Economic Warfare Deployed Against Russia

As Russia defies worldwide opinion and executes one of the most significant unprovoked attacks since WWII, it is receiving some non-military pushback. Throughout history, there has always been an economic component to warfare. Waging war is an expensive proposition not only in human lives but also financially. And often, the “winner” ends up a loser when it comes time to pay the piper.

Bankers have been known to finance both sides of a war and even to finance enemies when a country refuses to pay what they owe. Kings have had to grovel before bankers to finance wars, and inflation has financed more wars than can be counted.

The “Behind the Scenes” Battle Against Russia

Modern weapons of economic warfare include the “SWIFT” system.   According to Investopedia, SWIFT is behind most international money and security transfers. It stands for the Society for Worldwide Interbank Financial Telecommunications system. SWIFT is the messaging network banks, and other financial institutions use to send and receive money transfers worldwide. 

The first phase of financial retaliation against Russia is to block SWIFT transactions. The second step was to target the Bank of Russia specifically and freeze the assets of specific Russian oligarchs, government officials, and companies. Over the last few months, we’ve noted that alternative technologies such as Ripple are developing based on Blockchain to streamline international transfers and help prevent capricious Government meddling in financial affairs, such as Trudeau’s attempt to freeze Truckers Financial assets

One of the results of this concerted financial response to Russian aggression is that Russia’s Central Bank faces the steepest decline in the Ruble since 1998. Naturally, Russia’s central bank fought back by raising Ruble interest rates to their highest level in almost two decades and introducing capital exchange controls. 

In the following chart from Bloomberg, we can see the interest rate (in red) shoot up from under 10% to almost 20% after stair-stepping up from just over 4% a year ago. We should also note that the black line indicates the number of Rubles per Dollar, so higher is worse, and as of this writing, the exchange rate is just over 100 (so it is “off-the-chart”). So at this point, one Ruble is worth roughly 1 cent, whereas back in 2013, it was worth about 30 cents.

Ruble Interest and exchange rates

Over the last few months, the Ruble has lost about 25% of its purchasing power, which will not make ordinary Russians happy with Putin. As a matter of fact, Russians in St. Petersberg have already been protesting Putin’s actions. And as is typical of repressive regimes, “Over 1,400 protestors have been detained in 51 cities — including the capital of Moscow”.

Cyber Warfare Against Russia

In addition to protests by ordinary Russians and economic warfare attacks by foreign governments, Russia is under attack by the international hacking collective “Anonymous”. The group announced they “want only peace in the world.” It appears they will be using their collective resources (i.e., millions of anonymous hackers from around the world) to assault Russia’s online infrastructure. That often comes in the form of Dedicated Denial of Service attacks (DDOS), a form of hacking that overwhelms servers.

Anon deploys economic warfare via cyber-attack against RussiaTotalitarian countries engaging in activities opposed by their own people will often disable communications by dissenters, such as cutting off cellphone and internet service. But in this case, the opposition has used those same tactics to fight against government propaganda.

The Right to Self Defense

In addition to the non-typical and economic warfare methods of fighting back, Ukraine has declared a “state of emergency” and granted its citizens the right to “bear arms” and defend themselves. They have called up military reservists between 18 and 60, adding nearly 200,000 troops to the country’s defense.

Ukraine Declares Right to Bear Arms

Why Ukraine Matters

In addition to the simple freedom of self-determination, Ukraine is actually significant economically and is being punished by Russia for having the audacity to try to join NATO. The Ukrainians have made great strides in the years since the break-up of the Soviet Union.

For those who ask: “Why does Ukraine matter?” This is why Ukraine matters: ??
It is the second-largest country in Europe by area and has a population of over 43 million persons – more than Poland by about 6 million.
Ukraine ranks:
1st in Europe in proven recoverable reserves of uranium ores;
2nd place in Europe and 10th place in the world in terms of titanium ore reserves;
2nd place in the world in terms of explored reserves of manganese ores (2.3 billion tons, or 12% of the world’s reserves);
2nd largest iron ore reserves in the world (30 billion tons);
2nd place in Europe in terms of mercury ore reserves;
3rd place in Europe (13th place in the world) in shale gas reserves (22 trillion cubic meters)
4th in the world by the total value of natural resources;
7th place in the world in coal reserves (33.9 billion tons)
Ukraine is an essential agricultural country:
1st in Europe in terms of arable land area;
3rd place in the world by the area of black soil (25% of world’s volume);
1st place in the world in exports of sunflower and sunflower oil;
2nd place in the world in barley production and 4th place in barley exports;
3rd most significant producer and 4th largest exporter of corn in the world;
4th largest producer of potatoes in the world;
5th largest rye producer in the world;
5th place in the world in bee production (75,000 tons);
8th place in the world in wheat exports;
9th place in the world in the production of chicken eggs;
16th place in the world in cheese exports.
Ukraine can meet the food needs of 600 million people.
Ukraine is a crucial industrialized country:
1st in Europe in ammonia production;
Europe’s 2nd’s and the world’s 4th largest natural gas pipeline system;
3rd most prominent in Europe and 8th largest in the world in terms of installed capacity of nuclear power plants;
3rd place in Europe and 11th in the world in terms of rail network length (21,700 km);
3rd place in the world (after the U.S. and France) in production of locators and locating equipment;
3rd largest iron exporter in the world
4th largest exporter of turbines for nuclear power plants in the world;
4th world’s largest manufacturer of rocket launchers;
4th place in the world in clay exports
4th place in the world in titanium exports
8th place in the world in exports of ores and concentrates;
9th place in the world in exports of defense industry products;
10th largest steel producer in the world (32.4 million tons).
Ukraine matters. That is why its independence is essential to the rest of the world. ??

 

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