Photo by DENIS BALIBOUSE / POOL / AFP) (Photo by DENIS BALIBOUSE/POOL/AFP via Getty Images
Since the very beginning of the Russian invasion of Ukraine, many have warned that the ill-begotten sanctions against Russia would have little effect on its economy but rather create harm to the American economy.
Thus far, Russia has shown it is able and willing to service its foreign debts despite sweeping international sanctions, avoiding an anticipated national default.
One example is in April, JPMorgan Chase & Co. processed a coupon payment from Russia for one of its dollar bonds, which the country was expected to default.
According to a report from Bloomberg, JPMorgan processed a payment amounting to nearly $447 million, covering an $87.5 million coupon and a $359 million principal payment.
Russia’s national debt is relatively low, at $39 billion as of 2021. By comparison, the United States’ national debt is currently over $30 trillion. Sanctions are not likely to result in an actual default on Russia’s behalf.
Sanctions against Russia are prompting concerns over a coming food crisis.
Last month, the Bloomberg Green Markets North America Fertilizer Price Index jumped almost 10% due to Russian sanctions, the highest increase on record.
According to Bloomberg, the loss of the Russian fertilizer supply due to sanctions is likely to cause severe strain to crop nutrient supply. Before the war, the supply chain was under pressure as European fertilizer producers reduced output due to surging gas prices and rising freight costs.
Svein Tore Holsether, the CEO of the large fertilizer producer Yara International, told the Wall Street Journal, “We are going to have a food crisis. It’s a question of how large.”
Now, after months of concern and ongoing and expanded sanctions, the mainstream media is beginning to acknowledge that the sanctions against Russia and its oligarchs are only harming the American economy.
Max Blumenthal said this week that “anti-Russian sanctions have amounted to a price hike on working-class Americans that have so far failed to weaken the Russian economy.”
He shared an article from Tablet Magazine by Arnaud Bertrand outlining the harms of such sanctions. In the article, Bertrand says, “the production of so many essential commodities means that Russia, like few other countries on the planet, is in many respects a linchpin of the globalized production chain.”
Bertrand decries the impact of the harsh financial and import/export sanctions placed on Russia. He says that “the result may be a de-dollarization of the global economy, not a strengthening of the Western order.”
The Guardian said this week that Russia is winning the financial battles in an article outlining the positive impact that sanctions have had on the nation while detailing the adverse effects on the Western economies.
“The perverse effects of sanctions means rising fuel and food costs for the rest of the world,” noted The Guardian.
As Blumenthal stated, Biden’s “neocon policy accelerates the process of de-dollarization, diplomatic isolation & imperial decline.”