Putin Signs Executive Order to Begin “Special Economic Measures” aka Sanctions

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Why has Russia taken so long to retaliate against Western sanctions? One possibility is it’s because Putin and his team didn’t see the need to do all that much immediately given economic blowback. A second is that they wanted to wait for the gas for roubles arm wrestling to play out before applying new pressure. Third is they do have a war and internal restructuring going on, so economic counterattacks are lower on the priority list. Fourth is Russia wasn’t yet ready to make a negotiated settlement to the war on the ground impossible, despite that Lavrov snorted at the idea that Zelensky would stick to any position for as long as a day.

Regardless, Putin’s executive order sets up an initial framework for what we like to call sanctions. I wish Russia had posted the actual order; the embedded document below is a summary.

Putin pointedly calls these punishments “retaliatory special economic measures”. This may seem like a distinction without a difference, but Russia and China both take the view that economic sanctions are illegal unless approved by the UN, which clearly is not happening here. When I come across an explanation of how Russia thinks it has threaded this particular legal needle, I’ll be sure to make mention in Links or a post.

The executive order directs Putin’s staff to come back in ten days with initial targets, which at this point are only individuals, and to

…define additional criteria for transactions whose implementation and obligations shall be banned under the Executive Order.

Admittedly this document is broader and less specific than Putin’s announcement that Russia would require payment for gas by unfriendly countries be paid for in roubles, where he included enough additional boundary conditions as to considerably constrain how the process might work (that’s why we were able to outline the mechanism in advance, with the actual version adding only a couple more wrinkles). And it’s clearly intended to be expanded in scope.

The basis for the countersanctions is the violation of international law. The seizure of $300 billion of foreign exchange reserves and the German Gazprom operations, and Poland’s moves to expropriate Novatek’s pipeline infrastructure would all seem to be on the list.

Even though the initial targets are to be individuals, the text indicates the scope is broader: “special economic measures are to be applied to certain legal entities, individuals and organisations under their control.”

The document at points describes individuals at targets and at other points legal entities and organizations; I doubt the underlying Executive Order is imprecise as to what applies to whom, but we’ll have a better idea in due course. But here is the potential zinger:

In addition, the document imposes a ban on exporting products or raw materials manufactured or extracted in Russia when they are delivered to individuals under sanctions, or by individuals under sanctions to other individuals.

Limiting this section to individuals seems almost besides the point, since individuals are seldom in the business of buying Russian products or commodities. However, it’s not hard to see that if and when the list expands to include organizations and companies, Russia could inflict a lot of pain by limiting exports of key commodities. If I were them, materials critical to weapons manufacture would be at the top of the list. Cars might be next given how important auto manufacture is to many economies.

Russia will soon let the West know how bloody-minded it intends to be about this retaliation. If you think things are ugly now, just see what happens if Russia really tightens the thumbscrews.

Update 10:30 AM: Reader CzechAgain helpfully found the text of the decree in Russian, and in comments explained some key legal terms. The bottom line is that the summary below, which is more or less a press release, is inaccurate in depicting the initial list of sanction targets due in ten days as individuals only. It will include companies/legal entities.

00 Executive Order on retaliatory special economic measures in connection with unfriendly actions of certain foreign states and international organisations • President of Russia
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45 comments

  1. Altandmain

    Was the article cut-off? I only see 1 paragraph and 1 sentence.

    Right now they are only targeting a small number of people – what happens when they escalate? The EU and US and have basically sanctioned Russia completely. There’s not really much more to sanction.

    The big question becomes what the impact is on Europe and the price of energy. I suspect that the Europeans are not well prepared to absorb the full magnitude of the impacts of Russian retaliation. Certainly what has happened so far is already starting to show signs of cracking in Europe.

    There’s also the matter of if the US can make up for any volumes of losses from Russian energy to Europe. An export move would raise prices for Americans. It’s not too hard to see what the backlash might be domestically and a populist politician could easily campaign on limited exports in the age of higher energy prices.

