The West Declared Economic War On Russia, And Now Russia Is Striking Back In A Major Way by for The Economic Collapse Blog
Did you think that the Russians were just going to sit back and take whatever economic sanctions that western powers decided to dish out? Of course the Russians were going to strike back, and they definitely have the ability to cause quite a bit of pain. Unfortunately, economic wars have a way of becoming shooting wars, and if leaders on both sides continue to escalate matters we could soon cross a point of no return. As it is, relations between western governments and the Russians have totally broken down. The Russians are never going to forgive us, and western governments are never going to forgive them. So that means that many of the economic “punishments” that are now being implemented are likely to be permanent.
Without a doubt, the sanctions that have been imposed on the Russians have done a lot of harm. The Russian ruble has collapsed, there have been extremely long lines at ATM machines and banks, and economic activity inside the country has been greatly disrupted.
But anyone that thought that we would get out of this unscathed was just being delusional.
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In recent days, a whole host of western corporations have announced that they are pulling out of Russia, and the Russians are now saying that they could simply seize all of their assets…
Russia said it could seize the assets of Western companies that have suspended operations in the country.
Dozens of American, European and Japanese companies from almost every sector of the economy have abandoned joint ventures, factories, stores and offices in the last two weeks in response to Russia’s invasion of Ukraine and the ensuring sanctions.
Over the past few decades, western corporations have built up an enormous presence in Russia, and now much of that could be taken away without any compensation at all.
Ouch.
The balance sheets of some companies are about to get “adjusted” in a major way.
Do you think that their shareholders will feel good about achieving a “moral victory” even though it means losing so much shareholder value?
Many major financial institutions in the western world are about to get hammered as well.
According to CNN, very little of the $121,000,000,000 that Russian entities owe to western banks is likely to ever be repaid now that war has started…
International banks are owed more than $121 billion by Russian entities, according to the Bank for International Settlements, which suspended Russia’s membership on Thursday. European banks have over $84 billion total claims, with France, Italy and Austria the most exposed, and US banks owed $14.7 billion.
Goldman Sachs (GS) earlier disclosed that it had credit exposure to Russia of $650 million in December 2021.
U.S. banks only stand to lose 14.7 billion dollars, and that will definitely hurt.
But the amount of exposure that European banks have could potentially be absolutely devastating.
The Russians are also hitting back by restricting exports. On Thursday, the Russian government released a list of over 200 different items which will not be allowed to be exported…
“The list includes technical, telecommunication and medical equipment, vehicles, agricultural machinery, electrical equipment – more than 200 items in total, including railway cars and locomotives, containers, turbines, metal and stone processing machines, monitors, projectors, consoles and panels,” the Kremlin statement says. “This measure is necessary to ensure stability in the Russian market.”
