So Where Are We NowInteresting day to say the least today...
1....Biden had the nerve to admit some sort of invasion but fell short of calling it a full invasion - "The beginning of an invasion"
2.....Germany said it was delaying the certification of Nordstream 2 but fell short of saying that it was dead in the water (pardon the pun)
3...The US placed restrictions on Russian access to borrowing and limited access to financial markets of two Russian banks
So what does any of this mean and is Putin shaking in his boots?
A....right now Nordstream 2 is not producing any revenue for Russia and so a delay while perhaps important down the road, means nothing to Putin right now
B.....just like SU and CNQ and other oil companies, Russia has been making outsized income due to high energy prices. It has amazed a war chest of 650 billion US$ in gold reserves. More importantly, unlike just about any other country in the world, it is actually running a budgetary surplus!! This means that the Biden sanctions on access to sovereign debt markets mean nothing (except for good PR for the uninformed) since Russia has no immediate need to borrow any money. The same goes for the sanctions on the two banks.
C...based on A and B, today's sanctions have virtually no impact on Russia or future moves WRT The Ukraine.
D....based on C, and the fact that Biden said the US will not militarily intervene to stop Russia from taking the rest of the Ukraine, Putin has been given a green light for intents and purposes to take the rest of The Ukraine.
E....Biden said that if Russia tries to go further then there will be more sanctions, The most likely would be to stop Russian banks from using SWIFT. As I mentioned in an earlier post, such an action would be of limited value since most of Russia's financial dealings with the rest of the world center around energy and specifcally Europe which would still have to pay their bills for their oil and gas. Frankly, I see such an action by the US as having a more negative impact on the West than Russia since it will create instability in financial and energy markets.
F...based on all of the above, the picture I have is one of Putin smiling as sips on his afternoon vodka
So what hasn't been talked about which is important and could become an issue in the future?
The answer? - Food
What you ask?
The Ukraine is Europe's breadbasket. Russian control of The Ukraine would also lead to Russia having leverage in foodstuffs in addition to energy. The Ukraine is, depending on the year, the third or fourth largest exporter of grains. It is also one of the world's biggest suppliers of corn. It also produces many other significant basic foods.
So folks, settle in your seats and make sure you have lots of popcorn made from Ukrainian corn (lol) and watch the movie. I suspect it will be in the thriller category.