Join Us at the 2023 World Economic Conference in Orlando, Florida!

? Dates: November 17, 18, and 19 ? Location: Orlando, Florida, USA (or tune in from home with our virtual ticket options)

Are you ready to unlock the future of economics and finance? Prepare for an unforgettable World Economic Conference experience in sunny Orlando, Florida! This premier event is your gateway to insights, networking, and valuable resources that will supercharge your understanding of the global economy.

?️ What’s Included for In-Person Attendees:

1. Event Admission: Enjoy reserved seating assigned based on the order of ticket sales, ensuring you have a prime view of every presentation.
2. Presentation Slides: Gain access to the presentation slides from all speakers, allowing you to delve deeper into the topics discussed.
3. Video Recording: Can’t make it to a session? No worries! You’ll receive access to video recordings of all conference presentations, so you can catch up at your convenience.
4. WEC Event App: Connect with the conference on a whole new level. Access presentation slides, bonus reports, recordings, and more via the official WEC Event App.
5. Bonus Conference Materials: Get a package of bonus conference-related materials, including exclusive bonus reports and videos (as provided by Martin Armstrong).
6. Morning Information Sessions: Don’t miss out on important morning information sessions, screened on-site in the meeting room on Saturday and Sunday.
7. Networking Opportunities: Exclusive access to the Event App Networking Feature allows you to connect with fellow attendees, both in-person and virtual, fostering valuable professional relationships.
8. Culinary Delights: Savor delicious breakfast and lunch on Saturday and Sunday, prepared to keep you energized throughout the day.
9. Cocktail Reception: Kick off the conference in style at our Friday evening cocktail reception. Meet and mingle with fellow attendees while enjoying refreshing drinks.
10. Swag Bag: As a token of our appreciation, each in-person attendee will receive a swag bag filled with goodies, including an Armstrong Economics notebook, pen, and an event collector’s mug!

Unable to travel? We also have two different ticket options for those wishing to attend virtually! 

Don’t miss this opportunity to be part of a global gathering of economic and financial minds. Secure your spot at the World Economic Conference in Orlando, Florida, and gain the knowledge, connections, and resources you need to thrive in the world of finance and economics.

Space is limited, so act now and reserve your seat! Visit our Events page to register and join us in sunny Orlando this November.

Now available at all major retailers!

The eBook will be available shortly.

The second edition of “The Plot to Seize Russia – The Untold History” is now available for purchase in paperback and hardcover on Amazon and Barnes and Noble. The ebook will be available shortly.

Book description:

“Take care of Russia,” Boris Yeltsin said as he departed his presidency in August 1999. These words were directed at current Russian president, Vladimir Putin. Yeltsin specifically picked Putin as his predecessor to prevent the takeover of Russia.

So, who was Yeltsin warning against? Newly declassified documents from the Clinton Administration prove that there was a plot to rig the Russian election of 2000. These never-before-seen documents confirm numerous attempts to implement pro-Western policies using the Russian oligarchy headed by Boris Berezovsky.

On the other side were the communists who desired a return to the glory days of the Soviet Union. As one of the largest international hedge fund managers, author Martin Armstrong found himself in the middle of perhaps the greatest espionage, or attempt at a regime change for Russia, in modern history.

The Plot to Seize Russia pulls back the curtain to expose the most extraordinary attempt to seize power in modern history, but with the pen rather than armies. These declassified documents reveal a plot that has altered our thinking about the relations between the United States and Russia. The thirst for power comes seething through every line of these papers that alter our perception of reality, change the course of history, and now threaten us with World War III.

PRIVATE BLOG – Gold’s Real Risk – Capital Controls

Private blog posts are exclusively available to Socrates subscribers. To sign-up for Socrates or to learn more, please visit Ask-Socrates.com.

https://ask-socrates.com/

QUESTION: Is there any chance you can reason with Trump about Iran and Ukraine?

CP

ANSWER: Sorry. That is not going to happen. Some Republicans I have spoken with just say Keep the faith. I have warned this could be the worst Midterm since 2006. The 2006 midterm elections were widely seen as a vote against the Iraq War, with public dissatisfaction over the conflict and President Bush’s handling of it driving Democratic gains. Exit polling showed the war was the top issue, and voters opposing it broke heavily for Democrats.

