Western Sanctions Against Russia Destroying EU Economy

Sanctions Only Buy Time, Not Victory

Tom Luongo
Gold Goats ‘n Guns

One of the key points about US sanctions policy not fully understood by most analysts, and certainly not most pro-Russian analysts, is sanctions are not a direct political tool. In extreme cases, like what befell Russia in the days after its invasion of Ukraine, they are intended to be.

But on balance, sanctions as used by the West are a far more dangerous tool than just regime change, they are the lynchpin to long-term denial strategies of militarists and would-be colonizers.

We have spent five months now focusing on the boomerang effect of Western sanctions on the Russian economy. And that boomerang effect on the West, particularly Europe, is real and predictable. The intended goal of creating a quagmire in Ukraine which would create domestic unrest at home for Putin did not materialize.

The military quagmire is debatable, if you believe anything coming from Western media sources. I don’t personally believe much of what is said, but the relatively hard battle lines of the past few months lend credence to that view.

Again, not a view I ultimately share, but it’s one worth keeping in mind. If the sanctions have been so ineffective, why do they continue? What strategic purpose can or do they serve?

Because it is obvious that the people who crafted this sanctions package had a plan. Did that plan survive contact with the enemy? Was it wholly a failure or partially successful? These are some of the questions I want to address here.

On balance, most sanctions hurt the one imposing them more than victim. They are, of course, acts of war and only Imperial Privilege allows them to be used like this without repercussion.

So, while we’ve been focused on the monetary/fiscal side of the sanctions war, it’s worth talking about what the real price the West is willing to pay in its war on Russia.

Sanctions, at their most basic, are simply obstructions, intended to deny a country access to vital resources or, when it comes to today’s extreme geopolitical tensions, bleeding edge technology.

From the Neocon perspective, denying our ‘enemies’ (as they have defined them) access to the things they need to build advanced weapon systems or ramp up production of the latest military prototypes is worth any amount of economic and political pain at home.

And that pain is very very real. The Biden Junta and its compadres in Europe (mostly the German Greens) have made no bones about this, openly saying we the people have to endure hardships to support their geostrategic goals in Ukraine.

They haven’t made the case very convincingly as the polls suggest, but nonetheless that is the situation.

When the rhetoric from the West turned into this very early on, I said this would be a race to the Great Reset, the question I asked then was, “Whose?”

Putin settled this down into a grinding artillery war to turn up the heat (and the gas supplies down) on a Europe saddled with weak coalition governments and to expose cracks within the European Union. He has succeeded there.

UK/US neoconservatives believe that ultimately the sanctions will deprive Russia the stamina to fight a war into 2023 and beyond. This is why we have to consider that the original goal of all of the sanctions, going back to 2014, after Crimea, was to set Russia up for this.

So, if you ask yourself why haven’t the Russians committed their advanced T-14 and very many T-90 tanks to the battlefield in Ukraine the answer is two-fold. First, you could argue they don’t need them to do the current job, which is wear down the Ukrainian infantry and defenses in the Donbass.

Second and more importantly, however, is that western reports of Russian industry being unable to actually make them are more true than pro-Russian commentators want to believe.

Again, I’m not taking sides here, but like I don’t believe Ukrainian military reports of 70,000 Russians killed and/or incapacitated because I don’t see the videos supporting the propaganda, I also have to take seriously the fact that Russia is putting the ancient T-62 tank into combat, rather than sending over hundreds of T-14s.

I’m not a military hardware expert in any way so salt these comments to taste. I’m a guy who knows how to read between the lines of what people are and are not saying an what they are and are not doing.

And there is smoke here as to why this war has progressed the way it has.

Further, make no mistake, this is not throwing shade on what Russia has or has not accomplished in Ukraine. But it certainly may account for why, after the early offensives, they pulled back from heavy use of tanks to focus on artillery and infantry, cleaning up the Donbass methodically while figuring out workarounds for their supply issues.

It’s like everything else now, information is low-grade, if not near worthless. So, we’re all speculating on what’s happening.

For Russia, the technology blockades are meant to be particularly damning, because as a country it is woefully behind the curve in things like semiconductors and advanced machining and metallurgy. If they weren’t they would have T-14s in the pipeline.

There is no way to positively spin that the latest plan from the Russian government has them getting to homegrown 28nm chip technology, 2011 technology, by 2030.

90nm is hoped to be developed by year end.

90 nm.

Now, do you need anything smaller than 90nm to build a modern tank? Likely not. But with the complete cutting off of Russia from foreign-sourced basic technology like this it’s not hard to see it affecting their ability to replace lost armor from the early days of the war.

If you go into this rabbit hole on the web you will find all manner of western and Ukrainian propaganda on just how effective these sanctions have been. I’ll take the over on Russia having planned for this in some way and having secured workarounds in the past five months.

A report from May of a delivery of T-90M tanks from Uralvagonzavod is the last thing I’ve been able to find. The main thrust of the 2014 round of sanctions by the West after Russia reunified with Crimea was to blunt the development of things like chip lithography, optics, advanced CNC machining, etc. It was never about regime change until this spring after goading Putin into a general invasion of Ukraine.

