Warfare enters its fifth year

The special three-day operation of taking over Ukraine has gone on for more than four years. Four years ago nearly nobody expected that war to last that long, nor believed Ukraine would be capable of resisting the invader and keeping the frontline basically unchanged for months.

The Western countries have shaken off the shock quickly and launched a stream of military and financial aid to Ukraine, often depleting their defensive resources. The invasion has been a wake-up call for those still deluding themselves Russia would not infringe principles set out in the civilised world.

Hollow promises of the US president have not brought a ceasefire for more than a year and little implies there is a chance for warfare suspension in near future. This buys time for Western Europe for preparation for a war with Russia, while the tsar's country slowly bleeds out instead of growing stronger. 

In early 2026 Ukrainians have endured a first harsh winter since the onset of war. As the oppressor focused on destroying the country's energy infrastructure, millions of them have lived through a humanitarian disaster living in blocks of flats devoid of electricity, central heating and running water (except for that from heating pipes cracking when frozen over).

The nation as a whole remains valiant, though it is worth underlining civilians living far from the frontline are not as severely affected as during typical warfare. Ukrainians have got used to (as one can get used to everything) to blackouts, cold and having to run to shelters a few times a week, but except for that, their lives are not at constant peril. The enemy's missiles, rockets and drones target infrastructure, but to a much lesser extent, residential areas.

Over the past months the frontline has not moved much west, while in the recent weeks, thank to disruption of Starlink connection, Ukrainians have regained control over some minor areas (which are burnt grounds anyway). Peace talks are going nowhere and nothing is going to change in this respect, as the invader is not a trustworthy partner.

As four years ago the outbreak of war was beyond our imagination, these days the vision of end of war is also equally hard to imagine. I realise it is a controversial assertion, yet I keep fingers crossed for continuation of warfare. Firstly, since I fear Russia, devoid of the burden of warfare and (heaven forfend) with sanctions lifted will be able to step up preparations for a war with NATO. Secondly, the Polish labour market, deprived of only part of the Ukrainian workforce, will plunge into a structural crisis, as most low-paid jobs have been taken up by migrants (or refugees) from Ukraine. Poles are no longer interested in many of those occupations, so to fill the gap, if some of Ukrainians head home, substantial pay rises would be necessary, triggering a spike in inflation.

#StandWithUkraine

#UkraineStayStrong

To JEST nasza wojna

Dear readers. I put faith in your wisdom and have every confidence if you hear selfish goats from Konfederosja or their likes bleating the war in Ukraine is not our business, you know they are talking f**king rubbish.

Valiant Ukrainian soldiers, with substantial aid from the civilised world, have been keeping Russian army away from the Polish border for more than three and a half years. The Russia indeed occupies over 20% of Ukraine’s territory and attacks with drones spots in the entire country, but the frontline has been nearly intact for a while.

Over the recent weeks, Ukrainian drones keep destroying several refineries in European part of Russia. Estimates of damages done are to be treated with a solid dose of uncertainty, but sources say even up to 40% of total refining capacity of the tsar’s empire might be temporarily for long-lastingly shut down. Even if those figures are over-optimistic and knowing that the army will be the last to run out of fuel, those tidings are a music to my ears.

If what can be heard on a grapevine, namely that Ukraine is bound (with assents from the USA) to target power and heating plants in Russia in the coming weeks, is true, it also brings on a smile on my face, knowing weather forecasts for coming months for Russia do not indicate a mild winter. I do not feely sorry for ordinary Russians, who have superb track record of enduring a lot to help their homeland “prosper”. I also doubt they will ever realise they owe their misery to a totalitarian tsar, not to a rotten West.

In the light above the above, the major positive development in 2025 is that Donald Trump failed to nail down a ceasefire nor a peace agreement. I trust the US president, who two months ago clapped his hands as he was greeting Mr Putin in Alaska, was sufficiently humiliated by his Russian counterpart to come up to his senses.

With ceasefire in place, Russia would not see its industry destroyed. Instead, Putin would get two or three years to prepare for a bigger war, a timeframe over which Europe would not catch up with its enemy. With warfare going on, Russia is getting weaker day by day, admittedly at the price of bloodshed in Ukraine, soldiers and civilians being killed every day. It has to be spoken out Ukraine is paying price for our safety and hence it is a moral obligation of the West to aid it with weapons and information from intelligence.

Mindful of the above, I hope the war does not end soon. I keep fingers crossed for warfare continuing until Russia falls on its knees and then falls flat on its face into a frozen mud in which it has been stuck for centuries and until Ukraine regains its territories occupied by the invaders since 2014. Neither ceasefire nor peace, letting Russia regain its strength, are in a vested interest of Poland.

