Navigator wrote: ↑Tue Mar 15, 2022 11:59 pm
There are multiple serious implications and repercussions of what is going on in Ukraine.
I’ve already discussed the Russian need to replace incompetent leadership (and planners) with people who know what they are doing. War illuminates who is and who isn’t up to the task very brightly. I would imagine that we will learn of some “up and comers” in the Russian Army very soon.
In no particular order (other than which order they popped up in my head while writing), here are some of the other things that must be considered:
• Ukraine was hung out to dry by Europe/USA. Nobody really came to their defense. Sure, we provided them with anti-tank and anti-air weapons, but NOBODY sent troops or did combat air patrols or anything like that.
The West, at this point, I think smugly thinks that they have completely contained the war, and that it won’t spill over into a wider conflict (except maybe the addition of Belarus, which is expected). So people in Europe can get on with their lives of consumption and worry about what the real threat is in their mind, Global Warming.
This has made Ukrainians quite mad. They don’t say this because they need the weapons and any kind of support they can get while the shooting is going on, but they are seriously upset (and rightly so) that they are carrying the ENTIRE burden of Russian aggression.
In the end, the Ukrainians are going to hate the West almost as much as the Russians because of this.
I'm sure Ukrainians aren't happy, but I think they also understand. Getting NATO involved runs the risk of nuclear missiles flying. They might bear a grudge, but they'd do the same.
• Europe has actually further denuded itself of defensive capabilities. I would gather that the majority (if not overwhelming majority) of anti-tank weapons in Europe/NATO have been sent to the Ukraine. I would guess like a decade’s worth of military/industrial production.
When the Ukraine War ends, the Ukrainians are not going to ship the remaining stocks back to NATO. And if Ukraine isn’t involved in a Russian aggression against NATO, like the Baltic States, there may not be enough anti-tank missiles to meet the new threat.
Of course, this is assuming the Russian Army can refit and resupply to engage in such activity.
Raytheon is going to make a lot of money. Stingers and Javelins aren't that complex to make so manufacturing isn't a big problem. The question is how quickly will orders be placed. Putin has been a gold mine for defense manufacturers and this latest invasion has been even the most reluctant countries wake up and start spending. Even Germany will be making its 2% pledge.
• The Biden Administration has proven itself “War Averse”. While this sounds like a good thing (wars are bad), it isn’t if it means abandoning liberty and those that enjoy it (wars to defend liberty are needed if liberty is to be maintained).
What this means is that China has a pretty good idea that if it invades Taiwan, who does not have a defense treaty with the USA, the USA will not get involved.
We have telegraphed this to China for decades, as we have “unrecognized” Taiwan as a nation, were OK with giving the CCP the China seat in the UN (with its veto on action), and are too worried about our current economic ties with China to abandon them.
In the case of China, I can’t even see the Biden administration putting meaningful economic sanctions on the Chinese in case of an invasion of Taiwan. We would probably act like the Germans do now regarding Ukraine. Say we are against them, and then attempt to continue “business as usual”.
It would probably eventually get so messy in Asia that the US would eventually get sucked in anyway, but not until after the best military opportunities are lost.
Taiwan has a kind of treaty and it is almost vital for Western economies. Japan has already at least implied that it would fight to defend Taiwan and I suspect South Korea feels the same. Taiwan and Ukraine are in different categories plus it would be much more difficult to invade Taiwan.
• The sanction on Russia will have economic consequences for the world.
The world economy is currently hanging on by a thread. The sanctions make it very likely that the Russians will default on their debts. This could cause the collapse of some banks (which could start a chain reaction).
Russia will also probably nationalize the assets of foreign companies. They will eventually stop sending natural gas to Europe.
The Russian Oil is probably not coming back to the market for the US or Europe, and the increased gas prices will start to have more and more second and third order economic effects.
Russian and Belarus fertilizers will not be available for the foreseeable future, and will cause a huge increase in food production costs. Ukraine will not be exporting wheat for a while, and this will cause both food shortages (probably famines) and also add to increases in food costs.
All of this could lead to the final bursting of the current economic bubble. As in major stock markets tanking, financial institutions failing, and even defaults on national debts.
European banks are the most exposed (natch) so they likely will get some nice handouts from the EU. Russia can nationalize assets, but that doesn't mean they will get any use out them. For instance, a bill was passed allowing the expropriation of leased airliners but the lack of parts and maintenance will ground them within a year or so. And doing so will have long term effects like never being able to lease planes again. There may be a limit to the Pyrrhic actions that are taken.
Oil is fungible and someone is going to buy it. If China gets a discount it will buy that and then not buy from Gulf states. Or someone else will.
Fertilizer may be a problem for a year or so, but Russian/Belarusian percentage has been more an issue of them having the capacity so why build more? Wheat will be an issue for this year but a shortage will lead the changes in planting. The US has plenty of capacity to go more; getting rid of the ethanol mandate would free up oodles of land.
I don't think we're going to see a bubble burst. Stock markets are the only place you can make any investing money. It's more likely that it will be more difficult to fight inflation since central banks won't want to jack up interest rates right now.
• The economic downturn would probably have military repercussions.
The Chinese will blame the USA. This will greatly increase the chance of war.
The Russians will blame the USA/Europe, and economic hardship could trigger the “Mortal Threat to Mother Russia” bit, and cause them to want real revenge on NATO.
The US will focus on domestic issues rather than the gathering war clouds in the leadup to war. Chief among these are the concerns about Global Warming. Right now we need to be gearing up domestic production of every important resource and product that we might need in time of war. Instead, we continue to follow these asinine green policies that probably originated in (and are certainly heavily financially supported by) China in the first place.
China will blame the US because it's convenient. The chance of war will increase only if the situation seems to benefit China more that the US.
Russia blames the US for being powerful while Russia is not. Taking revenge on NATO? The West has been pretty united so Russia really doesn't have a wedge issue. NATO is also much stronger that Russia militarily. It's hard to conceal that after the poor performance we've seen in Ukraine.
I suspect we're going to see big changes in Congress this fall. Most likely Republicans will take the House and possibly the Senate. That will put great limits on what the Biden administration can do. I suspect the US will start to follow Europe in realizing that energy stability is more important than green virtue signalling.
