The horizon is not so far as we can see, but as far as we can imagine

America Flails, Resorting To Ineffective Sanctions Over and Over

This has been a theme, but let’s keep nailing it shut.

My favorite recent news was this beauty:

Russia would struggle to sustain its assault on Ukraine without China’s support, Blinken said. “If China does not address this problem, we will,” he added, in a possible reference to sanctions against Chinese businesses involved in the trade with Russia.

China wants Russia to win, or at least not lose the war and needs Russia as a secure ally so that it can’t be encircled or blockaded. Russia has the food, minerals and fuel that China needs, and naval power can’t embargo supplies.

As for the effect of sanctions, well, what’s the line? “Don’t threaten me with a good time?” The effect of sanctions on China has been to make China stronger in almost every way.

Back in 2015 Xi decided on a ten year plan “made in China 2025.” The US hated it and sanctioned large chunks.

The results?

the analysis confirms that more than 86 per cent of these goals have been achieved, with some others likely to be completed later this year or next. Meanwhile some of the targets, such as electric vehicles (EV) and renewable energy production, have been well surpassed.

We all know that the Huawei and anti-chip sanctions have backfired completely. China now owns the legacy chip market and is making rapid progress in advanced chips. It created its own OS, bypassing Google, and has put out phones as advanced as those made by US and South Korean companies. The iPhone market share in China, one of its most important markets, is cratering.

Chinese EVs are crushing: they cost far less than Western ones (though when sold in Europe, they are marked up hundreds of percent) and the car market in China is now dominated by Chinese vehicles, where in 2015 foreign autos were preferred.

As for Blinken’s threats, the Chinese ignored them, and the US did, indeed, sanction.

Boo hoo.

Meanwhile, China has been selling Treasuries at a record clip.

China has decreased its Treasuries holdings from $849 billion to $775 billion between the beginning of Q2 2023 and Q2 2024, reaching its lowest holdings since 2009.

Can you say “reduction of exposure?” Sure you can.

At the same time, a number of African countries have removed their gold stockpiles from America. It seems that stealing Russia’s reserves for geopolitical reasons has consequences.

The largest economies in Africa and the Middle East are withdrawing their gold reserves from the United States.
Starting in 2024, Egypt, South Africa, Nigeria, Ghana, Cameroon, Senegal, Algeria and Saudi Arabia have decided to withdraw their gold reserves from the United States.
It should be noted that South Africa, Egypt and Nigeria are the largest economies in Africa.


Let’s circle back to the “sanction China for trading with Russia” imbroglio. Russian foreign minister Lavrov had something to say about that:

“Russian-Chinese trade and economic cooperation are actively developing, despite the persistent attempts of the states of the collective West to put a spoke in the wheels,” Lavrov said. “There has been an almost complete de-dollarization of bilateral economic relations. Today, more than 90% of mutual payments have been transferred to national currency,” he added.

“Interaction in the energy sector is steadily advancing. The supply of our agricultural products to the Chinese market is growing. Joint projects are being implemented in the investment and industrial areas. The mutual benefit from such cooperation is clearly felt on both sides of the Russian-Chinese border,” Lavrov concluded.

Are sanctions working outside of China/Russia? Not in the near region. Lavrov again:

Despite the threats that our partners have received from the US and the European Union not to cooperate with the Russian Federation and the Republic of Belarus under pain of so-called secondary sanctions and other penalties, trade flows across the CIS are growing. [Trade] edged up by more than six percent last year, amounting to over $100 billion.”

Now let’s talk more generally. Every sanction is an imposition of geopolitical risk. Everyone in the world understand this: cross the US or Europe, in any way, and they will sanction you. If you use the US/European financial system, these sanctions can hurt. The way out is to move away from that system—to create another one, where transfers never touch the US or Europe.

So every sanction increase the incentives to create that system and move to it. Parts are already created, more will be and in the end there will be two major financial networks: one Western, one for the rest of the world. The effect on Western prosperity will be significant, though there will be advantages to Westerners not in the elite, as it will crush rent extraction by financial elites. (Though no doubt they’ll simple double down on domestic rent extraction.)

We are living thru the end of the Euro-American era. The end of centuries of dominance. It’s fascinating, but the consequences will be vast. Understand that it’s happening.

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The Retard Parade of Western Politics Exemplified By Trump and Biden


Open Thread


  1. ventzu

    Yes. Fascinating to watch in my lifetime. It will be interesting to see how quickly it happens: perhaps a more precipitous decline triggered by Israel. It could have been gradual if our elites weren’t so arrogant and stupid; but instead they have accelerated off the cliff. Bizarrely the mass of the PMC seem blissfully unaware, with business as usual.

  2. John

    Ironic that sanctions are effectively protective tariffs in the sanctioned country that protect their domestic industries. The Washington minions of the overlords are too dumb to notice. Arrogance and stupidity make such a fragrant stew. Smell it all over Amrika.

