Yes, wars are fought with guns and bombs, but they are also fought with money, computers and economics. If no one will take your money it makes it very hard to buy diesel fuel, bazookas, tanks and planes.
"But Dennis, Russia can simply print all the money it wants to buy those things."
No. It doesn't work like that. If no one else in the world has confidence in the Russian Ruble then no one will take their paper money and promises in exchange for oil, lead, steel and gunpowder.
One thing for sure, this following bit of news should really upset Putin, especially because he already feels like crap from the cancer he has.
The U.S. Treasury Department is expected to tighten sanctions this week on Russia, threatening about $1 billion owed to bondholders for the rest of this year and putting the country once again on the edge of default.
Treasury Secretary Janet Yellen said last week she’s unlikely to extend an exemption expiring Wednesday that allows Russia to make payments on its foreign-currency bonds to U.S. investors. That decision will close all loopholes allowing any such transactions, according to a person familiar with the matter.
So far, the world’s biggest energy exporter has been able to send funds through the plumbing of the international financial system, staving off Russia’s first foreign default in a century. But every step in the transactions has become more complicated since Russia’s foreign-currency reserves were frozen as punishment for Vladimir Putin’s invasion of Ukraine at the end of February.
“The intent of letting the general license expire and not renewing it is essentially to force a default scenario,” Brian O’Toole, a former adviser to the head of Treasury’s Office of Foreign Assets Control, said in a phone interview. “I can’t imagine they will avoid the default conversation for longer than two months.”
With Russia earning billions of dollars a week from its energy exports to Europe, the chance of a failed payment would be slim if the license is extended. On Friday, the Finance Ministry said it paid about $100 million of foreign-currency bond coupons a week ahead of schedule, in an apparent bid to avoid complications if the loophole expires.
“There would not be the same fervor around the renewal of a license for sovereign debt service if Russia did not have energy revenues to finance the debt,” O’Toole said.
Still, it’s not clear if the Treasury ban would close all routes for investors to get their money, and bondholders outside the U.S. may still be able to receive the funds.
Because most holders of Russian bonds are in Europe, there wouldn’t be enough creditors left short to declare a default, according to ITI Capital, one of Moscow’s biggest brokerages. The threshold is usually holders of 25% of the outstanding bonds. ITI even says Russian bond prices look “extremely attractive to buy” and the discount fully covers possible risks.
Russia’s 2026 note jumped almost 5% to about 16 cents Friday after the Finance Ministry announced the coupon payment. A euro-denominated bond maturing 2036, which also had a coupon due, climbed 22% to 13 cents. The shorter-maturity debt extended gains Monday, while the longer bond was little changed.
Now attention turns to almost $400 million of coupons due toward the end of June.
The first two, due June 23, have clauses that allow payment in euros, pounds sterling or Swiss francs. One day later, $159 million comes due that can only be paid in dollars, via a unit of JPMorgan as foreign paying agent.
Yellen’s comments on the exemption were partly intended as a red flag to investors who might consider Russia’s distressed assets a buying opportunity if the license is extended, according to Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security.
“They’re pushing back against the Russian narrative that all is well in Russian financial markets,” Ziemba said. The comments are “designed to remind investors about the significant financial risks for Russian assets.”
The twists and turns in Russia’s bond story have served up plenty of warnings in the past three months.
In Russia’s first test, a $117 million coupon payment due March 16 was delayed as banks sought approval to process the transfers from authorities. The money eventually arrived in investors’ accounts about two days late.
But after the Treasury narrowed its waiver to exclude transfers from the Russian government’s U.S. accounts, a similar payment at the start of April was rejected. That set the clock ticking on the grace period, and culminated in an eleventh-hour payment out of the Finance Ministry’s domestic dollar pot via an unsanctioned local bank.
Here; US Treasury set to push Russia closer to default | American Military News
Of course what has changed in the last 100 years of human history is that no country is an island unto itself. They need to trade with other nations for things they want to sell and things they need to buy. What this shows us is that the world's finances are very interconnected. If a bunch of nations don't like what you are doing then they can exert pressure on you, or potentially collapse your economy without firing a shot.
This continue to pave the way for the day when the Antichrist will exert maximum pressure on any person who refuses to take the Mark of the Beast