Putin Will Never Back Down | Institutional Investor’s Alpha

Excellent analysis of the situation in Eastern Europe by Bill Browder, founder of London-based Hermitage Capital Management:

I’m afraid that, based on the reasons behind Putin’s motivations for invading Ukraine in the first place, there is no chance that he will back down. To understand this, all it takes is a simple analysis of how this crisis unfolded.

First, Putin didn’t start this war because of NATO enlargement or historical ties to Crimea, as many analysts have stated. Putin started this war out of fear of being overthrown like Ukrainian president Yanukovych in February 2014. Yanukovych had been stealing billions from the state over many years, and the Ukrainian people finally snapped and overthrew him. Compared with Putin, Yanukovych was a junior varsity player in the field of kleptocracy. For every dollar Yanukovych stole, Putin and his cronies probably stole 50. Putin understands that if he loses power in Russia, he and his underlings will lose all the money they stole; he will lose his freedom and possibly even his life.

I believe that Bill is right. Putin was not reacting to EU or NATO encroachment (they were never a threat), but to Maidan. Especially when we read Michael McFaul’s (former ambassador to Russia) summation of Putin: “He is obsessed with the CIA…..With respect Ukraine he believes the US led the coup in the Ukraine. The Ukrainians had nothing to do with it. It was all the CIA.”

Former Ambassador to Russia Michael McFaul

….. Putin has never dealt with economic chaos before. Though some may argue that this will bring him to the table to negotiate with the West, in my opinion any negotiation would be seen as a sign of weakness and is therefore the last thing Putin would want to do.

Putin’s only likely response is to escalate in Ukraine and possibly open up new fronts in other countries where there are “Russians to protect.” But doing so will only harden the sanctions, leading to further economic pain in Russia — and further military adventures to distract Russia’s people from that pain.

I cannot imagine a scenario in which there is any compromise, because for Putin compromise means being overthrown. Judging from all of his actions to date, he is ready to destroy his country for his own self-preservation.

We should start preparing ourselves for a war in Europe that may spread well beyond the borders of Ukraine. The only Western response to this has to be containment. This all may sound alarmist, but I’ve spent the past eight years in my own war with Putin, and I have a few insights about him that are worth knowing.

In Putin’s mind, he is fighting for survival. The US/EU/Nato and Ukraine are just a convenient scapegoat. His real enemy is the Russian people. This 1945 image of Benito Mussolini, his mistress Clara Petacci, and three others hanging outside a petrol station in Milan must haunt his dreams.
Bodies of Benito Mussolini, his mistress Clara Petacci, and three others hanging outside a petrol station in Milan

When they realize they have been duped, the anger of the Russian people will be palpable.

Read the full article at Unhedged Commentary: Putin Will Never Back Down | Institutional Investor's Alpha.

5 thoughts on “Putin Will Never Back Down | Institutional Investor’s Alpha

  1. Bob says:

    Putin was also witness to the NATO shenanigans in Kosovo in former Yugoslavia when Russia was in weakened state at end of 1990s. NATO picked up a client, the vile and heroin trading Kosovo Liberation Army, who deliberately provoked a military response from the heavy handed Milosevic dictatorship Serb state by repeatedly killing Yugoslav state police and isolated Serb villagers. The Serb state was so internationally off side at that point the KLA knew it could manipulate international opinion to its advantage easily and the US and NATO threw their weight into the project.
    NATO had own agenda to access lands that were previously inconceivable as military base point under Serb state, that is traditionally Russian ally. Result NATO carved off a quarter of Serbia and gave it to an ethnic minority, and built bases there, all within spitting distance of the Russian Federation.
    At exactly the same time the US was giving financial and military aid to break away groups in Russian republics such as Georgia and Chechnya, Putin was well aware of the US largesse at Russia’s internal ethnicity problems, and this time around he is not playing to the NATO rules.
    It is literally Russia’s backyard that NATO is moving into in Ukraine, and ‘western’ policy here is directed by very hawkish Neo Cons who are confrontation orientated.

  2. Fabian says:

    Putin is a crook OK but who isn’t? It’s a young nation in its present form so apparatchiks don’t go to retirement when they reach a quarter billion dollars, like they do in the US (albeit, we may have to cope with a Clinton, again). The point regarding Russia is that it’s now facing a quasi bankrupt country that spends many times more in military than all other nations combined. What do bankrupt countries do, particularly when they have this huge military to keep busy? They wage wars for territory. Don’t forget that you’ve about 500,000 blokes in the Pentagon who need war to have an exciting career. Because soldiers always claim that they are for peace but their job is war, nothing else.

  3. Michael Snow says:

    Article is typical of our provincial blindness in the West. NATO encroachment may seem ‘innocent’ to us but we are rather clueless.

    • ColinTwiggs says:

      NATO is largely defunct. Couldn’t field one well-equipped brigade between the lot of them. Putin concerned? He must have laughed at their inability to stage a successful intervention in Libya. That is one of the major reasons for his confident aggression in Ukraine. He’s sure NATO will back down.

  4. We cling to the notion that good sense and decency will prevail, and all will be sorted peacefully. Surely whole populations wouldn’t start murdering other whole populations because one or two emotionally inadequate men, hiding in their bunkers said it’s OK. Oh, wait, that’s right; that’s how all wars start.
    In my armchair opinion, if Putin isn’t made irrelevant very soon, his worsening self esteem will inexorably force him to hand command and control of nukes to his field officers who will blindly assume he knows what he’s doing.

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