Russia benefits from international sanctions

Janet Yellen, Secretary of the U.S. Treasury, has already warned Russia’s complete energy embargo on Europe “… it will clearly increase global oil and gas prices, and will have a detrimental effect on the European Union and the rest of the world.”

At the same time, the US official pointed out that this measure would not affect Russia, which, on the contrary, will benefit from higher international prices. The danger that Janet Yellen worries about – in a supreme irony – is what actually happened.

The ruble depreciated 45% against the dollar in the first week of March (US $ 1/R. 150) while the US, the European Union (EU), and the UK froze more than a third of their reserves. (US $ 300,000 million), which at that time reached US $ 648,000 million, and the seventh in the world in terms of importance.

Then, in the last week of March, the ruble recovered more than 50%, reaching the price of US $ 1/R. 81.7, the same as Feb. 23, the days before the invasion of Ukraine resolved by President Vladimir Putin.

This extraordinary macroeconomic recovery responded to the following factors: first, a violent control over change resolved immediately by the Russian government in the face of international sanctions, accompanied by doubling the interest rate set by the Central Bank, which reached 20% per annum.

But the root cause, of a structural nature, of this wonderful event is due to that fact the price of oil reached US $ 118 per barrel as a result of international sanctions imposed on Russia.

The result was that the Russian Federation then experienced the best trade terms in its history, with a current account surplus this year of US $ 250 billion (Institute of International Finance/IIF), while it reached US $ 120 billion last year. . In other words, almost international sanctions doubled the positive current account gap in Russia.

Russia is leading energy producer in the world -produced 12 million barrels per day in 2021 -, and of these exports was 8.5 million barrels per day.

In summary, it can be said without fear of hyperbole that Russia has become the country that has benefited the most from the international sanctions imposed on it by the US and its allies. The story, apart from its pathetic aspects, has a deep paradoxical content, perhaps because it is a “wonderful freedom” that always violates the limits imposed on it.

The Bundesbank pointed out in the same week as Yellen that Russia’s gas import ban would reduce the Federal Republic’s product by more than 5 points (US $ 4.5 billion/5% of global GDP), which is fourth in the world. , and indicates a loss of more than $ 190 billion in 2022.

Germany depends on more than 60% of Russia’s gas, and its manufacturing industry, which is third in the global system, consumes more than a third of that total. In total, Russia’s gas supply is a key component of Germany’s competitiveness in the world.

The Bundesbank also says Russia’s gas losses will add 1.5 percentage points to the Federal Republic’s inflation rate, which rose to 7.3% year-on-year in March this year, the highest level since reunification in 1991. .

The thing to keep in mind is that the Bundesbank’s estimate of Russia’s gas loss will be forced a recession of 2% per year to a recession that would have to drag down across Europe.

For its part, the siege and annihilation operation carried out by the Russian army on select Ukrainian forces in the south-east of the country turned into a decisive battle of the war, for which a resolution will be reached in the next 3/4 weeks. For all this, British Prime Minister Boris Johnson has probably admitted that there is a “high probability” that Russia eventually won the war.

The Ukrainian rivalry has become a protracted world war waged by the US against Russia at the helm of the West, and by NATO.

This happens when the commander in chief of the Armed Forces. The American, President Joe Biden, has 39% support in public opinion, and 60% rejection.

Therefore, it is not surprising that more than 70% of Americans, which include Democrats and Republicans, believe that the country’s trend with the current president is grossly wrong.

The fighting that is taking place right now in the South-East of Ukraine is a turning point in European and world history; and this happens when mid-term elections in the U.S. approach, which all polls indicate is the loss of both chambers of Congress for Democrats and President Biden.

History, in other words, is accelerating, and gaining a character of qualitative leap, rupture and sudden finding of new; and it occurs both in the Southeastern part of Ukraine and in the Washington Federal District.

The year 2022 has been one of the decisive years in the history of the century.