Greg Valliere’s 5 Questions on Russian Invasion of Ukraine

With Russia’s invasion of Ukraine on Thursday, Greg Valliere, chief U.S. policy strategist of AGF Investments, put together a list of questions that advisors might keep in mind as the answers could affect investments.

1. How long will Phase One last?

“Intense aerial bombardment should take out Ukraine’s air defenses within the next few days,” Valliere predicts. This will help Russia’s ground troops, which will “stream” into Ukraine. This phase should give Russia control of the breakaway Donetsk and Luhansk regions in eastern Ukraine.

2. What’s Putin’s longer-term goal?

Putin’s goal, Valliere states, is “to take out the government in Kyiv, which won’t be easy.” Valliere believes special forces will “round up Ukrainian officials, assassinating and jailing them” and then establish a puppet government that won’t join NATO. Putin also hopes that surging energy prices will push the West into a recession, Valliere says.

3. Will Ukrainians fight back?

Valliere says this is a “huge” unknown, although due to Russia’s superior resources, Ukraine “will lose a conventional war.” That said, a guerrilla war could persist, which will kill Russian troops and is a risk for Putin, Valliere says.

4. Does Putin care about sanctions?

Harsh sanctions are on the way, including a ban on Russian membership in the SWIFT financial system “that facilitates global financial transactions.” Valliere notes that Putin has anticipated these sanctions and is flush with cash.

5. What about the mood in Moscow?

“The Russian markets have been clobbered,” Valliere writes, but state propaganda is selling the invasion as a “heroic fight against Russia’s foes.” He isn’t sure how long the Russian public will support Putin, especially if casualties mount into the thousands. At that time, “the Russian public could turn against him.”