Macro Mondays ??: Catastrophic

Over the weekend, Jake Sullivan, President Biden’s National Security Advisor, made the rounds on the Sunday morning talk?shows. When asked how the U.S. would respond to the potential Russian use of nuclear weapons in Ukraine, Mr. Sullivan used a phrase that should send chills down the spines of Americans and Russians alike. He said Russia should expect “catastrophic consequences” should they choose to use nuclear weapons in Ukraine.

Mr. Sullivan’s modulated response was intentionally vague, yet underscores just how quickly the rhetoric has intensified as Russia has suffered severe setbacks on the battlefield in recent weeks. Let’s recap.

Earlier this month, Ukraine staged a stunning offensive, retaking more than one thousand square miles of territory and embarrassing Putin. The counteroffensive pierced through the illusion of Russia’s so-called ‘superpower status’ and showed the Ukrainians – and the world – that Ukraine can win the war

Putin responded to these battlefield losses by accelerating his war effort. Last Wednesday he announced a partial mobilization of roughly 300,000 reservists to the military.

However, there are conflicting reports on the full size of the Russian mobilization. Some?new outlets?have already picked up on what OSINT first sniffed out. Namely, Putin plans to mobilize far more than 300,000 men, with some experts predicting more than 1 million Russians will be sent to the frontlines.

Also during his speech, Putin appeared to suggest that if Ukraine attacks the territory, Russia is in the process of annexing via?sham elections, he will take it as a direct attack on mother Russia herself. “If the territorial integrity of our country is threatened, we will certainly use all the means at our disposal to protect Russia and our people,” Putin said. “This is not a bluff.”

According to the?New York Times, “American intelligence officials say they still believe the chances that nuclear weapons will be used in the conflict are low. But they believe those chances are significantly higher than they were in February and March because Mr. Putin has lost confidence in the ability of his ground troops to hold territory, much less take over Ukraine.”

Immediately following Putin’s speech, every single international flight leaving Russia?sold out, as Russians scrambled to leave before being sent to the frontlines. Russians have also fled to neighboring counties like Finland, which, according to?Reuters, has seen almost 17,000 Russians cross the during last weekend alone – an 80% rise from a week earlier.

Simultaneously, protests quickly erupted across major Russian cities like Moscow and St. Petersburg, as well as in remote parts of the counties like the Siberian city of?Novosibirsk. So far,?over 2,000?Russians have been arrested for participating in anti-war protests. Some protesters are reportedly being handed?draft papers?while in custody, a tactic the Kremlin is using to instill fear across the Russian population.

In the days and weeks to come, there are a few things we should be watching. First, how Russia’s mobilization – “partial” or not – fares. There’s already been fierce pushback on this front. On Monday,?two recruitment centers?came under fire. A Russian man opened fire at a military-recruiting station in Siberia, critically wounding its commander, hours after another man rammed a car into the entrance of a different recruitment center then set it afire with Molotov cocktails.

Putin’s mobilization order is a sign of desperation and a last-ditch effort to reverse the tide of the war in Ukraine. If the effort falls apart or faces widespread domestic opposition, it could contribute to continued battlefield losses at the hands of the reenergized Ukrainians or political instability in Russia – which either way makes the mobilization a critical input into the broader war.

The other major issue to watch centers on Putin’s latest volley of nuclear-tinged threats. Although the U.S. intel community apparently believes Russia is ‘unlikely’ to deploy tactical nukes in Ukraine, Jake Sullivan clearly thought it was wise to reiterate the same message of deterrence on three different talk shows on Sunday morning. This shows the U.S. is taking Putin seriously and aims to deter further escalation.

Going forward, we should watch for any additional statements from Putin – who appears to have escaped to his ‘secret palace in a forest’ – or from one of his top confidants. If Putin were to use a tactical nuclear weapon he would likely escalate his rhetoric first, then perhaps fire off a “test” before actually deploying a real missile into Ukrainian territory. The last thing Putin wants is for the U.S. and its NATO allies to get further involved in the war, which makes his nuclear calculus multi-dimensional and fluid. Nevertheless, Mr. Putin finds himself in a totally unfamiliar position: with his back up against the wall. As a result, he may be more prone to lash out in a desperate attempt to regain momentum in what he views as an existential “special operation.”

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