    I’ve said it before and I”ll say it again. Strictly from an industrial policy point of view, Russia is about as perfect a nation to try to build up its own industries. Rich in natural resources and energy supplies – it would literally be one of the best nations for trying an MMT style economic buildup. Sure, the export market is now limited, but building up one’s own base of citizens for consuming is more important. This is the hard part. Russia still has some memory from a state run economy. Maybe China could also lend a hand on this one, as they have one of the most successful examples of an industrial policy in history and it may very well be in their interest to do so.

    A final point is that Russia can rely heavily on China for manufactured goods, while it is setting up. The free trade people have nobody but themselves to blame for this one. They were the ones that pushed what Michael Hudson called “junk economics” and their actions resulted in loss of manufacturing. Where the manufacturing goes, the innovation and expertise to make things follows. China clearly sees Russia as an important geopolitical ally and knows that they are next on the chopping block if they were to side with the West.

    I don’t think that there has been a carefully thought out plan among Western leaders about what to do in a situation like this and they may not have even considered what the Russians can do to retaliate. Hint: Get ready for worsening inflation and possibly a major stagflation crisis in the Western world.

    Reply
    1. Yves Smith Post author

      Sorry this launched before fully completed but as you can see, this is a summary, not full text, and it mentions individuals (notably as the initial subjects) but also references entities, organizations, etc. at other points. I’m sure the actual order is more tightly drafted.

      Starting with individuals may be intended as a sighting shot, with the attention getter being the content of the sanction. One part of the text suggests that the sanctions can/will be extended from the individuals, as in decision-makers, to entities they direct and/or control. But I’m spitballing. Russian language news reports no doubt have a better clue.

      Update to comment: see comment below by reader CzechAgain. The underlying decree (the English document we posted is a press release; we mere mortals can’t search for Russian only docs with English browsers) most assuredly is going after more than just individuals in this go round. The press release is not consistent with the decree….or did someone in the Kremlin want to see which Westerners were too lazy to find the relevant document and work out what was about to land on them?

      Reply
      1. LawnDart

        Yves, we mere mortals can’t search for Russian only docs with English browsers but we can using Yandex translate by entering key words into the translator (English to Russian) ie “putin executive order trade” = “указ путина о торговле” and then into Yandex search (page-on-page symbol) which pulls up–

        Указ Президента Российской Федерации от 3 мая 2022 года № 252 “О применении ответных специальных экономических мер в связи…”
        rg.ru › prezident-ukaz252-dok
        day before yesterday

        Click follow to site, hit translate:

        Decree of the President of the Russian Federation No. 252 of May 3, 2022 “On the application of retaliatory special economic measures in connection with Unfriendly Actions of Certain Foreign States and International Organizations”

        Rossiyskaya Gazeta-Federal Issue No. 95(8743)

        I’m starting to play with that Yandex feature in other languages, and I will note that translations into Japanese suck, but I haven’t tried it on other languages like Mandrin yet.

        Reply
    2. clarky90

      Re; “China clearly sees Russia as an important geopolitical ally and knows that they are next on the chopping block if they were to side with the West….”

      “GET OUT! – Foreigners Being Kicked Out of China”
      https://www.youtube.com/watch?v=1VgGTJQKu90

      “Foreigners are leaving en masse, and also being forced out by new policies of the Chinese government, which is only promoting xenophobia and nationalism.”

      Reply
      1. LawnDart

        In chess, Russia would be queen, China king, and Ukraine… …not a pawn, but maybe rook to Russia and knight to USA..?

        Reply
  2. NotTimothyGeithner

    I feel Moscow sees the economic blowback as the real sanctions. Except for more problematic oligarchs, my gut is this is for domestic audiences. Escalation without escalation.

    Reply
    1. Michael Ismoe

      According to the Saker, the Russians are going to take over the assets of the firms that abandoned the country when sanctions were announced. They estimated that there were almost $500 billion Western assets that will be nationalized, which is almost twice what the Russians lost when the US and EU stole their foreign exchange reserves.

