“Russia accused the United States Wednesday of declaring an economic war that is sowing chaos in world energy and commodity markets, putting Washington on notice it is considering its response, which could be devastating”–Paul Ebeling
This war in Ukraine is similar to the COVID-19 chaos, as again it has turned economic forecasting into an extremely crude scenario exercise, where forecasts are largely driven by assumptions about variables, which are way outside the realm of economic analysis, and where even specialists are forced to frequently revise their assessments, given the new information they are analyzing day-by-day. This time the Key known are, of course, the development of the war and the path of energy and commodity prices.
The 2 political events are strongly correlated.
The large price volatility in recent days seems to be more driven by market speculation based on the news flow related to the war, rather than changes in actual demand and supply, with the complete breakdown of Russian Crude Oil, Nat Gas, grains and fertilizer deliveries in sight.
When Russia wins this war
Remember, when Russia joined the civil war in Syria, in the Summer of 2015, it shocked the United States and its partners. Out of frustration, then President Hussein Obama claimed that Syria would become a “quagmire” for Russia and Russian President Putin. Syria would be Russia’s Vietnam or Putin’s Afghanistan, a grievous mistake that would eventually rebound against Russian interests. Of course that did not happen and it transformed the region,
And, when Russia controls the Ukraine it will transform Europe too.
Have a prosperous day, Keep the Faith!