It has been a tense week as the world watched in horror at the invasion as it advanced in real-time. It is like a sickening movie that is unravelling where no one knows what the ending will be like.
The online media has been bombarded with images and stories about how the Ukraine war waged by Russia is evolving. Sites like LinkedIn have heartwarming writeups of ordinary people facing their bleak situations of being personally caught up in this one-sided war between a bully and a smaller country fighting for its survival.
The world watched and debated on how it can help to stop this senseless war. No country wants to send in troops as it could trigger an escalation of the war. Even as stronger sanctions have been implemented, it will take time for them to filter down for their effects to be felt by the aggressor.
Real-time updates provided us with a glimpse of the bravery of the Ukrainian people as we witness the helplessness of the vulnerable children and women who are exposed to a situation beyond their control. Families are torn apart as the men are to remain to defend the cities while the rest of the family heads for safety in a neighbouring country as war refugees.
It is frightening for people who have never held a gun before in their lives to now volunteer to jump into a battle operation to defend the cities. Potentially, they have to kill an enemy or be killed. The call for overseas Ukrainians to return home to defend the motherland has also resulted in at least 500,000 going back to the country.
Even as Russia threatens a heightened nuclear alert, many still believe that this option will not and cannot happen as it will be truly MAD (Mutually Assured Destruction). What can unfold next even as Russian troops are now encircling each Ukraine city? They are slowly tightening their grip after days of bombardment.
A new war dimension is starting to rear its ugly head… The new pillar of Cyber Warfare will likely be escalating in the coming days and weeks. It is a relatively effective recent way of inflicting maximum pain via a small and superior number of individuals. Russia, China and North Korea have been at the forefront of this recent threat to steal data, create chaos and even ransomware for years.
Apparently, Ukraine is one of the top places where there is a lot of cyber talent in Europe for tech companies (eg. Grammarly HQ is there). Now there is a global call to arms to use Cyber Warfare to fight against Russia. Ukraine is uniquely positioned to execute this defence strategy against the enemy. Even the famous hacking group Anonymous had recently declared war on the invader.
Instead of heading towards nuclear warheads, this may be a new stepping stone to higher escalation before we go thermonuclear. Russia has been training for this for years. Examples include elections meddling in Brexit and Trump’s 2016 elections. Shutting down legacy computer systems to cripple national infrastructure and stealing from crypto wallets are other possible vectors of attack.
We have already seen Russian bots do DOS (Denial Of Service) attacks on Ukrainian systems to jam up the information highway. Elon Musk and StarLink to the rescue and internet access is maintained! It will be insightful to see how the invaded country will fight back via Cyber Warfare tactics.
What is Putin’s end game? Everyone thought that it was going to be the Crimea annexation all over again for the 2 new regions. But he now seemed determined to capture the whole country, city by city. Is that the main end game? Another theory had surfaced in the past few days which is worthy of consideration.
It concerns the SWIFT system that banks have used for many years to allow the transaction of funds across the world. It is mainly for the movement of USD and major currencies. America had been using this as a threat to cut a country off from international finance to choke its economy. This option has now been activated against Russia this week.
China and Russia have been planning for years on a strategy to neutralize this threat which can severely impact their economies. What if Russia intentionally wants to be kicked out of this system so that it can implement an alternative to SWIFT? It now has a strong ally in China (the parties have recently established Renminbi (RMB) swaps lines against the Russian Rouble (RUB)).
As a top oil producer, Russia can now force all the buyers of its oil to pay in RMB instead. This will decouple oil from only being priced in USD internationally and break away from the SWIFT financial handcuff. China also wants its currency to become more acceptable globally. They have enough of buying US Treasuries to support America’s deficit. It may seem to be a bit farfetched but anything is possible in these times.
Once the SWIFT sanctions were announced this week, the immediate beneficiary was cryptos. In order to move funds out quickly before all the financial pipelines were shut, cryptos were a quick alternative. Prices surged in the next 48 hours as a mad scramble to head for the exits followed.
Suddenly, Covid news has been sidelined for the last 2 weeks. We hardly hear much of this topic now, even as Asian countries are still waiting for peak Omicron to happen. HK and South Korea are currently suffering from record high positive cases as the contagious variant overwhelms their medical facilities.
S’pore is also in the same boat but a higher vaccination rate has limited the fatality count. Most do have mild symptoms and recover well. We have already seen at least 10 cases within our immediate family and none needed serious hospitalization treatment. It is highly likely that all of us will get it eventually. A recent report suggests that as many as 43% of Americans may already have been infected by Omicron.
The continued meltdown of asset classes, except for oil and gold, continues as uncertainties push many to position for a risk-off strategy. This is going to be a very long March month where every day is full of exciting turns and twists of events. Many are already invested in the markets. The question is do you average down, cut losses or do nothing? It is a very tough call now.
Leave a Reply