Political Posts

[Viking]

The interesting part of the Ukraine war the past 2-3 months is the success the Ukrainian army is having reclaiming significant chunks territory back from Russia. Complete shocker for me. My guess is if Ukraine does not take the territory back by force then it will be permanently gone. Russia has already made a legal claim to large swaths of Ukraine. And Putin desperately wants Odessa. So the war will continue because the Russian bear is still hungry for more.  
—————

My guess is Putin is playing the long game (years of war) and counting on the West losing interest at some point a year or two from now. Putin understands his adversary well. Perhaps this is why Ukraine is taking more of an offensive approach the last few months. Ukraine realizes popular/public opinion in the West can be fickle so time is not on its side. 
—————

My guess is Crimea is gone. I would be shocked if Ukraine aggressively went in to Crimea. Unless to use it as leverage to get the rest of its territory back.

———-—-

Hard to see how this ends unless

1.) Ukraine gives Russia mostly what Russia wants… starting with all the territory it has already claimed. 

2.) Ukraine takes it back by force. 
Not much of a middle ground. 

Edited November 13, 2022 by Viking

[Xerxes]

The middle ground is hard to see, because US like a central banker that is distorting the markets, is distorting the longevity of that conflict via unprecedented military aid. I.e. fighting Russia to the last Ukrainian or the last Russian. Whichever comes first, we don’t care. Of course corruption in Russia’ military and years of mismanagement helped as well.

 

If I am Zelensky, and have goodwill of the world, and a population eager to fight and flow of military aids as someone else expenses, do you think I am looking for a settlement ?
 

Biden says “no decision about Ukraine without Ukraine”. That is a cute statement. But Biden was making decisions about Ukraine without Ukraine all the way to the eve of the war. What changed is the carte Blanche that he has given that is making it difficult for him to retract. No one dares arguing with Zelensky, or he is going to raise the “G” word and shame you. He even pushed back on TotalEnergies who was scheduled to receive dividends from a now-closed JV saying that it ought to go to Ukraine.  
 

Make no mistake folks. Everything has a consequence. It is good what we have done so far in terms of aid etc but if you are not thinking/talking through backchannels, you OUGHT to be. 
 

I understand the fairy tale aspect of this conflict, but this is no fuc&&ing cartoon nor it is Star Wars, where “rebels overthrow the evil empire” nor its the “300 Spartans fighting the armies of Xerxes”.

At some point one way or another Putin will be gone, but most likely old age, and from his power-base the next leader will emerge and he may be younger, more energetic and full of ideas and be a hardcore nationalist, bent on revenge ! 
 

Consider this :  for decades following WW2 all that White House could see was a giant sea of Red stretching across the Eurasian mass lands with its very centre in the Kremlin. 
 

The White House was so deep into that Global Red menace thinking that they even feared an invasion by Chinese “volunteers” if they (US) were to invade North Vietnam (recall most of fighting was in the south, north Vietnam was bombed via B-52s). Why ? Because that is what happened in Korea, when they got closed to the Yalu river. Never mind that there was a very deep cultural chasm that existed between Chinese and Vietnamese that would have made that scenario extremely low probability. Never mind that Vietnam was NOT part of China’ red sphere (as North Korea was) but was part of Soviet’ red sphere and even at that was pretty autonomous. And the Chinese counterweight to Red Vietnam was actually Pol Pot and Cambodia. And the two Reds even fought a war in late 70s and early 80s.  
 

So It never occurred to the White House, that sea of Red had different shades of Red until decades later with Kissinger and Nixon. And they successfully exploited those shades. 
 

Bottom line. Don’t get emotional about these things. There is always a bigger picture. 

 

[no_free_lunch]

To the claim of Ukraine supporting anti jewish, anti polish sentiments, the proof against is looking at reality.  The president of Ukraine is.. Jewish.  Poland is one of Ukraine's greatest allies at the present time.   Many Ukrainian refugees go there and there is weapon transfer from Poland to Ukraine.

 

Just one example of what is happening on the ground.  This stuff will only accelerate.

 

Quote

Thousands of Ukrainian children reportedly have gone missing since the start of the war on Feb. 24. A growing body of evidence suggests that some of these children have been forcibly taken to Russia. According to Ukrainian Permanent Representative to the U.N. Sergiy Kyslytsya, more than 234,000 children had been transferred to Russia by early June.

https://www.washingtonpost.com/politics/2022/06/14/ukraine-kidnaped-children-russia/

 

Xerxes, they will fight because of the above.  Yes, the future may be even more bleak and yes maybe death for all but better to die fighting I suppose.

