Hearing that a new round of sanctions is going to be imposed, there’s something that I’ve been wondering since the first round has been imposed.
All the sanctions target everybody around Putin, but never Putin himself. Why is that?
I think it was a NYTimes article mentioned that all his friends have loads of money from bribes, buying up state assets as inside deals, etc. as for Putin, they’ve been looking for his money for a long time in the CIA and have yet to find any. It seems he likes power and leaves the billionaire bank accounts for his buddies to work on. When the state supplies you cars, holiday houses and fancy clothes, who needs bank accounts? Maybe he’s overconfident enough to think he’s never going to get the boot and need a fallback slush fund.
OK, that makes pretty good sense. Thank you.
Also, according to the new york times, imposing sanctions on Putin, a head of state, would be similarto a nuclear escalation . I assume this is leftover policy from the cold war, but it makes sense.
So, is the fear that Russia could retaliate by targeting the assets of US & European leaders?
Is that why the sanctions so far have been pretty trivial, to the point where Obama has more-or-less admitted they’re worthless?
The USA is the 800-lb gorilla. It also helps when the EU goes along. They can tell banks - “do this or you’ll never work in this ton again” like a Hollywood producer. So they order certain acounts frozen, stop certain transactions. Any bank that wants to be part of the international banking system does what the USA says. Nobody wants to be locked out of the US market, especially if it includes Europe, Japan, etc. (I.e. you don’t do what we say, you are sanctioned and nobody here can transfer money to you; you deal with a sanctioned bank, you pay a fine or possibly get sanctioned yourself)
IIRC, this is the threat the USA used to make Swiss banks cooperate with their attempts to find tax cheats (using the pretext of drug money laundering as the problem).
Russia has no such leverage. If they try to sanction like the USA, they simply create a class of local banks that cannot deal with the rest of the world. British or German banks , or example, would have to choose - “do I want to business only with Russia, or with the rest of the world except for Russia?”
Probably won’t work as they just convert to hard currency. In the US that sounds like a chore and it is. Over there… they are kinda used to it due to the constant history of some uprising occurring.
Maybe, in the long run it will cause a problem when they run out of money to convert. But, these guys have it all.