The shake and rattle

In Ukraine (Russia) and the silver markets (Free)

This morning there were no shortages of topics to write about. We had the silver squeeze, followed by rumors of a major bank collapsing (mostly in the X), Ukraine allegedly striking the residence of President Putin, and repo markets sending more, and deeper, signs of stress. Today, I will comment on the first two.

Ukraine (allegedly) struck the residence of President Putin at Lake Valdai in the Novgorod Oblast. Ukraine has naturally denied all such claims, but at this point I am more inclined to believe the Russian narrative (I cannot believe I just wrote that, but allow me to elaborate). Some even claim that the facility in question would be one of the command and control centers for Russia’s nuclear forces, but I have no knowledge to either corroborate or debunk such claims.

The thing is that President Zelenskyy has (much) more to gain of the war continuing than President Putin. War fatigue has begun to affect many Russians, the majority of whom simply want the conflict to end. Moreover, like I’ve explained, Putin is quite far from an actual dictator. He holds uncontested power because he has managed to restore some of Russia’s glory in the minds of its citizens, and because they are not yet ready for a true democracy. For example, Josif Stalin ruled with an “iron fist” with the help of an extremely pervasive domestic surveillance and control apparatus (the NKVD, which evolved into the KGB). President Putin does not have such an apparatus in his command, and I am keen to think he does not even want it. In any case, he wants (needs) the war to end.

President Zelenskyy, on the other hand, is “toast” after the war ends, because peace will bring to light all his highly detrimental decisions and rampant corruption under his rule. Thus, President Zelenskyy needs the war to continue much more than President Putin. Rumors are actually currently suggesting that President Zelenskyy is already preparing to leave Ukraine. I doubt it, but this is a possibility we need to acknowledge.

Ukraine, more precisely the SBU (Služba bezpeky Ukrajiny), the Security Service of Ukraine, has already killed two high-ranking generals in Russian territory. Last week, Lieutenant General Fanil Sarvarov died in a car bombing in Moscow. A year ago, SBU assassinated Lieutenant General Igor Kirillov, the head of the Radiation, Biological, and Chemical Defence Forces. Kiev thus has had the tendency to target Russian military leaders, in Russia. Why not up the ante?

We can thus assume the claims of Russia on Ukrainian efforts to strike the residency of President Putin hold merit, at least to some extent. This “shake and rattle” would have been aimed at derailing the peace process. In “How the war in Ukraine can go nuclear?” (now free to read), I noted that:

Yet, we are very close of the first two ladders already. The attempt to President Putin’s life comes follows the line established by the assassination of General Kirillov. This attempts acts as an escalation, a step to ensure a devastating response from the Kremlin.

With the first two ladders, I meant the first two in my 10-point path of escalation of the conflict in Ukraine into a nuclear war, where the third ladder was (is): “NATO/Ukraine make an effort for President Putin’s life with missile strikes to Moscow.” To note, in my thinking, President Zelenskyy is so corrupted that he would even risk a nuclear war to save himself.

Now, we wait to see in what way Moscow responds. In the worst case, the response will be in the lines of an Oreshnik strike to the government quarter in Kyiv. Yet, I doubt that the “promised” retaliation will be anything major, because the Kremlin does not want to derail the peace process, which could happen if they were to strike, e.g., the Presidential Palace in Kyiv. Therefore, I am expecting more of the “strategic patience,” with some show of force. However, we should not rule out any act of escalation from Ukraine/NATO during the first months of 2026.

The “shake and rattle” in the commodities (most notably silver) market has caused a stir during the past few days. Some commentators have even suggested that it could start the unraveling of the financial system. As, for example, the silver market is so small, I don’t consider any tremors there to risk a systemic event. After a major rally, some painful rebalancing will surely come (it is necessary), but it is very unlikely that commodity market (especially silver market) tremors would carry detrimental long-term consequences for the financial system. However, recent developments in the repo-markets can accomplish (signal) just that. I’ll return to those tomorrow.

Tuomas

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