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What Desperate Putin Wants to Hide

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What Desperate Putin Wants to Hide

Author: Greg Valliere

September 21, 2022

THE DRAMATIC ESCALATION of rhetoric this morning from Vladimir Putin is largely designed to hide the extent of battlefield losses suffered by Russia in recent days — and it’s also aimed at convincing hawks in Moscow that the war isn’t lost.

RECKLESS HINTS ABOUT A NUCLEAR RESPONSE from Russia have produced grim headlines, as Putin seeks a partial military mobilization and a sham referendum in eastern Ukraine, theoretically the prelude to annexation. These moves have been demanded by hard-liners in Russia.

THIS OBSUCRES A BASIC FACT: The Russian military is in utter chaos, with well over 15,000 fatalities and perhaps 50,000 wounded, at least a dozen generals killed, and Moscow’s military infrastructure in the region largely ruined or abandoned.

THIS ASTONISHING SETBACK now requires the mobilization of 300,000 reservists who will be very reluctant participants in the war — but for Putin, this changes the subject from the humiliating battlefield losses.

THE MOST DEPRESSING ASPECT of this verbal escalation is that truce talks —
which seemed to have a flicker of life yesterday — now seem doubtful any time soon,
which means a war throughout the winter is more likely, with all that implies for
energy shortages in Western Europe.

PUTIN REPORTEDLY HAS ASSURED HIS WAVERING global allies that he would seek peace talks, and Turkish President Recep Tayyip Erdogan reiterated yesterday that he’s willing to act as an intermediary. Erdogan, Chinese President Xi and Indian Prime Minister Narendra Modi have distanced themselves from Putin in recent days.

BOTTOM LINE: We have asserted since late February that Russia cannot win this war, which seems virtually certain after Putin’s battlefield losses. The most perplexing issue is whether an exit ramp exists for either him or Volodymyr Zelensky. Both seem unwilling to compromise.

IN THE ABSENCE OF A CLEAR EXIT STRATEGY, the most likely scenario is a war through the winter. But an intriguing wild card is becoming more likely — continued battlefield losses for Russia, prompting the removal of Putin by his generals and the increasingly restless hawks in Moscow. Putin must sense this threat to him, which is why he has doubled down.


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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