The 2006 midterm elections were the worst for Republicans in recent decades—a decisive “wave” election that ended 12 years of GOP control of Congress. Democrats didn’t just win; they won decisively across multiple fronts. Democrats gained a net of 30 to 31 seats, flipping control with a 233–202 majority. This was their biggest gain since the Watergate-era election of 1974. They picked up six Senate seats, all from Republican incumbents, securing a narrow 51–49 majority (including two independents who caucused with them).

The Republicans are living in LaLaLand. President George W. Bush’s approval rating hovered around 38% before the election, the lowest for a president in a midterm since 1950. Congressional Disapproval was serious with only 26% of Americans approved of the job Congress was doing. Donald Trump’s current approval rating is 34.6%, with a disapproval rating of 62.2%, resulting in a net approval of -22.4. Nobody wants to talk about it. Netanyahu has wiped out our country.

The Democrats are for WAR. This Sanction Bill on Russia was passed only because the Republican stuffed in the authority for Trump on Tariffs. They Democrats want to wash their hands in Russian blood like CNN, Politico, and MS Now.

We will see an economic decline that will be significant into 2028 as they will embrace Minandami’s philosophy and attack business and the rich, who the define as joint houshold income of $250,000.

Trump will lash out and it will become war between the White House and Congress. The Republicans FAILED to inform Trump about this Iran War we cannot win and waged for Netanyahu who does not give a shit about Trump and views he will get more endless money from the Democrats. The ONLY way to save the country and do what he was elected for is to throw Netanyahu under the bus, exit the war NOW, publicly admit he made a mistake listening to him. Anything shy of that will be a disaster.

I will do an update after running the models on civil unrest. God help us. It is going to get ugly into 2028. This is going to be the confrontation that lead to deep division in the USA and the eventual collapse of the Republican form of government as we reach 2032. I published this back in 2023 and it has target 2026 with a Panic Cycle in 2029. Grab your socks, and hold on tight.

The situation in Yemen is deteriorating by the day. The United Nations now says more than 130,000 people have been driven from their homes this month as fighting intensifies following the Houthi advance along the Red Sea coast. Another 100,000 could be displaced over the next three months. More than 3,000 people have already escaped Yemen by boat toward Africa, primarily Djibouti, and the UN is preparing for that number to reach 10,000 as calmer seas make the crossing possible.

Families are abandoning everything and crossing the Red Sea on whatever vessels they can find. Reuters documented families fleeing barefoot after bombardments reached displacement camps where some had already sought refuge from earlier fighting. This is what politicians sitting comfortably thousands of miles away never comprehend. War becomes a statistic to them. To the people trapped inside it, your home, savings, possessions, livelihood, and sometimes your family can disappear overnight.

Yemen was already one of the poorest nations in the Middle East before this latest escalation. Some 22 million people require humanitarian assistance. Now the infrastructure required to provide that assistance is itself being disrupted. Roads have been damaged, telecommunications have been interrupted, movement is restricted, and damage to the port of Mokha has complicated humanitarian logistics. UNHCR says its response plan was less than 20% funded even before this latest wave of fighting exploded.

This is precisely how regional wars expand. Everyone looks at Yemen as though it is some isolated civil war between the Houthis and the Saudi-backed government. It is not. Yemen sits beside one of the most strategically important pieces of geography on Earth. The Houthis’ advance along the Red Sea coast has placed them astride the Bab el-Mandeb, while Iran sits beside the Strait of Hormuz. Saudi Arabia is caught between both chokepoints.

Now even Vladimir Putin and Saudi Crown Prince Mohammed bin Salman are publicly calling for safe passage through BOTH Hormuz and Bab el-Mandeb. That alone tells you the seriousness of the situation. Saudi Arabia has already been forced to redirect oil through Egypt’s Suez Canal because of disruptions affecting its traditional export routes.