[Dinar]

28 minutes ago, no_free_lunch said:

To the claim of Ukraine supporting anti jewish, anti polish sentiments, the proof against is looking at reality.  The president of Ukraine is.. Jewish.  Poland is one of Ukraine's greatest allies at the present time.   Many Ukrainian refugees go there and there is weapon transfer from Poland to Ukraine.

 

Just one example of what is happening on the ground.  This stuff will only accelerate.

 

https://www.washingtonpost.com/politics/2022/06/14/ukraine-kidnaped-children-russia/

 

Xerxes, they will fight because of the above.  Yes, the future may be even more bleak and yes maybe death for all but better to die fighting I suppose.

I get it, you think Bandera and company are wonderful, and murder of hundreds of thousands of Poles and Jews is fine.   I asked you several times point blank if you think Bandera should be a national hero of Ukraine, you never answered.  Your silence is answer enough.   

[Xerxes]

35 minutes ago, no_free_lunch said:

 

Xerxes, they will fight because of the above.  Yes, the future may be even more bleak and yes maybe death for all but better to die fighting I suppose.

Me and you both would have done the same as individuals. That is normal. 

 

That said I cannot comment too much on the back history of polish, Jewish massacres in Ukraine simply because I am not from there, nor studied the country in any particular depth and am missing a fair amount of subtleties. The country seem to be a very diverse federation with different extremes. My interest has always been global affairs and I will happily admit that I am pretty ignorant on individual country histories. 

Edited November 13, 2022 by Xerxes

[no_free_lunch]

22 minutes ago, Dinar said:

I get it, you think Bandera and company are wonderful, and murder of hundreds of thousands of Poles and Jews is fine.   I asked you several times point blank if you think Bandera should be a national hero of Ukraine, you never answered.  Your silence is answer enough.   

 

I don't think of Bandera as wonderful as he joined the Nazi cause.  The Nazi's were horrible for Ukraine and labeled them as sub-human and fit for murder (of those deemed racially inferior) and enslavement of what was deemed the better half. 

 

Now that we are talking, I don't really care what you think but do Russian's view Stalin as "wonderful"?  He was after all one of the greatest mass murderers of the 20th century.  Not just a rhetorical question, it has direct bearing on Ukraine because of the genocide of Holodomor.

 

Quote

In May 2021, 56 percent of Russians polled by the independent Levada Center agreed that Stalin was a “great leader”—double the figure in 2016, when the Stalinization of mass consciousness had already been a clear trend for several years.

 

https://carnegiemoscow.org/commentary/84991

 

You all can call me emotional but I will suggest you cannot understand Ukaine, the rationale for fighting, without understanding Holodomor and the potential for a second version (it is Russia after all) if they lose this war.

Edited November 13, 2022 by no_free_lunch

[Spekulatius]

A quick look in Wikipedia marks Bandera as a controversial figure rather than a hero for Ukrainians.

 

Anyways, the Genozide attribute is a slippery slope, but we do know that the state goal for the Russians is de-nazification of the Ukraine and then there is stuff like this as well as mass graves Bucha , Lyman etc. We have yet to see the carnage that has a occurred amongst civilians In Mariopol which I think will be quite shocking:

Maybe it’s all fake news, but my bet is that it’s close to the truth.

 

As for military objectives, Crimea will likely fall, when Ukraine can severe the land bridge. If the Russians can hold it, it will remain Russian.

Edited November 13, 2022 by Spekulatius

[Xerxes]

Controversial indeed. This is from 2021. Rarely do these things make it across the pond into the mainstream Western media or The Simpsons for that matter. Almost as if we are being spoon fed in terms what we need to know.  

 

https://www.euronews.com/my-europe/amp/2021/08/04/controversy-as-ukraine-mulls-giving-hero-status-to-alleged-war-criminals

“ Seventy-eight Ukrainian lawmakers from all sides of the parliament have proposed to give the title ‘Hero of Ukraine’ to controversial figures such as Stepan Bandera and Roman Shukhevych.”

 

“The Ukrainian parliament will now consider the proposal, which is expected to meet fierce reactions from Poland and Israel if adopted.

