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Russian Economy in Free Fall

 

United States sanctions, paired with terrible political and economical moves by Russian leader Vladimir Putin, are crippling the Russian economy.
United States sanctions are crippling the Russian economy 

The recently announced new United States sanctions against Russia are causing chaos for Vladimir Putin and his already weakened government. The sanctions include targeting foreign financial institutions that are currently supporting Russia's illegal invasion of Ukraine. As recently announced at the G-7 Summit, the Biden administration is restricting Russian access to U.S. software and information services, which is a crippling blow for an economy that relies on them to fund its genocidal war machine. A large number of Russian citizens are invested in the American dollar and the euro, but the sanctions now force Russians to trade over the counter without any protection they previously relied on from banks. Until Russia ceases its invasion of Ukraine and the sanctions are removed, there will be no legitimate oversight from financial institutions for these investments leaving Russian citizens once again on their own to manage currency entirely at their own risk. 

The savvy move, which was designed to put pressure on the Russian government to get out of Ukraine, forced the closing of MOEX, the Russian stock exchange. The Russian government now faces increasing difficulties when it comes to getting goods in and out of the country, as the flow of money has been cut drastically. This all comes at a time when what is supposed to be the Russian equivalent of a dollar, one ruble, was already only worth one American penny. 

The United States Treasury released the following statement,

"[These sanctions] are targeting the architecture of Russia's financial system, which has been reoriented to facilitate investment into its defense industry and acquisition of goods needed to further its aggression against Ukraine." 

According to an unnamed senior U.S. Treasury official, 

"Russia today has become a war economy, and while Russia is working to build the weapons, from tanks to missiles to aircrafts that they need, fundamentally, they can't build them alone - they need parts and goods from other countries and from companies and individuals that are not in Russia. Today's actions....will make it harder and more difficult for Russia to get access to those goods that they need from third countries, and from individuals and companies in those countries." 

The new sanctions also target Russia's attempts to move money through other countries. Nearly 100 individuals from Russia, Belarus, the British Virgin Islands, Bulgaria, Kazakhstan, the Kyrgyz Republic, China, Serbia, South Africa, Turkey, and the United Arab Emirates now specifically face sanctions from the United States government. 

According to one Biden Commerce Department official.

"What we are doing today is going after the goods that are not just U.S. origin, but U.S. branded, which means all goods that are produced using U.S. technology, tools, software, intellectual property - and going after entities in these third countries, preventing them from getting access to any of these goods...to sell any of these goods into Russia." 

In response to the new sanctions, the Russian people have gone into panic mode and are making bank runs. Within hours of the announcement, Russians began lining up outside of banks to buy American dollars. The dollar rate is increasing exponentially in Russia. Norvik Bank is buying one dollar at 50 rubles and currently selling them for 200 rubles. 

According to Jason Jay Smart, a political advisor on post-Soviet and international politics, "the ruble is going bust."

"The ruble is collapsing. In St. Petersburg, Russia lines are forming at money changers after the news broke about the new U.S. sanctions that caused the suspension of currency trading on the Moscow exchange."


Smart also reiterated the following, 

"Increasingly, it seems the Russian economy's implosion could end the failed invasion of Ukraine."

As of this morning, the Moscow Stock Exchange was down 15% with the largest Russian banks halting all withdrawals. Currently, there are more Russian bank websites down than operating. 

 

Former Russian president and Putin Puppet, Dmitry Medvedev, has been ranting since the sanctions have gone into effect,

"The United States and its fucking allies have declared war on us without rules."

Medvedev called on all Russians to join the Kremlin in their information war against the United States, which includes spreading fake news in an attempt to swing the 2024 election ala 2016. In sheer rage and madness, Medvedev has also unilaterally declared a "space war" against the United States, 

"They fear a war in space? They will get it. Let everything stop for them, let everything go wrong, let everything go to shit."

It's typical insanity for a Russian government that once declared the United States a failing empire. Now that failing empire's currency is worth at least 200 times as much as one Russian ruble. 

FURTHER READING: Space Wars - Russia Releases Weapon into Space 







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Location: Chicago, IL, USA

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