It has been more than 3 weeks since Russia invaded Ukraine. Where are we now and what is the long end game objectives of all parties? Multiple discussions had been waged on how it is developing and where is this going from here as we try to filter out the noise.
Russia is finding that it is getting harder to conquer a country as large as Ukraine. The citizens’ resistance is much stronger than previously thought. Putin had fired the intelligence officials who told him that this invasion was a walk in the park and its people will welcome the victorious forces. Having EU and US supplying an almost unlimited weapons supply line, especially the anti-aircraft Stinger missiles and anti-tank Javelins, has made a conventional war extremely difficult for Putin.
It only takes a small band of resistance fighters armed with these weapons to stop a 42 kilometres convoy of tanks in its tracks. Fighter jets get shot down from the sky even as they try to aim for aerial superiority. The only way is to apply brute force via shoot and forget missiles. This was what the US did for Iraq to try to flatten a city and reduce the morale of its inhabitants.
The latest price estimates are that the invasion is costing Russia $15 billion per day. With half of its $600+ billion reserves being locked and sanctioned at the moment, it means that money could run out within 20 days (300/15). And we are already into the 3rd week now.
The economic sanctions on Russia will be starting to hurt now. Biden is increasing his rhetoric to poke the Russian bear by calling him names, a skill of his predecessor. The longer the war goes without a decisive victory, the higher the probability that Putin will have to stop the invasion engagement, so the thinking goes. An early May date is perhaps the longest that Putin can last, according to the military experts.
So it is in the interest of the Western world to prolong this situation until the invader runs out of ammunition to fight on. But this could make Putin even more desperate for a win and cyberwarfare, chemical and nuclear weapons may be considered fair game by then.
Everyone seems to be supplying their expiring weapons to Ukraine. The biggest winners are going to be the American military manufacturers because there will be new record orders for 2022 to replenish their stock inventory. Every European country is finally going to increase their defense budget now, something that the orange one was complaining about EU not putting in its fair share a few years back.
Interesting fact: The Russian are now accusing America of having Bio-Labs in Ukraine that may be producing bio-hazard weapons like anthrax. The US is denying it although someone testified in congress that they indeed do have labs to collect virus samples there. Strange that this is the same charge the US placed on China for Covid the last time. A ironic pot calling the kettle black situation?
While the US is rallying the world against the invader, one should not forget that America had also done similar “invasions” previously – Iraq, Vietnam, Korea, Libya etc. The Russian invasion of Ukraine is fundamentally wrong but the accusers cannot claim that their hands are clean too.
We are starting to see double standards being applied everywhere and this war has stirred up the distrust we have on news media which usually tell only one side of the story most of the time. There are multiple layers to every situation and like an onion, we need to peel off the layers to try to dive deeper to discover the truth for ourselves and make up our own minds based on further research.
I wrote about the end game a few weeks ago and what is the objective of invading Ukriance. Could Putin and Xi be trying to get out of the US controlled SWIFT payment systems as a longer term goal? SWIFT was always America’s financial “gun pointed at the head” threat everytime a country is “disobedient” to the wishes of the US.
Russia might accept RMB/CNY as payment for their sale of oil to China from now on. Commodities will stop being priced only in USD going forward, breaking the SWIFT grip on the balls of every country. Even the oil rich Middle East countries like Saudi Arabia is thinking of accepting RMB soon.
It is starting to happen for India too, based on a Financial Times article today. Russia is one of their top trading partners and they cannot just stop trading suddenly with them without having an adversed economic impact on their economy. They are exploring having a payment system using INR for their deals with Russia now.
The world now can have their reserves in RMB or INR in the future and this will diminish our reliance on the almighty USD. The Pandora box had been opened by the Ukrainian war.
Covid has been sidelined by Ukraine news recently even as countries relaxed restrictions while Omicron surges are still happening. South Korea just hit a new high of 600+k daily cases 2 days in a row. Hong Kong is into fire fighting mode now. Even China is not spared.
If we look at the positive cases now, the new Omicron variant BA2 is taking over as the main culprit. It is 50 to 75% of the new cases now. Are we seeing a worrying trend ahead? Will we see new mutations in the horizon or is the virus evolving into a non-lethal strain eventually and becoming endemic like the annual flu strains?
An interesting thing happened to me last week. I was betting that China stocks may have bottomed out after the horrified slow death caused by the authorities breaking up the company with fines and sanctions. I decided to invest my remaining SRS funds into a number of China focused mutual funds but had to suffer more melt down into early this week. Until a sudden announcement from the Chinese agency that they are done with the penalties caused a big China market rally into Friday. What a ride in these crazy times…
Leave a Reply