Bandera was named ‘Hero of Ukraine’ back in 2010 by outgoing president Viktor Yushchenko, which sparked protests from Poland and Israel before Bandera was stripped of the status again in 2011.”

 

From Wiki:

 

”In 2008, the massacres which were committed by the Ukrainian nationalists against the Poles in Volhynia and Galicia were described by Poland's Institute of National Remembrance as bearing the distinct characteristics of a genocide,^[14][15] and on 22 July 2016, the Parliament of Poland passed a resolution recognizing the massacres as genocide.^[16][17] This classification is disputed by Ukraine and some non-Polish historians.”

 

Anyways, I believe we also committed some genocide against the locals as we built our country here in North America. And have been slow to recognize it from what I gather. 
 

I ll happily admit that I am not exactly up-to-date on this stuff. 

Edited November 13, 2022 by Xerxes

[changegonnacome]

9 hours ago, Viking said:

Putin understands his adversary well. Perhaps this is why Ukraine is taking more of an offensive approach the last few months. Ukraine realizes popular/public opinion in the West can be fickle so time is not on its side. 

 

He sure does......from talking to friends/family in Europe.....they'll do this winter getting squeezed on energy bills in support of Ukraine......but not a second.........I expect once surpluses turn to deficits in the US....and the deficit starts to matter again & with the Republican's in control of the house (investigating Hunter Biden & finding out all the corruption with him/Ukrainian) the narrative is gonna shift to why are we spending so much scarce money over there.

 

Ukraine would be wise to push as hard as they can now with Russians on the back foot and their friends in the West still full throated in their support.

[Viking]

1 hour ago, changegonnacome said:

 

He sure does......from talking to friends/family in Europe.....they'll do this winter getting squeezed on energy bills in support of Ukraine......but not a second.........I expect once surpluses turn to deficits in the US....and the deficit starts to matter again & with the Republican's in control of the house (investigating Hunter Biden & finding out all the corruption with him/Ukrainian) the narrative is gonna shift to why are we spending so much scarce money over there.

 

Ukraine would be wise to push as hard as they can now with Russians on the back foot and their friends in the West still full throated in their support.

Europe has severed its relationship with Russia on energy and pretty much everything else. Finland/Sweden are joining NATO. Eastern European nations (bordering Russia) understand Putin/Russia and understand they are next on the menu should Russia have any lasting success in Ukraine. So they will play an important role moving forward in keeping Europe focussed on the task at hand (getting Russia out of Ukraine and weakening Russia as much as possible).

 

Moving forward, Europe’s energy future will now rest more on decisions Europe makes and less on developments in Ukraine. European energy policy has been a disaster for decades. If Europe continues to do dumb things (like closing down nuclear)… well that is not on Ukraine. Driven by supply issues, the spike in oil prices happened well before the Ukraine invasion. Did the Russian invasion make a bad situation worse? Of course. But that is now spilt milk. 
 

The real story of Ukraine: The West is now at war with Russia and China. The authoritarian model, lead by China/Russia (Saudi Arabia?), versus the liberal democracy model, led by US/Europe/Japan/Canada/Australia/South Korea etc. China/Russia, when they signed their pact in Feb, made their aims clear for all to see. Weeks later Ukraine happened. We are not even a year in to something that is going to run for decades… China has staying power. But the West is slowly catching on. Our world has fundamentally changed. I am not sure where Saudi Arabia sits… but the very public decision to materially cut production right before US mid-terms was certainly interesting. 
 

There is no going back. Thats because the last 20 years was largely a fiction. It never really existed (except in peoples imaginations). The Disney version of communist China was brilliantly marketed by Chinese leaders and gobbled up by a naive West. Of course, the reality of communist China, is much, much different - and much worse. Just ask anyone trying desperately to get out of Hong Hong right now. Xi has revealed himself over the past year for all to see. China is diametrically opposed to the West (that communism vs capitalism thing… not hard to understand). The West got completely played by China the past 20 years. Smart bastards. 
 

But is looks to me like Xi/China might have miscalculated. Their partner, Russia, has completely messed up in Ukraine. And the final outcome is unclear. China still needs the West… this was recently highlighted by the chips act (good luck developing your economy without access to high end semiconductors). The game has just started - the initial moved have just been made. Settle in, it is likely going to take decades before a winner is declared. Your grandchildren will probably be the ones who decide the final outcome.

