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Russia Sanctions Fallout: West Administers Self-Inflicted Colombian Necktie


Most of the Lugenpresse attention on the war and sanctions focus on the impacts for Russia. The fallout on the West is relegated to back pages.

Agricultural commodity prices of late are hitting highs and have that Weimar vibe to them. It goes without saying that high food prices and empty shelves leads to social disorder or worse. This seems very much from the agenda playbook of the kakistocrats (aka sub-zeros). As per their want, sub-zeros use the ploy of virtue signals to harm the security and well being of their own citizenry.

Food Impacts

With draconian sanctions, growers and their suppliers are self-administering a Colombian necktie. Russia is a low-cost, high-volume global producer for all major fertilizers, and it’s the world’s second-largest producer after Canada of potash, a key nutrient used on major commodity crops.

Russia and Belarus are the second- and third-largest potash-producing countries in the world. They account for 23% of the global ammonia export market, 14% of urea, 21% for potash and 10% of the processed phosphates.

Russia is a major supplier of natural gas used for making fertilizer as well as for fuel. After again administering a sub-zero Colombian necktie by downgrading fossil fuels, Europe is now highly dependent on this Russian gas.

Europe, including Ukraine, rely heavily on both countries for inputs such as potash. North America imports about 20% of its urea from Russia. Brazil imports about 47% of its potash supply from Russia and about 20% of its urea and 30% of its MAP supply.

The chokehold is the cost of fertilizer on which the growing industry has become increasingly dependent. Farmers in Iowa would be ecstatic to get $80/acre for corn. However, the cost of nitrogen fertilizer is now a dead on arrival at $240/acre.

“When war broke out in the Ukraine, fertilizer was up $200 day-over-day,” said Ben Brown, a senior research associate with University of Missouri Extension. “Shipping companies don’t want to enter into the Black Sea region, because they’re concerned that they might get pinched.”

The potassium-based fertilizer potash has been at the forefront of concerns.

“No substitutes exist for potassium as an essential plant nutrient,” according to U.S. Geological Survey (USGS).

The U.S. relies on imports for about 90% of its potash consumption, according to USGS estimates. Potash is brought in mostly from three countries: Canada, Belarus and Russia. Belarus and Russia produced a combined 14.9 million metric tons of potash in 2020, more than a third of the world’s overall production.

Russia and Ukraine account for 14% of global wheat production and 25% of global exports, ranking first and fifth, respectively.

There is another problem: China has hoarded large quantities of critical ag commodites and other resources. According to JP Morgan Chase, China currently holds an estimated 84% of global copper, 70% of corn, 51% of wheat, 40% of soybeans, 26% of crude oil and 22% of aluminum inventories. I don’t think the China-Russia block will go hungry and cold.

Drought is and will continue to be the story heading into the 2022 U.S. growing season. La Nina has had its influence in increasing drought across much of the West, Central and Southern Plains. The Southern Plains especially have a building drought as the main storm track has either passed off to the north, or the systems that have moved through have skipped over the traditional hard red winter wheat areas. Drought there is very concerning for winter wheat in the short term, and corn, soybeans, and pasture in the long term.

The following companies have unleashed their anti-Russia PR campaigns.

  • Boeing suspended major operations in Moscow, as well as maintenance and technical support for Russian airlines.
  • Airbus is halting supply of parts and services to Russian airlines.
  • Shell will sever ties with Russian gas giant Gazprom and end its roughly $1 billion financing of the Nord Stream 2 gas pipeline.
  • BP is exiting its nearly 20% stake in Russian oil giant Rosneft, and faces a potential financial hit of as much as $25 billion.
  • Exxon Mobil says it will exit Russia oil and gas operations valued at more than $4 billion and cease new investment.
  • GM, which sells only about 3,000 cars a year in Russia, says it will suspend exporting vehicles.
  • Ford suspended operations.
  • BMW stopped shipments and will stop production in Russia.
  • Daimler Truck Holdings said it would no longer send supply components to its Russian joint-venture partner.
  • Volvo Cars, owned by Chinese conglomerate Zhejiang Geely, halted sales and shipments.
  • Renault ceased operations and production at two assembly plants because it can’t get parts.
  • VW paused delivery of Audis already in Russia so it can adjust car prices to reflect the decline in value of the ruble.
  • Harley-Davidson suspended shipments to Russia.
  • Adidas suspended its partnership with the Russian Football Union.
  • Nike ceased online sales because it can’t guarantee delivery.
  • FedEx and UPS suspended shipments.
  • Yoox Net-A-Porter Group and Farfetch, luxury e-commerce platforms, are suspending deliveries in Russia.
  • Apple has paused product sales and limited services (including Apple Pay), on top of ceasing exports to Russia and restricting features in Apple Maps in Ukraine to safeguard civilian safety.
  • Dell stopped selling products.
  • Ericsson is suspending deliveries to Russia.
  • Walt Disney is pausing film debuts in Russia. Warner Bros., Sony, Paramount and Universal say they won’t release films in the country.

