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High Anxiety as Nuclear Threat Grows in Ukraine

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High Anxiety as Nuclear Threat Grows in Ukraine

Author: Greg Valliere

October 3, 2022

THINKING THE UNTHINKABLE: The dominant theme in Washington this past weekend was the threat that Vladimir Putin may resort to tactical nuclear weapons in response to Russia’s humiliation on the battlefield.

ODDS ARE BELOW 50% that Russia would resort to using even a small tactical nuclear weapon, U.S. officials believe; they cite two reasons: First, Putin’s generals, opposed to such a move, might refuse to carry out such an order. Second, if Russia used a nuclear weapon, Moscow would become a global pariah for years to come, facing even greater sanctions.

BUT FEAR OF THE NUCLEAR OPTION spiked higher on Saturday following the publication of a sobering article in the New York Times. For the first time since the Cuban Missile Crisis, explicit threats have prompted U.S. officials to game out scenarios for a limited nuclear conflict, the article stated.

NO ONE IS TALKING ABOUT INTERCONTINENTAL MISSILES with thermonuclear payloads. The Russians have hinted that they would use tactical nuclear warheads, which are small enough to fit in individual artillery rounds, though they can still devastate and irradiate a few blocks, or a single military base, the Times said.

IF RUSSIA DETONATED a tactical nuclear weapon on Ukrainian soil, the options
for the West include totally unplugging Russia from the world economy or some kind of military response — though one that would most likely be delivered by the Ukrainians with Western-provided conventional weapons, the Times said.

THE THREAT OF SUCH AN ESCALATION has prompted U.S. officials to intensify diplomatic overtures to China and India, two countries that have expressed reservations about Moscow’s invasion of Ukraine and, theoretically, could lean on Russia.

PUTIN IS NOT LIKELY to use a nuclear weapon immediately. His initial steps,
according to officials, would probably involve a sabotage campaign in Europe,
attacking Ukraine’s energy infrastructure or targeting senior officials in Kyiv, the
Times reported, adding that some officials wonder if the attacks on the Nord Stream pipeline may have been a first step — though it is not clear Russia was behind that sabotage.

PUTIN’S GOALS INCLUDE scaring the United States and NATO from considering direct intervention in Ukraine. A second goal is to force the West to back off supporting Ukraine at all, or perhaps forcing the Ukrainians to the negotiating table in a disadvantageous position.

PUTIN ALSO HAS TO CONVINCE his wavering hard-line supporters that Russia will
prevail, but he has lost the backing of young Russians, many of whom have fled. And he faces mass defections by retreating Russian troops.

FORMER NATIONAL SECURITY DIRECTOR H.R. McMASTER said yesterday that “I think the message to [Putin] is: If you use a nuclear weapon, it’s a suicide weapon. And the response from NATO and the United States doesn’t have to be nuclear.”

FORMER CIA DIRECTOR and retired Army Gen. David Petraeus said if Russia used a nuclear weapon, NATO “would take out every Russian conventional force that we can see and identify on the battlefield in Ukraine and also in Crimea and every ship in the Black Sea.”

BOTTOM LINE: The great irony is that the more Ukrainian troops advance, the more dangerous Putin will become. He believes that four annexed provinces are now part of Russia, even though Ukrainian forces are advancing rapidly to reclaim them. Putin is cornered on the battlefield and in Moscow, which makes him even more unpredictable.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2023 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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