Edited November 13, 2022 by Viking

[Xerxes]

There is no need for the West to play the “victim card” vis a vis China. 
 

We chose that relationship because supporting Chinese economic development helped our multinational, creating jobs at home etc. lower cost etc. Economy trumped national interest. 

 

Same goes for Saudi Arabia, we arm them to the teeth, creating jobs locally for our defence contractors, knowing full well that only means a more angry Iran, which in turn turns it into a self fulfilling prophecy and a virtuous cycle, with its aggressive actions.  
 

Saudi defence budget of $45 billion vs Iran defence budget of $15 billion. That is great business to be in !!!

 

That said, I don’t expect my fellow westerners to understand these things. 

[Viking]

36 minutes ago, Xerxes said:

There is no need for the West to play the “victim card” vis a vis China. 
 

We chose that relationship because supporting Chinese economic development helped our multinational, creating jobs at home etc. lower cost etc. Economy trumped national interest. 

 

Same goes for Saudi Arabia, we arm them to the teeth, creating jobs locally for our defence contractors, knowing full well that only means a more angry Iran, which in turn turns it into a self fulfilling prophecy and a virtuous cycle, with its aggressive actions.  
 

Saudi defence budget of $45 billion vs Iran defence budget of $15 billion. That is great business to be in !!!

 

That said, I don’t expect my fellow westerners to understand these things. 

@Xerxes my post was not to suggest the West was a victim. One of the most important lessons i am trying to teach my kids is ‘actions / consequences’. Do dumb things… bad things often follow. I also tell them if their world is not going well to start by looking in the mirror. If change is needed that is the best place to start. i also tell them to be rational. And to be rational you have to be able to properly analyze the situation. 
 

What i love is China is no longer pretending. Same with Russia. Even a dummy can figure out what is going on. So the West is slowly figuring it out. Brave new world. 
—————

i have an enormous amount of respect for China, their history, what they have accomplished the past 40 years and what they are capable of. ‘China’s got game.’ Russia, on the other hand, i am not so sure. 

Edited November 13, 2022 by Viking

[Ulti]

26 minutes ago, Xerxes said:

We chose that relationship because supporting Chinese economic development helped our multinational, creating jobs at home etc. lower cost etc. Economy trumped national interest. 

That is certainly correct as well as the same for the coming down of the Berlin

Wall and collapse of the Soviet Union. ( watch Kleo on Netflix; its a great quirky show about this.)  There was (and maybe still is) a sort of naive view of we can make money and promote freedom too. I might be naive also; (and no I'm not a progressive or woke) but I'm for the people ( GO Iranian women; Ukranians etc.)

All these decisions you discuss are made by the elites and people in power of all

countries, not by the general public.

42 minutes ago, Xerxes said:

That said, I don’t expect my fellow westerners to understand these things. 

I DO get it and I'm sure like you,  love, with all our faults,  living in a flawed democratic society. I don't see the victim card with China being played;

I see a readjustment on an initial assessment from Deng to Xi. It's why ,though I have some conservative leanings, will never vote for Trump or any of his acolytes.

[Dinar]

2 hours ago, Viking said:

Europe has severed its relationship with Russia on energy and pretty much everything else. Finland/Sweden are joining NATO. Eastern European nations (bordering Russia) understand Putin/Russia and understand they are next on the menu should Russia have any lasting success in Ukraine. So they will play an important role moving forward in keeping Europe focussed on the task at hand (getting Russia out of Ukraine and weakening Russia as much as possible).

 

Moving forward, Europe’s energy future will now rest more on decisions Europe makes and less on developments in Ukraine. European energy policy has been a disaster for decades. If Europe continues to do dumb things (like closing down nuclear)… well that is not on Ukraine. Driven by supply issues, the spike in oil prices happened well before the Ukraine invasion. Did the Russian invasion make a bad situation worse? Of course. But that is now spilt milk. 
 

The real story of Ukraine: The West is now at war with Russia and China. The authoritarian model, lead by China/Russia (Saudi Arabia?), versus the liberal democracy model, led by US/Europe/Japan/Canada/Australia/South Korea etc. China/Russia, when they signed their pact in Feb, made their aims clear for all to see. Weeks later Ukraine happened. We are not even a year in to something that is going to run for decades… China has staying power. But the West is slowly catching on. Our world has fundamentally changed. I am not sure where Saudi Arabia sits… but the very public decision to materially cut production right before US mid-terms was certainly interesting. 
 

