The Future of the Dollar
U.S. Financial Power Depends on Washington, Not Beijing
As Russian President Vladimir Putin pours weapons and fighters into Ukraine and the West responds with sanctions, the Russian economy appears bound for recession. The latest round of penalties that followed the downing of Malaysia Airlines flight MH17 has left Russia facing unprecedented capital flight, projected to reach $100 billion by the end of 2014 (compared with $63 billion for all of 2013). The ruble, meanwhile, is down 11 percent since November 2013.
But for Russia, things aren’t all bad. Its countersanctions on practically all food and agricultural imports from the United States and the EU are strengthening the country’s position in Eurasia. In fact, the closing of Russia’s western borders to European and U.S. goods could allow Putin to execute a judo flip: turning the West’s blockade to his benefit by using it to seal closer ties with neighboring post-Soviet states and even new partners such as Turkey.