Sanctions as weapons

In my new special article for coffee buyers which I am writing now, I posit that mankind has entered a new age—the result of massive changes in all areas.

Those changes include “war-’- which still exists in his old form-- as it was invented 7000 years ago – killing people with weapons and taking their resources and territory. Look at Ukraine. Look at Gaza.

But new forms of war have evolved along with societies and social systems and technologies: they are quite different—using economic, political, cultural, and informational weapons.

People still die --in fact, die in large numbers--but through deprivation of resources—just more slowly. Sometimes more painfully as a result of poverty, disease, starvation, and environmental issues. Most of these deaths are preventable—the result of deliberate political policies, externally imposed.

When Madeleine Albright denied the Iraqis access to medicines,500,000 children died. "It was worth it" she smirked. It was a policy decision. And she got away with it because those children were not shot or blown apart with bombs.

Killing at a distance used to be the modern way. Now it's killing indirectly. Murder is still murder.

More than 50,000 sick people died as a result of US sanctions in Venezuela which deprived the the country of medicines. That too was a policy decision. Once again nobody pulled a trigger-- they didn't have to.

So it is that "sanctions" are now the US's preferred weapon of indiscriminate mass destruction.

But while they worked pretty well against countries like Iraq and Venezuela—Russia and China are different matter. And things are changing fast.

The financialized, corporatist, neoliberal, world of the US and it's G-7 satellites belongs to the 20th century not the 21st.

The US cannot understand that—so it doubles down on the same failed strategies.

You can see that recently with the US doing two things to once again attack Russia economically.

There will never be boots on the ground in Ukraine — not American boots anyway . A financialized country cannot fight a war against a peer level enemy with an industrial base because it itself doesn't have an industrial base anymore—and its defense “industry” so-called really serves the financial interests of large corporations and elites— rather than the requirements of armed conflict.

Therefore, as I've said, for safety's sake, the weapon of choice has to be “sanctions”.

The problem is they don't work .

One measure US is taking now is to force the Europeans to give the interest from frozen Russian funds to the Ukraine. Zelensky needs another villa.

Of course, that action will blowback almost immediately on the Europeans, to the advantage of the US which can then further exploit European misery to its own ends. The Russians will simply respond by seizing European assets in Russia.

The second measure is a set of sanctions, which target currency exchange-- the Moscow Exchange (MOEX), the National Clearing Center (NCC) and the National Settlement Depository (NSD). In most countries currency exchanges are bank to bank-- OTC. That is not the case in Russia .The Russians, however, anticipated this action and will move to OTC. The Americans had hoped to weaken the ruble—but but so far ruble is fluctuating within its normal range

.What is happening is that the Russians are simply trading more in yuan and less in dollars and innovating alternative payment systems, stepping up the pace of change hastening the relegation of the dollar to a secondary rather than a primary one in world finance. When it is no longer in a dominant position, the dollar will be devalued and suddenly US economy will face ruinous inflation.

In the meantime, there will be negative effects for the Russian economy—but these will be temporary and lead to greater strength— as has proven to be the case over and over again with sanctions in general.

International sanctions can undermine the role of the US dollar intrade invoicing. The analysis is based on the episode of international sanctions targeting Russia after the invasion of regions of Ukraine in 2014. While European sanctions increased trade costs for firms located in the EU and conducting transactions with Russia, sanctions imposed by the United States affected firms located in third countries due to the extraterritoriality of the US law. This created an incentive to diversify away from the US dollar to avoid these sanctions when exporting to target countries such as Russi

Special Article Coming.

Probably early next week. If you're interested in the special article and want to get on the mailing list please buy me a coffee!