I think the missing component in the conversation is how much the war is affecting Russian exports--not just what the West claims it won't purchase, but what the Russians are unable to ship. If their oil exports drop because of the absence of Western technological aid, or they can't ship pig iron (no ports) or wheat (same), lumber, etc. then where's their money going to come from?
I found this satellite image really interesting:
Kiev is center bottom. The red bits are fires. What stands out to me is that there are all sorts of fires..... On and around the roads heading to Kiev. Kiev itself? Hardly anything.
I suspect that is likely because Kyiv still has a functional fire fighting capability, that won't get shot at while putting out a fire.
It is nice to see the forests around Chernobyl (near little lake just over boarder left of center) is not on fire though.
To expound upon how the war is pushing up inflation, I read this yesterday:
For starters, Russia’s economy, the 11th largest in the world behind Italy, Canada and South Korea, really isn’t that important globally, except for some key sectors. To wit: check out this chart that shows Russia’s market share of an array of commodities.
Note these numbers are broad brush. Take Russian oil and gas exports. The chart reads 8.4% for oil and 6.2% gas, but that underplays the potential impact here as Russia supplies about a quarter of Europe’s oil and 45% of its natural gas. Beyond that, the price of oil is up sharply this year from $75 to $110, in large part because of fears of constrained Russian supply.
Now let’s look at palladium where Russian exports account for 45% of global supply. Palladium, a highly precious mineral (33% more valuable than gold), is used in catalytic converters to reduce auto emissions (note it is not used in EVs) and other industrial uses. So far this year palladium prices are up 30%.
As for nickel, yes the chart says 5%, but Russia supplies 20% of the world’s purest or class 1 nickel, which is used to make steel and increasingly batteries for electric cars. Supply has been very tight with prices doubling over the past two years — even before the Ukraine invasion. Nickel speculation went so wiggy the London Metals Exchange recently suspended trading. Meanwhile, Elon Musk says Tesla has been looking into manganese-based batteries as an alternative.
Russia is a major wheat producer too and here again prices are up, up and away with futures 47% higher year to date. We should add Ukraine to the mix, as it is also a significant exporter of grain and the world’s number five producer of corn. And did you know, Ukraine and Russia are the number one and two producers of sunflower seeds and sunflower oil with over 50% of the market?
Julia Friedlander, director of the economic statecraft initiative at the Atlantic Council, says the global implications of reduced Russian and Ukrainian grains “could have dramatic ramifications for countries in North Africa and the Middle East, even in parts of Asia. As prices for these commodities rise around the world, that’s going to lead to inflation in less stable markets as well. That is definitely something to watch.”
Russia is also a major global supplier of fertilizer particularly to Brazil, which uses it to produce soybeans, coffee and sugar. The Green Markets Fertilizer Index has doubled over the past year and is now at an all-time high, which will almost certainly result in higher food prices. (See this excellent Wall Street Journal article.)
Now let’s look at how Putin’s invasion is a drag on the global economy as it causes businesses to reduce investment and consumers to curb spending. “We think there's an enormous threat,” says Dana Peterson, chief economist at The Conference Board. “We downgraded our forecast for the global economy. We originally had 3.9% growth for this year, then lowered it to 3.5% — that’s almost half a percentage point.”
As for the U.S. specifically, consensus is the damage won’t be severe as we have energy aplenty and strong consumer demand. (Capital Economics says oil prices would have to exceed $200 to produce a recession in the U.S.) Still Goldman Sachs recently lowered its 2022 GDP forecast for the U.S. by a tidge from 2% (already on the low side) to 1.75%.
And yes, you can have inflation and slow growth at the same time. In fact Peterson says one can lead to another: “Higher inflation will eat into consumer demand,” she says. “And if you have less demand, that means reduced consumption and that’s going to reduce GDP growth.”
That’s called stagflation, which we endured in the 1970s and which Mohamed El-Erian and former Treasury Secretary Larry Summers think could happen again.
It’s an incredibly fraught and complex environment, and not just for the generals and political leaders. Of course there are some beneficiaries in these dark times. Defense stock ETFs ITA and PPA are up nearly 10% year to date, while the overall market is down some 5%. As so often is the case, when war stocks fare particularly well, millions endure strife, misery and worse.
irish44j (Forum Supporter) said:All that said, I'm sure people over at State or Langley or whatever have plans in place for different post-putin leaders and how to deal with various ones from various parts of teh Russian power base. Or I certainly hope so.
