3 Ways the Crisis in Ukraine Could Cost You

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Ukraine
Associated Press/Vadim Ghirda
As of this moment, Russia appears to be in complete control of Crimea. Of course, for many Americans, this may seem very far away and not very relevant to their lives. But whether you realize it or not, there are at least three ways in which the crisis in Crimea could directly affect you -- hit your pocketbook.

Food

Ukraine is the world's third-largest exporter of corn, and the sixth-biggest wheat exporter. The country's most prolific wheat-producing regions lie in Russian-leaning eastern provinces -- where demonstrations against Ukraine's new government, advocating secession from the country to join Russia -- are near-daily occurrences. Just as important, much of Ukraine's wheat leaves the country via the ports of Odessa, Nikolaev and Yuzhny -- all in regions that are a hotbed of dissent now.

Result: Since bottoming at $5.58 per bushel at the end of January, the price of wheat futures contracts for delivery in May have soared 17 percent to $6.54 per bushel in morning trading Monday. (A "bushel," by the way, is 60 pounds) Nearly half that rise came during the past week.

True, America grows most of its own wheat and corn and doesn't need Ukrainian exports. But these are commodity products. If buyers who ordinarily shop for their grain in Ukraine can't get it there, they begin competing with buyers here for "our" grain -- driving up prices for American consumers of bread, cereal and pretty much everything listing wheat as an ingredient -- hot dogs and apple pie included.

Gas

Do you own a car? More precisely, do you own a car that uses gasoline? Then if you'll pardon the expression, here in the context of a war scare -- you may have just dodged a bullet.

Futures prices for Brent crude oil Monday are mostly flat compared their cost one month ago -- still in the $100 to $102 a barrel range. But that could change in a hurry. News of Russia's invasion of Crimea sent Brent prices spiking 2 percent last week on worries about Russian President Vladimir Putin's intentions, and what happened once could easily happen again.

A big exporter of energy to world markets, Russia has often used its massive oil and natural gas supplies as a tool of foreign policy. While last week's early price spike has subsided, it could repeat if Russia decides to use its control over those fossil fuel supplies to retaliate against the U.S., Canada and the European Union for the sanctions they're threatening to impose.

Travel

One sanction, announced Thursday, calls for the U.S. to restrict visa issuance to "anybody who is involved or complicit in activities that are threatening the sovereignty, territorial integrity or stability of Ukraine." The Obama administration isn't saying whom, precisely, it will target. But in years past, tightened requirements for admission of Russian citizens to the U.S. have met tit-for-tat restrictions on Americans wanting to visit Russia.

For example, when in 2011, the U.S. banned several Russians, connected to the death of Russian lawyer Sergei Magnitsky, from entering the U.S., Russia's Foreign Ministry wasted no time assembling a similar list of U.S. government officials to be made unwelcome in Russia. In 2002, when the U.S. State Department began requiring Russians applying for U.S. visas to list the countries they had visited over the previous 10 years, to provide contact information for their employers and to divulge other personal information, it wasn't long before Russia began demanding the same information from U.S. tourists.

It's hard to predict what kind of blowback U.S. sanctions on Russians hoping to travel to the U.S. might entail for Americans desiring to travel to Russia to see the "White Nights" in St. Petersburg, ogle the crown jewels of the Kremlin or ride the Trans-Siberian Railway. But based on past experience, it's pretty certain we will see some form of retaliation.

Motley Fool contributor Rich Smith has no position in any commodities mentioned above. A financial writer and analyst today, he previously spent more than a decade working in international law, primarily in Russia and Ukraine.​

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16 Comments

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worried man

Much porno comes from that area so your subscription bills will go up...uh oh !

March 10 2014 at 11:07 PM Report abuse rate up rate down Reply
worried man

The price of everything is going up because people are broke and cannot buy like the maniacs they were for the last 15 years

March 10 2014 at 11:03 PM Report abuse rate up rate down Reply
Iselin007

Some Sattelites can read a license plate which kind of says maybe somebody can see you hiding? Your enemy might down load a photo from the Internet.

March 10 2014 at 9:33 PM Report abuse rate up rate down Reply
1 reply to Iselin007's comment
worried man

There is a drone at your window ...right now video taping you

March 10 2014 at 11:08 PM Report abuse rate up rate down Reply
Iselin007

This should be interesting with the proliferation of hand held cellphones with video cameras warring parties could make having a war very difficult to carry out with out someone just giving away their positions ect. Maybe technology will just screw up everyone else's plan of conquest ect.

March 10 2014 at 9:27 PM Report abuse rate up rate down Reply
Iselin007

It's kind of strange how one of the supporters of the Viet Cong got our factory jobs but now they being asked to intercede between the Russia and the Ukraine. Gee maybe they can hand our SSI over to China and bake them a cherry pie!

March 10 2014 at 9:02 PM Report abuse +1 rate up rate down Reply
Iselin007

You think heathcare costs are expensive now just wait until the medical profiteers start billing for another world war's injured. If the war came here few citizens could not afford the outragious cost! Companies cut workers here just to avoid the rising cost of medical insurance but now with the return to sweat shop productivity few handicapped would ever get hired.

The world and it's people aren't perfect but today many greedy businesses expect Olympic Gold Medalists just for a crappy minimum wage job!

March 10 2014 at 8:53 PM Report abuse +2 rate up rate down Reply
Iselin007

The Russians have one of the largest diamond mine fields in the world if they choose to they could put them on the market an bankrupt Debeers while driving prices down world wide!
I would not like to see either of these countries harm each other. Many of us came originally from Europe an while many of us have English surnames our ancestors were from Normandy /Denmark ect. : /

March 10 2014 at 8:35 PM Report abuse rate up rate down Reply
1 reply to Iselin007's comment
worried man

Then maybe I could afford one

March 10 2014 at 11:05 PM Report abuse rate up rate down Reply
Iselin007

This time we won't need a draft lottery anybody with a work visa that is draft age goes. :)

March 10 2014 at 8:20 PM Report abuse +2 rate up rate down Reply
Iselin007

This could be a disaster for companies employing any one on any of the variations of H1B visas use to displace American workers because if war broke out Americans would get their jobs back but the visa workers of draft age would be huffing it to the front lines.

March 10 2014 at 8:13 PM Report abuse +2 rate up rate down Reply
1 reply to Iselin007's comment
worried man

sounds good to me

March 10 2014 at 11:01 PM Report abuse rate up rate down Reply
drusus5845

Well the Mongol hordes have raised their faces again. Oriental Russia with its different social values created the gulags, legalized serfdom in the 20th century and a totalitarian state. Alexander the Great and nebuchanezar were more benevolent than Czar Putin.

March 10 2014 at 4:08 PM Report abuse +1 rate up rate down Reply