Geopolitics and Markets Review – 15th May 2023

Sections:

1) Ukraine Sees Massive Explosion

2) Bank of Canada CBDC Queries

3) U.S Official in Saudi For Rail Project Discussion

4) Other News:

o China Expels Canadian Diplomat

o Armenia-Azerbaijan Border Conflict Arises Once Again

o Turkey Elections

o South Africa Military Aid To Russia

o Imran Khan Arrest Updates

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Ukrainian Ammo Factory Explosion

I’m rather confused about why you can’t seem to find information about this anywhere except Twitter. A massive explosion in Khmelnytskyi occurred at a building on Saturday morning. It was first thought to be an ammunition depot, but those on Twitter seem to think the building was storing some kind of fuel based on the explosion. Another possibility is the building was storing weapons sent by the West in support of Ukraine. If true, this would be a massive loss to Ukraine and the West, who continue to provide billions in support of Ukraine with no discussion of peace on the horizon. The source of the explosion appears to be Russian Shahed drones.

Photo by Alessio Soggetti on Unsplash

In recent months, Russia has been working on strategies to try to sell its war in Ukraine to the general public. The drone strike on the Kremlin, whoever was the perpetrator, will show the Russian public that the war could come home. This could also be used as a reason for escalation.

Ukraine also announced last week the postponement of their counter-offensive due to a lack of Western weapons. If Western weapons were stored in this building, that certainly won’t help with speeding up any potential counter-offensive.

In history, Russia has won its wars by throwing people at the problem until it stops being a problem. They start wars poorly but eventually gain the upper hand. If Russia is now targeting weapons storages and logistical targets, will Ukraine ever be in a position to launch a counter-offensive? If Ukraine isn’t able to launch a counter-offensive, would weapons from the West escalate in the damage they can cause? The UK is sending Storm Shadow cruise missiles with a range of 150 miles.

I worry that this war continues to escalate, with neither side willing to back down, and other countries who even whisper about potential peace seem unable to decrease tensions. Whether Russian aggression fighting to raise itself up to the power of the former Soviet Union and plug gaps into its territory, or the West goading Russia into war to weaken it, the trend is clear. Both sides continue to escalate. Until one side backs off and accepts they are in a losing position, they won't approach the negotiating table for peace. Whichever side approaches will have to make the biggest concessions. Neither side will want to be this side. We’re treading on a very thin tightrope, hoping game theory is managed and neither side is pushed too far.

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Bank of Canada Queries CBDCs

We are well on the road to Central Bank Digital Currencies. With fears over privacy issues and government control through limiting what we can buy, or how much and when we can make certain purchases, here is one promising sign. The Bank of Canada is seeking feedback from the public on their opinions on the digital Canadian dollar.