War Won’t Happen While Stock Markets Are Quiet

If the West wanted to go all the way in the conflict with Russia, it would save its money first

This post first appeared on Russia Insider

The military and political confrontation between Russia and the US, and the West in general is growing. No one is likely to make concessions. The US wants to assert its leadership, which is being called into question, while Russia is fighting for its future on the world stage, something not included in the American scenario. There are even fears that a proxy conflict between two great powers is possible,  as happened twice, in Korea and Vietnam. Some people are especially inclined to whip up fear, even talking about all-out war.   

In fact, it’s unlikely there are serious reasons for concern. Armageddon is on hold. Stock markets always read the tea leaves. A hundred years ago, before the Russian Empire collapsed, shares in Russian companies were reduced to nothing (stock brokers restored pop-up retailers in the center of Moscow after the Revolution, but the KGB noticed them at once and they came to a bad end).  

Right now, there is no stock market crash, either in Russia, or in the world. If the West wanted to go all the way in the conflict with Russia, it would first save its funds. For example, BP would sell its shares in Rosneft, and foreign foundations would withdraw funds from Sberbank, causing it to crash. The sale would affect both foreign and internal debt, lowering the Russian ruble. Currently, nothing special is being observed in the market.

Of course, new sanctions are possible, although both Russia and the West appear to have done everything they could without serious losses. Russia’s  standing in the world economy is relatively small, but an interruption in its exports of oil, gas or titanium would be painful for the West. That’s why only symbolic steps should be expected from both sides, probably resulting in a free trade zone between the Eurasian Union and the SCO.  

In conclusion, “the market is smiling”. Due to the Russia/West conflict, the ruble is being sold at a military and political discount, which is very profitable for Russia’s budget, at a time of deflation.

Source: Na Linii

This post first appeared on Russia Insider

Anyone is free to republish, copy, and redistribute the text in this content (but not the images or videos) in any medium or format, with the right to remix, transform, and build upon it, even commercially, as long as they provide a backlink and credit to Russia Insider. It is not necessary to notify Russia Insider. Licensed Creative Commons

Our commenting rules: You can say pretty much anything except the F word. If you are abusive, obscene, or a paid troll, we will ban you. Full statement from the Editor, Charles Bausman.