by Kane » Tue Mar 04, 2014 12:11 am
War with Russia would be disastrous for the world. Risk is incredibly high right now with EM economies already fraught with increasing levels of political instability (Thailand, Turkey, Ukraine, etc) and with slowing growth (Venezuela is in the dumps due to policies enacted, China is grappling with debt and a huge network of shadow banking, India is dealing with HUGELY inept political leadership, etc). Economics is the name of the game and Russia is learning that the hard way, with the Rouble dumping along with their equity markets after this Ukrainian excursion into Crimea. Shit, the Russian Central Bank just took action to try to stem the drop in the Rouble...all because of Ukraine.
That said, I think somebody has to do something. Our leverage over Russia in economic terms is paltry, the best we can do is hit them with expulsion from the G8. Europeans can have a far greater impact on Russia via sanctions BUT...most of Europe is still in the shits. So they don't want to rattle their brittle economies all that much either...which is something Putin may have already calculated. If Putin goes whole hog into Ukraine he does one thing and one thing only...
He tests the degree to which the EU is actually a union. If Economics trump this invasion aggression in the future is not hard to imagine. He has been poking and prodding nations within his sphere to determine what kind of a response he'll get internationally speaking. I call this the penultimate test that will tell him whether he can press forward...or show him just how united Europe is. As it is, actors in the market have spoken and their money doesn't appear to be on Russia.
I support war on Russia if Russia moves to go beyond the Crimea and into greater Ukraine. War sucks, is terrible, and will throw our current geopolitical set up into total chaos. Not a single country on the planet will go untouched in economic terms. But I want to make something perfectly clear:
What happens in Ukraine matters here. We're already feeling the economic effects - commodities are on the rise, gold is being used a hedge, safe havens in the form of treasuries are being utilized, and risk is sliding off the table for safety instead. Furthermore, this isn't a replay of either Afghanistan or Iraq. We haven't been attacked, this is true. But a country attempting its own hand at self determination is being punished in its genuine aim to do so by a foreign aggressor - I have said this before and I'll say it again: What good is Democracy if we aren't willing to stand up and defend it? I am not talking about a pre-emptive strike to contain or instill democratic notions where there once were none. No, this is not Iraq. I am talking about defending the right to seek proper political representation. While we suck here at home when it comes to agreeing on how to best proceed towards ameliorating our domestic concerns the choice here appears to be, at least IMO, crystal clear.
The ball is in Russia's court.