March 5 Update: More self inflicted neckties.


Obviously, suddenly ending business ties with the world’s 11th largest economy with a GDP of $1.48 trillion will have revenue and profit ramifications for the boycotters.

Here, a Russian spokewoman points out that there are patriotic substitutes for Apple phones. The same Russian companies whose stock prices have collapsed to minuscule valuations now can take the market shares of vacating western companies.

The severe downgrades of Russian sovereign debt seems corrupt and political. The country runs twin surpluses. Russia has the very large reserve of $690 billion, which has been made difficult to deploy. I have a strong hunch that the SWIFT work around developed with China is already well advanced thus eliminating the use of the dollar and euros. The game is all about financial manipulation.

At the same time Ukraine legislated a theft and grifting operation on Russians in that country.

Russia’s Financial Markets Being Gamed

The Moscow stock market has been closed all week. This has opened the way for a complete destruction of price discovery for Russian stonks. I really haven’t seen anybody review this objectively. Mostly it has been schadenfreude directed at Russians and very much of the “don’t count your chickens before they hatch” variety.

Message to my son, who I have been going over this event with: To wipe out the stock equity and assets of a country the size of Russia and not think it could kick off a worldwide depression is the height of sub-zero insanity.

In rapid fire, the major ETFs have suspended the creation of new shares. Worse major European markets, such as Frankfurt and London, have suspended trading in Russian GDRs. This in turn has led to blind guesses as to the NAV of the major funds, such as Van Eck’s RSX holding Russian stocks.

Sberbank, Russia’s largest bank, was subjected to a bank run and closed its European operations. A number of European banks have exposure here. The stonk is down 98% in the non-existent London exchange. This was Van Eck’s RSX largest holding.

However, RSX holdings at the beginning of the week were loaded with some of the most endowed energy and resource companies in the world.

Van Eck RSX is still trading as sort of proxy for that “market” and is down over 80% from its high last October. Much of this waterfall collapse has been since the Ukraine war began.

The major indexes of developing markets have also virtue signaled and are jettisoning Russian holdings. Since Russia is a major developing nation, this proposition distorts the whole purpose and value of such an index.

The short interest in RSX is extremely high, although not sure on a daily or hourly basis. $RSX options volume is 4x the average. “Retail fingerprints” all over this. There is wild gambling as implied volatility on puts expiring March 18 are unprecedented at 480. 

Right when we see the classic blood-running-in-the-street contrarian indicators that naturally draw deep value bargain hunters, a number of so called social media platforms have banned trading in Russian ADRs and GDRs.

These platforms are worthless, avoid.

Social trading brokerage eToro, which froze buy orders on some Russian stocks earlier this week, said on Thursday it could close positions in certain instruments and would do so at the end of business on Friday for Russian retailer Magnit (MGNT.MM). Before the suspension, eToro saw interest in Russian exposed stocks rise among its users.

On the other side of the coin, the large Russian national wealth fund is preparing to allocate $10 billion to national stonks once the Moscow exchange reopens. I suspect the oligarch vulture class is licking their chops as well.

The vulture funds are moving in.


19 Comments on Russia Sanctions Fallout: West Administers Self-Inflicted Colombian Necktie

  1. It is obvious the bankrupt countries of the West , mainly US /UK / EU , will now blame everyting on Russia and of course people will fall for it in their ignorance of economics and geopolitics
    . I imagaine Moscow and all it`s sanctioned poliricians , oligarchs and companies will now be singing , ” Sticks and stones will break my bones but names will never hurt me ” tra la la la

  2. Sorry I forgot to say thank you Russ Winter for another very informative article which in my opinion should be read by a much wider audience who remain un informed about our current situation .

    • I am reading Brendan Simms “Hitler: A Global Biography” which is a pretty objective account of the evolution of Hitler’s world view. Hitler’s drive for living space was largely for agricultural self-sufficiency so Germany could never be starved into submission. Despite successes in increasing agricultural productivity, the National Socialists were still unable to become self-sufficient. I note that today Germany is still a net food importer.