There is no going back. Thats because the last 20 years was largely a fiction. It never really existed (except in peoples imaginations). The Disney version of communist China was brilliantly marketed by Chinese leaders and gobbled up by a naive West. Of course, the reality of communist China, is much, much different - and much worse. Just ask anyone trying desperately to get out of Hong Hong right now. Xi has revealed himself over the past year for all to see. China is diametrically opposed to the West (that communism vs capitalism thing… not hard to understand). The West got completely played by China the past 20 years. Smart bastards. 
 

But is looks to me like Xi/China might have miscalculated. Their partner, Russia, has completely messed up in Ukraine. And the final outcome is unclear. China still needs the West… this was recently highlighted by the chips act (good luck developing your economy without access to high end semiconductors). The game has just started - the initial moved have just been made. Settle in, it is likely going to take decades before a winner is declared. Your grandchildren will probably be the ones who decide the final outcome.

I am not sure that I agree on a couple of points:

 

a) Why do you think China is an ally of Russia?  Perhaps Xi thought that this war was unlikely to strengthen Russia, and perhaps drastically weaken it, which is in China's interest.  What have they done to help Russia, besides buy oil/gas on the cheap, and now Russia has to sell gas to China at a huge discount to LNG prices

b) Why are you surprised by Saudi behavior.  If I call you a murder, will you do a favor for me?  Biden called Prince Salman a murder, and then expects the guy to bend over backwards to help him.  Really?

[Xerxes]

1 hour ago, Ulti said:

I'm not a progressive or woke) but I'm for the people ( GO Iranian women; Ukranians etc.)

All these decisions you discuss are made by the elites and people in power of all

countries, not by the general public.

 

Me and you both.

The men couldn't do it, so hopefully the women can .... lol

[Xerxes]

'Putin's Brain' Turns On Russian Leader With 'King of the Rains' Warning (msn.com)

 

Warning to Putin from Twyin Lannister, oh i mean Alexander Dugin

[Xerxes]

30 minutes ago, Dinar said:

b) Why are you surprised by Saudi behavior.  If I call you a murder, will you do a favor for me?  Biden called Prince Salman a murder, and then expects the guy to bend over backwards to help him.  Really?

 

My view is that would have happened regardless, the OPEC+ production cut was largely in reaction to Federal Reserve interest rate hike. if the latter was/will kill aggregate demand, than that takes away demand from barrels. So a cut was natural step.

 

 

[Ulti]

3 minutes ago, Xerxes said:

he OPEC+ production cut was largely in reaction to Federal Reserve interest rate hike.

maybe mainly due to this ?

[Spekulatius]

@Xerxes I had no idea about this Bandera follow before I heard about it in this board, it’s also interesting that he was in West Germany in 1959 when the KGB do his hit job on him. Not a big loss for mankind, I think.

[Viking]

2 hours ago, Dinar said:

I am not sure that I agree on a couple of points:

 

a) Why do you think China is an ally of Russia?  Perhaps Xi thought that this war was unlikely to strengthen Russia, and perhaps drastically weaken it, which is in China's interest.  What have they done to help Russia, besides buy oil/gas on the cheap, and now Russia has to sell gas to China at a huge discount to LNG prices

b) Why are you surprised by Saudi behavior.  If I call you a murder, will you do a favor for me?  Biden called Prince Salman a murder, and then expects the guy to bend over backwards to help him.  Really?

a) Why do you think China is an ally of Russia?

1.) They both signed a very public agreement in Feb. These things happen every, what, 40 or 50 years? Big deal. And it is long term in nature.
- https://www.newyorker.com/news/daily-comment/russia-and-china-unveil-a-pact-against-america-and-the-west

2.) China is essentially bankrolling Russia right now. That follow the money thing. Without China’s financial support today, Russia would be screwed.

 

Is this good for China? Well, China is getting raw materials on the cheap. But their marriage partner is not holding up their end of the bargain. I think it is safe to say the marriage has started out more than a little on the rocks.
 

b) Why are you surprised by Saudi behavior?

 

I am having a hard time keeping up with exactly what the US / Saudi / middle east relationship was/is under Obama, Trump and now Biden. And what it will be in 1 year and after the next presidential election in the US. And how OPEC overlays over this. And exactly what Saudi Arabia’s relationship with Russia is. 

