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Biden’s Sanctions Might Hurt Americans More than Putin

AMAC Exclusive – By Andrew Abbott


As the Russian economy strains under the weight of severe western sanctions following Putin’s invasion of Ukraine, the Russian President appears to be looking eastward for salvation. After Visa and MasterCard – which combined generate more than $1 billion in revenue from Russia annually – announced they would suspend all operations in the country late last week, Russian banks announced a potential plan to replace American credit cards with new cards backed by China’s UnionPay. This seemingly small act might be the first red flag that western sanctions of Russia, if they aren’t used correctly, could drive America’s two chief adversaries closer together, and might even bring the primacy of the U.S. Dollar to an end.

The U.S. Dollar has been the dominant global currency since World War II. In 1944, a delegation of 44 nations came together at Bretton Woods, New Hampshire, with the hope of creating a global exchange system. Ideally, this system would promote international growth, increase global cooperation, and ease the barriers to doing business between nations. The “Bretton Woods Agreement” created the International Monetary Fund, the World Bank, and critically “required a currency peg to the U.S. Dollar which was in turn pegged to the price of gold.” Although the system would collapse in the 70s following President Nixon’s decision to take the U.S. off the gold standard, the agreement, along with the strength and stability of the U.S. economy, has made the U.S. Dollar the dominant international currency to this day.

Part of the reason for the historic strength of the U.S. Dollar is that the U.S. Federal Reserve guarantees that every single dollar printed will be honored. Yet, late last month, the Biden administration announced that it would “immobilize Russian central bank assets that are held in the United States.” This effectively froze all of Russia’s foreign exchange dollars. John E. Smith, the former director of the Treasury Department’s Office of Foreign Assets Control, told the New York Times this move was “unprecedented to a scale and scope that we haven’t seen since the Cold War.” As he went on to explain, the sanctions now being imposed by the Biden administration on Russia “are simply beyond comparison to previous sanctions regimes, particularly involving a major power like Russia.”

Presidents have frozen the assets of rogue states in the past. Last year, Biden froze half of Afghanistan’s foreign currency reserves following the collapse of the American-backed Afghan government. Yet, as Smith notes, the U.S. has never frozen assets on this large scale since the Cold War.

As the credit card switch signals, however, Russia believes it has an “ace in the hole” to counter these sanctions. China is aggressively pushing to “dethrone the dollar” with its own currency. China has made multiple attempts to “de-dollarize” the global economy in the last two decades by promoting the Yuan as a more stable alternative. Notably, the Chinese have created the “CIPS System,” an alternative to the SWIFT international banking system from which Russia was recently expelled. As U.S.-Chinese relations have deteriorated in recent years, China has used every opportunity to turn the global economy into a bifurcated system that runs less on SWIFT and more on CIPS. The stronger China’s system becomes, the weaker the U.S. leverage over the global economy. Should the Yuan replace the U.S. Dollar as the de facto global currency, it would likely lead to a significant international recession and financial crisis for America.

Putin has stated multiple times that his goal in invading Ukraine is the establishment of a “Russian Sphere of Influence,” explicitly distinct from the West. In a roundabout way, Western companies exiting Russia may help Putin achieve this goal, while also providing a golden opportunity for China to grow its financial influence in a market of 140 million people. Visa and Mastercard are not alone in their boycott of Russia. Companies from McDonald’s to Tinder have shut down their Russian operations and will not reopen until the current crisis is resolved – if they ever do.

If Putin attempted to expel the U.S. Dollar, McDonald’s, or Visa from Russian soil before his invasion of Ukraine, he likely would have faced severe backlash from his people, who have in recent decades become accustomed to the benefits of Western restaurants, stores, and services. Now, in part due to these sanctions, he doesn’t have to kick them out – the companies are choosing to leave Russia themselves. And with China ready to swoop in and replace the presence of those Western companies, Putin can ease the shock to the Russian economy.

