02.03.2022 – Russia is threatened with national bankruptcy – Moscow has stopped coupon payments for ruble bonds. But there is a far greater threat: Vladimir Putin has de facto gambled everything away. Perhaps he will punish the world for this with a nuclear Nero order.
History could repeat itself with a technical default in the bond market: On August 17, 1998, Russia declared default, after which the hedge fund Long Term Capital Management collapsed, and Wall Street was in shock. Moreover, when news arrived yesterday that NATO foreign ministers would hold an emergency meeting on Friday, prices dived. Is an escalation in the Ukraine war imminent? The recovery is thus faltering, as can be seen in the Dow Jones, which is still well below the 50-day line.
Especially since the world is threatened by a completely different danger. Putin has lost everything with his invasion of Ukraine. Russia is isolated, its economy is threatened with collapse. New, even more severe sanctions are possible – such as a total boycott of oil, gas and coal from Russia. NATO is arming itself. What else can Putin do? Nothing. How is a Moscow-installed, hated puppet regime supposed to rule this vast country? A long partisan war is foreseeable. Or else, Ukraine wins because it equips tens of thousands of rested reservists with weapons from the West – and the people right along with them. Russian generals have probably also realized all this.
First hairline cracks
Hairline cracks are already appearing in the power structure: The Islamist Chechens who were supposed to eliminate President Selensky were reportedly eliminated after warnings from the FSB. As we read further, Russian soldiers have punctured the tanks of their trucks to avoid having to advance further. Vladimir Putin has changed – he has put on weight, his face is puffy. His recent appearances have been bizarre, especially the huge marble table in the Kremlin, where no real conversation is possible. And that raises the question of how a power politician in a doomsday frenzy reacts. What if Putin’s indirect warning with the use of nuclear weapons last weekend was not an empty bluff?
A world without Russia is supposed to end
In a brilliant article, Thomas Spahn of “Tichy’s Einblick” referred to a March 2018 televised speech by Putin: “Our theoretical plans include a so-called retaliatory counterstrike. Yes, it will be a global catastrophe for humanity. It will be a global disaster for the planet. But as a citizen of Russia and as a Russian president, I ask: Why do we need a world where there is no Russia?” Those who compared Putin to Adolf Hitler were vindicated. For he once wrote in “Mein Kampf”: “Germany will either be a world power or not at all.”
In short, if Putin despairs that the dream of a united, mythical Greater Russia consisting of Russia, Belarus and Ukraine will be shattered, then things will get nasty. Any statement or action in this direction will crash the stock market. Needless to say, conversely, if Russia pulls out of Ukraine or even Putin disappears, prices will explode upward. Bernstein Bank keeps an eye on the situation for you!
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