While Obama has ruled out any military engagement with Russia, Death of Money author James Rickards tells us the U.S. has already moved toward financial warfare with the use of sanctions (prior to the new sanctions announced Thursday, the U.S. had announced sanctions against seven key Russian officials).
"Financial warfare is really all we have ... the U.S. has to be seen as doing something," he tells us in the above video. Rickards, also the portfolio manager of the West Shore Funds, does not expect the U.S. will levy severe sanctions against Russia because Russia can fight back. He argues if the U.S. does something more extreme like freeze Putin's assets, Russia can refuse to pay dollar debt or freeze U.S. assets -- even unleash their hackers to take down the NYSE.
"No one wants to go there," Rickards says. "Doing weak sanctions ten times is not the same as doing strong sanctions once. The fact that the president has new sanctions today does not mean they will be effective."
Russia did announce sanctions against nine U.S. government officials in retaliation Thursday. Lawmakers such as Senate Majority Leader Harry Reid and House Speaker John Boehner were included in the list.
A Kremlin aide Thursday said Western sanctions don't have much sting. And we've heard rhetoric from a Putin advisor that Russia can dodge any U.S. sanctions by switching to other currencies and creating its own payment system, but Rickards says that isn't really feasible in the short run. Check out the video to see why.