Nonetheless, the transitional pains associated with something like two major credit card carriers exiting Russia will still be very real for ordinary Russians. This may also backfire against the West. On the day of Russia’s invasion, thousands of Russians took to the streets to protest Putin’s aggression. However, sanctions that make it harder for those protestors to do things as simple as buying a loaf of bread or paying for medicine might have the unintended effect of galvanizing the Russian population against the West. Such a move would be disastrous for U.S. national security interests if it drives Russia and China even closer together.

While the Biden administration has thus far avoided the blunder of embroiling the U.S. in a direct military confrontation with Russia, their sanctions strategy – along with that of most of the West – has in some ways been crude, imprecise, and potentially dangerous to American interests. The job of a leader is to see the entire playing field, even in a moment of crisis. China is still the biggest threat to U.S. global leadership.

Instead, Biden and Western leaders should target Putin and his cronies while actively working to avoid driving Russia further into the arms of China. Otherwise, the West may be opening the door to a much more dire threat down the road.   

Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.       

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Dennis Savage
2 months ago

Ariel Sharon said Israel controls America obvious who put Biden in power. Biden is just a straw man for a powerful lobby.

5 months ago

Biden is already killing us every which way.

Stephen Lykins
5 months ago

That’s what he WANTS!

5 months ago

The word for the response is incompetent. Traitorous also fits…

Bill T
5 months ago

Biden is on a suicidal mission to ruin our once strong democracy, in one years time he’s accomplished more damage and pain to our country than anyone or anything ever before. This is only the tremors we’re now seeing, the guaranteed EARTHQUAKE will shake this country to its core and Trust the it’s guaranteed to happen and soon.

Bill T
5 months ago
Reply to  Bill T

Trust me

Tracy Sweny
5 months ago
Reply to  Bill T

biden and his cronies are destroying our democracy/republic. These people are communist, and there’s no other way to describe them and their agenda. They must be stopped. All of this would have never happened if we hadn’t had our election stolen by false ballots, and loads of ballots being brought in and the people who were there to oversee things were told to leave. VP Harris did say one thing on TV last night that passed for sense.She said ” we are doing the job we were elected to do, and we will continue to do it….. I’m sure they are all satisfied”

5 months ago

The Biden Admin does not seem to understand Economics & causes of inflation, and doubt if they have done solid homework on pushback on US from Sanctions. Go back a few years, & decide if Trump’s Tariff Wars helped or harmed US consumer. Some of the Tariff wars are still hurting us today & also were not based on solid homework from economists and history.

5 months ago

Thanks for a very good informative article on possible scenarios to US dollar. Realistic but scary for future world currencies.

5 months ago

I’d say that Biden and his cabal of the anti American stoopid are making sure America is deprived and menaced with increasing suffering…..I do believe they will fail and will help to stick their climate Krap in their lunch pail…..

Rick Saunders
5 months ago

“Biden’s Sanctions Might Hurt Americans More than Putin” That is just what he wants, to destroy America.

Tim D.
5 months ago

Joe Biden’s political nature is to alway’s “go after” the people, whether they be American citizens or, in this case Russian and Ukrainian citizens. By cutting off everything they need to survive,(credit cards, food, fuel and cash) Biden THINKS he is hurting Putin! Putin and his government have EVERYTHING they need, but the people, as usual will be left with very little. But Uncle Joe, in his “high tower”, will “kill” the American economy AND the Russian and Ukrainian economies as well, all in the name of sanctions. I have a thought… OPEN the American pipelines and let’s get back to cheaper, cleaner fuels, UNTIL somebody creates viable, useable “green” alternatives that the average person can afford. You cannot force people out of fossil fuels by raising prices at the pump! All you do is alienate the regular folks in trying to change the way we do energy BEFORE you have that energy available, and we can afford it! Subsidies on “green” alternatives IS NOT “building back better”! It’s the WORST way to economic recovery, but it looks like part of the master plan. The only zero emissions I want to see, are coming out of this administration’s mouth! Wake up America!

