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Economic sanctions have been one of the main ‘weapons of choice’ by the USA, EU, and some others related to the Russian military moves in Ukraine.

There will be unexpected consequences to sanctions.

There will be expected, but undesirable consequences to sanctions.

Some do not think sanctions work:

Why Sanctions Don’t Work, and Why They Mostly Hurt Ordinary People

The United States and its Western European allies have in recent days repeatedly increased economic sanctions against not only the Russian regime, but against millions of ordinary Russians.

It has done this by cutting much of Russian trade and Russian finance out of international markets. …

When it comes to economic sanctions, there are several reasons that sanctions fail to achieve stated ends.

First of all, sanctions will fail unless there is near universal cooperation from other states. …

Germany, for example, has refused to impose sanctions in the near term, noting that Germany—as well as much of Europe—cannot meet its energy needs without first making time-consuming changes in energy policy and industrial output. Several key medium-sized states have shied away from a hard line on sanctions as well. India, for instance, has refused to void a weapons agreement with Russia. Mexico has stated it will not impose sanctions, and Brazil states it is seeking out a neutral position.

Most importantly, China has not cooperated with US-led sanction efforts, and China stands to benefit from sanctions imposed by other states. …

Yet sanctions remain popular because they placate the voters who insist “we” must “do something,” and government officials are more than happy to engage in policies that grow state power and can be used to reward friends of the regime.

But having the regime “do something” is a dangerous game, and if the voters want to signal their virtuous opposition to perceived foreign enemies, the voters can always take action on their own. 03/09/22 https://mises.org/wire/why-sanctions-dont-work-and-why-they-mostly-hurt-ordinary-people

One unintended consequence of USA sanctions is that they pushed countries away from using the USA dollar in trade.

Notice the following:

India is discussing how to set up a rupee-ruble payment mechanism to enable it to trade with Russia, to circumvent the U.S. sanctions regime.

India abstained from voting on the March United Nations (UN) General Assembly Resolution demanding an end to Russian offensive in Ukraine (General Assembly resolution demands end to Russian offensive in Ukraine). 03/11/22 https://www.nakedcapitalism.com/2022/03/india-is-mulling-rupee-ruble-payments-system-for-trade-for-trade-with-russia.html

India is the second most populous nation in the world.

Bypassing the USA dollar hurts the USA which profits mightily from its position as the world’s primary trading and reserve currency (see also WP: Why the enormous scale of financial pain being inflicted on Russia worries some in the West’ ZH: Zoltan Pozsar Warns Russian Sanctions Threaten Dollar’s Reserve Status).

Consider also the following:

Russia’s official media report that Putin seeks to establish a ban on the export of certain products and raw materials outside the country by the end of 2022.

Besides oil and natural gas, Russia exports substantial amounts of food crops and precious metals used in industrial production like aluminum, titanium, palladium, platinum, nickel, cobalt and copper.

This is the most important move yet. Consumers are familiar with the retail end of the supply chain. But they aren’t as familiar with the input end. If you can’t source the raw materials, you can produce finished goods.

For example, the farmers who grow food and raise livestock and the butchers and food processors who prepare that output into meat, poultry, bread and dairy products are not the source of the supply; they are intermediaries. The source of the supply chain is in fertilizers made from chemicals, especially nitrogen and phosphate.

Any break or bottleneck anywhere in this supply chain will result in either higher prices or empty shelves at the consumer end.

If Russian nitrogen exports are diminished and prices soar, that has a global impact including on U.S. farms. The impact of higher fertilizer prices does not stop with grain. Most grains are used not for direct consumption by humans but as feed grains for livestock. That means the fertilizer price increase will flow through to meat, poultry, eggs and dairy products.

These breaks are already occurring. Russia and Ukraine together provide more than 25% of the wheat supply in world trade and 20% of global corn sales. Ukrainian exports are already in disarray because of the war and Russian exports are being handicapped by the sanctions. 03/08/22 https://dailyreckoning.com/putins-options/

The UN reported that for the past 12 months, ending February 2022, there was food price inflation was just over 20% (see Oil, food, financial, and military impacts of the Russian-Ukrainian conflict). And presuming Ukraine produces less food now, plus various sanctions and government spending plans, what will the next 12 months bring? Here is one prediction:

With dozens of countries around the world relying heavily on both Ukraine and Russia for food supplies, the United Nations warned Friday, the ongoing war is likely to significantly drive up global food prices and worsen malnourishment in the Global South.

“The war in Ukraine not only has a dramatic impact on the lives of civilians but also has global repercussions.”

With both Ukraine and Russia’s ability to produce and export food uncertain, a global supply gap “could push up international food and feed prices by 8% to 22% above their already elevated levels,” said the U.N. Food and Agriculture Organization (FAO).

Two weeks into Russia’s invasion of Ukraine, which has killed more than 560 civilians and forced more than 2.5 million people to flee the country, FAO said up to 30% of Ukrainian wheat fields will not be harvested in the 2022 to 2023 season due to the violence.

