Noting the US and its rather soft response to Russian aggression in Crimea, Currency Wars and Death of Money author James Rickards says the sanctions have not gone very far and likely won’t go much further. “A few oligarchs don’t get to go to the Super Bowl,” he said, noting the net impact in an interview with Yahoo Finance’s Lauren Lyster. “Many people have called on tougher sanctions,” but Rickards doesn’t think such action is likely.
World War 3: Russia can fight back
“Russia can fight back with their own forms of economic warfare,” which would have significant consequences for the US. “If the US does something more extreme, like freezing Putin’s assets, freezing Russian state assets, they will strike back,” he predicted. “They can refuse to pay their dollar debt, they can freeze US assets, and they can do worse. They can unleash their hackers to take down the New York Stock Exchange. So no one wants to go there, no one wants to escalate.”
World War 3: Withdrawal of Iranian sanctions sent message of weakness
Rickards noted that eliminating sanctions against Iran at an inopportune time might have sent the wrong message to Putin.
“We had very tough sanctions on Iran,” he said. “Those sanctions were moving in the direction of destabilizing the Iranian regime.” Then in December the sanctions were lifted just as they were beginning to bear fruit, which Rickards says “sent Putin the wrong signal. It sent the message, not only are we going to have weak sanctions, but we will take them off once they are starting to have some effect.”
World War 3: Russia’s realistic options
In terms of sanctions, the US looks like a paper tiger with Russia but has few realistic options. “Financial warfare is all we have,” he said, noting the US needed to do something in response to aggression, but didn’t want to engage in a destabilizing escalation of world tensions.