20230304 - Why and How Sanctions Are(n't) "Working" (via: Muses)
0Today, Boys and Girls, we will continue our study of the Human Condition via ... ... ...
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NOTE: THIS IS NOT AN EXHAUSTIVE DESCRIPTION OF THE CURRENT SANCTIONS REGIMES
- Sanctions on Russia
1. sanctions on semiconductors
- self-sanctioning by western business in general
2. Cap on oil prices, via insurance and re-insurance
- Russian crude is selling at below cap anyway
- refined products are less emphasized (sanctions are kind of working here)
- Sanctions are a good way to cause broad-based pain.
- How they are working?
- Refined petroleum products are less in demand, and thus Russian exports switch over to crude.
- How they aren't working?
- sanctions are portrayed to the average person as "nothing is getting into Russia"
- "look at the retail microcontroller parts in Russian weapons, hahahaha, sanctions are working!"
- Semiconductor imports into Russia have grown exponentially (from basically 0) since 2021
- it took some time to establish new routes back into Russia, via third-party countries, but it has happened, and while this is less than previous direct trading, obviously only the rich and powerful will get these imports
- net effect means that the average Russian citizen is less well off, with lower quality of life
- a part of western inflation is due to this effect, and effectively subsidizes the creation of these legally-grey im-re-ex markets, and goes to funding new semi-legal networks which will persist after the war
- You cannot consider sanctions as being successful at winning vs the Soviet Union, because the current Russian question is a direct result of the failure to bring the country into the international system.
- Brezhnev vs Sanctions
- 19:30 - Ultimatum: Bring the conversation back within a minute, or we can continue offline.
- This discussion is important, but because I can't talk about it on-air, it's better for us to do so privately afterwards.
Nothing here is investment advice.