5 months ago

The threat is to hurt the American people and bring us to our knees so they can usher in the Great Reset (NWO). Not going to happen. The DS is in a panic mode with the Ukraine bombing if the biolabs. .

Steven H
5 months ago

Everything this man touches turns to ashes.

5 months ago

China has certainly wished this to be the Chinese Century. It now appears the sanction regime being implemented by the Biden Administration and our European Allies does carry the real possibility of creating the environment for the Chinese wish to come true. It is interesting to note the countries lining up with Russia include not only China but India, and most of the Middle East. It seems obvious that if Russia is successful in taking over Ukraine or even partitioning it between East and West along the Dnieper River, Russia will have shifted the geopolitical balance in China’s favor.

Joe P
5 months ago

They already are hurting Americans more than Putin. China will buy all the oil, they’ve already said as much. And they will do it without using dollars. So Russia is whole and China has a sweet deal for oil and gas.

While we Americans are paying more.

5 months ago

The inference in the article that the ostracizing of the US credit cards companies might drive the two Commie Nations together leans to fantasy to predict it might happen that way to any significant extent. More likely they (Russia & China) will get into a more head-to-head confrontation. Yes, China might be emboldened a little (about seizing Formosa), but the US should predict this possible trend in China’s thinking by some significant activity to send a subtle message that the USA is aware of such emboldening. The USA must stand firm in backing Formosa. China is probably grinning politically because they will likely benefit from cheaper oil imports when the smoke clears.

5 months ago
Reply to  Hal

China doesn’t work with any nation unless it’ stands to benefit China heavily.

Michael Venaccio
5 months ago

In all the articles that AMAC has published, where are some showing how the average citizen can counter all of this?? Bury your representatives under emails and phone calls, visit their offices, do not contribute, etc.

So, what can we do to get their attention that they have ceased to represent us?? Sue them for ineffective representation, like labor unions (There was a Supreme Court case called the Vacqua Decision about unequal representation within a labor union so the principle may apply.), class actions suits for violation of oaths of office??? What can we legally do, please give us some suggestions.

We all know that the American People have been/are being manipulated, so what can we do within the system.

Enuf Said
5 months ago

Biden can make a old out house smell WORSE!! Have the American people EVER seen a more incompetent, evil, disgusting, brain dead President?

5 months ago
Reply to  Enuf Said

He has a BRAIN, who found it? First I have heard about this major discovery.

5 months ago

Zelensky has started attacking Biden as an international criminal now. Most Americans are unaware of the things Zelensky is saying since mainstream media is not publishing his speeches. I expect Ukraine and Russia will hammer out a mutually agreeable solution and Ukraine will enjoy a new harmony with China as well.

Joe P
5 months ago
Reply to  Joanne

And no doubt China and Russia will have working examples of Stinger and Javelin missiles when all is said and done. Joe Biden is a menace.

Steven Tapper
5 months ago

It’s a sad fact but whenever Biden or Harris open their mouths to speak they weaken the nation. In the Democrat Playbook under the term Diplomacy, it means appeasement and surrender. If you ever wondered what Obama’s 3rd tern would look like, your watching it play out now.

5 months ago
Reply to  Steven Tapper

It is Obama’s 3rd term.. Hillary losing to Trump just postponed it a few years..

Al Wunsch
5 months ago

The author expesses concerns about the relationship between China and Russia, yet the reality is, for the short term, this is a natural relationship. China and Russia, while not fully trusting each other, have clearly entered into a joint relationship against the Western world. Putin’s rhetoric is clear and is an announcement of a war against the West. It can be stopped now or the West will meander along until the war expands beyond Ukraine. One could reasonably speculate that leaders of Marxist persuasion along with the current progressive Democrat party here in the U.S. will lead to the next major world war. Hopefully the people will wake up.

Bruce P
5 months ago
Reply to  Al Wunsch

“The enemy of my enemy is my friend”. They can team up on America now that we have a weak administration then deal with each other later.

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