The humanitarian crisis cannot be separated from the economic crisis. The same waters desperate Yemenis are crossing to escape the fighting are among the most important commercial shipping lanes in the world. UNHCR warns that further deterioration around Bab el-Mandeb could force humanitarian cargo to travel around the Cape of Good Hope, adding 25 to 30 DAYS to delivery times. That means higher freight rates, more fuel, higher insurance premiums, delayed food and medicine, and eventually higher prices.

Djibouti is now being dragged directly into the consequences. It has fewer than 1.2 million people and already hosts tens of thousands of refugees and asylum seekers. The Markazi refugee facility has room for only around another 5,000 people while authorities are preparing for more than 10,000 arrivals from Yemen. More than 60% of the initial arrivals identified by UNHCR were women, children, and elderly people. The pressure on food, water, shelter, schools, and medical services will rise rapidly if this becomes a genuine mass exodus.

This is how migration crises begin. Nobody wakes up one morning and decides to abandon their country for entertainment. Capital flees political instability first. Businesses disappear. Employment collapses. Infrastructure deteriorates. Then the people begin moving because survival leaves them no alternative. Europe learned absolutely nothing from Syria because politicians never address the cause. They argue about migrants AFTER the war has already destroyed the economic foundation that allowed people to remain home. The same mistake is being repeated throughout the Middle East.

The Houthis do not need a fleet comparable to the United States Navy. Geography has given them leverage that money cannot easily purchase. Control enough coastline, deploy inexpensive missiles and drones, make insurers afraid to cover vessels, and a relatively small military force can disrupt commerce worth hundreds of billions of dollars.

This is asymmetric warfare in the 21st century. The West spent decades constructing a global economy based upon just-in-time delivery and narrow maritime chokepoints because it was efficient during peace. Nobody seriously planned for what happens when those chokepoints become battlefields simultaneously. Hormuz, Bab el-Mandeb, and the Suez route are not merely lines on a map. They are arteries of the world economy.

Yemen is therefore no longer something that can be dismissed as another forgotten Middle Eastern war. People are already fleeing across the Red Sea. Shipping is being disrupted. Saudi oil routes are being rearranged. Humanitarian organizations are running out of money while the number of displaced people accelerates. The politicians will still call each development an isolated event. Markets will eventually understand that they are all part of the same crisis.

The Houthis have not technically seized the entire Red Sea, but that distinction is becoming almost meaningless for Saudi Arabia. Their forces have swept down Yemen’s western coastline, taking Mokha, Dhubab, the Hanish islands, and most importantly Mayyun, also known as Perim, sitting directly inside the Bab el-Mandeb Strait. They now control nearly the entire Yemeni coastline along the Red Sea and possess something far more valuable than territory. They have acquired leverage over one of the most important maritime chokepoints on Earth.

This is becoming an economic nightmare for Saudi Arabia because geography cannot be negotiated away. The Saudis traditionally relied heavily on the Strait of Hormuz to move oil eastward toward Asia. When Hormuz became increasingly dangerous, Riyadh shifted more crude through its East-West pipeline across Saudi Arabia to Yanbu on the Red Sea. That was the escape route. Oil could bypass Hormuz, load at Yanbu, sail south through Bab el-Mandeb, and reach Asian customers. Now the Houthis are sitting at the other door.

Saudi Arabia is therefore confronting the nightmare of being squeezed between TWO strategic chokepoints. Iran can threaten Hormuz while the Iran-aligned Houthis can threaten Bab el-Mandeb. Saudi Arabia built the East-West pipeline precisely to reduce its dependence on Hormuz, but geography has now transformed the Red Sea alternative into another vulnerability. You could not design a more dangerous strategic position for an oil exporting nation.

The shipping data already reflects the fear. Traffic through Bab el-Mandeb fell by half immediately after the Houthi seizure of Perim, from 30 vessels in one day to just 15 the next. Large crude carriers have been particularly reluctant to enter the strait. This is the part politicians never understand. The Houthis do not actually have to sink every tanker or formally “close” the waterway. They merely have to make the risk sufficiently expensive that insurers, shipowners, and charterers refuse to go there.

