|Posted by Conspiracy Cafe on March 23, 2022 at 8:50 PM|
What Russia’s War in Ukraine Means for the World Economy
By Adam S. Posen
March 17, 2022
Over the last three weeks, the Russian economy has been overwhelmed by sanctions. Soon after the Kremlin invaded Ukraine, the West began seizing the assets of the wealthiest individuals close to Russian President Vladimir Putin, prohibited Russian flights in its airspace, and restricted the Russian economy’s access to imported technology. Most dramatically, the United States and its allies froze the reserve assets of Russia’s central bank and cut Russia out of not just the SWIFT financial payments system, but of the basic institutions of international finance, including all foreign banks and the International Monetary Fund. As a result of the West’s actions, the value of the ruble has crashed, shortages have cropped up throughout the Russian economy, and the government appears to be close to defaulting on its foreign currency debt. Public opinion—and the fear of being hit by sanctions—has compelled Western businesses to flee the country en masse. Soon, Russia will be unable to produce necessities either for defense or for consumers because it will lack critical components.
The democratic world’s response to Moscow’s aggression and war crimes is right, both ethically and on national security grounds. This is more important than economic efficiency. But these actions do have negative economic consequences that will go far beyond Russia’s financial collapse, that will persist, and that are not pretty. Over the last 20 years, two trends have already been corroding globalization in the face of its supposedly relentless onward march. First, populists and nationalists have erected barriers to free trade, investment, immigration, and the spread of ideas—especially in the United States. Second, Beijing’s challenge to the rules-based international economic system and to longstanding security arrangements in Asia has encouraged the West to erect barriers to Chinese economic integration. The Russian invasion and resulting sanctions will now make this corrosion even worse.
There are several reasons why. First, China is attempting to navigate a nonconfrontational response to the Russian invasion. Both its financial system and its real economy are observing the sanctions because of the potential economic retaliation if they finance or supply Russia, let alone bail Moscow out. But anything short of fully joining the blockade will feed anti-Chinese policies in the West, reducing the country’s economic integration. Second, countries fear being subject to the whims of Washington’s economic might, now that it is re-enamored with its apparent power. Right now, the United States’ economic actions may be just, and there may be little risk of countries not invading Ukraine ending up on the wrong side of U.S. policies. But the next time, the United States may be more selfish or capricious.
Pay particular attention to their image of a Russian currency exchange. There is a man smoking a cigarette. How obscure that is today. The Euro is 0 00. In coded format that can warn the elites of impending currecy collapse. The additional articles say it's time to end the war.
Globalization in Retreat
Further Geopolitical Consequences of the Financial Crisis
Roger C. Altman
The Hidden Threat to Globalization
Why the Developing World Is Turning Against Free Trade
Niccolo W. Bonifai, Irfan Nooruddin, and Nita Rudra
While not an instrument of surrender, it is an admission of impending defeat.