Obama and Kerry have both told Russia there will be consequences for their actions in the Ukraine.
The question is “what consequences?” The only thing the West can do which would really hurt Russia and Putin is strong financial sanctions: freeze Russian accounts, institute a trade embargo, etc—the full Iran treatment.
The problem is that Europe needs Russia’s natural gas and oil and Britain, aka. London, aka. The City, needs Russian money. London is awash in Russian cash, and the London Real Estate market would most likely crash if real financial sanctions were put on Russia. Since real-estate and financial games are the only thing keeping Britain afloat, this is a total no-go: completely unacceptable to Britain.
Germany, meanwhile, will find any sanctions on energy completely unacceptable. They can’t replace all that natural gas before next winter, even if the US agrees to sell American natural gas to Europe.
The Russians, to put it crassly, have paid their bribes. They have made the right people in England, and Europe, rich. On top of that they supply something Europe absolutely must have: hydrocarbons.
Further, if real sanctions, like the Iranian ones were applied to Russia, the price of oil and natural gas would spike so high the world economy would go into a tailspin, even before one considers the spin-off financial effects. Russia would then orient hard to China, who in no way would go along with such sanctions, and while the initial affect would be massive, in time, all that would happen is that Russia would now firmly be a Chinese client state.
Many have noted that the ruble is dropping relative to the dollar and the Euro and say that “markets” are punishing Russia. They aren’t, because oil and natural gas prices have increased, and Russia doesn’t get paid for hydrocarbons in rubles. In fact, the crisis will probably make Russia money.
The intermediate sanction would be Visa restrictions on Putin’s closest associates, along with freezing their accounts. The problem with that is that Putin has plenty of ways to retaliate, starting with not letting the US get its gear out of Afghanistan when the Afghan government kicks the Americans out. (Getting that gear out through Pakistan will be much harder, dangerous and much more expensive.)
China, of course, is the actual threat to American hegemony. It is also the country that the Ukraine should actually be going to for help, not to the West. More on that in future posts.
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