      I’m not sure who is running the US operation but it appears it’s not anyone with a brain.

      Reply
      1. Yves Smith Post author

        The Saker is not as strong on economics as he is on military and general political issues.

        The part he is missing is that comparatively few Western companies actually did abandon operations. Most are still paying rent. Many are still even paying all employees or at least key managers. The problem for Russia is that a shuttered KFC is not buying electricity, chicken, napkins, etc. It’s in a zombie state and contributing way less to the economy.

        Seizing truly abandoned property isn’t hard, it just takes a bit of time. Negotiating with far away owners who are meeting their financial obligations is another matter. Jacques Baud claimed the Russians like the Swiss are very legalistic, contrary to Western perceptions.

        I don’t see the “retaliatory special economic measures” as being mainly or even much about the semi-shuttered Western businesses. First, Russia is well along in the planning about what to do there. By contrast, I think the tipping point here was the seizure of Gazprom’s German assets on top of the foreign reserves heist. The Russian Government has to be thinking, “We need to put a stop to this and the only thing these guys seem to respect is pain.”

        Second, those semi-abandoned businesses are mainly in the consumer goods and services area. Aside from foreign bank branches, I don’t seem much overlap with the parties that Russia needs to whack for stealing.

        But I could be wrong. We’ll know more over the coming weeks.

        Reply
        1. PK

          “…comparatively few Western companies actually did abandon operations. Most are still paying rent…”

          Are they paying in Rubles? :-)

          Reply
        2. Tony Wright

          In Early April Canadian, but also NYSE listed, Kinross Gold sold its rather profitable Kupol underground mine located in Chukotka in Eastern Russia and it’s Udinsk development project to a large Russian gold mining company Highland Gold relatively cheaply according to market commentary.
          Kinross thus ended a 25 year history of gold mining in Russia, although it also has mines in the United States, Brazil, Ghana and Mauritania.

          Reply
        1. Alyosha

          Dugin likes to tell a story about his meeting with Brzezinski which was using a chessboard as a prop and Brzezinski (supposedly) told Dugin that chess is a one person game. You move, then spin the board and move from the other side. True or not, I feel like all of US foreign policy derives from this idea.

          Appreciate the link. Maybe it’s just me, but the story in the link makes it all seem so well planned while watching it play out in real time suggests the exact opposite.

          Reply
  3. scarnoc

    I too was wondering what the scope of the scope of these countermeasures includes. Russian media does expect corporate and national entities to be sanctioned. Perhaps the summary published above hints at this with the line ‘with legal entities, individuals, and organizations’ under the control of sanctioned individuals. Thus, if they sanction Mr. Scholz, then Germany is an entity under his control, for example. We shall see.

    Reply
  4. LawnDart

    Did you say, “tighten the screws”?

    About the situation on the uranium market

    The sanctions have not yet affected the supply of uranium from Russia. The US continues to want to receive these raw materials. If supplies stop, the entire US nuclear power industry will have to be shut down in a year

    https://colonelcassad.livejournal.com/7592556.html

    Reply
      1. Mark Gisleson

        Thinking back on my WWII studies, I can’t remember any examples of the Weimar govt ever being this grossly incompetent.

        Reply
        1. Polar Socialist

          You have to think all the way back to WWI and Habsburgs to find a match. In 1913 they had a multicultural and prosperous empire which regardless of minor mur-murs here and there wanted to remain an empire. And yet they botched it all with a little world war.

          Reply
      2. lance ringquist

        if you do not expose and demonize someone like nafta billy clinton, we will get one nafta billy after another.

        so by ignoring what nafta billy clinton started, americans perpetuate nafta billys crimes.

        robert scheer once said that he supported nafta billy clinton, and realized what he was. he made a public apology.

        scheer also went on to say should we be surprised at the shape of the democrat party, the NGO’s, the unions, etc. are in today? after all, the nafta billy had 30 years and hundreds of millions of dollars to infiltrate just about all of americas civil society.

