How Sanctions Shape the World (and Your Investments)

Forget bombs and battleships. The U.S. has a new weapon of choice in its global arsenal: economic sanctions. With a third of the world's nations currently under U.S. sanctions, the impact of these policies is reverberating across the globe, reshaping alliances, fueling technological races, and creating both risks and opportunities for investors.

This newsletter delves into the complex world of U.S. sanctions, exploring their historical context, real-world consequences, and potential market implications. Get ready to uncover the hidden power dynamics shaping our world.

• Check out today’s sponsor. We will not waste your click!

• Take a look at TradingView to enhance your investment strategies!

If you enjoy this newsletter, please consider sharing it with your friends and business contacts. Click the button below:

Join the poll and share your thoughts on investment portfolios.

Like, comment, and express your opinions on the pros and cons between Kamala and Trump!

Understanding U.S. Sanctions

The U.S. government imposes sanctions on roughly one-third of the world's nations, significantly more than any other country or international body. These sanctions are three times more numerous than those enacted by Switzerland, the European Union, and the United Kingdom combined. Sanctions have become a primary tool for U.S. presidents to influence global affairs without deploying military forces. While they are designed to cripple economies, alter political dynamics, and create instability in targeted countries, their effectiveness and long-term consequences are complex.

The Historical Use of Sanctions

Bill Clinton Era: A Unique Approach

• Sanctions vs. Removals: Bill Clinton's presidency was notable for his balanced approach, where he lifted more sanctions than he imposed.

• Legacy: This strategy highlighted a departure from aggressive sanctions policies seen in other administrations.

George W. Bush and the War on Iraq

• Increased Aggression: Bush’s administration increased sanctions as part of its broader strategy against weapons of mass destruction.

• Impact: This approach coincided with the Iraq War, showing a shift towards more aggressive economic measures.

Obama’s Consistent Sanctions Policy

• Stability in Numbers: Barack Obama maintained a steady rate of sanctions throughout his presidency.

• Warnings: Treasury Secretary Jack Lew warned about the risks of overusing sanctions, suggesting that doing so could diminish their effectiveness.

Trump’s Record-Breaking Sanctions

• Unprecedented Numbers: Donald Trump’s presidency saw the imposition of over 2,000 sanctions in a single year.

• Targeting Key Nations: The focus was on China, Russia, and Venezuela, the latter leading to significant controversy.

Biden’s Sanction Surge

• Historic Figures: Joe Biden set a new record by issuing over 6,000 sanctions within two years.

• Trend: This increase illustrates an ongoing reliance on sanctions as a foreign policy tool.

Case Studies of Sanctions' Impact

Venezuela: A Cautionary Tale

• Objectives vs. Results: The aim was to topple the Venezuelan government and induce economic collapse. However, the sanctions led to severe economic contraction, the worst in modern history for a non-war country.

• Humanitarian Crisis: The strategy failed to unseat President Maduro and instead resulted in mass migration and severe hardship for Venezuelans.

Cuba: A Longstanding Embargo

• Decades of Failure: U.S. sanctions on Cuba have been in place for over 60 years with little effect on the government but significant suffering for the Cuban people.

• Ongoing Issues: The embargo has impacted Cuba's essential services and living conditions.

Iran: Stagnant Policies

• Enduring Sanctions: These sanctions were imposed over 50 years and aimed to alter Iran’s government. Despite this, the Iranian regime remains and has strengthened ties with Russia and China.

Syria: Prolonged Struggle

• Sanctions and War: U.S. sanctions against Syria, which have lasted 20 years, have failed to dislodge the Assad regime. The country continues to face severe humanitarian needs due to ongoing conflict.

The Broader Consequences

Global Shift in Alliances

• Economic Warfare: Over 60% of low-income countries are currently under U.S. sanctions. This has pushed many to seek new economic partners, boosting China's global influence through initiatives like the Belt and Road.

• European Response: Italy's recent re-engagement with China highlights shifting allegiances driven by economic needs.

Impact on High-Income Countries

• Allied Tensions: The Biden administration’s consideration of sanctions against Japan and the Netherlands for their dealings with China exemplifies a broader trend of using sanctions even against allies.

Technology and Sanctions

• Semiconductor Industry: The U.S. government’s control over crucial semiconductor technology, mainly through Dutch company ASML, represents a strategic advantage in the ongoing tech rivalry with China.

• Stock Market Reaction: News of potential sanctions or restrictions can significantly impact stock prices, as seen with ASML's recent market performance.

The Future of Sanctions and Global Relations

The Evolving Geopolitical Landscape

• Sanctions as a Tool: The continued use of sanctions reflects a broader strategy of economic pressure in global diplomacy. However, their effectiveness is increasingly questioned, especially when they fail to achieve their goals.

• Economic Shifts: The rise of new economic alliances and technological advancements continues to reshape the global order.

Opportunities in the Drone Industry

• Domestic Growth: The U.S. and EU's push to reduce reliance on Chinese technology opens opportunities for domestic companies, particularly in the drone sector.

• Investment Potential: Companies like Unusual Machines are well-positioned to benefit from increased demand for domestically produced drones and related technologies.

Wrapping up

1. Sanctions Overview: The U.S. has become a leading user of economic sanctions, with a notable increase in recent years.

2. Case Studies: Historical examples from Venezuela, Cuba, Iran, and Syria illustrate varying successes and failures in sanction policies.

3. Global Impact: Sanctions influence international alliances and economic strategies, pushing countries towards new partnerships and technological advancements.

4. Future Trends: Monitoring the evolving landscape of sanctions and their impact on global markets and technology is crucial for understanding future geopolitical shifts.

Note: As you explore the impacts of U.S. sanctions and their broader consequences, consider how these policies shape global relations and economic strategies.

Stay informed about industry trends, particularly in emerging sectors like domestic drone manufacturing. Watch out for the next episode!

If you enjoy this newsletter, please consider sharing it with your friends and business contacts by clicking the button below. ⬇️ 

That’s it for this episode!

Thank you for reading this far. Please share your thoughts and join the conversation in the comment section below.

About The Modern Warfare

We strive to provide insightful and unbiased reporting on the most pressing issues of our time. Subscribe to our newsletter to stay informed and ahead of the curve.

Stay informed. Stay vigilant. Stay ahead.

The Modern Warfare Team

Disclaimer: This newsletter is for informational purposes only and should not be construed as financial or political advice.

Paying the bills

Our newsletter is powered by #beehiiv, which partners with trustworthy and high-quality advertisers. We receive payment from the advertisers for each verified click. You may find something valuable by clicking to explore the products or services being promoted. When you click, not only do you have the opportunity to benefit from the ads, but you also help support our efforts to improve our newsletter for you as our readers or listeners. All profits are reinvested into growing our newsletter to provide greater value to you. Your genuine engagement with the ads would mean a lot to us.

Today’s sponsor is…

Affiliate of the day

What is Alpha Picks?

Two data-driven stock picks each month to hold long-term

Access to all Alpha Picks (over 20 stocks) on day 1

The stock picks cover multiple sectors

The performance to date has significantly outperformed the S&P 50