That is how modern economic warfare works. You do not need a naval blockade when the insurance market will create one for you.

Saudi tankers leaving Yanbu can instead sail NORTH toward the Suez Canal. But oil destined for Asia then faces an absurd journey. Some vessels must enter the Mediterranean, pass Gibraltar, travel down the entire western coast of Africa, round the Cape of Good Hope, and then sail back across the Indian Ocean. AP reported that the journey to South Korea can increase from roughly 24 days to 54 days. Tankers can cost tens of thousands of dollars PER DAY to charter, and rates during this energy crisis have in some cases exceeded $100,000 per day.

This is inflation being manufactured geopolitically in real time. Every additional day at sea means fuel, insurance, crews, financing, and charter costs. Those costs eventually appear somewhere in the price structure. Politicians will then blame “greedy corporations” when energy prices rise while ignoring the fact that their geopolitical adventures have transformed the world’s shipping lanes into war zones.

Saudi Arabia’s vulnerability extends far beyond tankers. The Houthis have attacked Saudi energy infrastructure and announced what they call a maritime embargo on Saudi-linked shipping. Riyadh temporarily shut its East-West pipeline after an attack in September. Saudi Arabia then reportedly appealed to China for help, and Reuters reported that Beijing subsequently pressed Iran to restrain the Houthis. That is perhaps the most revealing development of all.

Saudi Arabia is asking China to help influence Iran. That tells you how dramatically the geopolitical chessboard has changed. China is one of the world’s largest energy consumers. It needs Gulf oil. Beijing therefore has an enormous economic interest in keeping both Hormuz and Bab el-Mandeb functioning. The United States once dominated every major diplomatic conversation in the Middle East. Now Riyadh is turning toward Beijing because China has relationships with both Saudi Arabia and Iran and possesses economic leverage Washington simply does not have in the same form.

This is precisely what happens when sanctions and endless wars fragment the world economy. Trade routes change. Alliances change. Capital flows change. Countries begin looking for alternative partners because survival always comes before ideology.

The Houthis have also demonstrated something that should terrify every major military establishment. You no longer need an enormous blue-water navy to threaten global commerce. Cheap drones, missiles, mines, and control of the coastline can impose tremendous economic costs on ships worth hundreds of millions of dollars. A relatively poor armed movement sitting beside the correct piece of geography can influence the price of energy across the entire world.

Bab el-Mandeb means the “Gate of Tears.” That name is becoming rather appropriate. This is not simply another chapter in Yemen’s civil war. The Houthis have acquired strategic leverage over the southern entrance to the Red Sea while Iran retains leverage over Hormuz. Between those two chokepoints sits Saudi Arabia and an enormous portion of the world’s energy infrastructure.

Saudi Arabia is certainly not cut off. Oil will continue moving. Markets always find another route. But every alternative becomes longer, more expensive, and more dangerous. You do not need to stop world trade to create an economic crisis. You merely need to make world trade expensive enough.

Something rather extraordinary has happened in the Middle East. Saudi Arabia has turned to China for help with Iran and the Houthis. Riyadh appealed to Beijing after the Houthis advanced along Yemen’s Red Sea coast and around Bab el-Mandeb, threatening the western route Saudi Arabia increasingly depends upon for oil exports. China then privately approached Tehran and asked Iran to use its influence to restrain the Houthis and prevent the conflict from spreading further across the region’s energy routes.

Think about what has actually happened here. Saudi Arabia did not turn first to Washington to carry a message to Tehran. It went to Beijing. The country that was once viewed primarily as the factory of the world is increasingly becoming the economic middleman of the Middle East because China has something the West has steadily destroyed through sanctions and ideological foreign policy: relationships with BOTH sides.

China buys Iranian oil. It trades heavily with Saudi Arabia and the Gulf states. It needs energy from the entire region. It has no economic interest in watching Iran shut Hormuz while the Houthis turn Bab el-Mandeb into another battlefield. Roughly half of China’s oil imports come from the Middle East, while trade between China and the Gulf Cooperation Council states is around $300 billion annually. More than 80% of Iran’s seaborne oil exports went to China in 2025, according to Kpler data cited by Reuters. Beijing does not need some humanitarian lecture from the United Nations to understand what is at stake. Its factories need energy and its economy needs those shipping lanes OPEN.

