The Many Consequences Of US Sanctions On Russia

     Either the United States intended to cause all of the ripple effects of sanctioning Russia, or these were unintended consequences. When Russia invaded the Ukraine 2 years ago and the US seized their assets including their gold that we were holding, the rest of the countries on the planet that had gold reserves with us took notice and started requesting their gold back from the United States. What if the US got mad at them? In Africa former French colonies also started requesting their gold back from France, who holds 50% of their gold while they use 2 different kinds of French African francs. Then in India there is a city called Surat, also known as Diamond City because they import and cut up to 90% of the world's diamonds. The US sanctions on Russia means that they can't import, cut or sell Russian diamonds. Before the sanctions were imposed, it is claimed that 20% of all diamonds coming into Surat were from Russia, but around 9 months ago 50% of all Diamond cutters in the city of Surat were laid off, totaling nearly 25,000 employees.

     Russian diamonds are considered the highest quality in the world and were used exclusively by Cartier until the US sanctions. Russia produces 35% of all of the diamonds on the planet and because of their strategic partnership with India, it makes sense that India was actually importing more than 20% of their diamonds from Russia, which accounts for the fact that they laid off 50% of their workers. It sounds like they were importing 50% of their diamonds from Russia before US sanctions.

     Lab grown diamonds were already being grown at one facility in Surat, India that increased production to try to make up for the fact that India couldn't sell Russian diamonds to the West, and 9 months ago they already had 2,000 total employees of which 1,000 were diamond cutters. And then the Indian government committed around ¾ of a billion USD to building more factories like the working one in Surat. When the US stops sanctioning Russia and India can sell their diamonds again they will also have their own domestic Lab Grown diamond industry right there in Surat.

     BRICS is an alliance of Brazil, Russia, India, China and South Africa that together are opposed to the United States and the West and many other countries have joined them. For more than a year they've been talking about having a unified currency backed by gold, and BRICS countries have been continuing to buy gold at record paces for their central banks for the last few years now, possibly the main reason that gold prices have continued to rise. BRICS is currently either trading between member nations in digital RMB, the Chinese digital version of their money, or trading between countries in their domestic dollars, as when Saudi Arabia (who plays both sides) sold oil and gold to India last year and took Indian rupees instead of USD for the oil and gold. Saudi Arabia has been flirting with all sides, but has now been trading oil to many other countries for their domestic currency and not in USD, like they did with India last year. After 50 years of US money being the dominant currency on the planet for all forms of international trade, the era of the petro-dollar has ended.

     The petro-dollar ended due to BRICS courting Saudi Arabia, BRICS has become stronger every year now, Russia has become the preferred security partner for the Association of Sahel States, former French colonies in Africa kicked France and the United States militaries out, half of all diamond cutters were laid off in India, and the embargo on Russian diamonds forced India to go all in on Lab Grown diamonds to fill the gap. It seems like a reasonable question to ask, but was all of this deliberate or unintended consequences?

     Then a little over a month ago DeBeers announced that they were getting out of their Light Box brand of lab-grown diamonds and were dropped their prices from $1,500 a carat to $500 a carat for H Color and SI Clarity, causing the intended collapse in price for all Lab Grown diamonds. All of the articles mentioned that India is producing Lab Grown CVD diamonds, and the city of Surat now has 8,000 CVD reactors producing better quality grades of white diamonds than Light Box. That is what collapsed the diamond market, not DeBeers getting in and out of the Lab Grown diamond market with their 5 year stint with Light Box. Curiously lacking in all of the coverage about DeBeers getting out of the Lab Grown diamond market was how the embargo on Russia forced India to double down on the Lab Grown diamond industry, literally doubling the amount of reactors in Surat and investing ¾ of a billion dollars.

     So the sanctions on Russia 2 years ago ended the petro-dollar, laid off half the diamond cutters in India, drove the price of gold up and the price of diamonds down, and all because the United States sanctioned Russia after they invaded the Ukraine to specifically, “demilitarize and de-Nazify,” the Ukraine. The demilitarizing was specifically referring to US military equipment delivered to the Ukrainians after the results of the pro-US Ukrainian Coup almost 10 years ago called the Maidan Revolution. It took the Russians only 18 days to destroy every piece of military equipment the Obama, Trump, and Biden administrations had delivered to the Ukraine over 8 years, then Putin declared mission accomplished. Of course the US just sent in more equipment to drag the war out to over 2 years now, but the war does not just affect the citizens of the Ukraine and Russia, due to the US sanctions of Russia even things like the price of gold and diamonds are being affected.