Putin Again Shows How He Runs Rings Around Biden’s Sanctions

The headlines are full of announcements of new economic sanctions on Russia. In truth, we’re seeing the most extensive and powerful sanctions ever imposed.

The Central Bank of Russia has been banned from the global dollar payments systems. The same is true for the ten largest Russian banks and a long list of oligarchs and Russian government officials.

Payments in and out of Russia have been blocked. Accounts of Russian targets in western banks have been frozen. Exports of critical technology and high-tech equipment to Russia have been banned. U.S. and European airspace has been closed to Russian airlines.

Secondary sanctions have been imposed so that, if China sells goods to Russia made with U.S. technology or machines, China will be punished also. The list goes on.

Russia has not stood still. Russian exports of critical strategic metals such as nickel, titanium, palladium, and aluminum have been cut off. Russian (and Ukrainian) wheat and other grains have also been cut off. This will result in starvation in certain parts of the world and massive food price inflation everywhere.

Given the extent of these sanctions and the retaliation, the damage to world trade, supply chains, and even the availability of goods will be massive.

At this point, it’s helpful to step back and ask if the sanctions are working as intended. There is extensive pain being inflicted on the Russian people. The pain on the American people has begun but is about to get much worse. But what about the strategic aims?

Here, the sanctions are a complete failure. They have had zero impact on Russian advances on the battlefield and Russian goals in Ukraine. In fact, Putin has proved to be a master chess player as he runs rings around the sanctions.

The latest example is described in this article. When the U.S. imposed sanctions on Russian banks, the value of the ruble collapsed. Still, oil and natural gas exports from Russia were allowed because Europe is dependent on them and the world is facing an energy shortage independent of the War in Ukraine.

Oil and natural gas are paid for in dollars. In a masterpiece of judo, Putin is now demanding that Russian oil and natural gas bought by states imposing sanctions be paid for in rubles.

This mystified many. If Russia needs dollars (they do), why be paid in rubles? The answer is that the only way for Europe to get rubles quickly is to buy them from the Central Bank of Russia using dollars.

Under Putin’s plan, Russia still gets the dollars, still sells oil and natural gas, but he has the added benefit of making the ruble stronger because Europe has to buy them to pay for the energy exports.

This is how judo works. You use your enemy’s power against him by avoiding the main attack and turning the tables. Putin’s a judo expert in real life and he just demonstrated that he can practice it in economic warfare.

The West will now be engaged in propping up the ruble after they did so much to destroy it. Putin thinks three moves ahead on the chessboard while Biden is playing pin the tail on the donkey – blindfolded.

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