The Gentleman's Dual was popular around the time this nation was founded. Like the one with Aaron Burr, that took Alexander Hamilton's life.
The opponents were given a single-shot pistol. "March ten paces," went the instructions, turn and fire.
It must have been a wild event. The contestants had to turn quickly to gain their target, aim, and fire.
There was one thing you knew for certain. If you fired and missed, you were as good as dead. Because your opponent would almost certainly reach his target.
Today, this country finds itself in the modern equivalent of that ancient combat. And it is the United States, as the putative aggrieved party, which has selected the method of conflict.
The conflict will be economic, declared President Biden, as he imposed sanctions against Russian oil and gas sales here in the United States. A move which in itself removed approximately 10% of our daily use of petroleum. And especially refined gasoline.
Biden imposed sanctions on major Russian banks, including VTB Bank, "Novikombank," and "Sovocombank" among several other banks. Essentially removing these banks from the US Dollar Denominated SWIFT International Transfer System.
The US lead additional sanctions against select Russian individuals, including Vladimir Putin and several leading businessmen.
The President described these sanctions as “severe” and “far-reaching.” Designed to cut off the main artery of the Russian Economy.
His statement back in February read:
"We have purposely designed these sanctions to maximize the long-term impact on Russia and to minimize the impact on the United States and our allies," Biden said. "I want to be clear, the United States is not doing this alone. For months, we've been building a coalition of partners representing well more than half the global economy."
In short, the United States has fired its round. In economic terms, there would seem to be little more the US could add to its economic attack on Russia.
However, Russia has yet to respond.
Now, to be fair there have been some minor reverse sanctions by Russia, as when they proclaimed sanctions against President Biden, Secretary of Defense Austin, and Joint Chiefs Head Milley. But on balance, Russia has imposed nowhere near the type of across-the-board, core economic shots that they are more than capable of.
Instead, Russia has been able to parry the US thrusts. And turn them to its own advantage.
Case in point. Our move to remove Russia from Swift. Was countered, with Russia requiring oil and gas payments only in the Rubles. Thereby strengthening their own currency.
Additionally, it appears that Russia has been able to simply replace other international transactions with the Chinese competitor to SWIFT, called CIPS.
Refusing all US Deliveries of Russian oil and gas, has simply driven the price of domestic US Gas higher. While Russia has been able to find other buyers. Principally in India and other Mid-Eastern Countries.
But note: these have all been Russian counters to the US Sanctions.
Russia has yet to fire its economic canon toward the US. And it's here that things could well get dicey.
This weekend we saw perhaps the Russian counter-economic offensive when they threatened to cut off Finland's electricity. After that country indicated a willingness to join NATO.
But Finland may be only the beginning of what Russia has in store.
With Russia's control over Ukraine, they are now the most influential exporter of wheat and grains in the world. They've not yet indicated that they will play the “wheat” card. But it's certainly possible.
Oil too is a powerful weapon that Russia has at its disposal. We've seen this, as we've watched many of the European countries concede to pay in Rubles.
Russia is a country with but half the population of the United States, and an economy but a fraction as large.
But it has proven to have a seasoned and wily leader. Willing to take chances, and strategically play his hand.
Remember, we've already played ours.
In economic terms, it's Vladimir Putin who has the loaded pistol. It's his turn to take the next shot.
China Plunges, India Withdraws
We've seen it all before. Governments lockdown the people, and the economy falls. We saw this here in the United States, over in Europe, and now for a second time in China.
As you know China began its second lockdown in Shanghai, just a few weeks ago. And they have now increased the lock-down to most of the southern port cities in that country.
The reason is given: a new “Zero Covid Policy.” A policy that means that even a mere hint, one positive PCR Test, and an entire city or region within China can face lock-down.
Last night we began to see the first of the economic reports for China this quarter. And they are mighty grim. Industrial Production went from a positive 5% growth. To a nearly 3% contraction.
Retail Sales contracting at over 11%.
This is an economy in free fall. And just how long it will last, is totally in the hands of the Leadership of the Peoples Republic.
Moving over to India.
Over the weekend India announced that it was halting overseas sales of Wheat. In a trend that looks to be gaining momentum around the world.
Projected poor harvests have countries deciding to keep grains for their own people. Rather than sell abroad. India was projected to sell as much as 10 million tons of wheat globally. That supply has now effectively been taken off the market. Look out for wheat prices this harvest season.
What's more, there appears to be a political dimension to this decision by India. Countries that have already arranged for payment on existing wheat contracts, will be granted shipment.
This includes those countries on the other side of the growing worldwide divide. Countries like China, and certain Mideastern countries. Not Europe, and of course not the US.
The great fissure, first observed as a result of the Ukraine conflict continues to grow.
Germany reported a big drop in inflation as wholesale prices in Germany dropped to just over 2%. A somewhat surprising reduction in wholesale prices in Germany this morning.
A little later this morning, New York State will report on its latest Manufacturing. The street expects to see a large drop in this report.
Have a Great Day!