How Russia Survived 16,000 Sanctions (Genius Strategy)

Summary

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Takeaways

• 📊 Despite over 16,000 sanctions imposed by Western countries, Russia's economy has not collapsed and has even grown by 3.6% last year.
• 🛒 Russian grocery stores remain well-stocked, and prices are low, indicating that the sanctions have not significantly impacted the daily lives of Russian citizens.
• 💡 Russia has shifted to a wartime economy, with defense spending set to exceed social spending and becoming a main driver of economic growth.
• 🌐 Western sanctions targeted shipping and trading but overlooked the gold market, which has allowed Russia to continue trading and growing its economy.
• 🇷🇺 Russia is the second-largest producer of gold and has been preparing for sanctions since 2013 by isolating its economy from US dollar transactions.
• 🔄 Russia has rebounded its supplies to pre-war levels by importing computer chips from consumer products, using third-party traders, and leveraging changing geopolitics.
• 🤝 Russia has expanded trade with countries like China, India, Turkey, and the UAE, which have chosen to ignore Western sanctions, leading to a significant increase in trade value.
• 💰 Putin has implemented a gold strategy by pegging the Russian ruble to gold, which has helped stabilize the currency and economy amidst sanctions.
• 🌍 Central banks globally are stockpiling gold, with over 1,073 metric tons purchased in 2022 alone, indicating a shift away from the US dollar and towards gold as a stable asset.
• 🔑 Russia, along with other BRICS nations, is exploring the creation of a new currency incorporating digital assets and cryptocurrencies to reduce reliance on the US dollar.
• 🚀 China has been aggressively stockpiling gold and reducing its US dollar reserves, signaling a move towards a multi-polar world and a potential de-dollarization effort.

Q & A

How many sanctions have been imposed against Russia and how are they categorized?

More than 16,000 sanctions have been imposed against Russia, with 11,000 of them aimed at individuals, 4,600 at entities including financial institutions, and the remaining directed at ships and aircraft.

What was the expected impact of Western sanctions on Russia's economy and why did it not occur?

Western sanctions were expected to cripple Russia's economy, stop its military, and crash its currency. However, remarkably, none of this has happened as Russia's grocery stores remain full, prices are low, and the economy has continued to grow.

How has Russia managed to maintain the availability of Western brands' products despite companies pulling out?

Russia has managed to maintain the availability of Western brands' products through new stores that sell the latest products like iPhones and MacBooks, despite the original companies pulling out of the country.

What is the main driver of Russia's economic growth according to the script?

The war in Ukraine has become the main driver of Russia's economic growth, with Russia set to spend 6% of its GDP on the military, exceeding social spending.

How has Russia's economy performed despite the sanctions?

Surprisingly, Russia's economy grew by 3.6% last year, outperforming any G7 country, and is forecasted to grow an additional 2.6% this year.

What is the significance of Russia being the second-largest gold producer and how does it relate to sanctions?

Russia being the second-largest gold producer signifies its ability to bypass some economic sanctions through the gold market, which has been largely untouched by Western sanctions.

How has Russia managed to prepare for economic sanctions since 2013?

Russia has been preparing for economic sanctions since 2013 by isolating its economy from transactions requiring US Dollars and increasing its gold production.

What is the role of gold in Putin's strategy to bypass economic sanctions?

Putin has used a gold strategy to bypass economic sanctions by pegging Russia's currency, the ruble, to gold, allowing it to stabilize its currency and economy despite the sanctions.

How have third-party networks and changing geopolitics helped Russia to rebound its supplies to pre-war levels?

Third-party networks of traders with access to components for military equipment and the shift towards a multi-polar world with countries like China, India, Turkey, and the UAE ignoring Western sanctions have helped Russia to rebound its supplies to pre-war levels.

What is the significance of the new BRICS currency and how does it relate to the current global financial system?

The new BRICS currency, which will incorporate digital assets and cryptocurrencies on the blockchain, signifies a move away from the US dollar and traditional financial systems, indicating a shift towards a more multi-polar and independent financial future.

How has the trade value between Russia and China changed since the imposition of sanctions?

The total trade value between Russia and China has increased dramatically, from $17 billion in 2020 to $240 billion in 2023, showing a 124% increase in just three years.

What is the role of gold in central banks' strategy to deal with global uncertainty?

Central banks around the globe are stockpiling gold as a way to deal with uncertainty and instability, with over 1,073 metric tons of gold purchased in 2022 alone.