Random Thoughts on the Russian War in Ukraine

I wrote two very well timed items final week: one on housing and one on the Russian invasion of Ukraine. That is the latter; the housing piece could be very lengthy, so will probably be damaged up into two articles. Half one of many housing article will exit this week. However I needed to share with you this piece on Ukraine right now. 

What follows are some very, very random, loosely linked ideas. This isn’t an article. An article has a starting and an finish, with a conclusion. These random ideas don’t observe that sample. I’m simply attempting to assume via complicated points early within the morning and sharing with you my ideas. 

Conflict in Ukraine consequence

I’m cautiously optimistic on the result of the warfare. To win a warfare you want each will and means. 

The Ukrainian will to win will increase with each mass grave of murdered civilians uncovered with each liberated Ukrainian village. For Ukrainians, this warfare is not about territory however about survival as a nation – its invader believes Ukraine doesn’t have the appropriate to exist (I wrote about that right here). 


To win a warfare you want each will and means.
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The technique of the Ukrainian military have elevated considerably over the previous few months. Along with receiving extra fashionable tools from NATO, after they pushed the Russian military out of Kharkiv Oblast, the Ukrainians loved a bigger weapon switch from the Russian aspect to the Ukrainian aspect than NATO had supplied thus far. Additionally, Ukrainians know how you can use this tools and might begin utilizing it instantly. 

I heard a statistic. I couldn’t confirm it, however the numbers made sense. Within the early phases of the warfare, for each tank or different piece of heavy tools the Ukrainian military misplaced, it captured three items of heavy tools. In early summer time this ratio fell to 1:1 (when Ukraine misplaced floor within the East). However in August it rose to 7:1 and it may need been as excessive as 17:1 in September/October.

Earlier than the warfare, the Russian military was feared to be the second strongest military on this planet (after the US). Over the past eight months we found that it’s the second strongest military in Ukraine. 

Putin nonetheless has a number of methods in his arsenal: 

First, win the warfare by drive – this one is just not understanding so properly. 

Second, scare the West economically. To date this has not labored. Europe crammed up its gasoline reserves and thru economizing, it thinks it could actually get via the winter. 


Earlier than the warfare, the Russian military was feared to be the second strongest military on this planet (after the US). Over the past eight months we found that it’s the second strongest military in Ukraine.
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The final card Putin has left is the specter of nuclear warfare. From what I’ve learn, tactical nuclear weapons will accomplish little or no from a army perspective, however they do have a big psychological affect. The West has drawn a purple line, telling Putin that if he makes use of nuclear weapons, we’ll destroy the Russian military in a single day utilizing standard forces. The Russian military is barely defending Kherson; it isn’t a match for NATO.

To point out how critical we’re, the US has moved the a hundred and first Airborne Division to Europe – the final time it was there was 80 years in the past. I’m not certain if Putin is bluffing, however NATO is just not. We’re sending a message to different nations, together with Iran and North Korea. Additionally, China is watching this very intently. 

The mobilization

The mobilization Putin has enacted could destabilize his regime. As I used to be rising up in Russia, my dad and mom had been fearful of my brothers and I turning 17 and being drafted into the Russian military. The Afghan warfare was over; Russian dad and mom of boys didn’t worry for our lives however for our sanity. Being drafted into the Russian military then was like serving a three-year jail sentence. Older troopers always abused youthful ones. 


Giant-scale protests in Russia may occur tomorrow or years from now, however the probabilities of it taking place are exponentially greater with dad and mom residing in worry for his or her sons’ futures.
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I can solely think about the agony Russian dad and mom undergo, fearing that their sons shall be drafted and, with out correct coaching or tools, despatched to the frontlines inside two weeks to change into cannon fodder for Ukrainian artillery. Russia has by no means valued human life (that is one thing in widespread with China).


The Afghan warfare lasted 9 years. It resulted within the loss of life of 15,000 Russian troopers. In eight months in Ukraine, Russia has already misplaced 71,000 lives. One thousand died in a single day final week. 

With each grieving guardian, the Russian political system turns into a bit bit much less secure. It’s not possible to inform if or when a spark units the system on hearth, however we’re observing one thing like this in Iran. A younger girl died in police custody, arrested for violating the Islamic gown code for ladies. Her loss of life has sparked protests in Iran for greater than a month. It took a very long time for the system in Iran to come back to this boiling level, however instantly it has.

Giant-scale protests in Russia may occur tomorrow or years from now, however the probabilities of it taking place are exponentially greater with dad and mom residing in worry for his or her sons’ futures. And the possibilities rise greater and better with each grieving mom. The people who find themselves probably the most terrified of the Russian military right now are younger Russian males and their dad and mom. 

I’ve many causes to be grateful to my father for immigrating to the US 31 years in the past, and right now I’ve a brand new one: I don’t have to fret about my 21-year-old son, Jonah (who was born within the US) being drafted to die on this mindless warfare. 

The Russian financial system

This warfare has set the Russian financial system again forty years. On the floor this Russia seems to be very completely different from the Russia of the 80s I keep in mind. This one has stunning, fashionable supermarkets which nonetheless, to my shock, are filled with meals. Resulting from sanctions and the voluntary withdrawal from Russia of Western firms, Russia will finally freeze in time. I’m considering of Cuba after I say this. Cuba seems to be right now the identical means it did in 1959 when Castro got here to energy and the West imposed a commerce embargo. 