China has leverage with Iran because Iran needs China economically. Beijing remains Iran’s largest trading partner and principal customer for its oil. At the same time, China has spent years deepening economic relationships with Saudi Arabia, the UAE and the rest of the Gulf. China therefore finds itself sitting at a table where it can pick up the telephone and speak to Riyadh, Tehran and, increasingly, the Houthis themselves. Reuters reported back in July that Beijing had already established direct contact with the Houthis seeking guarantees that Chinese tankers could safely transit the southern Red Sea.

China brokered the restoration of diplomatic relations between Saudi Arabia and Iran in 2023. That was an enormous signal that most people in Washington dismissed. Beijing was demonstrating that its Middle East strategy would be based primarily on commerce. China did not need Saudi Arabia to love Iran or Iran to love Saudi Arabia. It merely needed both countries to recognize that trade is preferable to war. There is an old lesson here that politicians never seem capable of understanding. Commerce creates relationships. Sanctions destroy them.

Washington has spent years weaponizing access to the dollar, SWIFT, technology, banking and trade. Every geopolitical disagreement is answered with another sanction. Politicians imagine this demonstrates strength because they look only at the immediate target. They never calculate what happens ten years later when everyone they sanctioned has built alternative relationships precisely because they could no longer trust the West.

China took the opposite approach. It bought the oil. Now look at where that has brought us. Saudi Arabia needs somebody capable of speaking to Iran because Iran possesses enormous influence in the region. China can make that call because it never completely severed the economic relationship. Tehran in turn cannot simply ignore Beijing because China purchases the majority of Iran’s exported crude and remains one of the few major economies capable of providing the investment Iran desperately needs.

This does not mean China controls Iran, nor does Iran simply issue orders to the Houthis. The Houthis have developed their own political and military interests, particularly now that their territorial gains have increased their leverage around Bab el-Mandeb. Beijing can pressure Tehran, and Tehran may influence the Houthis, but none of these relationships amount to absolute command. Nevertheless, the shift in diplomacy is unmistakable.

China’s interests are brutally straightforward. It needs Hormuz open. It needs Bab el-Mandeb open. It needs Saudi oil, Iranian oil and Gulf trade. It does not want an ideological crusade in the Middle East because wars interrupt commerce. Beijing is not doing this out of charity. It is protecting China.

Saudi Arabia understands that China has skin in the game. If Bab el-Mandeb closes while Hormuz remains disrupted, Beijing suffers immediately. Chinese manufacturers face higher energy costs. Tankers must travel farther. Freight and insurance costs rise. Supply chains become less reliable. Inflation spreads outward through the entire world economy. China’s incentive to mediate is therefore economic rather than merely political.

This is also why the rise of China cannot be understood simply by looking at GDP or military spending. Economic power eventually becomes diplomatic power. When you become the largest customer of one nation and one of the largest trading partners of another, governments begin answering your phone calls. That is how power shifts.

America emerged as a global power through commerce and capital long before Washington became obsessed with sanctioning half the planet. The dollar became dominant because everyone wanted access to American markets and American capital. China has studied that lesson while Washington seems determined to forget it.

None of this means the dollar disappears or China suddenly replaces the United States. China’s capital controls remain an enormous obstacle to the yuan becoming a true global reserve currency. But reserve currency status and geopolitical influence are not the same thing. China does not need to replace the dollar tomorrow to become increasingly important diplomatically.

The Saudis are facing Iran across the Persian Gulf and the Houthis across the Red Sea. Their oil infrastructure is increasingly squeezed between Hormuz and Bab el-Mandeb. When Riyadh needed someone capable of carrying a serious message into Tehran, it turned toward Beijing. That is how geopolitical power changes hands. Not with some grand announcement. Not because politicians hold a press conference declaring a new world order.

