🌍 Holding the sanctions line pushes the pain onto emerging markets

“what's going to be very, very difficult is the impact that this has on emerging markets in Southeast Asia, Asia, Africa could be really, really deleterious for some amount of time. ... I think that that is actually really the risk that I think holding the line on these sanctions really does. It pushes the risk towards EM countries.”

“It's going to cause a humanitarian problem. It's really friggin sad. And it's, you know, whatever progress has been made could be unwound.”

“we engage in economic sanctions and I was the first one to say, hey, this could really work and this could be a roadmap for how to do it. And it turned out this is the roadmap for how not to do it. ... These sanctions were so porous as to be like Swiss cheese.”

“As a result, a lot of dollars are moving out of emerging market debt into US debt, and the price of that debt has collapsed. We've seen in the last couple of months a decline of emerging market debt of about 20 percent. This makes it harder for those countries to issue new debt to fund things, and it's creating this really challenging spiral that may ultimately lead to defaults.”

“And what's really important here is that as goes Sri Lanka, so goes Ghana, so goes Pakistan, so goes a whole bunch of countries where you're already starting to see food riots, food insecurity, energy insecurity, rampant inflation, sovereign defaults.”

“And if that happens, then you could see massive civil unrest. He's been encouraging the population in Brazil to go to the streets and fight back. And there are a number of these flashpoints. And by the way, that's a massive food supplier, as well as a massive holding in EM credit portfolios around the world.”