  3. I am doing my part virtue signaling this issue. Effective immediately, I am removing all Russian Dressing from my refrigerator and replacing it with Ranch.

    • A Prague friend of mine tells me effective immediately Russian and Belarus bred dogs are excluded from dog shows. Apparently Belarus is a dog breeding center.

      • Wow, Russ…and I love Russian Wolfhound types, Borzois, Samoyeds, etc., beautiful dogs! And does this mean Westminister Kennel Club? I love their dog shows! And I also wonder how connisseurs of Vodka will handle this “all part of the Great Reset” crapola! It’s bad enough it’s hard to get Canadian Fireball!

  4. All I wanted to do was find out why we import so much fertilizer, why we don’t produce. Down the rabbit hole. lol

    I found something interesting and upsetting. I saw we import a lot of fertilizer from Belarus, I kept an eye on Belarus all last year when the Clinton/Soros organized another color revolution coup to oust President Lukashenko after his election win.

    Lukashenko said the world has gone crazy and he would not mask his people or change anything, he said sit in a sauna and drink Whiskey. This coup attack was damn ruthless I am shocked and happy he made it through.

    Then I came across an article saying Biden sanctioned Lukashenko for breaking international norms and migrant issues. he could no longer use shipping lanes to export his Potash. So sinister.

    Now Belarus and Russia won’t be able to export and the US and many other countries totally stunted because we need it and we need it because we are not mining our own Potash.

    When you read the sanction order you can’t help but get pissed. I know this depravity is just a tiny part of the things they are doing,

    US imports 90% of its potash, mostly from Russia, Belarus, and Canada. Imported potash is more expensive than domestically produced potash, of course, but the supply chain is also Fastly more susceptible to failure.


  5. The all knowing all wise “Western” governments will have a solution to the fertilizer problem, they’ll buy processed Chinese sewage to put on their crops.

  6. It appears the Russian oligarchs got caught with their pants down. They can’t be too happy with Putin right now. I don’t think anyone in Russia is happy with him. I wouldn’t rule out some coup attempt to remove him.

    • The oligarchs will land on their feet. Unless Russia has a complete overhaul there will always be more money. Putin saw a threat in NATO. He is protecting his country from “wokeness” and this cannot be tolerated by the cabal. Any citizen that understands this will have no issues with Putin.

  7. The is simply a continuation of the war against the west. From weather warfare to plandemic to economic and now the final touche starvation of raw materials and food.It’s fourth generational warfare. Their magic money system is collapsing, They have stolen the pensions both government and private. They don”t need worker bees any more with their AI

  8. We may have some problems for the next couple years until new suppliers are established, but this is nothing compared to how much it will hurt the soviets. Case in point we are not shutting down our stock market.

    Another thing is that if you were an Eastern European country wouldn’t you want to be part of NATO? If you had endured 50+ years of Soviet occupation wouldn’t you want an alliance to prevent that from happening again? It’s not all one sided.

  9. As some have pointed out, these sanctions could backfire by accelerating de-dollarization:

    Follow the money: how Russia will bypass western economic warfare

    Hudson remarked how he is “simply numbed over the near-atomic escalation of the US.” On the confiscation of Russian foreign reserves and cut-off from SWIFT, the main point is “it will take some time for Russia to put in a new system, with China. The result will end dollarization for good, as countries threatened with ‘democracy’ or displaying diplomatic independence will be afraid to use US banks.”

    That is, assuming the rest of the world, especially China, can get its shit together on this and come up with a credible alternative to the USD — which is something they should have been working on feverishly already.

    There can be no doubt that many nations see the lack of fiscal discipline in the US, the unending creation of vast numbers of fiat dollars, as an amoral abuse of the USD as ‘the world’s reserve currency’; as something that undermines the legitimacy of American hegemony.

  10. I like the laundry list of crap companies that are boycotting Russia. I won’t go line by line but these are garbage corporations that haven’t put out quality products for years. Ford, Harley Davidson? Are you kidding? Over-priced junk. Both companies depend on their maintenance packages to stay in business. YES they depend on their products failing in order to make money. It’s a joke and in my opinion they are doing Russia a favor. The automotive business has been a hustle for a long time. Maybe Russia and China can build dependable vehicles that don’t fall apart after 5-10 years. Or maybe they can make an alternative fuel vehicle that doesn’t suck and doesn’t cost a fortune. Fuck American corporations and their money grubbing capitalist schemes.

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