So, when you hear US and British foreign policy wonks talk about bleeding Russia white in Ukraine, they believe this is the culmination of a near decade-long strategy to start a war that they believe Russia would not be able to finish.

With the report last week that SMIC – Semiconductor Manufacturing International Corp. — skipped ahead to shipping Bitcoin mining chips based on 7 nm lithography should tell you what you need to know about how long you can hold back demanded products from the market through obstructionist behavior.

SMIC’s surprising progress raises questions about how effective export controls have been and whether Washington can indeed thwart China’s ambition to foster a world-class chip industry at home and reduce reliance on foreign technologies. It also comes at a time American lawmakers have urged Washington to close loopholes in its Chinese-oriented curbs and ensure Beijing isn’t supplying crucial technology to Russia.

Now, as I write this Speaker of the House, Nancy Pelosi, is on a tour of SE Asia. Posturing in relation to this trip had her stopping in Taiwan in the biggest provocation to the One China Policy, to which the US is a signatory, ever.

China’s response has been nothing short of apocalyptic in its rhetoric. Pelosi then backed down once she was in the area and won’t be visiting Taiwan after China mobilized in ways that were truly scary.

Do we think these things aren’t related in some way?

With TMSC is on its way to 2nm lithography, is 7nm that big a deal? It is if we are looking at things from the sanctions perspective. Pelosi going to Taiwan the same week the Biden administration is touting its new CHIPS Act, to invest billions in new US-based fabs, is clearly an attempt to get China to over-react to give the US the excuse it needs to put export-control sanctions on China.

Remember, when it comes to fighting Russia and China, Davos and US/UK neocons have common purpose. When it comes to who controls the restored Unipolar world and what it looks like, that’s where their paths diverge.

We’ve been threatening China’s chip industry since the war began. We did the same thing to the Russians before the invasion. But it was Trump’s blacklisting Huawei that spurred SMIC to ramp up development work to get us to where we are today.

So, don’t think those sanctions aren’t the first thing on the list if China over-reacts to any future provocation. In fact, I’d wager good money that getting those sanctions in place aren’t the whole point of this ridiculous l’affair Pelosi.

Her backing down ultimately tells you that someone on Capitol Hill got the message that China is serious.

This is why sanctions aren’t a path to victory. They are nothing more than a time-buying exercise. Once properly viewed, they are the ultimate bluff, just like Pelosi’s threat to visit Taiwan.

You can’t stop the flow of information without eventually running into the very real ‘put up or shut up’ moment where someone says, “I can also build this or make this, what are you going to do to stop it?”

SMIC is likely reverse engineering TMSC’s designs, if not outright stealing them. Are we going to start a two-front war with nuclear powers on opposite sides of the world over this? If the Chinese can get to 7nm lithography in a year from 14nm Finfet is it that hard to believe they can’t get the 3-d CNC machining necessary to help Russia build T-14 Armata tank barrels or chips needed to build cars and airplanes?

It’s obvious that the sanctions bluff over technology is getting called here. Otherwise we wouldn’t be staring at the potential for war between the superpowers. Russia was due to ramp up production of the T-14 this year for its own use and for export to India.

Do we not see why then a battle for Ukraine had to happen now as opposed to in two years, if the T-14 is all Russia claims it to be?

But, is that really what’s going on when India now makes T-90Ms. So, even if Russia can’t directly import the parts anymore to make their own thanks to sanctions, are you telling me that India, now, wouldn’t divert their own parts and ship them to Russia?

Has anyone noted that all of a sudden everyone’s talking about the International North South Transport Corridor (INSTC)? I’ve been talking about it for years. Now it’s viable. Now Iran is supplying Russia with drones.

The point of this post is not to make definitive claims about what is and is not happening but to remind us all that there is the war we’re told is happening and the war that is really happening.

From my perspective, when we analyze things this way we then have to look at the state of play and make some guesses.

There’s a lot of chatter about Russia gearing up for a major offensive this fall, likely in the next few weeks. According to Alexander Mercouris of The Duran Russia has been training and outfitting a force named after “Odessa” since March.

If that’s the case, then wouldn’t a major Russian offensive this fall using hundreds of tanks blow open all the theories about how effective the sanctions have been at keeping Russian military hardware production down?

And if it doesn’t happen what does that say about the situation?

Remember these are the same sources and theories that had upwards of 5 million barrels of Russian oil coming off the market because their storage facilities couldn’t handle the overflow or that a Ukrainian counter-offensive in Kherson was coming any day now.

In the end, for every day the Russians survive the sanctions war against them, the day comes closer they invalidate even the long term strategies implied by them. And maybe, just maybe, a new generation of foreign policy ‘experts’ will finally put to bed the idea that sanctions are not the modern equivalent of siege warfare and that the whole exercise is nothing but a waste of everyone’s time.

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https://tomluongo.me/2022/07/31/sanctions-only-buy-time-not-victory/

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