  3. Look at the sanctions failure as a good thing for mitigating climate change. A less affluent North America will lower its carbon footprint.

  4. Bill R

    I heard somewhere and wonder if anyone can tell me if it is true that USA told Saudi Arabia that if the Saudi’s took their money out of treasuries and USA, the US would see that as an act of war.

  5. Mark Level

    Recently I had to talk to my financial adviser, & I checked to make sure I got out of Treasury bills entirely, anticipating that the USUKEU would get hit by RoW (Rest of the World) for stealing Russian assets in both Europe & the US. In fact, probably I had instructed him to do this earlier, because none of my money was in T-bills!! I didn’t know how quickly things would unravel, but it looks like the run on US banks has begun. Perhaps just in time to force the DNC to switch Biden out for Gavin Newsom before the Dem Convention?

    In other news, the House has passed an unconstitutional law allowing for people to be arrested & jailed for criticizing Israel as an “anti-Semitic” crime. Yet, I am supposed to fear the Orange Man’s “authoritarianism”? This country is becoming full on fascist. I thought I could stick it out another year here, but it’s looking less & less likely.

    Oh, yes, everyone is saying, even the ultimate insiders like Forbes, that Ukraine’s lines will collapse to the east of the Dnieper & Russia (which was an Imperial power before the USA even existed) will control everything there in a “NovoRossiya”.

    With leaders like Blinken, Sullivan, nominally Biden (“my uncle probably got eaten by a (black) cannibal during WW II” one of his recent statements), & he just inaugurated US’s Asian-Pacific American month by denouncing Russia, China & our faithful ally (puppet) Japan as deeply xenophobic. Watching the flail & the fail are entertaining– however the Elites do plan that only the peons will pay & imagine they will be safe in their gated, guarded communities. I guess we will see if that’s how things play out.

  6. Curt Kastens

    In the November 2024 election the snakes have never been lower for the USA. No candidate can save the USA let alone the world now.

  7. VietnamVet

    The fall of the oceanic global Empire (the old British Empire) is complete with the severing of western shipping through the Red Sea and Suez Canal. Shipping to Eastern Coasts of the Americas and Europe from South and East Asia is up to two weeks longer and more costly now. USA-UK-France can’t do a damn thing about it but expended million dollar missiles to shoot down $1000 drones. The West does not have the men, armament or ammunition to conquer Yemen. Israel has lost either its radar or is out of defensive missiles. Hezbollah hit an Israeli air field 22 times in online video several days ago. The Axis of Resistance shipping is internal to Eurasia and is unaffected by any of the Forever Wars on its periphery. Israel, EU and USA are helpless except for tactical nukes and their use will immediately escalate the ongoing proxy WW3 to a global nuclear war. Georgia, the nation in Transcaucasia, is apparently seeing the writing on the wall and is exposing the NGOs money operations being spent there to make it a western vassal like Ukraine. A new Iron Curtain is coming, a multi-polar world is here, and the globe is on the brink of the Cold War 2. But the West is de-industrialized and its financial schemes to become the holder of the world’s wealth have been sabotaged by its stealing of other nations’ gold and money and sanctions against most everyone else.

    The only way to avoid the Western Empire’s fall is a repudiation of neo-liberalism and the belief that the only thing that matters is corporate profits made within a four month period. Greed kills. Only the restoration of morality, equality, good governance and strong borders can bring peace between human cultures/societies. All the wealth that the western elite have hoovered up with exploitation of humans and resources, pestilence, and war must be redistributed fairly if humans are to survive on planet earth.

  8. Cirze

    Mark Level,

    Where are you going? Can we go with you?

    Bon voyage!

  9. Kfish

    Ian, could you please explain why you think that only the elite in the West would be hurt by the rest of the world moving away from the Western systems? I would have thought that everyone in the West would be hurt by that change.

  10. Ian Welsh

    I don’t think that and I’ve written articles talking about the damage it will do.

  11. bruce wilder

    When Putin ordered his “Special Military Operation” in February 2022, what should have been made obvious is that Russia had largely demilitarized under Putin. It only barely could muster the forces for the invasion. From a Western perspective, a naive person would imagine that such demilitarization was a desired state of affairs, a triumph of policy. Why chance provoking Russia into a reversal of that policy with NATO expansion and the failure of the Minsk Accords, the Maidan revolution and the hostile and aggressive maneuvering of Zelensky?

  12. someofparts

    My worry about leaving the country is that I fear it would be much easier for our mad kings to stop my Social Security payments if I am in Mexico.

    Speaking of which, I have the idea that certain other national currencies, like the Mexican peso, are pegged to the value of the greenback. If that is true, how will they respond to the decline in the value of the US currency?

    Also, I’m thinking that Turkey is not in the EU and has thus been able to devalue their currency to keep their economy quasi-functional. Am I getting that right?

