Monday, July 21, 2014

Remind Me Again Who the Sanctions Are Intended to Punish

AWR Hawkins at Breitbart reports on Obama's EO to ban importation of Russian-made AK-47s, Izhmash arms, and Saiga rifles and shotguns -- as well as repair parts for these weapons.

Nothing like killing two birds with one stone.

Hawkins calls the AK-47 "one of the greatest rifles ever made".  They are cheap, reliable, and very popular, and they do have rifled barrels.  Great? I don't know.  I doubt that Putin is going to be convinced to end his support of the pro-Russian rebels in Ukraine because Americans can't buy Saiga shotguns.  I can't really fault Obama on this because it is a symbolic sanction, but I'm sure the gun-grabbing twit was gleeful to have an excuse to sign something to keep "assault weapons" out of the hands of law-abiding Americans.

Talk seems to have been quite tough on the Sunday shows.  I caught a glimpse of Kerry's bizarrely deformed head appearing to speak via the local news last night.  The Obama regime is all but accusing Putin of launching the SAM that took down MH17 himself.  Denninger has a reasonable summary of the known knowns and the known unknowns, and it continues to look like a tragic accident plus some negligence on the part of whomever is responsible for allowing the plane to take that flight path. 

How much of the so-sad news coverage is simply trying to capture eyeballs and how much is agitprop is hard to say.  Is the regime trying to build a case for more extensive support of the Ukrainian government against the rebels?  It seems likely.  Is there a chance this will turn the Ukrainian civil war into a proxy war between something approximating NATO and Russia?  At this point, I would say the probability is low, less than one in twenty.  There's too much inertia.  But another such incident or perceived atrocity would raise the odds significantly. 

Something else to consider is that gold-bugs have been warning about BRICS action to replace the petro-dollar for years.  The dependence of Chinese economic growth on American consumer spending has made such a decoupling effort unrealistic.  The sanctions against Russia could give the BRICS coalition more impetus in that direction.  If Russia and China start dumping dollars, we would be looking at higher prices for anything imported.  It might take a while for domestic production to take up the slack -- which could mean shortages for many goods as well as potentially increased prices for food and fuel.  I think the BRICS would be shooting themselves in the foot long-term, but hubris is a human flaw not an exclusively American one.


  1. Nothing like killing two birds with one stone.

    Yeah, that's what my wife and I were thinking. I don't think I would ever own an AK. The image represents "The Enemy" to me.

    I read something on the BRICs organizing their own exchange system. It will be interesting to see what comes of it. Have you seen the reserve currency history chart that appears at zerohedge fairly regularly? It looks like the dollar's time is comming to a close -if the past is a good predictor.

  2. There could be good things come out of the loss of the dollar as a reserve currency, though undoubtedly painful in the short-term. You could see a resurgence of domestic mining and manufacturing as well as energy production. It depends on whether or not Americans are willing to wake up and act like adults.