Even some of those directly affected by the U.S. and European sanctions laughed them off and openly mocked Mr. Obama.
“Comrade Obama, what should those who have neither accounts nor property abroad do? Have you not thought about it?” Russian Deputy Prime Minister Dmitry Rogozin said in a message on Twitter. He is one of the seven Russian officials directly targeted by the president in an executive order signed Monday morning. “I think the decree of the President of the United States was written by some joker.”
In the order, Mr. Obama declared all American-controlled assets of the Russian officials frozen and said they “may not be transferred, paid, exported, withdrawn or otherwise dealt.”
“We can only speculate about who might have decided to move their securities out of the Fed and into a third-party custodian, but one obvious candidate is Russia,” said Lou Crandall at Wrightson Icap.
Russia held $138.6bn in US government debt at the end of December, according to the US Treasury.
One senior Moscow banker said 90 per cent of investors were already behaving as if sanctions were in place, adding that this was “prudent exposure management”.
Markets were nervous before Sunday’s Crimea referendum on secession from Ukraine. Traders and businesspeople fear this could spark western sanctions against Russia as early as Monday.
It probably will. What it will also do is force Russia to engage China far more actively in bilateral trade and ultimately to transact using either Rubles or Renminbi, and bypass the dollar. Perhaps even using gold, something which the price of the yellow metal sniffed out this week, pushing itself to 6 month highs. It will also make financial ties between the two commodity-rich nations even closer, while further alienating that “imperialist devil,” the US.
Of course, the west thinking like the west, and assuming that all that matters to Russia is the closing level of the Micex, believes that a sufficient plunge in Russian stocks would have been enough to deter Putin. After all, the only thing everyone in the US cares about is if the S&P 500 closed at yet another all time high, right?
The single biggest mistake Obama and the progressives make in their conception of international relations is that everybody is alike. By this, I mean that American leadership thinks that everybody else values the same things they do, and in the same way. Which leads to insane notions involving Democracy as a panacea for the Islamic world, and robust market capitalism as a panacea for the former Soviet Union and the rest of the evolving communist empires. Even George W. Bush fell prey to the notion with his feckless attempts to impose “democracy” on Iraq and Afghanistan.
The clusterfuck that led to World War One – which was actually a Great War that lasted from 1914 through 1945 – was founded on the notion that all nations valued their economic ties and cocomitant prosperity above all else, and would never risk that economic prosperity by resorting to something as crude and brutal and warfare.
Thus always does the arrival of the barbarians at the golden gates come as a shock and a surprise – except to the Gods of the Copybook Headings, who return at precisely the same time.