Sure, Russians will miss McDonalds and Coca-Cola, however that isn’t a terrific loss; it’s in all probability good for his or her waistlines and general well being (extra of them shall be spared from diabetes). However the fashionable world runs on know-how – semiconductors, software program, complicated manufacturing – and Russia has little of it. Immediately you can’t construct a automobile or washer with out semiconductors. Because of this Russian auto manufacturing is down by half for the reason that warfare began and washer manufacturing dropped from 600k models a month to 100k.

A wild card right here is China. China has some applied sciences that Russia wants. As an example, it has antilock brake and airbag know-how that Russia must restart factories that had been “bought” for 1 ruble to Autovaz by Western firms after they left Russia. Russia wants oil drilling tools, and spare components for his or her planes. Will China threat sanctions from the US and Europe by exporting these items to Russia I don’t know. After Visa and Mastercard reduce off Russia from their networks, mainly stopping Russians from utilizing rubles exterior of Russia, China stopped onboarding Russians to their bank card community. The Western economies mixed are 20x bigger than Russia’s financial system. 

Nevertheless, the US simply banned gross sales of superior semiconductor know-how to China. This ban sounded just like the opening shot of a brand new Chilly Conflict with China. US firms are prohibited from promoting not simply sure microchips but additionally their newest variations of chipmaking tools. A US citizen could lose his citizenship if employed by a Chinese language semiconductor firm. Our relationship with China is just not getting friendlier, which naturally pushes China in direction of Russia. 


Russian warfare has been a tragic infomercial for Russian weapons. India used to import half of its weapons from Russia. Now, the US and Europe will doubtless change into the only suppliers of weapons to India.
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The Ukraine warfare and sanctions turned Russian weapon exports right into a factor of the previous. Initially, sanctions have crippled Russia’s means to provide sufficient weapons to struggle its warfare. Trendy missiles require semiconductors, which Russia has a tough time getting (although I’ve a sense they’ll smuggle some in). 

Second, right now Russia wants each weapon it could actually get its fingers on to exchange those it misplaced over the past eight months. It has already resorted to utilizing tanks from the Nineteen Seventies. Lastly, this warfare has been a tragic infomercial for Russian weapons. India used to import half of its weapons from Russia. Now, the US and Europe will doubtless change into the only suppliers of weapons to India – one other tailwind for protection contractors (we personal loads of these). After the warfare is over, Russia shall be promoting its weapons to rogue regimes like Iran and North Korea, however the marketplace for its weapons has shrunk significantly since February 24th.

Till the warfare, the Russian financial system was doing pretty properly. Russians shouldn’t thank their leaders for this, however give a heat hug to their neighbor to the East. China’s insane progress (by any fashionable customary) drove demand for all commodities (China is a commodity-poor nation). Costs of most commodities have gone up rather a lot, and one-trick commodity pony Russia benefited from it. Putin jumped proper aboard and took the credit score for the financial rebirth of Russia. (Any good politician does that. I see American politicians do it on a regular basis – simply observe the Twitter accounts of the final three presidents.) 

Nevertheless, aside from mastering the manufacturing of commodities and meals with the assistance of Western applied sciences, Russia has achieved little or no over the past three many years since I left it for the US. Russia even imported from Germany the metal it used to make its tanks. Sanctions will doubtless have a big crippling affect on the financial system. We ain’t seen nothing but.

Beginning in December, Europe and the US will cease shopping for Russian oil. There shall be a cap positioned on its value – I hear will probably be $60/barrel. If India or China pays greater than the cap, it’ll face secondary sanctions from the West. India and China will embrace this opportunity to purchase oil at below-market costs. 

It’s unclear what is going to occur to Russian manufacturing of pure gasoline. Most of it has been pipelined to Europe.  This gig is over.  Nearly all of oil and pure gasoline extraction in Russia takes place in very chilly (permafrost) areas. When you cease manufacturing, the wells freeze and it takes an unlimited effort to restart them. Russia will nonetheless be promoting oil, but it surely must settle for any value it could actually get. However what’s it going to do with its pure gasoline? Even when it builds one other pipeline to China, that can take years.


Europe can have a difficult winter, however it seems that the Russian financial system shall be challenged simply to outlive.
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Additionally, Western oil firms have left Russia. Along with offering capital, they introduced know-how and knowhow. Each at the moment are gone. Russia is the third largest producer of oil, behind the US and Saudi Arabia, producing 11 million barrels a day. The recession that we’re going to discover ourselves in will cut back demand for petrochemicals, although not by a lot. (Traditionally, recessions have decreased the speed of progress of demand for petrochemicals however didn’t result in declines.) The availability of oil and pure gasoline from Russia won’t be rising and can doubtless be shrinking. Europe can have a difficult winter, however it seems that the Russian financial system shall be challenged simply to outlive. 

The Way forward for Russia

The political setback from this warfare has been even larger for Russia than the financial toll – it has rolled again the clock 80 years. In a single day, the nation has began to resemble Stalin’s Russia. Any unkind phrase concerning the warfare or the Russian military lands individuals in jail. It’s a matter of time earlier than individuals begin telling on one another and Russia begins reopening gulags. 

Historical past offers conflicting classes on how lengthy Putin will keep in energy. Castro and Sadam Hussein had been in energy for many years. Castro peacefully died in his mattress, and Sadam would have dominated Iraq for one more 30 years if the US had not “liberated” it.

The publish Random Ideas on the Russian Conflict in Ukraine (Trace: It’s Not Going Nicely for Russia) appeared first on Vitaliy Katsenelson Contrarian Edge.

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