        As he prepared to collect a $500,000 payday in Moscow in 2010, Bill Clinton sought clearance from the State Department to meet with a key board director of the Russian nuclear energy firm Rosatom — which at the time needed the Obama administration’s approval for a controversial uranium deal, government records show.

        “The “Wall Street Democrats” is the wing of the party created by the Clintons and nurtured further by Barack Obama. It takes money hand over fist from Wall Street for political campaigns, wags a warning finger at Wall Street from the public podium while stuffing its administrations with Wall Street execs, then its leadership reaps millions of dollars in personal speaking fees from the robber barons after leaving office. As of this morning, there’s no longer any debate that Obama is firmly entrenched in this cozy world of money.”

        http://www.informationclearinghouse.info/48043.htm

        Our Whole System Is Rotten To The Core
        Bill Clinton Sought Permission To Meet With Russian Nuclear Official During Obama Uranium Decision
        By John Solomon and Alison Spann

        October 20, 2017 “Information Clearing House” – As he prepared to collect a $500,000 payday in Moscow in 2010, Bill Clinton sought clearance from the State Department to meet with a key board director of the Russian nuclear energy firm Rosatom — which at the time needed the Obama administration’s approval for a controversial uranium deal, government records show.

        Reply
    1. CzechAgain

      This Russian analysis is highly speculative and likely highly exaggerated. Compare to this WSJ piece:
      https://www.wsj.com/articles/u-s-rethinks-uranium-supply-for-nuclear-plants-after-russias-invasion-of-ukraine-11647941401

      “U.S. plants typically refuel every 18 to 24 months and plan refueling at least two to three years in advance, so there is little immediate concern of a short-term fuel shortage for existing plants.”

      This is supported by EIA info on Uranium stocks held by US entities (mostly operators):
      https://www.eia.gov/uranium/marketing/

      “Total U.S. commercial inventories (including inventories owned by COOs, U.S. brokers, converters, enrichers, fabricators, producers, and traders) were 123.1 million pounds U3O8e at the end of 2020, down 6% from 130.7 million pounds at the end of 2019.”

      If my simple math is right, that 130 million pounds is ~60,000 tonnes of U, which is close to the peak of total worldwide production in ~2015-17 (more than 2020’s by about 10,000 tonnes). Repeat, worldwide production. From the same EIA, it looks like US consumption (loaded into reactors annually) is about 40% of that – ballpark 2.5 years worth. (Rough estimates only to check against the WSJ article – yep, 2-3 years.) A bit of random checking against other countries’ inventories looks to be similar, couple years inventory.

      Now the WSJ article is rightly critical and raises the issue that if KZ and RU stop selling to USA, yep, the USA would really have to look at sourcing.

      But it would still likely get quite a lot from abroad – Canada, Australia, some other sources. Canada’s producers clearly have some mines and capacity, it’s just about money and investment to get it out of the ground and process it. Notably, prices have been too low and they’ve semi-mothballed big sites. If you check numbers for Cameco (large U producer), it produced 2-3 times as much only a few to five years ago.

      The other things to note are: there is a fair bit of U sourced from recycling, weapons decommissioning, etc., as well as efficiency increasing in newer plants / better operation (these are ~10% of global consumption annually). All of these could likely contribute more U / more output with some investment and more attention.

      Now, I’m not saying any of this would be easy. It would require some serious investment – but in the case of production to meet the demand, money/capital commitments (eg long-term purchase agreements) would go a long way to getting there.

      But the claim that the ‘entire US nuclear power industry has one year before shutdown’ is fancifully bad analysis and facts. No way this would mean taking 18% offline in a year. Even handling it very badly indeed would probably mean only some reduction, starting a year or more away, and likely managed down over a period of several years.

      Note, I haven’t even mentioned the possibility of covering some of this gap with other generator sources or lots of other partial or potential solutions.