Edited November 13, 2022 by Viking

[Spekulatius]

@Viking I think the big pact between Russia and China may be more show than a real functional alliance than  NATO. China said OK, you do what you want  inUkraine and let them go first to see what happens. I don’t think they like what they are seeing and the implication for their main target Taiwan.

 

However, it is also telling that China has done almost nothing to help Russia -  No weapon deliveries for most. Russia had to go to a Iran and a North Korea. They saw that Russia got an arrow through their torso with Ukraine and decided “maybe not..at least not yet”.

 

As for the Saudi’s, they just look out for themselves. They buy cheap russian oil and replace what they consume themselves with that cheap oil , so they can export more of their own for full price. Sorry, but it’s just business for us.

Edited November 14, 2022 by Spekulatius

[UK]

What obvious implications possible war ending would have in terms of economies and markets? Perhaps it would be somewhat disinflationary at least in short/mid term? Also bullish for Europe?

 

https://www.wsj.com/articles/as-ukraine-retakes-kherson-u-s-looks-to-diplomacy-before-winter-slows-momentum-11668345883

 

The imminent onset of winter—coupled with fears of inflation spurred by mounting energy and food prices, the billions of dollars of weaponry already pumped into Ukraine, and the tens of thousands of casualties on both sides—has prompted talk in Washington of a potential inflection point in the war, now in its ninth month. The U.S. and its allies are pledging to continue supporting Ukraine, but top officials in Washington are beginning to wonder aloud how much more territory can be won by either side, and at what cost. Some European officials, meanwhile, are more bullish on Ukraine’s chances. “There has to be a mutual recognition that military victory, in the true sense of the word, is maybe not achievable through military means, so therefore you need to turn to other means,” Army Gen. Mark Milley, the chairman of the Joint Chiefs of Staff and the top U.S. military officer, told the Economic Club of New York on Wednesday. “There’s also an opportunity here, a window of opportunity, for negotiation.”

 

“It remains to be seen whether or not there’ll be a judgment made as to whether or not Ukraine is prepared to compromise with Russia,” Mr. Biden said at the White House. He added: “They’re going to both lick their wounds, decide…what they’re going to do over the winter, and decide whether or not they’re going to compromise.” Washington has signaled to Ukraine that at a minimum Kyiv needs to appear open to a negotiated solution. Mr. Biden’s national security adviser, Jake Sullivan, conveyed that message to President Volodymyr Zelensky and his lieutenants in Kyiv on Nov. 4, suggesting that Kyiv would gain leverage by showing openness to negotiations, according to people familiar with the discussions. Two European diplomats briefed on the discussions said Mr. Sullivan recommended that Mr. Zelensky’s team start thinking about its realistic demands and priorities for negotiations, including a reconsideration of its stated aim for Ukraine to regain Crimea, which was annexed in 2014.

 

Officials in some European countries, particularly in the east and north, have said that publicly pressing for talks could hurt Ukraine’s efforts and play to Russia’s aims of dividing the alliance. “We need to talk about the cost of peace,” one northern European official said. If the war ends now, “The message the Ukrainians would get is that their fight was meaningless. The message Russia would get is that this is time to refit and to rebuild economically. No one believes [Russia] will stop until they achieve their strategic objective.”

 

Mr. Putin has said that Russia is open to peace talks and argued that if Washington ordered Mr. Zelensky to sit down for negotiations, Kyiv would do so. With the latest setbacks in the battlefield, Western officials have said the Kremlin appears to have backed away from its previous preconditions for talks, such as accepting Russia’s annexation of Ukrainian territory.

Edited November 14, 2022 by UK

[Dinar]

7 minutes ago, UK said:

What obvious implications possible war ending would have in terms of economies and markets? Perhaps it would be somewhat disinflationary at least in short/mid term? Also bullish for Europe?

