Once again, I wake up to see that the Ukraine war is not over, but it's spreading.
That's bad news for Russia. Especially since the rest of the world sees that Russia is losing badly. Unfortunately, Ukraine is also being destroyed in the process. It will cost quite a bit to rebuild Ukraine when all this is over.
The Russian economy is collapsing due to economic isolation from the west. It has significant gold reserves, but can't sell gold for a bunch of reasons. The current sanctions target money inside Russias’s foreign exchange reserves. But those holdings in EUR and USD are frozen. And for the people who think gold and currency based money are a good thing. Well, the gold market is simply not very liquid. Never in history did the aggregated sales of all central banks (CBs) exceed 400 tons in a year. And when that happened, gold market participants were already accusing CBs of “market manipulation”. Gold only has value, if “gold whales” (i.e., the central banks) aren’t selling it.
While Russia has 2000t of gold. There is just absolutely no way Russia could sell more than 5-10% of its gold reserves within like a month. If Russia was starting to sell, prices would plummet, as there is simply very little market depth in the gold market. Compare that to FIAT currency which is backed by a solvent central bank.
Case in point, the US Treasury bond (UST) market has basically infinite market depth, which was proven in March 2020. If the value of USTs falls below future cash flows become discounted, the Fed will step in. See: https://threadreaderapp.com/thread/1499339625671938052.html
Aside: And cryptocurrency: who is backing that? Seriously, you're fucked if someone starts dumping cryptocurrency since it isn't backed by much of anything other than the "block-chain".
The bottom line is that this war hasn't been working to Putain's plan: militarily or economically. The longer he holds out, the worse the outcome for both Ukraine and Russia. Ukraine is physically ruined and Russia is economically ruined. While Ukraine can rebuild, it won't be too long before Russia collapses...Again.
A Chinese observer gives a good reason for stronger involvement from the West:
The conflict may escalate further, and the West’s eventual involvement in the war cannot be ruled out. While the escalation of the war would be costly, there is a high probability that Putin will not give up easily given his character and power. The Russo-Ukrainian war may escalate beyond the scope and region of Ukraine, and may even include the possibility of a nuclear strike. Once this happens, the U.S. and Europe cannot stay aloof from the conflict, thus triggering a world war or even a nuclear war. The result would be a catastrophe for humanity and a showdown between the United States and Russia. This final confrontation, given that Russia’s military power is no match for NATO’s, would be even worse for Putin.The hope is that Putain is rational, but the current situation demonstrates he is not. I know that at least Lithuania is on an alert status. I would also guess that Poland, Hungary, Slovakia, and Romania are as well. Those countries are NATO members and an attack on them would trigger NATO involvement.
The longer this lasts, the worse the outcome for everyone--worldwide.
One more comment (adding). Kyiv Independent reports:
⚡️Defense Ministry: Number of Russian casualties hasn't changed for days due to slower offensive.
— The Kyiv Independent (@KyivIndependent) March 13, 2022
The official data showing over 12,000 Russian troops killed hasn’t change since March 8 because of decreased confrontation, according to Deputy Defense Minister Hanna Malyar.
Sources and Other interesting reading:
- Russian economic collapse will be hard to avoid
- Possible Outcomes of the Russo-Ukrainian War and China’s Choice
No comments:
Post a Comment