      I’d also note that Uranium export earnings are not at all insignificant for a country like Kazakhstan, and I’d be very surprised if negotiations with Russia led to a complete embargo on KZ exports to Western countries. There will have to be some agreement between KZ and Russia.

      (I’d also note: I don’t know much about Rosatom’s technical production or its supply chain – but is anyone really convinced that Rosatom doesn’t have its own issues with being dependent on supplies from Western partners? Remember – that includes dependence of all of Rosatom’s domestic suppliers as well. I’m skeptical.)

      Reply
  5. CzechAgain

    Important: on the implied question in the post about whether the decree is imprecise on whether it applies to individuals or organizations…

    This is a language issue that I think even the Kremlin press release is unclear about – I don’t think the actual decree in Russian is imprecise (at least on this issue).

    The issue: Russian legal language commonly refers to physical and legal ‘persons’ (litso in Russian, which word also means ‘face’). In law, physical persons are individuals, legal persons are basically everything else, basically legal entities in English. (My understanding is that there are a couple types of ‘organizations’ that aren’t exactly legal entities but let’s ignore that for now, that’s something only Russian lawyers could argue about).

    The actual decree at a few points (see in point 5a – ‘confirm the list of persons (лиц) subject to sanctions) combines the two without specifying it means legal and physical persons, which definitely and clearly in Russian includes the two; it emphatically does not imply only individuals. This is perfectly normal with respect to most types of ‘economic’ (civil code governing transactions) laws and regulations (other types of laws might specify citizens, residents, foreign individuals, etc., as appropriate).

    More specifically the Kremlin press release above says ‘executing obligations under existing agreements … to individuals, and that is clearly wrong. The text in the decree says ‘execute in favour of persons’ (исполнять перед лицами), an expression that covers individuals and legal entities (as above).

    http://publication.pravo.gov.ru/Document/View/0001202205030001?index=1&rangeSize=1

    Caveat that I have not done a detailed reading of all relevant documents, but the specific one about fulfillment of obligations is a clear and obvious error in translation.

    Reply
    1. Yves Smith Post author

      Thanks so much for the link to the underlying document! I assumed that ambiguous points in the English document were clear in the actual decree; the official text on the gas for roubles procedure was impressively nerdy.

      I can run the decree proper through a translator (they are not bad for Russian, surprisingly) and your explanation of the legal fine points will be extremely helpful. But I need to turn in.

      Oh, in the US, we do have “unincorporated associations of individuals” which the law does recognize as entity-like-enough to be sued. Amusingly, our nemesis PropOrNot was such a beast. But you need to find at least one individual in the real world (name and address) to sue (you need to know that to argue jurisdiction and venue), and the PropOrNot types kept that hidden.

      Reply
      1. CzechAgain

        I think for translation and understanding purposes in this case the question of whether there are entities that aren’t covered by ‘physical and legal persons’ is irrelevant. I haven’t used machine translators enough to know whether they’ll pick up this distinction. (Note I see some translations of Russian texts say juridical and natural persons – which is the translation-philosophy opposite, as ‘juridical’ is clunky and specific in a not-relevant way, and ‘natural’ arguably better English but losing the immediacy of the Russian ‘fizicheskoe litso.’)
        Russian government agencies dealing with the ‘foreign media agent’ have wrapped themselves in circles with the terminology, first using it to deal with foreign legal entities and then having to apply the same to individuals (Russian citizens who don’t even work for foreign media).
        My editorial comment on the decree and announcement is that using the word for persons (litsa) to mean both without specifying physical and legal persons feels a bit … odd. I mean, my impression is that laws, decrees, contracts and regulations that refer to physical and legal persons almost always specify both when both are meant, they don’t just imply the inclusive use – it’s just a standard usage for drafting legal texts, even if easily understandable in context. (‘Litso’ in the sense of person has other legal usages that are not relevant to this context, like an under-aged person/minor, and good reason for legal texts to use legal and physical persons). So: a machine translator could confuse this to mean individuals.
        And: it implies to me that those responsible for writing the decree (and the translation of the press summary) were not the usual subject matter professionals, comfortable and fluid in this type of drafting (or they were rushed). It’s not that it’s wrong, just a bit different than usual. But my inference may be overstating it (and I’m pretty sure Russians themselves would argue about this too) – and even if I’m correct, it doesn’t mean it’s significant.

