This past week saw two notable events rock the state of U.S. and Russian relations. President Trump accused Moscow of helping the North Koreans to avoid internationally imposed sanctions. A few days later, the U.S. Treasury Department released a list of all Russian oligarch and senior government figures who could be targets of future sanctions on the country. The Russian government was infuriated.
Such geopolitical tensions between the two military superpowers of the world remind you why you need a gold IRA. Gold protects against geopolitical and market turbulence. This is why financial experts still value gold for its ability to help insure investment and retirement accounts. Now is the time to learn what gold belongs in an IRA as well as the applicable IRA rollover rules and regulations.
Motivations Behind Russians Helping North Korea
U.S. President Donald Trump received international news headlines a week ago as he blamed Moscow for aiding the North Korean regime in avoiding biting international sanctions. Unsurprisingly the Russian foreign ministry officially denied any part in such activities. Yet Reuters reports that Russian oil tankers delivered fuel to the outlaw state’s ships at sea were telling evidence.
Experts in foreign policy point to a number of reasons for why Moscow would gain from increasing world tensions with North Korea. Putin may have a variety of agendas including distracting the United States and attempting to take the spotlight off his country’s own sanctions. Russia suffers from quite severe international sanctions because of its military activities in countries like Ukraine and Georgia that started several years ago.
Analysts have argued that Russia helping North Korea to continue its struggle against the world community might take emphasis away from Moscow’s own condemned actions. Senior Policy Fellow Gustav Gressel of the European Council on Foreign Relations argued this with:
“Putin has his own interest in helping North Korea. Moscow’s interference also serves as a diversion to take the focus away from the country’s own activities in Europe.”
Allowing the North Koreans to continue their global defiance might make Moscow look less bad (if it is not caught in the act). It also forces the United States to divide its military concentration and focus in various parts of the world. This increases an already overstretched American military budget significantly. Brown University recently released its study that argues as much. It reported that the United States’ military conflicts that began in 2001 have cost the country $5.6 billion directly.
Russian President Vladimir Putin may also be looking to gain leverage to have his own sanctions lifted by engaging with North Korea. By making Russia a part of the regime’s support, he hopes to gain a seat at the negotiating table. Vice President of Global Analysis Rodger Baker of Stratfor explained this with:
“I think the situation is only going to escalate. Kim Jong Un sees his nuclear weapons as being fundamental to the regime’s self preservation and is never going to give them up — putting any progress on peace talks on a standstill. Once Russia is accepted as the mediator for peace talks between the U.S. and North Korea, they will be able to bargain for their own sanctions.”
Yet despite this theory, Stratfor does not see world tensions with North Korea being reduced at any point in the immediate future.
Treasury Department List Angers Moscow
Tensions between the United States and Russia were further increased this week as the U.S. Treasury released its long awaited report on other potential Russians for sanctions. The Treasury document revealed 114 individuals who are high level government and state company leaders as well as the 96 richest oligarchs in Russia. The department was quick to point out that this is not a new list of sanctions.
Yet the report has angered and alarmed officials and business leaders across Russia all the same. It was originally commissioned by congressional law as part of a means of coming up with punishments on Moscow for its accused interference in the U.S. elections back in 2016. Individuals may not be facing any new sanctions today, but they likely would be targeted in any future reprisals.
This alone has been enough to raise tensions between the two formerly Cold War enemies. The report might have been worse. It could have included new sanctions for any Russian military hardware buyers. The law that mandated the report did provide for such a step. The administration opted not to add new sanctions at this time. Yet the reaction from Moscow was angry. Government spokesman Dmitry Peskov declared that people who are listed in the Treasury report:
“are de facto being named as enemies of the U.S. This could potentially do harm to the image and reputation of the businessmen and politicians on the list.” It raises “more questions than answers.”
Peskov personally had reason to be upset. His represented one of the names on the list of high government officials. President Putin claims that this report damages relations with the U.S. further, though he has not announced any retaliation so far. Still for officials and oligarch businessmen working on business deals with Western countries, banks, and companies, the report has set off new tensions with America.
This list of names turned out to be far more sweeping than many had anticipated. The Treasury Department claimed that it relied on “objective criteria drawn from publicly available sources.” Any businessman who possessed at least a billion dollars or important government politician made the report. Chief Economist Vladimir Tikhomirov of Moscow-based BCS Financial Group expressed the collective Russian frustration with:
“They just included everybody, all the big businessmen, all the major bureaucrats. The aim is to increase pressure on Russia and on major Russian business people in order to destabilize the political situation without specific sanctions.”
Many figures on the list were already under sanctions as they enjoyed close connections with President Putin, like Arkady Rotenberg. Still others had no known ties to the Moscow government. Grocery billionaire Sergey Galitsky and billionaire banker Oleg Tinkov are some of these individuals. Among government officials included were Prime Minister Dmitry Medvedev and Minister of Energy Alexander Novak.
National government representatives to the regions of Russia also made the list alongside state corporation bosses. Treasury apparently also developed other lists that were classified beyond the main publicly released one. These have names of more wealthy businessmen and less important government officials. Any of them could one day find themselves the subject of U.S. sanctions.
Past Sanctions Have Reduced Ties to A Pitiful State
In an ironic twist, President Putin’s spokesman now blames the American administration for attempting to impact the Russian presidential elections on March 18th with the Treasury report. Aside from an unforeseen major event, Putin is expected to be returned to office in a landslide victory that will have in power more than two decades.
The sanctions which the U.S. and other countries have already applied to government officials in Russia have heavily reduced the country’s ability to take advantage of international energy technologies and finance. Over 400 firms and 200 Russians have been caught up in these. The chart below shows countries that have participated. It is little wonder that Moscow labeled its U.S. relations to be in a “pitiful state” last month.
This deteriorating relationship between the United States and Russia should only encourage you to safeguard your retirement portfolio using the time-tested precious metal. Geopolitical tensions like the ones you see going on between these two great military powers can dramatically affect financial markets. Now that you know another reason why to invest in gold, you should consider how to invest in gold today.