The Ukrainian people want an election. Zelensky lied and promised peace, and has been doing nothing but carrying out his personal hatred of Russians. Reliable sources from Ukraine report that (1) the factories are being run by women since men are sent to the front line, and (2) they are actually handcuffing men in transport to the front line to prevent them from fleeing. My discussions with members of Congress know that Zelensky is the problem and that Putin has agreed to peace.

All they have to do is honor the Minsk Agreement that Europe and Ukraine both signed to allow the Donbas to vote if they want to separate from Ukraine after they started this civil war attacking the Donbas by an unelected government on the orders of the Neocons.

The historical record shows that Oleksandr Turchynov, as the UNELECTED “Acting President” of Ukraine (February–June 2014), initiated the civil war on the orders of the American Neocons, claiming that he was acting against terrorists simply because they were defending themselves, their language, which was then outlawed, and their religion.

It was Kiev that attacked the Donbas calling them terrorists because they sought their freedom like Yugoslavia also broke up according to ethnic lines. Everything in the CNN broadcast was a total lie. Not a single word was the truth. They are propelling the world into World War III and do not care about anything but their own hatred of Trump that blinds them to what is taking place around the world.

To sell us WWI, they hid arms in a passenger ship the Lusitania knowing the Germans would sink it to get the US into WWI. They swore there were no arms, then in 1987 the found it and pulled up ammunition proving they lied again. To get us into WWII, they instigated Japan and pretended the attack was unprovoked when it was even leaked to the newspaper that they would be hit that weekend. FDR pulled out the aircraft carriers and let thousands die claiming this would be a day in infamy.

There was so much outrage over the truth that FDR lied to the country to get the US into war that the Senate was forced to investigate. They admitted the government knew about the coming attack, but claimed they could not confirm FDR personally knew. They used the same excuse on 911.

They have lied about every war. For Vietnam, we were told the BS that we were fighting communism and Russia was behind it. That was a lie and Robert McNamara before he died wanted to clear his conscience. He said Russia was not involved and it was just a civil war. Some 58,000 Americans died for that one.

Even in my case, they were in league with the bankers to pull off a regime change of Russia by blackmailing Yeltsin insisting he appoint their stooge, Boris Berezovsky. Yetsin turned to Putin. Here is a declassified background showing their involvement.

Here is Berezovsky with none other than George Soros, Treasury Secretary Bessent’s role model.When the regime change failed, they  claimed  he  committed  suicide.  His  bodyguard  said  he  was  assassinated  to  cover  it  all up.?

COMMENT: Hi Martin,

I can see that things are getting dark for some time, like many others I find on the internet. It is getting to the point of utter absurdity. Storytelling has replaced reality to the extend that it outplays the Goebbels era. MK Ultra for the people. I suspect with the help of AI which is nothing but ones and zero’s and easily manipulated. But I see some hope in the younger generation. The 20 plus Z generation people. They are maybe the ones we should pay attention to. Maybe too late . I do not know at this point. But it is also nothing new.

All best,

L.

REPLY: I have been asked if I would teach at two of the top 10 universities in the world. I declined because I had no desire to teach a class of 30 kids. Still, we get a lot of inquiries from the younger generation. Literally, the age range has ranged from 11 to early 20s. Because the issue is to pass on the knowledge of how the world really works to Generation Z, a 21-year-old wants to head up a different WEC called the Next Generation WEC.

This will not be about forecasting markets to survive the chaos. It will be about the solutions and lessons we must pass on to change the direction post-2032. I have agreed to do this as I try to give back what I have learned over the course of my life.

We will let you know When We will Be Ready to Launch This Project

Trump has now signed the sweeping Russia sanctions legislation championed by the late Senator Lindsey Graham. The bill passed the Senate 86-11 and the House 262-159, targeting Russian officials, banks, and the so-called shadow fleet transporting Russian energy. But the most dangerous provision is not actually directed at Russia. Washington has given the president authority to impose tariffs of up to 100% on the largest countries purchasing Russian oil and natural gas. In other words, we have moved from sanctioning Russia to threatening nations that refuse to obey American foreign policy.