        Reply
      2. David

        I think we are probably dealing here with a distinction, common in continental legal codes, between a so-called “moral person” (“personne morale”) and a normal individual (“person physique.”) The former is an entity of any kind other than a private individual which has a legal personality, and can enter into contracts, treaties, agreements etc. It makes more sense if you think of “personality” rather than “person.”

        To give a simple example, some years ago I was responsible for chairing the broad of trustees for an NGO under Belgian law (not an experience I recommend, by the way.) The NGO was a “personne morale” under Belgian law, and could be invoiced, sued, write cheques, sign contracts etc. But the officers of the NGO and the Board members were “personnes physiques,” and the legal status of the two was quite separate, and very different. I’m not a Russian speaker, but I wonder whether the force of this is just “individuals and organisations.”

        As an aside, sanctioning individuals is quite an astute psychological move. Nothing ruins your day like having a journalist call and asked for your reaction.

        Reply
        1. CzechAgain

          Yes, the force of this is entirely consistent with your description of how the French/continental codes work, and the terminology (legal/physical vs morale/physique) sounds a direct parallel. The Russian legal system overall is to a large degree a somewhat standard French civil law approach, or at least ‘continental’ (some argument I understand amongst specialists whether closer to French or German system). And terms like ‘to have a legal personality’ are used in exactly the same way as you describe.

          Reply
    2. LawnDart

      The text in the decree says ‘execute in favour of persons’ (исполнять перед лицами), an expression that covers individuals and legal entities (as above).

      This appears to be more clear in a Yandex translation of the new doc, under Section 2a:
      …legal entities, individuals and organizations under their control that are subject to special economic measures (hereinafter referred to as persons under sanctions)

      Section 2b is the fun stuff– a ban on exports of raw materials produced or extracted on the territory of the Russian Federation.

      Section 6 of the doc that CzechAgain linked to would seem to imply that these sanctions come into effect… …on May 3rd? Yesterday? Or am I misunderstanding this?

      Reply
      1. Polar Socialist

        Well, the degree is in effect the moment it’s published so in that sense yes. But the actual lists of sanctioned subjects and types of transactions remain to be published within 10 days. So until then nothing or nobody is sanctioned, even if the sanctioning itself is in force.

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      2. CzechAgain

        Section 2b is considerably broader, as it applies to all production and raw materials, ‘production or mining’ of which in Russia. (My paraphrase) Note though that the ban is only ‘in favour of’ (for use of etc) sanctioned entities/individuals.
        I would warn though: I see zero information here about exceptions that may be made (and who may provide licenses or confirmations of such exceptions, aside from noting that MinFin and central bank provide more details).
        I am highly skeptical that there will not be exceptions made to such broad-ranging sanctions, unless there is going to be much greater attention paid to ensure that no important counterparties (such as key providers or customers) will not end up on the list in the first place.
        In other words, more important than this very broad decree is going to be the implementation, either details of how this is done or how broad the list of sanctioned names will be.

        Reply
  6. The Rev Kev

    I’m going to take a guess and say that the plan in Washington and Brussels was that the whole thing was only going to take a few weeks and then victory. The massive financial onslaught would implode the Russian economy which would result in regime change and then Russia would be weakened for a generation if not longer. The fact that armouries in the US and EU are being rapidly depleted which will take years to replace is I think proof of this being a planned short operation only. As I have said in previous comments, that plan has gone out the window and we are now into week eleven. The Russian economy survived and though they have a lot of problems, it will leave them much stronger in the long run. They tried to kill the king and they missed – always a major mistake.

