Washington's sanctions 'own goal'

own goal
noun: (in soccer) a goal scored inadvertently when the ball is struck into the goal by a player on the defensive team.

Time and time again Washington has tightened Russian sanctions in an effort to crush the Russian economy. When virtually every legal outlet had been sanctioned, Washington has turned to sanctioning third parties that cooperate with Russia.
So what is the net effect of all of these sanctions?

The Russian stock market has reached record highs this year but still has room to climb further in coming months before paring gains towards the end of 2020, a Reuters poll of market experts found...
The rouble-based MOEX index has reached an all-time high of 3,009.1 in November, taking its year-to-date gain to over 25%, and is seen finishing this year at 3,000.

That's not exactly what Washington had in mind.
However the real kicker is this.

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North American investors, led fully by Wall Street, account for over half of the foreign capital flowing into Russian stocks, according to the Moscow Exchange. By comparison, Russia’s next door neighbors in Europe account for only 26%.

So what is happening is that Washington is punishing Europe for cooperating with Russia, while turning a blind eye to when their Wall Street donors cooperate with Russia.
As you may have guessed, this has created some hard feelings.

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Speaking on German TV, Finance Minister Olaf Scholz said the sanctions were an infringement of sovereignty...
The US sanctions have also angered Russia and the European Union, which says it should be able to decide its own energy policies.

"As a matter of principle, the EU opposes the imposition of sanctions against EU companies conducting legitimate business," a spokesman for the trading bloc told AFP news agency on Saturday.

Imagine that: countries making their own policy decisions that don't align with Washington's interests? What's the world coming to?

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Allseas, a Dutch-Swiss private company, is going to be significantly harmed by the newest sanctions, and it will delay the Nord Stream 2 pipeline (but it will only delay it).
However, there is a bright side to all of this.

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While it costs Moscow hundreds of millions in lost income and additional investments, the country is benefitting on a geostrategic and political level.
For a mere $9.5 billion, NS2’s price tag, Moscow has unintentionally managed to drive another wedge between key Western allies. Berlin is furious about the sanctions and its already fraught relations with Washington are set to escalate even further. According to German Foreign Minister Heiko Maas, the American sanctions amount to “interference in autonomous decisions taken in Europe.”
What is certain is that NS2 will be completed eventually. Most of the work on the 1,230 kilometer or 765 mile long pipeline has already been finished. Also, the vast majority of the $9.5 billion in investments have already been spent.

Much like our GWOT, we've reached a point in sanctions where staying the course just makes things worse.
It isn't just Russia. The Muslim world is looking for an alternative trading system to avoid sanctions that Washington hasn't even threatened yet.

Iran, Malaysia, Turkey and Qatar are considering trading among themselves in gold and through a barter system as a hedge against any future economic sanctions on them, Malaysian Prime Minister Mahathir Mohamad said on Saturday.
...“I have suggested that we re-visit the idea of trading using the gold dinar and barter trade among us,” Mahathir said, referring to the Islamic medieval gold coin.

“We are seriously looking into this and we hope that we will be able to find a mechanism to put it into effect.”
The leaders agreed they needed do more business among themselves and trade in each other’s currencies.

You know that you are using sanctions too much when other nations expect to be sanctioned by you before you even consider doing it.
As for the gold dinar, this is what was proposed by Libya's former leader Gaddafi, and also what got him eventually killed.

The most recent batch of Clinton emails reveals perhaps the most bizarre morsel of Blumenthal-baked intelligence to date. An April 2, 2011 memo titled "France's client/Q's gold" quotes "knowledgeable individuals" with insider information about French President Nicolas Sarkozy's motivation for bombing Libya. The military campaign, the anonymous sources say, was designed to quash plans by Gaddafi to use $7 billion in secret gold and silver to prop up a new African currency. The French worried the move would undercut the currency guaranteed by the French treasury, known as CFA franc, that's widely used in West Africa and acts as a strong link between France and many of its former African colonies. After French intelligence officials got wind of this secret plan, the Blumenthal memo reports, Sarkozy freaked out: "This was one of the factors that influenced [his] decision to commit France to the attack on Libya."
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Many remember the quote "We will bury you". I think he was quoting someone else. Lenin?
But they forget the second sentence. "And the capitalists will sell us the shovel."

Greed is indeed a sickness, a mental illness. Not ordinary greed, but Scrooge McDuck greed. The need to have more more more, when it cannot possibly make any difference in your life.
Not like the guys I worked with that volunteered for every Holiday, every overtime opportunity. The money did make a difference there, although one can question whether it is worth it. But pursuing an extra billion when you already have tens of billions? How much is enough? How high is up.

EDIT:
I'm reminded of the old sitcom "Mama's Family". Dim bulb son, Vinton, hears of a new larger lottery jackpot and says, "Wow! Imagine how many lottery tickets you could buy with that much money!"

EDIT2:
Like an alcoholic that just drinks more and more until he passes out.

