As the Group of Seven leaders met in Japan late last week, the United States announced new sanctions on more than 300 Russian targets – intensifying one of the harshest sanctions efforts ever imposed.
The move was meant to target Moscow’s sanctions evasion, future energy revenues, and military-industrial supply chains Reuters reported. The aim is to punish Russia for its unprovoked invasion of Ukraine as the war enters its 15th month.
“(These) actions will further tighten the vise on (Russian President Vladimir) Putin’s ability to wage his barbaric invasion and will advance our global efforts to cut off Russian attempts to evade sanctions,” U.S. Treasury Department Secretary Janet Yellen said in a statement on Friday.
Targeting Russia and Individual Russians
The U.S. and Europe imposed financial penalties on Russia immediately following the start of the invasion in February 2022 and have steadily ratcheted up the pressure since.
This has included targeting Putin, officials close to him, the financial sector, and oligarchs.
By some accounts, Moscow has been able to so far cope with the economic pressure, but the sanctions could still be taking their toll.
It was also last week that Russian insider Andrey Nechayev, who formerly served as his nation’s minister for the economy, admitted that Russia’s economy is “in the ****” and further suggested that the Western sanctions will cause a financial crisis within the country next year.
Nechayev told attendees at the Ekaterinburg financial forum last week that while foreign franchises like “McDonald’s can be replaced by blini (Russian pancakes), high-tech products can’t,” The Times newspaper first reported.
The former minister, who was in office from 1992 to 1993 following the dissolution of the Soviet Union, explained that Moscow exceeding its budget deficit plan in the first four months of this year is a sign of the coming crisis. Nechayev said that though there are enough reserves to finance the deficit for a year, the country would have to resort to borrowing money next year – and lenders may not be lining up.
The former minister further noted that mass emigration, capital outflows, and falling oil and gas revenues would continue to wreak havoc on the Russian economy. His blunt appraisal comes as many economists had expressed surprise as to the resilience of the Russian economy, which has proved to be far sturdier in the face of Western sanctions than expected.
Good Times… For Now
Russia is actually seeing the lowest unemployment in 30 years, and wages are still paid regularly. There hasn’t been a return to long lines across much of Russia, as food remains readily available. Though Western products have largely been withdrawn from the country, those have been replaced by local ones, or have been imported via Turkey and Central Asia.
However, there are already millions on unpaid leave, and Russian opposition leader Vladimir Milov has claimed that up to 25 percent of Russia’s manufacturing sector is actually experiencing a form of “hidden unemployment.” People are technically employed but aren’t actually working. This has been a lingering problem that began during the global novel coronavirus pandemic.
Moreover, the unemployment rate is low as hundreds have thousands have fled the country, while hundreds of thousands of young men have been sent to fight – and potentially die – in Ukraine.
MORE: The War in Ukraine Is About to Explode
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Author Experience and Expertise
A Senior Editor for 19FortyFive, Peter Suciu is a Michigan-based writer. He has contributed to more than four dozen magazines, newspapers, and websites with over 3,200 published pieces over a twenty-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a Contributing Writer for Forbes and Clearance Jobs. You can follow him on Twitter: @PeterSuciu.
May 22, 2023 at 3:33 pm
Take a look around. America is about to collapse. Our debt is stifling and our currency is based upon others using it… which they aren’t as much. Russia has a currency based on something. So as long as there is a need for oil and gas Russia is ok.
America is in trouble
May 22, 2023 at 7:52 pm
Why pretend you love America when you whimper about my country, comrade?
May 23, 2023 at 5:07 am
Russia is not in fact making payrolls. In fact there was just a widely publicized strike at a major vehicle manufacturer who’s employees have not been getting paid properly. Before you write articles you might want a read a few.
May 23, 2023 at 12:24 pm
Lmao, everyone knows 1945 is a CIA psyops and propaganda wing homie.
May 23, 2023 at 1:14 pm
The modern patriotism, the true patriotism, the only rational patriotism is loyalty to the Nation all the time, loyalty to the Government when it deserves it.
May 23, 2023 at 5:30 pm
A collapse will not just involve Russia but the entire global economy.
The world’s capital markets are floating on between 600 trillion and by some estimates as much as 1 quadrillion, that is 10x the global GDP of 100 trillion USD in 2022. In highly leveraged types of financial contracts that nobody seems to talk about. Except maybe the Bilderberg Group and the WEF behind closed doors.
Derivatives are binding contracts between parties that are bought or sold as (bets on or as hedges against) the future price moves of whatever assets they’re based on,
including various credit contracts.
Recall the mortgage backed security debacle of 2008? That was caused by over extended financial institutions crashing mortgage derivatives.
The derivative market is not limited to the West. The largest holders of Global derivatives include: Goldman Sachs, Deutsche Bank, Citi, J.P. Morgan, Morgan Stanley.
Chinese market derivatives companies mainly include Yongan Futures, Citic Securities, GTJA, Haitong Futures and Ruida Futures.
According to some economists.
Spiraling global debt may lead to an overabundance of credit oriented derivatives. That
can further push the already over extended credit envelope. Resulting in a chain reaction in the capital markets. Starting the liquidation process for global debt. The result being a global economic super depression lasting decades into the future.
History does have the habit of repeating itself. Too bad in the future we may be ‘too poor to pay attention’.
May 24, 2023 at 4:36 am
Guess the author missed the news we might default next week. We don`t make much, and import the majority of our products. Russia is rich in natural resources, and owns tons of gold. The rest of the world is figuring out they don`t need us.
May 24, 2023 at 4:34 pm
Dave,the author has not gotten the memo yet
May 24, 2023 at 5:28 pm
The America’s brain trust and Biden are planning on putting the final nail in Russia’s coffin by defaulting on the National Debt.
May 29, 2023 at 8:35 am
You mean America is?
With $34 trillion in debt that has caused a 25% cost of living increase?
With a banking crisis that could add another $5 to $10 trillion with even more spiraling inflation?
They are devaluing the dollar and stealing our life savings. The biggest threat to my future is not in Moscow my friend.