How Vladimir Putin Miscalculated the Economic Cost of Invading Ukraine

[Uncle Joe]

(snip)

If Putin was indeed calculating along these lines, he was gravely mistaken. On Saturday, Ursula von der Leyen, the president of the European Commission, announced that the E.U.—in coöperation with the United States, the United Kingdom, and Canada—was taking steps to “cripple Putin’s ability to finance his war machine.” The transatlantic allies moved to bar “selected Russian banks” from the global swift messaging system, which financial institutions use to facilitate cross-border transfers of money. And, in a more surprising step, they also announced that they would impose “restrictive measures” on the Central Bank of Russia, with the explicit aim of preventing it from using its large stock of foreign-exchange reserves to lessen the impact of the sanctions. “This will show that Russia’s supposed sanctions-proofing of its economy is a myth,” a senior official in the Biden Administration said, in a teleconference with reporters. “The six-hundred-billion-plus war chest of Russia’s foreign reserves is only powerful if Putin can use it.” The measures the allies announced were designed to block Moscow’s Central Bank from buying rubles from Western financial institutions, a step that could offset the impact of sanctions and stabilize the Russian currency. “The ruble will fall even further, inflation will spike, and the Central Bank will be left defenseless,” the U.S. official predicted.

If Putin was indeed calculating along these lines, he was gravely mistaken. On Saturday, Ursula von der Leyen, the president of the European Commission, announced that the E.U.—in coöperation with the United States, the United Kingdom, and Canada—was taking steps to “cripple Putin’s ability to finance his war machine.” The transatlantic allies moved to bar “selected Russian banks” from the global swift messaging system, which financial institutions use to facilitate cross-border transfers of money. And, in a more surprising step, they also announced that they would impose “restrictive measures” on the Central Bank of Russia, with the explicit aim of preventing it from using its large stock of foreign-exchange reserves to lessen the impact of the sanctions. “This will show that Russia’s supposed sanctions-proofing of its economy is a myth,” a senior official in the Biden Administration said, in a teleconference with reporters. “The six-hundred-billion-plus war chest of Russia’s foreign reserves is only powerful if Putin can use it.” The measures the allies announced were designed to block Moscow’s Central Bank from buying rubles from Western financial institutions, a step that could offset the impact of sanctions and stabilize the Russian currency. “The ruble will fall even further, inflation will spike, and the Central Bank will be left defenseless,” the U.S. official predicted.

In Washington, meanwhile, the Biden Administration intensified its economic offensive by imposing a freeze on the Central Bank of Russia’s assets held in U.S. financial institutions. The Treasury Department also prohibited any U.S. person, including American banks and businesses, from engaging in transactions with Russia’s Central Bank, finance ministry, or sovereign wealth fund. “This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located,” the Treasury said, in a statement announcing the new policy. In London, the U.K government has introduced a policy along the same lines.

It wasn’t immediately clear just how much money the Central Bank of Russia still holds in New York, London, and other Western financial centers—and which it will no longer be able to access. (According to some estimates, about two-thirds of Russian reserves are now blocked off in countries that have introduced sanctions.) Even so, experts on economic sanctions described the targeting as unprecedented and highly effective. “The G-7 sanctions against the Russian Central Bank, not the swift sanctions, are the real hammer, and they’re showing effect,” Jonathan Hackenbroich, a policy fellow at the European Council on Foreign Relations, said. “Russia’s Central Bank might struggle to fight massive inflation and panic even after it doubled interest rates and introduced capital controls.”

(snip)

https://www.newyorker.com/news/our-columnists/how-vladimir-putin-miscalculated-the-economic-cost-of-invading-ukraine

[C_U_L8R]

1. Seems he miscalculated everything.

His Generals should dump him before he dumps them. And in Moscow, dumps are usually performed out 5th floor windows.

[Uncle Joe]

4. I agree,

I also believe that crunch time is coming up fast, for everyday they wait entangles them more in his cynical and/or paranoid web of destruction.

[onecaliberal]

2. He has cost everyone everything. People can't get their money in their bank accounts.

This is not good for the Russian people.

[Uncle Joe]

5. I hear you onecaliberal and my heart goes out to them,

but Russians are the people most empowered to do something about it.

[onecaliberal]

6. Oh for sure. They have allowed the monster to remain in power.

I don’t feel sorry for them. I’m simply saying shit is going to hit the fan. They can’t get money, they can’t get food or anything else.

[Stuart G]

9. Don't be so sure Putin will remain in power. The show is not over yet.

Russian military can remove Putin when it wants to..Not before the time is totally correct.

Putin is a fool who has killed members of the Russian Army. Be Patient, there is at least one more act to
follow, maybe two.

[onecaliberal]

10. I hope you're right. In my lifetime, I've never seen the world Unite against another country ever.

Freezing Swiss accounts is going to leave a mark.

[Dan]

3. I am thinking, that

We should leave a way out for a cornered rat.

[Mme. Defarge]

7. Give him a "peace" award for uniting liberal democracies

and countries aspiring to that status. Thank him by saying, “It was a tough job but somebody had to do it”.

[Uncle Joe]

8. I am thinking that Putin

could immediately pull his troops out and actually commit Russia to democracy, settle their borders peacefully and perhaps someday Russia could join NATO even if it's 20 or 30 years from now.

I can't think of anyone that needs more intervention from the people closest to him with the possible exception of the Orange POS.

[Stuart G]

11. I presently think.:..Anything Can Happen:

...A cornered Putin is very dangerous. We don't know the future, and it can be really weird and ugly...

...I apologize for mentioning this again, but when Hitler invaded the Soviet Union in 1941, he was so sure of success that
he did not prepare his troops for the winter. At that moment in 1941, Hitler was at the height of power and he had
no fear of losing anything. So, "Anything Can Happen"

...No matter what Putin thinks, he could be wrong in his thinking. Evidently, he has already made serious mistakes
in planning and carrying out this invasion. I don't think it is going the way it was planned. Time will tell, and if Putin
pulls out his troops that would be good for the world and Ukraine... I still think .".Anything Can Happen" and

.................Anything Has Already Happened.........