    One thing that I notice about the Putin administration is that they are legally minded. They try to dot their ‘i’s and cross their ‘t’s on the eyes of the law and this is no different. Remember how that had to wait to recognize the Donbass Republics as independent so that they could honour their legal call for help first? With this document, the Russian Federation has now laid the legal groundwork for every measure that they will take. Consider this. The west turned their pain dial up to 11 on Russia and it did not work. Now Russia has their turn and so far they have only turned it up to 1 with their demand for payment in Rubles. I can take a few guess what Russia may do but they are only guesses. The only way that the west can avoid this is by negotiating in good faith but I cannot even see this being attempted. And would Russia trust any agreements with them in any case? I suppose that the only thing to do is to get out the popcorn and wait for further developments.

    Reply
    1. Bart Hansen

      I like that penultimate sentence. Our political system has settled into the habit of each new administration spending several months undoing the acts of its predecessor. Treaties have been abandoned willy-nilly, often out of spite. Long ago, Putin and Lavrov declared us agreement incapable, and that is true.

      Reply
      1. juno mas

        Yes, that is the genesis of the “Empired ofg Lies” epithet.

        I would not reach for the popcorn, Yankee: Learn survival agriculture, install rooftop solar (pronto!) and charge the battery on your new e-bike (transportation)! Russian sanctions could do to the US economy what US sanctions didn’t do to Russia.

        This is the “New World Order” circa 21’st Century.

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    2. poortiredandhopeless

      Looking forward to Russia turning it up to 11. America is an increasingly fascist state that practices eugenics against the elderly and the vulnerable.

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    3. Alyosha

      Agreed. And I’m coming around to a personal conspiracy theory that there was a planned Ukrainian offensive to recapture the Donbas and the hostilities would trigger the sanctions. Once the territory was captured, the western oil majors could come in and frack which would cut Russia out of the European energy market. A deposit can be fracked in less than a week and almost all of the transport infrastructure would be in place.

      For me, this theory at least partially explains why the US seemed “prepared” in what it wanted to do but discombobulated in execution from Russia striking first. There’s a link above that clearly shows a whole suite of sanctions were planned ahead of time. But if they were planned for a different situational context, implementing them in the current one might mess everything up. It also explains why Europe wouldn’t have made sure all its gas storage was full. After all, the US warned of a Russian invasion in the spring of 2021 too. A plan to permanently isolate Russia and replace its European gas deliveries should have included more LNG infrastructure, storage, etc. Unless the plan was to replace it with Ukrainian gas. And we know that Blinken and the Biden clan – at least – were involved in the companies with the claims to those gas fields.

      Reply
  7. Dave in Austin

    NC is one of the few “Let’s get at the truth” sources left, so lurking in the bushes are people like CzechAgain. Thank you!

    It seems to me that the US has inadvertently landed in 1942. The propaganda campaign and Twitter storms continue but underneath there is a real disconnect between the public discourse and the ground truth. Remember, less than a year after Pearl Harbor, with the American public solidly behind the war, the public was still feeling very angry about being forced into World War II. In 1942 the Democrats lost 45 seats in the house and 8 in the Senate- the largest unexpected electoral earthquake in US history (see the map of the losses at: https://en.wikipedia.org/wiki/1942_United_States_elections).

    And the Washington cognitive dissonance about the present moment seems to be widespread.

    The long-term US monthly trade deficit never exceeded $40 billion until 1/2020. Then it began to rise. The March 2022 trade deficit is $110 billion and still accelerating while the US physical GNP in March was down 1.4%. How can this be explained? I think by the Ukraine geopolitical disruption and flight to the dollar. The Yen is down almost 10% and the Euro is approaching one-to-one parity with the dollar. Can it be sustained? I doubt it.

