Select Page

WSJ: Sanctions on Russia Not Working

WSJ: Sanctions on Russia Not Working

Substantial evidence is emerging that U.S. and world sanctions are not as crippling as the Biden Administration has promised.  As we have said previously, Putin has been planning this invasion for 10 years or more. Preparations were made.

According to reports by the Wall Street Journal, the withdrawal of Mastercard and Visa has had minimal effects on disrupting the Russian payments system.

Their withdrawal was designed to be a major blow to the average Russian consumer crippling payments systems and disrupting commerce.

However, Russia has been working for the last 8 years to insulate the Russian economy from Western economic pressures. They have aggressively built a company called MIR, built on its own National Payment Card System (Russian initials NSPK). Over 100 million cards have been issued since its launch in 2015.

We see that the Russian Ruble has rebounded from its previous crash, approaching its pre-war strength. The finance world appears to be hedging its bets against a potential Russian economic failure, seeing that perhaps the war will be over soon and betting that the financial markets will mend themselves.

Additionally, WSJ has noted a rebound in Russian corporate bonds. “Distressed-debt investors are driving a recovery in Russian corporates, betting those with foreign assets can pay their debts despite Western sanctions”

Russia has also been busy firming up its new plans for oil, attempting to demand payment directly in Rubles.  China has been attempting for some time to establish the Yuan as a currency for oil.  Each of these is an attack on the “petrodollar” whereby oil transactions are conducted in dollars. If established, this would be a major blow to the stability of the world oil markets because neither the Ruble nor the Yuan are directly convertible, and each has a long history of manipulation.

Slovakia has agreed to the “petro-ruble” in order to keep the flow of gas and oil to its cities.  Look for others to step up and agree as well.


We have no doubt that some sanctions, notably the personal sanctions on the Russian oligarchs, are causing strain in Russia and in Putin’s immediate circle of power. 

But as we have mentioned many times, Putin has been planning this war for 10 years. Putin has found that U.S. sanctions were predictable, and at least somewhat defensible.

That is not to say they will not do damage to Russia’s economy in the longer term, but right now this is a battle of time. Can Russia outlast the sanctions until military operations are over and a settlement reached?  It appears Putin has thought and planned in this respect.

Remember that Russia has not yet used its ace in the hole. They could cause a great amount of hardship in Europe by cutting off gas deliveries. Biden’s promises to aid Europe in this respect are empty at best.

They are saving that one as a threat for when the new agreement with Ukraine is settled, to issue a joint Ukraine/Russia request for relief of sanctions.

The end of the conflict is near. Biden’s influence has been almost nil. In fact, his contribution has been dangerous and incompetent.

About The Author


  1. frank stetson

    Did you hear that Putin paid Zelensky off using a MIR card? Think Joe reported that in his last story. :>)

    Interesting, although if you expected sanctions to work perfectly, instantly, you’re an idiot. If you are a journalist and did not know about MIR and made claim that MasterCard, Visa, leaving would cripple them, you’re incompetent. But to say the sky is falling, as Joe says the WSJ support, is just that: chicken-little talk.

    MIR started in 2014 after Crimea when Putin and company realized sanctions might cripple their commerce and trade. To normal people, it’s just a card. To bankers, it’s controlled by the Russian bank so insulated.

    It sucked and no one wanted it. So, in 2017, as Trump took office, Putin MANDATED that all public sector payments, by 2019, they held about 20% of the Russian credit card market. Today, about 66% of the folks have one. In the US, we have about 3 cards per person, so one might imagine the Russians have other cards, 33% of them still don’t have MIR. Also, in 2020, Putin MANDATED that most government payments, pensions, etc. be paid only on MIR which artificially added subscribers.

    MIR can get you goods in Russia, but not many places outside of Russia. About ten countries accept them. Foreigners can’t use their cards in Russia. So, perhaps not a complete crippling, their is and end run, but certainly commerce is not free market in Russia just due to MIR.

    The bonds show one of the sadder aspects of money, that loopholes, and downturns, can represent easy profits. Like Trump hats you can buy at any rally coming from China, although the official ones sold there too, are indeed US made, but may feature foreign materials. But whether the rally sellers are selling Chinese, or US made with Chinese materials, Trump always profits from either sale. Legal, but seems like a loophole given his rhetoric. Similarly, the Russian bonds are junk and junk has a market. So, smart guys look to see if the bond issuer is funded mostly by foreign assets and, if so, decides to take a huge junk bond risk on the Russian bond. So, not all Russian bonds, just the ones funded by foreigners, and then —- it’s a junk bond market and you will always find a buyer, at some price.

    Not good, but not exactly the sky is falling portrait that Joe paints. And yes, Putin has planned to put the USSR back together forever, but MIR is more a Crimea lesson than a ten-year plan.

    Fact is there will be workarounds and loopholes for every aspect of the sanctions and a pirate taking advantage of every one of them. Sanctions, blockades, none of this every completely stops all of it. But for 33% of those Russians without a MIR card, this really sucks. And for those with a MIR card, hello —- you sure as fuck ain’t buying Trump hats on Amazon or many other imports. It’s still a better course IMO than boots on the ground and nukes in the air.

  2. Micala

    If Biden gets lost in the White House looking for the bathroom, what makes anyone think he can “Scare” Putin with his senile and ineffective sanctions! What he has done is like “threatening a kid with a major spanking — then only gently giving them one slap on the hand!”

    NO ONE IS AFRAID OF BIDDYBOY BIDEN except his toilet which he keeps on missing!

    What happens with Russia and the Ukraine is going to happen with or without Biden’s attempts to look ferocious but instead looks pathetic and weak. Biden may as well have done nothing because that is how affective his actions are = ZERO!

    • Ben

      He forgets why he wanted to find the bathroom

  3. Ben


    Semper ubi sub ubi.