04.10.2022 – The political tectonics in Russia have begun to slip. The cracks in the Putin system are now unmistakable. We warn of violent geopolitical tremors and consequences for the global financial market. And we strongly recommend hedging with puts.
Not only the USDRUB – here the weekly chart – could soon be shaken considerably. The central bank has stabilized the ruble after the initial panic of the Ukraine invasion through interventions as well as drastic repression. For example, Russian exporters were required to exchange 80 percent of their foreign exchange earnings into rubles. Foreign investors were no longer allowed to conduct transactions. Russian citizens were not allowed to bring more than $10,000 out of the country. Remittances abroad were capped at $5,000 per month. Commercial banks were not allowed to sell foreign currency for rubles. Ultimately, the fact that Russia was importing fewer Western goods also had an impact. The question is whether things won’t soon go round again here – and whether we are heading for a system collapse.
Source: Bernstein Bank GmbH
There are some arguments for a big quake: 1): War has entered the consciousness of the masses. For example, we see an unprecedented flight from Russia: apparently a quarter of a million young men have fled abroad to escape mobilization. In the regime-critical “Moscow Times”, a few high-ranking veterans have just openly opposed the war.
Beacon off Bornholm
Of particular interest is 2) the ominous attack on the Nordstream gas pipelines in the Baltic Sea. If it was the Kremlin, one wonders why it went that way. Gazprom could have just turned off the gas tap. Or it could have been Russian coup plotters who disagree with the gas supply. In that case, it would be a declaration of war against Vladimir Putin. Or it was the West trying to keep Germany from sucking up to Russia again. The Kremlin would have to consider such an attack a declaration of war – but Vladimir Putin has so far only complained that the U.S. was behind it.
Bare nerves in the Kremlin
3): Boris Reitschuster, one of Germany’s best Russia experts, has stated that there are “bare nerves” and “spooky scenes” in the Kremlin. Thus, the ex-“Focus” correspondent in Moscow commented on the annexation celebration: “The system is close to the end, there are signs of decay. To put it bluntly, many of those present seemed like hostages who had to participate in an event against their will and were forced to join in and applaud. Yes, they almost gave the impression of being traumatized.” Moreover, Patriarch Kirill, who recently proclaimed that death in war would free from all sins, was absent; he fell ill “in time” with corona.
The journalist further analyzed, “Not to be seen was Chief of General Staff Gerasimov, the supreme military: either he was not there or was hidden from the cameras. Only at the very back and placed so inconspicuously that it almost amounted to a demotion: Defense Minister Sergei Shoygu.” And further, “At the later concert in Red Square, a brief overlay revealed that apparently many of those present had left before Putin’s speech.”
Resentment among hardliners
Most importantly, “Nikolai Patrushev, head of the powerful Security Council and informally number two in the state, demonstratively applauded very cautiously after Putin’s speech, then stopped clapping as the others continued to applaud.” We think: This is a challenge to the voskhd – the leader at the top – in front of running cameras in a totalitarian inner circle. Patrushev is our number one candidate for a coup against Putin.
The observations of the Institute for the Studies of War (ISW) fit this: According to them, the screwed-up partial mobilization and the defeat in Kharkiv and Lyman have shaken up the hardliners. The public criticism of army commander Alexander Lapin and General Valery Gerasimov by Ramzan Kadyrov and Yevgeny Prigozhin, head of the Wagner mercenary force, is astonishing. In doing so, they also indirectly attacked Putin, ISW stated. Further, aggressive Russian milbloggers were increasingly getting a hearing in the state media. Their calls for all-out war plus nuclear strike and occupation of all of Ukraine heated up the atmosphere considerably.
Impending III. World War
What a Western response might look like has just been mapped out by former CIA chief and General David Petraeus. He told U.S. television station ABC that U.S.-led NATO could conventionally take out all Russian troops in Ukraine and the Black Sea. A nuclear attack should not go unanswered, he added. Well then – just eliminate a whole Russian army, the world war is waiting.
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