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07/14/2022

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The issue here is the fact that Putin has been preparing for this since 2014. The author highlights "Moscow has roughly $300 billion in foreign currency and gold reserves." However, if we dug deeper look back to 2014 we notice that Putin has increased gold holdings to blunt sanctions. In specific, "The Russian gold-buying spree really took off in response to the Western sanctions that followed the annexation of Crimea in 2014. That year, the percentage of Russia’s reserves that were held in gold jumped from 8.4 percent to 10.6 percent. By this year, just before the invasion of Ukraine, the figure stood at around 20 percent (https://www.grid.news/story/global/2022/07/15/russias-bright-shiny-anti-sanctions-weapon-inside-the-billion-dollar-business-of-blood-gold/)." Russia will fail to due force of arms not sanctions because it is not a pariah like South Africa because of trading partners like China and India.

I agree that energy sanctions are hurting the West more than Russia, largely due to buyers like India and China. In the short term, sanctions are not leading to the outcome the US and EU wanted, but what about in the long term? Other industries, like auto and aviation manufacturing, that rely in specific industrial inputs may not be able to hold out for long period of time. As production decreases, factories close, and employees are laid off. Perhaps the long term impacts on the Russia consumers with contribute to disenchantment with leadership.

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