    On a final wildly divergent note, does Manchester City just dominate professional soccer?

  13. Willy

    I still don’t know the real reason Putin invaded Ukraine. All I can do is line up all the great many speculations and try to organize them in order of plausibility. (Let the special pleadings begin)

    Sanctioning Putin’s Russia does seem like wishful thinking folly these days. The USA gave up its economic hegemony years ago when they let their own plutocrats take control of damned near everything. In our currently ‘kiss up kick down’ world, they inadvertently made China the ass they need to be kissing. Russia has gotten too big to kick, not because Russia is some great big angry bear, but because “the USA” has been shrinking the size of its shoes. A good, bad analogy might be that they’ve become these great big floppy nerf shoes.

    What bad man’s gonna be afraid of a circus clown always clomping around in a pair of great big floppy nerf shoes?

  14. different clue

    @Mark Level,

    I suspect ( without any real knowledge) that if enough non-gated people get disgruntled enough by the gated communities, that they may find a way to keep the guards pinned down while welding the gates shut so that the engated cannot get out of their communities through their welded-shut gates. Not for food, not for anything.

    In general, for those who wish to see the DC FedRegime Empire decline faster harder deeper, Biden ( or Noisome or whomever) may be the wishful upholder of flailing empire to vote for. Because he or whomever would just double down, triple down, double-triple down, etc. on doing more of the same.

    Whereas a President Trump 2.0 would surrender the Far Empire in order to focus all effort on maintaining the Near Empire ( the Monroe Doctrine Empire) a while longer.
    A President Trump could transform the “falling Roman Empire” into a New Byzantine Empire which could last for a thousand more years in a smaller footprint. Whereas President Dem would speed America down the road to a new Fall of the Western Roman Empire.

  15. Willy

    Augustus actually tried to do some of what he said he would. Inscriptions like the Res Gestae Divi Augusti survive to this day, where that first emperor tried to rationalize his totalitarianism and provide a behavioral model for subsequent emperors.

    His grandiose PTB rationalizations/dreams obviously didn’t last. Patriotic integrity, duty and honor gave way to base self-interest as the empire’s other PTB only increasingly rigged their game. After Rome fell (or was allowed by the mob to fall IMHO), it was actually reasonably well-maintained by the new “barbarian” overlords.

    Only after Justinian “The Great” tried to conquer it back did it become so damaged that the residents move out en masse, never to be Roman ever again.

    Trump is no Augustus. Nor is he even close to being a Constantine or a Justinian. He’s more like Nero or even Caligula. Empowering Trump would only hasten the USAs demise.

  16. Mark Level

    Diff Clue, great response, great idea, I hope it happens. The Elites are a tiny minority & there’s only so much money can do when millions who aren’t in “the club” hate you.

    Cirze– it’s a long way from Northern Minnesota to Mexico, but since I spent a year living in Mexico & Central America when young, & just did a grueling move here from Norcal in 2021, I imagine I could pack up all my stuff, put a chunk into storage on the Texas side of the border, & once I’ve found a safe place in Mexico to live (it was all pretty safe back in the 80s & 90s, even before the US drug appetite supported the growth of pandillas (gangs) & insane violence) continue my retirement there. My Spanish is not quite at the Native fluency level I had when younger, but in a few months I’m confident I’d get it back. Sadly I can’t pass as Latino any more like when I was younger but there are plenty of gueros (Mexican and Central American “whites”) so I don’t think I’d suffer much stigma. I’m just sick of the violence & ignorance in this country, where we’re all trained to hate everyone but those at the top who are responsible for the lack of civil society.

    I think DC is right on Trump, but on the other hand he is so shambolic that I don’t think they could keep Latin America under the US’s whip hand for very long. With countries like Colombia turning left, the majority in most countries will stick to BRICS and avoid the Empire like the poison it is. Even Millei’s Argentina will crash quickly, & Ecuador will see another revolt of the indigenas some time soon since being the US’s proxy will only cost its wealth & prestige.

    Who’ll stick with the US. Canada, UK (a hellhole now) apart from Scotland maybe, certainly not Ireland, Germany (will look like the UK in 5 years) . . . even France may not stick it out once it’s clear how entirely isolated the US & its patsies are? A new world is coming. West Africa is kicking out the US along with the French. The death of every Empire, including possibly the most homicidal one that has ever existed in human history, is to be celebrated!!

  17. different clue

    @Mark Level,

    If I am possibly right on Trump, could that mean that I might be right on Biden?

    If Biden would indeed see the faster harder deeper self-destruction of Empire, does that mean that we should try getting Biden re-elected in order to get a faster harder deeper self-destruction of The Empire? Vote for regressive means to get to the progressive end faster?

    Is that The Progressive Paradox? or The Progressives’ Dilemna? Or something like that?

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