 

https://www.wsj.com/articles/as-ukraine-retakes-kherson-u-s-looks-to-diplomacy-before-winter-slows-momentum-11668345883

 

The imminent onset of winter—coupled with fears of inflation spurred by mounting energy and food prices, the billions of dollars of weaponry already pumped into Ukraine, and the tens of thousands of casualties on both sides—has prompted talk in Washington of a potential inflection point in the war, now in its ninth month. The U.S. and its allies are pledging to continue supporting Ukraine, but top officials in Washington are beginning to wonder aloud how much more territory can be won by either side, and at what cost. Some European officials, meanwhile, are more bullish on Ukraine’s chances. “There has to be a mutual recognition that military victory, in the true sense of the word, is maybe not achievable through military means, so therefore you need to turn to other means,” Army Gen. Mark Milley, the chairman of the Joint Chiefs of Staff and the top U.S. military officer, told the Economic Club of New York on Wednesday. “There’s also an opportunity here, a window of opportunity, for negotiation.”

 

“It remains to be seen whether or not there’ll be a judgment made as to whether or not Ukraine is prepared to compromise with Russia,” Mr. Biden said at the White House. He added: “They’re going to both lick their wounds, decide…what they’re going to do over the winter, and decide whether or not they’re going to compromise.” Washington has signaled to Ukraine that at a minimum Kyiv needs to appear open to a negotiated solution. Mr. Biden’s national security adviser, Jake Sullivan, conveyed that message to President Volodymyr Zelensky and his lieutenants in Kyiv on Nov. 4, suggesting that Kyiv would gain leverage by showing openness to negotiations, according to people familiar with the discussions. Two European diplomats briefed on the discussions said Mr. Sullivan recommended that Mr. Zelensky’s team start thinking about its realistic demands and priorities for negotiations, including a reconsideration of its stated aim for Ukraine to regain Crimea, which was annexed in 2014.

 

Officials in some European countries, particularly in the east and north, have said that publicly pressing for talks could hurt Ukraine’s efforts and play to Russia’s aims of dividing the alliance. “We need to talk about the cost of peace,” one northern European official said. If the war ends now, “The message the Ukrainians would get is that their fight was meaningless. The message Russia would get is that this is time to refit and to rebuild economically. No one believes [Russia] will stop until they achieve their strategic objective.”

 

Mr. Putin has said that Russia is open to peace talks and argued that if Washington ordered Mr. Zelensky to sit down for negotiations, Kyiv would do so. With the latest setbacks in the battlefield, Western officials have said the Kremlin appears to have backed away from its previous preconditions for talks, such as accepting Russia’s annexation of Ukrainian territory.

I am sure that it will cause a stock market rally in Europe, led by luxury goods, cosmetics, and spirits - Russia is a big market and Philip Morris International - Russia+Ukraine 10% of revenues.   German machinery companies and Epiroc will benefit - 5% of revenues I believe were from Russia.  Other than that, very hard to say.  As Truman used to say, do you have a one-handed economist?  

 

If Russian energy starts flowing to Europe as before, that's obviously very disinflationary, of course it is not clear whether Europeans will be dumb enough to be at Russia's mercy again.    On the other hand, millions of Ukrainian and Russian refugees are generally hard workers, and highly skilled, so that in turn could push labor inflation up in Europe/USA/Canada if/when these people return back to their homelands.   However, this return will in turn depress demand for real estate in Europe/US/Canada.  

Assuming something along a Marshall plan is done for Ukraine, that probably will be wildly inflationary as this $750bn figure floated somewhere will be spent and where will the West get the money if not by money printing?  Also, given that there has not been a rule of law in Ukraine since 1917, I doubt private capital would be available on any reasonable terms, unless investors considered it charity.    On the other hand, Ukrainian diaspora is very numerous, very patriotic (at least in the small but statistically significant self-selected sample size that I have encountered over the last three decades), and quite wealthy, so perhaps I am wrong and the same way Jews financed Israel in the 1920s-1960s, Ukrainians will finance Ukraine.  Ukraine is a blessed country in terms of agricultural wealth for instance, historically very hard working people, excellent universities, and many very highly skilled engineers/mathematicians/computer programmers.  I would personally buy $10K of Ukrainian reconstruction bonds with zero expectations of ever seeing my money again.  

 

 

[Spekulatius]

The war ending and the sanctions ending are two different things. I believe when the war ends, most sanctions will remain in place. Maybe Europe will start buying some NG from Russia again, but it will be far less than before.

 

I think the iron curtain that has been build between Western Europe and Russia/Belarusian will remain in place.

Edited November 14, 2022 by Spekulatius

[UK]

https://www.telegraph.co.uk/world-news/2022/11/14/russias-spy-chief-talk-us-g20-leaders-meet-discuss-ukraine-war/

 

Edited November 14, 2022 by UK