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The Boomerang Effect Of Sanctions On Russia Is Still Unknown

Ivan Martchev profile picture
Ivan Martchev


  • The EU surely has more to lose from backfiring Russian sanctions than anyone else, given its rather large trade relationship with the Russian Federation and its dependence on Russian natural gas and oil.
  • One puzzling development has been the amazing recovery of the Russian ruble, which last week traded at levels near 76 on the USDRUB rate - stronger than before the war started.
  • QE has broken down a lot of correlations, and the Ukrainian crisis has not helped. The present situation may turn out to be equally bullish for both gold and the U.S. dollar - two assets that normally are inversely correlated.

Sanctions Over Russia

CatLane/iStock via Getty Images

A lot can happen between the time I write this (on Sunday) and when it finally hits readers inboxes on Tuesday morning, as world events these days comprise a rapidly evolving situation.

There were indications

This article was written by

Ivan Martchev profile picture
Ivan Martchev is an investment strategist with Navellier Private Client Group. Previously, Ivan served as editorial director at InvestorPlace Media. Ivan was editor of Louis Rukeyser's Mutual Funds Newsletter and associate editor of Personal Finance Newsletter. Ivan is also co-author of The Silk Road to Riches (Financial Times Press). The book provided analysis of geopolitical issues and investment strategy in natural resources and emerging markets with an emphasis on Asia. The book also correctly predicted the collapse in the U.S. real estate market, the rise of precious metals, and the resulting increased investor interest in emerging markets. Ivan’s commentaries have been published by MSNBC, The Motley Fool and others. Currently Ivan is a weekly editor of Navellier’s Market Mail and a contributor to Marketwatch.

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Comments (10)

A gold standard means that the govt is willing to REDEEM their currency for gold. Do you think that the Russian klepto govt is going to sell gold at a discount to market? Your rose-colored theories are borderline dementia.
Gasoline in Paris costs $8/gallon. Does that have anything to do with oil prices? No. It’s their own taxes. They could buy oil elsewhere and the cost difference will be nothing in relation to their own taxes.
If the rouble is not convertible to other currencies then its exchange rate is meaningless, no?
bluescorpion0 profile picture
gold standard!? they really are going back to the middle ages, if not farther back .
Russia main target is the US dollar, through dedollarization Putin wants to end the current petrodollar fiat system, US should take that into account, the Dollar is the Big Prize for Putin
cenc profile picture
@PITX3 yea, that is a serious threat, because the entire russian economy does not even equal the united states military budget.
@cenc Russian GDP is about the size of Spain's--and shrinking fast. Good luck with the economic warfare.
@Green Chiles I'm not proRussian, I'm stating what they think, in a war is better to think other side is clever than be the dumb guy
Boomerang effects? There is no such thing. COVID lockdowns also didn't impact the economy or people's livelihoods in any noticable fashion. We did it for the good of mankind, and it was the only morally correct thing to do, so there couldn't possibly be any downstream issues. Right?

Edit: If there is any inflation - which there isn't - I can assure you it will only be temporary. Certainly not longer than one, maybe two decades.
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