This is economic warfare, plain and simple. Politicians have convinced themselves that they can manipulate the world economy as if every nation has no alternative but to obey Washington. They tried this when Russia was cut off from SWIFT. They froze Russian reserves and effectively announced to every government on Earth that foreign reserves are yours only so long as Washington approves of your foreign policy. Then everyone acts surprised when China, Russia, India, and others begin constructing alternative payment systems, increasing gold reserves, and reducing their dependence on Western financial infrastructure.

The real target here is increasingly India and China. India went from being a relatively minor purchaser of Russian crude before the Ukraine war to obtaining more than 40% of its oil from Russia. New Delhi has 1.4 billion people and has repeatedly made clear that its priority is affordable energy. Washington is now effectively telling India: buy energy where we tell you or risk losing access to the American market. Reuters reports that India has warned this could damage bilateral relations and disrupt global energy markets. Washington spent decades cultivating India as a strategic counterweight to China, and now Congress risks pushing India away because politicians cannot understand that sovereign nations act in their own economic interests.

China presents an even greater problem. Russian ESPO crude has surged above $120 per barrel amid disruptions in Middle Eastern supplies, with premiums over Brent reaching extraordinary levels. Chinese refiners have increased purchases precisely because they require reliable energy. If Washington attempts to remove Russian barrels from China and India while Middle Eastern supplies are already constrained, where exactly do these politicians believe the replacement oil will come from?

This is the stupidity of sanctions. Politicians look at a spreadsheet and assume that eliminating Russian exports means Russia receives less money. They never bother understanding markets. Reduce available global supply and the PRICE rises. Russian oil can therefore decline in volume while Russia receives more dollars per barrel. Reuters has already reported traders warning that restricting Russian supplies to China and India could drive global oil prices even higher and potentially increase Russian oil revenues. You cannot repeal supply and demand with legislation.

Then there are the secondary consequences. India either continues buying Russian oil and risks American tariffs, or purchases more expensive crude elsewhere and passes that cost through its economy. China will accelerate its efforts to circumvent Western financial systems. Countries conducting business with Russia will become increasingly reluctant to clear transactions through institutions exposed to American sanctions. Every sanction therefore provides another incentive to construct an alternative to the dollar-based financial system.

This is precisely what I have written about regarding the weaponization of SWIFT. The dollar became the world’s reserve currency because people trusted the American financial system. Reserve currency status is not something Congress can legislate. It is based upon confidence. When politicians weaponize that system against anyone they dislike, they undermine the very confidence that made the dollar dominant in the first place. That does NOT mean the yuan suddenly replaces the dollar tomorrow. China has capital controls and lacks the deep open capital markets required of a true reserve currency. But Washington is nevertheless encouraging the rest of the world to develop alternatives.

The most disturbing aspect is that sanctions have replaced diplomacy. Graham believed squeezing Putin economically would force Russia to reconsider the war. That is the theory behind virtually every sanctions regime. Yet sanctions have a terrible historical record of forcing major powers to surrender their core geopolitical objectives. More often, they encourage self-sufficiency, alternative alliances, black markets, and new trading blocs. Russia redirected energy toward Asia. China learned that dependence upon Western technology and finance represents a strategic vulnerability. Europe discovered that cutting itself off from cheap Russian energy carried an enormous economic cost of its own.

Trump has always viewed tariffs as leverage, and this legislation preserves considerable presidential flexibility. That distinction matters. A tariff authority does not mean every threatened 100% tariff will actually be imposed. Trump may use that authority as a negotiating weapon with India and China rather than immediately triggering an economic confrontation with both. But Congress has nevertheless created the weapon, and markets must now price the possibility that it will be used.

This is how wars expand beyond the battlefield. First there are military sanctions. Then financial sanctions. Then secondary sanctions against neutral countries. Then tariffs against countries trading with the enemy. Eventually the entire global economy begins dividing into competing blocs.

That is exactly what happened before previous major international conflicts. Capital begins retreating behind geopolitical lines long before politicians admit what is taking place.

The neocons continue to believe that economic pressure will bring Russia to its knees. They never consider what happens when their policies instead fragment the world economy, push Russia and China closer together, alienate India, increase energy prices, and undermine confidence in Western financial institutions.