One would hope. What concerns me is that Langley and Foggy Bottom have their contingency plans in place, and both are convinced that they have reached their conclusions based on sound analysis of the best available evidence, but they have come to completely different conclusions. But that never happens....
haven't seen anything about neon production in Odessa required for chip processing in this thread.
AngryCorvair (Forum Supporter) said:haven't seen anything about neon production in Odessa required for chip processing in this thread.
Yikes. Crazy. I did just see that GM shuttered its Ft Wayne, Indiana plant for a couple of weeks.
02Pilot said:irish44j (Forum Supporter) said:All that said, I'm sure people over at State or Langley or whatever have plans in place for different post-putin leaders and how to deal with various ones from various parts of teh Russian power base. Or I certainly hope so.
One would hope. What concerns me is that Langley and Foggy Bottom have their contingency plans in place, and both are convinced that they have reached their conclusions based on sound analysis of the best available evidence, but they have come to completely different conclusions. But that never happens....
Lol, truth
02Pilot said:FJ40Jim said:02Pilot said:FJ40Jim said:Question from my cynical self to the smarter forum members (that's all y'all.)
I don't understand why there is any talk of "negotiations" with Putin & co. It's not possible to negotiate a contract with a sociopath or pathological liar (choose one). Are the Ukrainians really so naive as to think that any sort of agreement/treaty that is reached with Russia is worth the paper it's printed on, and the effort that it took to come to an unenforceable agreement?
I reject fully the characterization of Putin as irrational.
Just to be clear, I don't think Putin is at all crazy. He is a sociopath & a liar. A sociopath is a person who has no empathy for others. The others in this case are the people of ukraine, russian conscripts, the russian populace who are suffering because of sanctions.... Interestingly, sociopaths are able to think faster & more clearly than normals, because they aren't slowed by thoughts of "Will others think this is OK?"
If a sociopath and/or pathological liar is in fact rational, then why is it "not possible to negotiate a contract" with one?
It is totally possible to negotiate a contract, but the rational sociopath will regard the contract as a useful tool to constrain the other party, and ignore the contract when it does not serve him. A contract can be useful when it is court enforceable. This treaty will not be enforceable (because OMG he haz nukes), so it seems there's no reason to waste precious Ukrainian time on it?
FJ40Jim said:02Pilot said:FJ40Jim said:02Pilot said:FJ40Jim said:Question from my cynical self to the smarter forum members (that's all y'all.)
I don't understand why there is any talk of "negotiations" with Putin & co. It's not possible to negotiate a contract with a sociopath or pathological liar (choose one). Are the Ukrainians really so naive as to think that any sort of agreement/treaty that is reached with Russia is worth the paper it's printed on, and the effort that it took to come to an unenforceable agreement?
I reject fully the characterization of Putin as irrational.
Just to be clear, I don't think Putin is at all crazy. He is a sociopath & a liar. A sociopath is a person who has no empathy for others. The others in this case are the people of ukraine, russian conscripts, the russian populace who are suffering because of sanctions.... Interestingly, sociopaths are able to think faster & more clearly than normals, because they aren't slowed by thoughts of "Will others think this is OK?"
If a sociopath and/or pathological liar is in fact rational, then why is it "not possible to negotiate a contract" with one?
It is totally possible to negotiate a contract, but the rational sociopath will regard the contract as a useful tool to constrain the other party, and ignore the contract when it does not serve him. A contract can be useful when it is court enforceable. This treaty will not be enforceable (because OMG he haz nukes), so it seems there's no reason to waste precious Ukrainian time on it?
"Contract" is a misleading word here, given that it implies a level of mutually agreed legality; international agreements are a different animal.
With that out of the way, I'd argue that any national leader worth his salt regards international agreements as tools to advance their interests or constrain those of their rivals; to do otherwise is utterly pointless. No agreement is enforceable without the use of force if any party chooses to go that way. Ultimately, the Clauswitzian dictum - War is policy by other means - mandates that the availability of the use of force be an implied option in any international relationship. Nations have militaries for no reason but to enact policy, whether defensive or offensive, foreign or domestic; a nation that foregoes the use of military power is constraining its own policy options.
