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NO ONE HAS ALL THE ANSWERS as a period of intense uncertainty now begins. As the financial markets reel, here are five crucial questions:
1. How Long Will Phase One Last? Intense aerial bombardment should take out Ukraine’s air defenses within the next few days. Russia will enjoy total air control relatively quickly, paving the way for ground troops, many of which — ominously — will stream into Ukraine from Belarus. Phase One also will result in firm Russian control of the breakaway regions of Donetsk and Luhansk.
2. What’s Putin’s Longer-term Goal? He wants to take out the government in Kyiv, which won’t be easy. Special operation forces will round up Ukrainian officials, assassinating and jailing them and establishing a puppet government that will pledge to never join NATO — which is the key Putin goal. In the meantime, surging energy prices could threaten a Western recession, still another Putin goal.
3. Will Ukrainians Fight back? This is a huge unknown. Russia has vastly better
resources — from cyberwarfare to tactical nuclear weapons — so Ukraine clearly will
lose a conventional war. But a stubborn guerrilla war could persist for many months, which will kill many Russian troops — a huge political risk for Putin.
4. Does Putin Care About Sanctions? Harsh new sanctions are imminent in the next day or two, including a ban on Russian membership in the SWIFT financial system that facilitates global financial transactions. But will sanctions on oligarchs or Russian banks have much of an impact? Putin anticipated sanctions, and Russia is flush with cash.
5. What about the mood in Moscow? The Russian markets have been clobbered, but the state media has portrayed the conflict as a heroic fight against Russia’s foes. How long will Putin have political support as casualties mount? If Russia suffers hundreds — or thousands — of casualties, the Russian public could turn against him.
THE FOG OF WAR: The first casualty of war is the truth. There will be false reports, starting today, of casualties and war crimes as Putin becomes a pariah for life in the West. But through brute force, Russia should prevail in a bloody war.
MOST AMERICANS AREN’T FOCUSED ON THIS WAR, except for the impact on gasoline prices. Joe Biden will announce major sanctions today, but Putin thinks he can withstand that. No Western country — certainly not the U.S. — is willing to sacrifice its young people in a Central European war, so Ukraine is effectively alone on the battlefield.
BY SUMMER a stooge government should be in place in Kyiv, as fears grow about the threat to Central Europe, including the Baltics — as Putin brazenly attempts to resurrect the old Soviet Union.
Related: Ukraine - Russia: What It Means for the Market
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