Congress Wants To Freeze Russian Gold. Good Luck Freezing The Physical.

The War in Ukraine is the result of Ukrainian President Zelensky’s refusal to rule out NATO membership for Ukraine, and President Putin’s refusal to accept anything less. We are faced with the irony and tragic consequences of two non-NATO members fighting a war over … NATO.

Both have blood on their hands. Still, the biggest cause of the war may be the utter failure of U.S. diplomacy.

No war was ever easier to present. The U.S. (or perhaps France) could have brokered a good faith agreement that Ukraine would not join NATO (or the EU) and would maintain a neutral foreign policy. That would have been enough to dissuade Putin from a full-scale invasion, although he would likely have wanted de facto control over the eastern Donbass region of Ukraine in all events. America’s failure to see this or do anything along those lines reveals the stupidity of Joe Biden, Tony Blinken, Jake Sullivan, and the rest of the so-called foreign policy establishment in Washington DC.

Still, the stupidity doesn’t stop there. The latest example is a call by U.S. Senator Angus King of Maine to freeze gold reserves held by the Central Bank of Russia, as described in this article.

Of course, the gold is physical, about 2,300 metric tonnes worth about $150 billion, and is stored inside Russia. So, it can’t actually be frozen or seized at all.

What King’s proposed legislation would do is impose secondary boycott sanctions on any party that assists Russia in transporting or transacting in the gold. Most of the sanctions can be worked around in some manner, but this presumed sanction would be the easiest of all. If Russian puts 100 metric tonnes of gold on a plane and flies it to Beijing in exchange for manufactured goods, they’re not exactly going to issue a press release about it. That’s the kind of transaction that will go undetected by U.S. intelligence.

Gold is an element, atomic number 79, and is easily melted down and re-refined into new gold bars with Chinese markings that are untraceable. The Central Bank of Russia can buy more gold from Russian miners for rubles to make up for the shipment. Again, that gold is untraceable (Russia and China both have numerous gold refineries).

Senator King’s proposal is a good example of what’s called virtue signaling – basically doing or saying something that has a feel-good appeal but doesn’t actually accomplish anything. At best that’s useless and at worst it’s deeply cynical. If this is the best the U.S. can do, then Putin is not only on his way to winning the shooting war, he may win the financial war as well.

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