I just read that Koigu has been sugar coating the war effort to Putin by a vast margin. How is the leader of a country incapable of fact checking his staff to ensure they are being honest?
QuasiMofo (John Brown) said:I just read that Koigu has been sugar coating the war effort to Putin by a vast margin. How is the leader of a country incapable of fact checking his staff to ensure they are being honest?
1: Someone in the White House or Intelligence is brilliant for publishing otherwise classified information to the public.
2: When you start out lying your way to the top, and disappear everyone who gets in the way, you eventually start believing you really are the smartest person in the room.
tuna55 said:1: Someone in the White House or Intelligence is brilliant for publishing otherwise classified information to the public.
While I agree with you these releases seem to have been very effective, one of the dangers in doing such things is you might be giving information on, or at least clues as to where the info is coming from, which could make it easier for those holes to be plugged and then, no more info.
That of course can be used also. E.g. the Ukrainians saying some of their info was coming from within the FSB might cause some investigations inside the FSB and some false accusations / prosecutions.
I do hope they are well aware and careful with this aspect.
Someone help me understand. Russia sells oil and gas to Europe. Europe stops buying. Russian currency tanks. Putin demands Russian currency for oil and gas.
Now, I'm no economist. I do know that currencies are held by banks and individuals outside borders. Obviously the US dollar is help all around the world and I would imagine the Ruble is, similarly. By demanding payment in now nearly worthless Rubles, is Putin playing some clever hand by forcing most of that externally held currency back into Russia, in bulk, then somehow restoring the value by making it the only means to pay for Russian exports?
In reply to barefootcyborg5000 :
My general understanding is asking for payment in Rubles would force buyers to exchange whatever currency they would normally pay in (Euro, USD, bitcoin, whatever) for Rubles. In theory, this would increase demand for, and thus the value of the Ruble. I also understand those in Europe basically said that demand is a breach of contract and Putin can pound sand.
I was just over on Yahoo Finance reading about Putin's demand to be paid in Rubles.
I have never seen so much propaganda in the comments sections before...clearly, armies of Chinese and/or Russian influencers are just pounding away at their keyboards trying to control the narrative.
At least people are calling them out.
Ukrainian Ambassador at the UN while the Russian ambassador is talking:
So how about that inverted 2/10 t note yield curve the other day. Yikes. I may actually get a deal on a house next year.
aircooled said:Ukrainian Ambassador at the UN while the Russian ambassador is talking:
I can't think of any country previously invaded that has done such a good job at memorable meme moments as Ukraine.
irish44j (Forum Supporter) said:aircooled said:Ukrainian Ambassador at the UN while the Russian ambassador is talking:
I can't think of any country previously invaded that has done such a good job at memorable meme moments as Ukraine.
irish44j (Forum Supporter) said:I can't think of any country previously invaded that has done such a good job at memorable meme moments as Ukraine.
A comment on the latest Forgotten Weapons vid on YT, from someone w/ a Cyrillic user name (no idea if they are Ukrainian):
We have a saying: "Это было бы смешно если бы не было так грустно." - "It would be funny if it wasn't so sad.". There is also a more modern and popular version: "Мем смешной - ситуация страшная." - "The meme is funny, the situation is terrible."
Ukraine apparently is on the offensive today:
Ukraine: Ukrainian attack helicopters executed a low-flying predawn raid on Russian territory, a Russian official said, eluding air defenses to strike an oil depot and signaling Kyiv’s ability to broaden the field of the war.
Security-camera footage released by Russian state-owned media appeared to show several missiles firing at the depot and igniting explosions. The regional governor of Belgorod wrote on social media that two Ukrainian helicopters carried out the operation while flying at low altitude. Kyiv didn’t immediately comment on the attack.
In reply to stuart in mn :
I think I will wait for a confirmation from somewhere more trustworthy than "Russian Officials" who have previously made up easily debunked stories about Ukraine invading Russia.
In reply to Russian Warship, Go Berkeley Yourself :
True. I could just as easily believe some Russian helicopters attacked their own depot by mistake.
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