Santiago Capital Profile picture
Jan 14, 2022 16 tweets 7 min read Read on X
Can't go a day without someone saying Russia going to invade Ukraine and nothing the Biden admin can do to stop it.
And the media is happy to paint the situation as an evil attempt on Putins part to take over a sovereign nation despite US's own record.
Whatever you think of Putin, I hope we can all agree he is not a stupid person. Like him or hate him, he has been an extremely effective leader. And has probably played the hand he was dealt better than any of his peers. And even the f'ing birds respect him.
Part of this theory for the imminent invasion of Ukraine is bc Biden is weak and Europe is in an inflationary energy crisis. And with Europe dependent on Russian Natural gas to keep warm, the timing is good for Russia.
But is it?
It's already the middle of January.
Winter lasts another 2 months. Maybe 3.
Not too much longer before the Nat Gas card starts to lose at least some of it's value as the ice in Europe starts to thaw.
Also, a cold winter is always seen as a negative for Europe. But isn't it also a negative for any military action? Do you think Putin doesn't know history? I seem to remember a little something about a war that was fought on the Russian border in the middle of winter.
The longer he waits to ensure a sunny day for his tank parade the less valuable (at least in short term) his natural gas card becomes. So while it's certainly not impossible, it's not as if Putin doesn't have any challenges in his way. He's got a few ups and downs to consider.
And what about first half of the #DragonBear as described by @vtchakarova
Isn't China throwing a big party next month?
Is Putin really going to ruin his best friends plans right before the opening ceremonies?
That's only slightly less rude then peeing in the Champagne.
Could wait until after closing ceremonies similar to what he did after Sochi. But wouldn't have the same element of surprise as last time. And again, the longer he waits, the less effective the gas card becomes. So...what to do...what to do...
In meantime, don't forget there is already a coalition threatening to sanction Russia. Does Putin care about sanctions? I think he cares but he would never admit it. And I'm sure there's a part of him that would just react like this if the coalition tried to tell him what to do.
The better play IMO would be to wait. Let some of the chatter die down. Play it off as more Western propaganda and fear mongering. Let the West think they stared you down and won. And let them get back to their reality shows & tik tok videos.
Then in the late summer...early fall...when the rest of the world thinks you are on vacation & eating ice cream, you hatch your plan.
As the skies start to get a little less blue, and the winds start to change, and the seasonal Nat Gas prices just barely start to rise, thats when you fail to meet a delivery of energy. And of course you say it was just an accident...a miscommunication...
And then as NG prices rise a bit more, the US is gearing up for mid term elections and attention is focused elsewhere...but it is still sunny enough for your parade, you start make your move towards the border. You say its just a normal defensive move against Nato expansion.
And then another delivery is missed.
Europe & Ukraine are like "What the hell, its starting to get cold." And Putin is like "its gone".
And then, if he decided to, that would be time to move in. Bc Ukraine's allies would be focused elsewhere, Ace card would be rising in value and would be harder for resistance to hold out heading into dead of winter. And those few who had been paying attention would be like...
And of course this is all just speculation as I'm sure whatever the various options are Putin has already war gamed them out and knows it a hundred times better than I ever will.

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More from @SantiagoAuFund

Oct 20, 2023
OK, potential mea culpa time.
Ive now had 2 phone calls as well as email correspondence with US Treausury Dept about TIC data regarding what it does & does not show.
Long story short, its a bit confusing bc they recently changed methodology and may change it...again.
1/
In thread below I will share what Ive learned.
U are then free to make up your own mind as to what info is saying & what it means for markets.
The debate started a few months ago when charts of UST holdings by China started making the rounds.
TIC is the source for the chart
2/ Image
TIC data is based on CURRENT MARKET VALUE of CURRENT HOLDINGS at the end of period. Meaning it reflects purchases, sales & CHANGE IN VALUATION. This has been confirmed by UST department in person and in writing. Also, see footnotes on TIC data reports below.
3/
Image
Image
Read 10 tweets
Sep 8, 2023
Much has been made of the recent Fed rake hiking cycle as well as the coinciding collapse in long term UST Bond prices. I thought I'd do a short thread in order to help those who seek a better understanding of what is going on & whether "It's different this time."
Enjoy...
1/
Lets take look at historical hiking cycles.
Since late 70s, have been 7 cycles.
Chart shown below.
Absolute value right hand axis.
% growth shown on chart
(numbers approximate).

77-81 (290%)
83-84 (40%)
87-89 (60%)
94-95 (100%)
04-07 (400%)
15-18 (900%)
22-23 (2000%)

2/ Image
Here we see rate hiking cylcles with price of Long Term UST price overlaid.
We see both over long term, as well as during short term cycles, the UST price has tended to have an inverse correlation to rate hikes.
This is Bond 101.
As rates rise/fall, bond prices fall/rise.

3/ Image
Read 14 tweets
May 6, 2023
Which does a government hate more?
What is more likely to lead to deflation?
What is more likely to lead to a currency strengthening?
Read 5 tweets
Mar 26, 2023
For anyone who thinks I haven't done my research, I'm posting a paper I wrote on Bitcoin several years ago.

It is now somewhat dated but please feel free to tell me where I have it wrong or which part I "just don't get".

1/
2/
3/
Read 9 tweets
Mar 1, 2023
A thread...

I started in this business almost 25 (!) years ago.
In that time, I have transitioned through the .com boom/bust, Sept 11, the RE boom/subsequent GFC, the Euro sovereign crisis, the '18 volmageddon, the '19 repo crisis, the Covid crisis & the '22 Fed hiking cycle.
1/
Safe to say Ive seen many separate episodes of both panic & euphoria. Sometimes right on heels of each other. Despite all of that, I've never seen a more uncertain time than right now. This is long way of saying if someone says they know for certain what comes next...
2/
This is also why I am always a bit surprised when I talk to someone who is a devoted member of some monolithic inflation, deflation, gold, fiat, crypto, hegemonic surpremacy, or global south tribe.
3/
Read 19 tweets
Oct 26, 2022
Think of the monetary system like a game of Musical Chairs. USD Base Money (Reserves at the Fed + Physical Cash & Coins) are the Chairs. All other USD monetary aggregates (M2, M3, Securitized Debts/Loans, USD credit extended, etc) are the people circling the chairs.
While these are often times considered Supply, these monetary aggregates are also DEMAND. Bc when the music stops (USDs stop circulating/credit stops being extended) all these Aggregates (people) are ultimately claims on the Base Money (chairs).
The Supply can be increased by extending more credit (people) as the music plays, but this ALSO increases Demand as extending credit does NOT increase the Base Money (chairs). So as credit (people) grows the sytem becomes more & more leveraged.
Read 13 tweets

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