    And the economic sanctions? Slovakia and Hungary and recently Bulgaria have issued a polite “No” to a Russian oil cutoff while nobody is seriously claiming that Europe can operate in the next 36-48 months without Russian gas, which will one-way-or-another have to be paid for and the proceeds will fill Russian coffers and fund the Russian war effort. How long will the European voters support the new Long War which will seriously depress European living standards? I’m not sure, but when according to the WSJ even Pope Francis says: “the “barking of NATO at the door of Russia” may have led to the invasion of Ukraine and that he didn’t know whether other countries should supply Ukraine with more arms.”, I suspect that the Long War losers, Russia and the EU, will find reasons to cooperated regardless of what America thinks.

    I still have a few contacts in DC. Like all insular elites, the denizens of DC begin to believe their own propaganda. When the press spokesman for DOD, John Kirby, tears-up when talking about the Ukrainians, I know we have a problem. The US and NATO are rushing heavy weapons to the Ukraine in an attempt to change the underlying force disparity, but US production rates and US and NATO reserve stocks are low. The recent decision to send 40 155 mm track-mounted howitzers to the Ukraine has led to the delivery of the same howitzers to Taiwan to be delayed from 2023 to 2026. And this is just 40 howitzers; in WW II we were producing 1,000/month. De-industrialization has come home to roost. I notice that the JCS statements on the conflict have been much more measured than what comes out of the White House, the NYT and the Washington Post.

    As in November, 1914, after the Battle of the Marne and the extension of the trench line from Switzerland to the sea created a stalemate, the Ukraine war may be heading to a new stalemate which Scott Ridder with good reason thinks will be based on a Russian occupation of the south followed by a “What now?” moment. Will Europe be willing to face a 10 year war, rationing, and a reduced living standard for a war without a likely victory? I seriously doubt it. But present American rhetoric requires that Europe make that sacrifice and that the American public not share the burden.

    The present bet is that the Republicans will regain the House and probably the Senate this year. The 2024 Presidential election is already underway. Propaganda campaigns and Twitter wars are smoke and mirrors; elections are the real thing.

    Reply
    1. bluedogg

      Election are the real thing but then again I think you’re wrong for It’s who counts the votes that really matter, or so Stalin said anyway. And it appears he was right, for most of the elections in the U.S. since it became a country have been fraudulent.

      Reply
      1. Synoia

        Got any data or other proof to post on your claim “Most elections in the US have been fraudulent”?

        Reply
  8. RobertC

    oops — Blinken has more time to think things through:

    Blinken to outline U.S. China policy in speech on Thursday

    WASHINGTON, May 3 (Reuters) – U.S. Secretary of State Antony Blinken will deliver a speech on Thursday outlining U.S. policy towards China, the State Department said.

    …[The Biden administration] has said it is working on a separate strategy for China, but has faced significant distractions due to Russia’s invasion of Ukraine.

    Blinken address on China to be rescheduled following positive COVID test

    …”The Secretary looks forward to delivering the address that was scheduled for tomorrow. Unfortunately, it will not take place tomorrow. But we’ll find an alternative date. Just as soon as we can,” [State Department spokesperson Ned] Price said during the briefing.

    Reply
    1. Late Introvert

      It’s small comfort that some of these people who cause so much damage will experience long covid in the most severe fashion, but comfort nonetheless.

      Reply
  9. RickV

    The West owes a debt of gratitude to Putin. With the move on Ukraine whether called Special Military Operation or invasion he has cut years, if not decades, from the time it will take to convert from carbon- based resources. Thank you Vladi!

    Reply
  10. Gertrud Fud

    in my opinion, the Russians are using the “boild frog syndrom”. If Russia stops all oil, gas, uran, titanium etc. in one day, the shock to the world economy would be massiv and the frog would jump out of the hot water. All affected countries would work together to find a solution and the populations would be very angry with Russia. Doing the small heating of the water, the affected countries are not doing enough to avoid economic problems and the local population gets slowly angry at the politicians in the affected countries. They try to adapt to the water getting warmer until it is too late. Single companys are going out of buisness, one after another, but not all together. And the frog stays in the warm water until he dies.

    Reply

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