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I've seen lots of changes. What doesn't change is people. Same old hairless apes.

excessive are the mountains of paper they accumulate are still stimulated by acquiring more.
@The Voice In the Wilderness
And whether it be newspapers solidly packing every room in their homes to a depth of 6 feet, leaving barely a 12" crawl space between the top of the stacks and the ceiling, or be it a pile of money, more than they and their extended family and descendants can spend in 100 years, it is hoarding, a mental illness.

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Roy Blakeley's picture

@entrepreneur that capitalism selects for people with this mental illness. A person with a healthy view of life will never be selected as fortune 500 CEO.

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@Roy Blakeley

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CB's picture

They have their own undersea pipe-laying equipment and experience. These sanctions will only delay the completion date for a few more months. Russia under Putin is very patient, resolute and not prone to rash decisions. They play the long game and will win out in the end.

This stunt just damages and weakens US/European political and economic ties.

MoA has an interesting report on MSM Russian propaganda:

U.S. Media Bias Creates False Pictures Of Russia

The latest Putin bashing piece in the New York Times is headlined:

It’s Putin’s World. We Just Live in It.
Its economy is sputtering and its young are frustrated, but with America and Europe in tumult, Russia and its leader of two decades are on a roll.

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CB's picture

originally with US supplied coal but recently revived with US LNG.

Fascinating historical backgrounder to the current US sanctions against Russian gas pipelines.

The Great Gas Game:
Vesti Presents a New Documentary Film About Pipelines and Power

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Nord Stream 2 is financed by leading energy companies from France, Germany, the Netherlands, Great Britain and Austria, ENGIE, OMV, Shell, Uniper and Wintershall Dea. A multi-billion Euro investment in European industry and services, the project involves more than 200 companies from 17 countries worldwide.

Well, congradulations Congress and Trump. This will drive a wedge between the US and Europe. Can you just imagine how those investing in NS2 feel about the US. The US is saying in effect - lose all of your investment because we have determined that the project is against our geopolitical/economic interests. And to make matters worse the pipeline will be completed, probably only 2 months behind schedule. So the financial backers will get hit, but will eventually see returns due to Russian efforts. Russia could have built the entire pipeline themselves, but preferred to have European partners.

At the end of WWII most of Europe used coal for energy. The US had a goal to convert Europe to oil, since the US was the major world exporter of oil. One of the stated reasons was to make Europe dependent on US oil and give the US political leverage over European countries. So this whole thing is about the US projecting their geopolitical dominance schemes to Russia. As it has turned out, for more than 70 years Russia and previously the USSR has never done that as a policy. The reason being that once you do that you lose trust as a trade partner. But this is even worse as the US is interfering in trading among European partners that has nothing to do directly with the US.

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Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

CB's picture

@The Wizard
to Europe at the start of the 1980's, the US had just gone through the Oil Shock of 1978–79. The US has not been a net exporter of oil for well over 75 years. It is only this year that this has changed through the extensive use of fracking.

The oil shortage of the 1970's brought about the end of power generation using oil. The US, a major exporter of coal, was pushing the use of American coal for energy security in Europe since WWII.

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CB's picture

@CB


Trump Makes American Coal Great Again — Overseas

U.S. coal exports have exploded. Can that continue?
April 4, 2018
...
The export boom is the one part of Trump’s pledge to help the coal sector that is coming true.

Production ticked up a bit last year after a disastrous 2016 but is still at the lowest level since 1978. And despite plenty of promises to bring back jobs to coal country, coal mining employment only grew by some 1,100 jobs last year; mining employment is down about 40 percent since 2012. Meanwhile, closures of coal-fired power plants continue apace, with more than two dozen plants shutting down early last year alone, which means less domestic demand for coal.
...
And the Trump administration’s other policies don’t look like they’ll end up helping coal much either. The push to increase exports of natural gas to Europe, Asia, and Latin America undermines the overseas market for U.S. coal, since both can be used to generate electricity. And as U.S. coal is shipped abroad, its price at home tends to rise slightly — making coal even less attractive as a power source there.

“Unfortunately, most of the policies the Trump administration is pursuing inside and outside of energy do not help domestic coal production,” Book says.

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earthling1's picture

shoots itself in the other foot, it will turn its gun on the rest of the world.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.

The emerging lesson seems to be that to hurt Russia economically, better to sanction allies than the Russians themselves. Sorta witness this when Trump put sanctions on Iran, one of the largest German companies (in the world), left Iran almost immediately.

Thing is that in the case of Russia, EU companies will have no chance to sell to a market of 150,000,000 people and to engage in large projects. It looks like Putin is going to raise the ante in developing large infrastructure projects such as building bunches of airports in Siberia--of which probably no EU companies will participate in to fear of sanctions. An Irish journalist in Russia named Byran MacDonald (@27khv) if memory serves, claimed that in the last 20 or so years, only Russia compeleted major infrastructure projects in Europe.\

Of course, if recent history is any guide, the Russians will develop internally the technologies internally which the West could provide.

But EU countries are backing down with useless rhetoric.

What is going to happen is that the US will continue with a sanctions regime that gets increasingly hysterical and even insane given that Russia apparently seems to be thriving the sanctions thrown at it. And will get worse even if a democrat gets into the White House including Bernie.

Does not take much to realize what this will lead to...

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