Mike Shedlock

Will there be any meaningful sanctions against Russia for invading Crimea? The answer is no, and a comparison to Iran will show why.

It was easy enough to impose sanctions on Iran because there was no meaningful trade with Iran other than oil. And global oil supply can come from anywhere.

Secondly, and unlike the US which has little trade with Russia, Germany, the UK, and other European countries do have meaningful trade with Russia.

Finally, Germany gets 30% of its natural gas supply from Russia. Impose severe sanctions and Russia can shut down those supply lines, most of which happen to run through Ukraine.

Obama can pretend to put down a tough stance, but don't expect any meaningful reaction globally. Events are already firming up along those lines.

UK Says No to Sanctions

Two days ago the Guardian reported secret documents photographed outside No 10 Downing Street [the Prime Minister's Office] state that 'London's financial centre' should not be closed to Russians.

The picture of the document was taken by the freelance photographer Steve Back, who specialises in spotting secret documents carried openly by officials entering Downing Street. The document was in the hands of an unnamed official attending a meeting of the national security council (NSC) called by the prime minister to discuss the Ukrainian crisis.

The document said Britain should:

• "Not support, for now, trade sanctions … or close London's financial centre to Russians."

• Be prepared to join other EU countries in imposing "visa restrictions/travel bans" on Russian officials.

Former US presidential candidate Senator John McCain said he was "disappointed" by the UK's position and said European countries were "ignoring the lessons of history".

Asked if it was right to avoid such sanctions, he said: "Of course not. I am not astonished, to be very frank with you. Disappointed, but not astonished."

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.
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