Thursday, July 17, 2014

Smiley's People Trump Karla

Russian stocks and the ruble fell sharply Thursday after US President Barack Obama [Unlink] imposed tougher sanctions for Moscow’s support of rebels trying to bring down the Ukraine government.
The shooting down of high-flying Ukrainian planes most likely by Russian soldiers was the last straw.
“The ruble-traded MICEX stock market dropped 2.5 percent in early deals, its dollar-traded cousin, the RTS index .IRTS, fell 3.2 percent and the rouble RUB= dropped as much as 1 percent against the dollar,” said Reuters.
For a country go up ahead against a cyber-rich and cyber-savvy with Tandy Radio Shack gear is the path to national suicide, or to the overthrow of the Russian government.
"From the West's perspective they could not have chosen a better time to intensify sanctions," said Societe Generale strategist Regis Chatellier. "Until a few weeks back Russia was in a position of relative strength because there was massive pressure on oil but that is not the case any more."
The European Union still has to spell out its new sanctions, but at the very least European investors will be blocked from spending money in Russia.
The sanctions got the usual reaction from Soviet President Vladimir Putin [Unlink], who is still living in dream world in which US and European allies can be sepated and Russian oil can buy the country’s way out of any problems.
The US and others in the West have had more than 30 years to tweak and refine sanctions, and numerous countries to test them new ones on. Mineral-rich South Africa never had to face sanctions that put targets on the backs of white government and corporate leaders. They had to endure being pariahs, but the rich could still live a life of luxury.
Targeted sanctions in this cyber connected world might well have ended apartheid years earlier.
Companies close to Putin are going to have most methods of funding cut off to them. Exit ramps are being offered to Western investors to limit their losses from pulling out.
“What we are expecting is that the Russian leadership will see, once again, that its actions in Ukraine have consequences, including a weakening Russian economy and increasing diplomatic isolation,” Obama told reporters.
The Wall Street Journal said Putin “bristled” at the new sanctions. "They tend to have a boomerang effect, and without a doubt, in this case they have driven Russian-American relations to a dead end, causing very serious damage," he said. "I am convinced that is to the detriment of the long-term national interests of the American government and its people."
It was clear that Putin’s day-to-day strategies were no match for what the capitalist world can bring to bear on an economy. The days of a paper-pusher KGB agent in Dresden being able to tell the world to take it or leave it appear to be over.

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