“Cereal crops will be ready for harvest in June,” said FAO Director General Qu Dongyu. “Whether farmers in Ukraine would be able to harvest them and deliver to the market is unclear. Massive population displacement has reduced the number of agricultural laborers and workers.” https://www.commondreams.org/news/2022/03/11/un-warns-russias-attack-ukraine-could-spike-global-food-prices-22

Sanctions may be a factor in weakening Europe’s economy.

Notice:

As Sanctions Against Russia Take Hold, They Are Having The Effect Of Devastating Economies All Over Europe, Who Will Be The First To Fall?

The political impact of the cost-of-living squeeze is ultimately likely to test the continent’s resolve to keep confronting Russia at a time when its president, Vladimir Putin, is threatening to shut off gas supplies amounting to about a third of EU consumption. “This is a sword of Damocles,” said Yves Dubief, whose grandfather founded textile weaver Tenthorey, an employer of 50 people in northeastern France …

Economic sanctions to bring Putler and Russia to their knees? Don’t count on it. In fact, the sanctions placed on Russia over the past 2 weeks is hurting the economies of Europe just as much as it is Russia, and on some levels, even more so. The thing people forget is that Russia is a nation whose people have suffering as their birthright, shutting down McDonald’s and Starbucks doesn’t do anything. But $20 a gallon petrol for the Europeans will wreck their lives and inflict pain that they will not likely survive. …

Critically, Russia is also a major exporter of fertilizer, the price of which has already been soaring. Significant disruptions of Russian exports could see that price jump more — further driving up the cost of food production globally. …

A crisis of human suffering in Ukraine, whose wider economic impact prompted European Central Bank officials to quicken their withdrawal from stimulus this week, is affecting prosperity from the farmlands of Spain to the euro zone’s manufacturing core in Germany and France.

Surging energy costs are the central complaint, though disrupted supply chains, sanctions and worries about a looming demand drop are also weighing on enterprises. …

In Germany, the heartland of the euro-zone economy, Porsche AG stopped production of its Taycan electric car in Stuttgart because it lacks cable trees made in Ukraine. Meanwhile its parent, Volkswagen AG, has halted exports to Russia and stopped production at an auto factory in Kaluga outside Moscow.

Most onerous is the energy impact. If current prices persist, the extra cost of importing gas and oil will amount to an income shock of 550 billion euros ($605 billion) or 4.5% of annual gross domestic product, according to JPMorgan economist Greg Fuzesi. Goldman Sachs now reckons inflation will reach toward 8% and the euro zone will suffer a contraction in the second quarter. …

. Carlo Lista, who owns a fishmonger business in Rome’s Monteverde district, says the effect has been dramatic.

“About 80% of fishing boats have stopped due to the surge in fuel prices,” he said. …

Officials accelerated stimulus withdrawal on Thursday as they unveiled forecasts showing inflation averaging 5.1% this year. The war presents a “substantial upside risk” to prices, she said.

Rodriguez, the French ceramics entrepreneur, looks on that threat with dread. He warns that the problems he’s seeing are likely to cascade throughout global manufacturing.

“There is a domino effect,” he said. “All big industrial firms on the planet have the same problem. In the more or less long term, we will all be faced with this problem of gas that’s too expensive.” 03/11/22 https://www.nowtheendbegins.com/businesses-in-europe-having-economies-rocked-from-russian-sanctions-putler-putin/

Just like most roads go two ways, sanctions have affects on those who impose them and those they are imposed upon.

Economic problems affect individuals, governments, and banks.

Interestingly, the late Pastor General of the old Worldwide Church of God, Herbert W. Armstrong, had a view about banking matters and European unity. Here is something he said in a sermon on July 7, 1984:

And I can see now, the event that is going to trigger the formation of the reunification in Europe; the resurrection of the medieval Holy Roman Empire that we’ve been looking forward to that is prophesied to come…

But I believe that some event is going to happen suddenly just like out a blue sky that is going to shock the whole world and is going to cause the nations in Europe to realize they must unite! … Well now I think I can see what may be the very event that is going to trigger…that is the economic situation in the world…

The whole banking structure in the United States is a network all jointed together. But not only that, one nation has to deal with other nations and imports and exports. And so they have to have a means of transforming money from one nation to another. And so the banking structure is international and interwoven…

Now when the financial structure breaks down, all civilization is going to break down…

So, an economic or banking crisis is what Herbert W. Armstrong concluded would drive Europe to unite.

And yes, I agree with Herbert W. Armstrong that it will take some type of crisis for Europe to reorganize.

A major reorganization is prophesied to happen and push Europe under totalitarian control:

12 “The ten horns which you saw are ten kings who have received no kingdom as yet, but they receive authority for one hour as kings with the beast. 13 These are of one mind, and they will give their power and authority to the beast. (Revelation 17:12-13)

Sanctions could be another straw on the back of Europe’s economy.

After being impacted by COVID and related policies, parts of Europe were already struggling.

Sanctions will hurt Europe and others around the world.

The solution to wars and conflicts is not sanctions, but the return of Jesus and the establishment of the Kingdom of God.

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This entry was posted on Sunday, March 13th, 2022 at 2:00 pm and is filed under Prophecy.

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