffer from a lack of food? Does that sound like a good foreign policy to you?

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Sanctions against Russia Are the Lockdowns of 2022 | Mises Institute

Posted by M. C. on March 9, 2022

As Austrian economists have long pointed out, it is no coincidence that the century of total war rose at the same time as the era of central banking. By relying on debt and the printing press rather than direct taxation, nations could hide from the public the immediate costs of war. Over time, global powers have turned central banks into weapons themselves. America’s abuse of its power has even forced longtime allies to speak out.

https://mises.org/power-market/sanctions-against-russia-are-lockdowns-2022

Tho Bishop

Russia’s invasion of Ukraine is nearing its second week. Vladimir Putin’s military continues its push west, with clear attempts to encircle Kyiv. To date, thankfully, America and its North Atlantic Treaty Organization (NATO) allies have held off pleas from President Volodymyr Zelenskyy to enforce a no-fly zone, which would risk the eruption of a new hot world war. So instead, along with supplying arms, intel, and—potentially—runways and planes to Ukraine, the focus of the West has been economic warfare.

What is not clear is whether the West is prepared to deal with the actual consequences of this approach.

It seems that with every passing day, America and its allies find tools to escalate financial pressure on Putin. What began with targeted sanctions on the Russian leaders and oligarchs has expanded to cutting off Russian banks from SWIFT, broad attacks on Russian industries, and now complete bans on Russian oil and other exports by some—though not all—NATO countries. Moreover, Western corporations have reinforced these policies by indiscriminately banning Russian customers from various services.

This coordinate blanket canceling of Russia is not a tool crafted by the necessity of the situation, but rather a new application of the form of warfare that the West has become the most comfortable with. America’s weaponization of the dollar-backed financial system began with the war on terror, utilized against rogue state actors like North Korea, Iran, and Venezuela (the latter two Washington is now seeking assistance with for oil) and is increasingly used against domestic enemies.

Even the Swiss historical tradition of neutrality has failed to hold in an era of financial war.

Unfortunately for the West, Vladimir Putin is a far shrewder adversary than Kim Jong Un or Nick Fuentes. Russia is not only a major energy provider to global—and, in particular, European—markets but is a globally important exporter of wheat, fertilizer, metals, and other strategically important resources. To add to these concerns, the West has become increasingly frustrated by the refusal of other global powers—including India, Brazil, Mexico, and China—to follow their lead.

None of this should be particularly surprising. China’s interest in using Russia as a foil against American global hegemony has been clearly illustrated for years—even prior to Trump-era escalation and the covid outbreak. Nations like India, Brazil, and Mexico have seen the rise of nationalist political parties that have echoes Putin’s critiques of the globalist West.

Already Putin has demonstrated a willingness to wield his natural resources as a wedge to pull traditionally subversive global actors away from America’s leadership. The Russian government has made a list of countries that have been hostile to its military actions and has directed trade to favor countries that have remained neutral. Meanwhile, Russian nationalists have celebrated the West’s economic response to the Ukraine invasion, identifying the possibility of shifting consumer trends away from America- and Europe-based companies toward Eurasian products.

As a result, it is precisely the Russians that are the most culturally aligned with the West that are the most penalized by the American response to Putin’s actions. This is similar to the way American sanctions against Iran most victimized the most liberal members of their society.

While the West has made vividly clear its sense of moral self-righteousness in imposing this financial warfare, it is less obvious whether there are any planned off-ramps to deal with the shock back home. In America, gas has already hit all-time highs, while market signals indicate that the cost of food, energy, and other vital resources is soon to follow. In response, the Biden White House and its allies have lectured Americans on the virtues of electric vehicles and other forms of “green energy.” Not even Tesla’s Elon Musk believes this line of logic holds up.

Ultimately any attempts by Western governments to soothe the concerns of their citizens depend upon convincing them that the very same expert class that believed preconflict inflation was “transitory” is intellectually equipped to handle this new conflict. It is uncertain how successful they will be.

The question largely left unasked as firefights continue to play out on Ukrainian streets is what the long-term consequences of the West’s financial war on Russia will be. If peace were to break out tomorrow, what would that mean for market actors?

Many of the same leaders that have engaged in an increasingly vicious economic conflict with Russia supported debilitating lockdowns in the face of covid. In the case of the latter, many seemed to act as if the economy could simply be turned on and off with relative ease—like a computer suffering from an operating malfunction. The world is still dealing with the consequences. How long will the scars from this last?

What if Russia and China are serious about undermining America, the dollar, and its subservient allies? What if Putin recognizes that the economy of the debt-saturated West is far weaker than our policy makers believe it is? Is there any reason for Americans to question the judgment of the decision-makers at the Fed or Treasury?

As Austrian economists have long pointed out, it is no coincidence that the century of total war rose at the same time as the era of central banking. By relying on debt and the printing press rather than direct taxation, nations could hide from the public the immediate costs of war. Over time, global powers have turned central banks into weapons themselves. America’s abuse of its power has even forced longtime allies to speak out.

In 2020, global powers ignored the economic consequences of lockdowns in order to “boldly” respond to the perceived risks of covid. The damage done was catastrophic, and the impact of the policies was minimal.

In 2022, many of those same global powers are destroying the lives of innocent Russians to signal their virtuous opposition to invasion. Unfortunately, when the dust settles, the underlying damage done to their nations may be far worse.  

Be seeing you

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