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The Unreasonable Ineffectiveness of Sanctions on Russia

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Summary

This article explains why sanctions on Russia are unlikely to have the desired effect, and why they are more performative theatre for domestic consumption than a meaningful policy that will pressure Vladimir Putin. It explores the ability of Russia to command over all the physical resources available within its borders, and the fact that the US dollar is not necessary for international trade, but is merely a convenient network layer. The article concludes that sanctions on Russia will ultimately prove ineffective, and that the West will need to take a more physical approach if they want to push back against Russia.

Q&As

What is the response of Western democracy supporters to Russia's trampling of Ukraine?
The response of Western democracy supporters to Russia's trampling of Ukraine is depressing.

How does Russia have command over all physical resources within its borders?
Russia has command over all physical resources within its borders by ordering the Russian Central Bank to debit the Russian Treasury account at the central bank and transfer that to the supplier of the resources.

What is the effect of sanctions on Russia likely to be?
The effect of sanctions on Russia is unlikely to have the desired effect and are, once again, performative theatre for domestic consumption.

What is the significance of US dollars in international trade?
The significance of US dollars in international trade is that they are convenient, but not necessary.

What approach is required to push Russia back?
The approach required to push Russia back is a physical approach, which is something our effete elite appear incapable of understanding.

AI Comments

👍 This is an incredibly informative article that does an excellent job of breaking down why sanctions on Russia are unlikely to be effective.

👎 This article is overly long and could have been much more concise in its explanation.

AI Discussion

Me: It's about the ineffectiveness of sanctions on Russia and why they are unlikely to have the desired effect. It talks about how Russia has its own currency, the rouble, and it has the authority of the state to get things done. It doesn't need US dollars to survive and it has the resources it needs within its borders. It also talks about how the West believes Russia to be entirely dependent on imports, which isn't the case.

Friend: That's really interesting. It's sad that the sanctions are ineffective and won't do much to hurt Russia. It's also concerning that Western leaders are not properly understanding how international trade works.

Me: Yeah, it's really concerning. It's also worrisome that Russia has the fourth-largest armed forces in the world and can easily counter sanctions. It has the power to put taxes up, freeze savings in foreign currencies, lower interest rates, and ration goods and services. It's really worrying that our leaders don't understand the power of Russia and what they can do.

Action items

Research Modern Monetary Theory and its implications for international trade.
Analyze the potential effects of sanctions on Russia and the West.
Explore alternative strategies for responding to Russia's actions in Ukraine.

Technical terms

Sanctions: A form of punishment or restriction imposed by one country on another, typically for political or economic reasons.
Rouble: The official currency of Russia.
Modern Monetary Theory (MMT): A macroeconomic theory that describes the practical uses of taxation and government spending to influence a nation's economy.
SWIFT: Society for Worldwide Interbank Financial Telecommunication, a global financial messaging system used by banks and other financial institutions to securely transmit information and instructions.
FX Risk: The risk of losses due to fluctuations in exchange rates.
Gulag: A Soviet system of forced labor camps in which political prisoners and other dissidents were held.
Monopoly: A situation in which a single company or group owns all or nearly all of the market for a given type of product or service.
Legislature: A law-making body, such as a parliament or congress.
Inflation: A sustained increase in the general price level of goods and services in an economy over a period of time.
Turkey: A country in the Middle East and southeastern Europe.
Iran: A country in the Middle East.
Commodity: A raw material or primary agricultural product that can be bought and sold, such as copper or coffee.
US Dollar: The official currency of the United States.
Network Layer: A layer of a computer network that is responsible for the delivery of data packets from one node to another.
Application Layer: A layer of a computer network that is responsible for the delivery of data packets from one application to another.
Wool and Corn Exchanges: A type of exchange that was used in the past to trade wool and corn.
Hypnotism: A trance-like state in which a person is highly suggestible and can be made to perform certain actions or believe certain things.
Alchemy: A medieval chemical philosophy that sought to transform base metals into gold.