Australian (ASX) Stock Market Forum

War threat in Ukraine

30 June 2008
The risk of Russian invasion of Ukraine is now approaching certainty.

What implications are there for investment markets ? (Greggles observations in Russian Aggression thread)

Russia doesn't need to invade there are enough Soviet-trained troops domiciled in the Ukraine already , and there would be plenty of older weapons and munitions left over from the Soviet area in bunkers , the Eastern Ukraine rebels have all they need except maybe food supplies ( which can be foraged for in any aggressive action )

remember the government friendly forces are mostly conscripts and some part-time volunteers ( even the police walked away from the government , and left the armories open ) , now there is some debate on how many battle-hardened Islamists have 'retired' to the Western part of Ukraine , and would they be a useful core in any Ukraine defensive move ( since they are more experienced in insurgency )

implications , yes the Ukraine will find a way to confiscate more Russian Gas bound for the EU and Germany ( and i bet Putin is hoping they will do precisely that )

BTW Russian has a fair amount on military ( Army , Navy AND Air Force ) already stationed in Crimea as per the original lease agreements
since Putin is going to China for the Olympic Games AND a summit in February , you should probably explore who will be in charge of Russia in that period ,

for example Medvedev mounted a very brisk response to some unrest in Georgia a while back , and Kazakhstan was a very nice practice run for a brisk international response , if one was needed in the near future

unlike the US and UK , the Russian Parliament is made up of about 80% intelligence agency officers ( GRU , KGB , etc etc etc ) ( and Dead Hand is activated ensuring an automated nuclear counter-strike .. so no decision needed there )
uranium ??

since Russia China , and possibly North Korea have hyper-sonic systems ( the Chinese vehicles were NOT described as missiles by the Chinese ) , one might expect a more efficient payload , especially if North Korea has created a mini-nuke weapon ( less than critical-mass device )

now sure China and Russia have gone different paths towards more nuclear nuclear power generation ( and sales of that technology )

but there is every chance Russia has a big enough nuclear arsenal to achieve it's goals already , and wouldn't China prefer to invade any captured territory ( ditto for the US and EU ) Russia seems to be alone in the major powers that doesn't need to conquer for more resources or agricultural land ,

i see uranium becoming more acceptable in ( a real ) peacetime as demand for power generation grows ( and most other 'clean technologies ' having flaws that restrict then from baseline supply , unless battery storage makes a quantum leap )

BUT war has always been the successful solution to Western financial crises ( distract until folks forget are the mess governments created and loot the vanquished )
What implications are there for investment markets ? (Greggles observations in Russian Aggression thread)
Oil and gas are the most obvious but not the only ones.

Russia is the second largest producer of both oil and gas globally. It's the largest exporter or gas (by pipeline + as LNG) to other countries and the second largest exporter of oil.

Russia's also the sixth largest producer and third largest exporter of coal.

Russia's also a leading producer of natural diamonds, gold, iron ore, nickel (10% of world production), platinum (largest producer globally), silver.....

That situation with mineral production and exports does mean that Russia has many other countries, those reliant on importing from Russia, over the proverbial barrel. All Russia need do in order to cripple them is nothing at all. Just down tools and stop selling whatever mineral and that stuffs up those who rely on imports. Oil and gas especially but the others too.

That creates a very different dynamic to conflicts where others can impose sanctions etc with little cost to themselves.

In terms of financials, well it's at least possible that there's some disruption to the supply of one or more of these things either as an intentional action of itself or as a consequence of conflict. A lot there will likely depend on how the West reacts and how Russia chooses to react to that reaction. :2twocents
The gold price is holding up very well and the GB£ is falling: Copper is a bit more uncertain. The mining sector is generally weak as markets prepare for Putins' advance into part of the Ukraine. Then the installation of a puppet government.
Biden the Weak, has all but capitulated to giving up part of the Ukraine.
Next an agreement to move the Ukraine forces back and let the Russian troops move in peacefully.
Russia has to move soon as the thaw will arrive and his tanks and vehicles will be bogged down.
Maybe Biden prays to god on high to bring the thaw a month earlier - unfortunately Biden it is close to check mate to Putin.​
The risk of Russian invasion of Ukraine is now approaching certainty.

What implications are there for investment markets ? (Greggles observations in Russian Aggression thread)


From memory South Africa, Zimbabwe and Russia are main producers.

The Foreign Affairs Committee at the Hotel last night met to decide on our reaction to Russia threatening to invade the Ukraine.

It decided that it is none of our business.

Admittedly the committee is heavily weighted with retired wharfies and commos, but that is now the hotel patrons' official position.

The Secretary has informed the Russian and US embassies via telex.

Russia will probably annex Ukraine as the ancient Russian motherland is Kiev and guess who fancies himself as a Tsar ;)
i suspect not , Ukraine is a useful drain on NATO resources , and since Ukraine has waning gas supplies of it's own , add in the aging infrastructure ( especially in the gas pipeline from Russia to Europe an important part of the Ukraine income )

Russia hasn't rushed to re-incorporate Belarus ( where Belarus might be more likely to embrace than resist )

check your maps Russia is a HUGE landmass and still under-explored ( mineral-wise ) remember Russia also sold Alaska to the US many decades ago , and considering the Eastern Ukraine rebel areas are the main manufacturing areas ( including for tank chassis ) i am mildly surprised the rebel areas haven't just moved the Russian border west a bit by themselves

ALSO Russia has a court case in England over the loan default by Ukraine that it has made no attempt to repay , issued in 2013 when it was still a Russian ally , one might wonder how the Ukraine is funding that court case

i would be surprised if Putin desires to control another failed state ( the weather in Iraq is so much better an Iraq has gas , oil in abundance , i would be liking Iraq right next door to friendly Iran over the Ukraine )

AND Russia and China could easily come to some sharing agreement with under-explored Afghanistan , strengthened that relationship
ALSO the current Ukraine Government is strongly considering conscripting women into military service to bolster the male conscripts ( because even the police walked away from their jobs )

PS why would Russia invade in Winter , when a gas pipeline failure do the same task cheaper ( than even sanctions )
now there are some that call Putin Mr. 5 Percent , because that is what he ( allegedly ) gets from every worth-while business activity in Russia
and the black soils of eastern Ukraine are the source of much exported wheat.

but there is a global fertilizer shortage , i haven't heard any gossip that the Ukraine is so perfect it doesn't need fertilizers and pesticides to grow crops .. and BTW if the Ukraine keeps on conscripting there will only be children left to work the farms

and BTW the Eastern areas appear to be the more Russia -friendly areas

so apart from WES which fertilizer producer ( in Australia ) can step up production ??

and then we might also have our own logistics problems over here