Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Putin’s Ukraine Strategy Could Lay the Groundwork for War

Politics / Russia Sep 21, 2016 - 06:03 PM GMT

By: John_Mauldin

Politics

BY GEORGE FRIEDMAN : Tensions between Russia and Ukraine are growing. According to the Russians, a special operations team from Ukraine attacked Crimea in August. The Ukrainians denied the claim. The Russians appeared to be moving forces around in Crimea and increasing their number and posture.

There have been reports of Russian troop buildups east of their border with Ukraine. There is also an unconfirmed report of Russian troops deploying in pro-Russian, rebel-held territory inside Ukraine. The Russians have done nothing to tamp down tensions.


Whatever the truth, the Russians are establishing a justification for taking action against Ukraine. I have predicted that the Russians will eventually move to change the situation in Ukraine, militarily if necessary.

Ukraine is too key to them strategically to accept anything less than a neutral government in Kiev. Therefore, I expect the Russians to take some notable action.

My view is that the military option is likely off the table. Ukraine is a large country. To occupy it against minimal resistance would require a force that Russia didn’t have a year ago. Thus, I think the informal truce will hold to at least the end of 2016.

So, an increased tension will likely lead nowhere. But the Russians are talking war, and we must consider why.

Russia’s Need to Show Strength

The Russian economy has declined sharply. This hurts President Vladimir Putin’s political position, especially among senior officials and oligarchs who make up the Russian elite. Putin has been increasing his power lately, replacing some governors with his former bodyguards. But actions like that don’t make him appear powerful. They make him seem worried.

The other force that is undermining Putin’s position is his mishandling of Ukraine. While Westerners think of Putin as the aggressor, at the end of the day, Ukraine’s Russian-friendly government was replaced by a pro-Western government.

All the Russians retained were Crimea (where they already had a massive force) and a presence in eastern Ukraine. There, the Russians tried to incite a broad uprising that never happened.

Putin needs to do something significant since he hasn’t been able to do much about the economy or Ukraine. He needs to appear threatening, even if it’s a bluff.

Given recent regional shifts and improved relations with Turkey, Russia has some advantage. It is not clear, though, whether the Russian military would take action that might lead to confrontation with the US.

If Russia were to get bogged down or lose, it would be Putin’s end. It would also end Putin’s attempt to separate Europe from the US. This type of Hail Mary doesn’t seem worth it.

Putin’s Strategy

So what is Putin doing?

If Putin wanted a suitable political settlement, this would be the best strategy. He should create a crisis that makes it appear Russia is on the verge of attacking Ukraine. This would lead countries to send dignitaries to the region in an effort to convince the Russians not to go to war.

Putin would make absurd demands, enraged by the aggression of the Ukrainians. Then as talks appear to be collapsing, he would come to a deal. Given the American sense of weakness after Ukraine, and Germany’s distraction, it would be the ideal time for this move.

But, the Russians could also use the same strategy if they made a decision to go to war.

The Russians would create a massive crisis and then reach a reasonable agreement. They would stand down—except for a few divisions that carry out exercises—and everyone would relax. Then, the Russians would strike.

This is what the Soviets did in Hungary and Czechoslovakia and what Russia did in Georgia. And they blame the attack on some action by the target—a target that thinks the Russians have backed down.

Here’s the problem. If the Russians wanted a negotiated settlement or if they were getting ready for war, they would act in exactly the same way. The negotiation requires an opening bluff. A war requires a final bluff.

So, as much as I think this is not going to end up in a war right now, we can’t ignore that this looks like the early stages of one.

A Poor Economy Won’t Stop the Russians

Some believe that a weak economy precludes war. Generally, I believe that isn’t true, but with the Russians, it certainly isn’t true. The Russians have fought all their wars from Napoleon on with an economy in shambles. It is their normal condition.

Keep in mind, this would be a local conflict, not a world war. The US might be involved but not on a large scale. As for sanctions, they really aren’t a deterrent on a national security issue. Sanctions are rarely placed on a country that has just won a major war and is now perched on the borders of Europe. And that’s one of the attractions. In that position, Russian can try to extract economic benefits.

I would not have been surprised to see this happen in a year. I am surprised to see it now. But while we know what we are seeing, we don’t know what it means. The next thing to watch is whether the Russians increase their rhetoric. If they do, things could get very scary indeed.

Watch George Friedman's Ground-Breaking Documentary Crisis & Chaos: Are We Moving Toward World War III?

Russian posturing is part of a storm of instability engulfing a region that’s home to 5 billion of the planet’s 7 billion people.

In this provocative documentary from Mauldin Economics and Geopolitical Futures, George Friedman uncovers the crises convulsing Europe, the Middle East, and Asia… and reveals the geopolitical chess moves that could trigger global conflict. Register for the online premiere now.

John Mauldin Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in