Chwała Ukrainie! J***ć Brauna i Konfederację!

A lunatic behind the wheel

In the eve of the third anniversary of the invasion to Ukraine, my hopes Donald Trump would act reasonably are dashed. The warfare, marked with attrition on both sides, might within a few months come to an end. Sadly, the peace agreement’s shape might be far from expectations of the civilised world.

The idiocy the US president displays on every step does not cease to amaze, or rather disturb me. How dumb must a man be to say he trusts the russian dictator? How short-sighted must a man be not to predict a ceasefire will buy time to putin’s war machine to build capacity for a broader campaign against NATO? How narcistic must a man be to want to bring the war to an end at any price, just to prove his powerfulness? How brazen must a man be to claim Ukraine has sparked off that war and could have finished it and accuse it of breaching a never nailed down deal?

In his transactional politics, Ukraine has a role of an object, not as a subject, it best summarises endeavours to reach a peace agreement without the invaded country being involved. The US president and his cronies are not interested in protecting NATO or in shielding foundations of the civilised world, such as a country’s right to stand up for its independence and integrity. This guy craves for rights to dig up rare resources beneath the Ukrainian soil. At the end of the day, such approach is still lesser evil than coercing Ukraine to give away occupied areas to russia, as it involves defending territories where rare metals are deposited against the russian army.

Europe in these circumstances appears powerless and sluggish. The EU leaders have belatedly realised they have made a mistake by relying on the behind-the-ocean ally as a guarantor of stability in Europe. Most countries in our region have run out of weapons shipped to Ukraine, have not rebuild their military capacities and now stick to expressing their deep concerns about how the peace is to be restored. The new US administration, no matter how critical we might be towards its policies, does not lack decisiveness and determination to resolve this conflict. Voters around the world are somewhat sick of indecisiveness and powerlessness politicians display; in several countries we see the outcomes of such shift.

Between us – Ukraine has still way to go before it becomes a mature democracy, especially in terms of cracking down on corruption and rule of oligarchs. From the perspective of Poland it needs to get to grips with its history (Wolyn genocide during WW2) But at the moment is is above all a country fighting for its independence and territories belonging to it based on international treaties. For the last 3 years Ukraine kept the russian army away from NATO’s borders. Biden’s administration’s tactics was to wear russia down and deplete its resources sustainably, so that it emerges frail after the war ends. Trump’s policies will help Russia to grow stronger in long term.

If prominent politicians call Ukraine’s president a dictator or claim aid from the Western world was partly seized by oligarchs, they speak one voice with the tsar of russia. This tsar, or his successors, will not stick to any peace agreements in a horizon of more than 3 years. The war will be suspended to let russia rebuild its military power and launch another “special operation” without making mistakes leading to a prolonged warfare in Ukraine.

As an economist I wonder how the imminent suspension of warfare impacts the Polish economy. Along with other analysts, I remain uncertain of impact on the stock market, labour market and housing market. Much depends on migration – depending on the shape of peace agreement, Ukrainians might want to return to their homeland, but a new wave might flee the country. Also, we might sadly expect a normalisation of trade relations with Russia, which is already priced in by the rallying stock market in Warsaw (I slowly begin to dispose of stock-market investment fund units purchased in late 2022 and early 2023).

Where is the war heading?

Two events in world politics from November have passed so far unnoticed on PES. I did not bother to comment on the victory of the narcistic redneck in the US presidential election. Then came the scheduled event, to my positive surprise, echoing in the media – 19 November 2024 was the 1,000th day of the invasion to Ukraine. Those forgetful are now reminded the operation was planned to last three days and end up in installing a puppet government in Kyiv.

Nearly three years after those days Russia controls roughly 20% of the Ukraine’s territory and is slowly progressing. Faced with an imminent power handover, the democratic administration in the US have resolved to allow Ukraine to hit military targets in Russia with weapons delivered by them. This seemed a game changer, but in fact solidifies a stall in the conflict.

Time before the redneck and his cronies takes over is running out. He intends to freeze the warfare, plausibly by leaving territories held by occupiers within their borders. For Russia it means some areas in the Kursk region would stay under Ukraine’s control. If such scenario is the most likely, Ukraine should strive to take over an even bigger territory of Russia, as this decreases odds of Russians agreeing on warfare freezing.

Shortly commenting on the Trump’s victory – I hope once he is sworn in, he will be less unpredictable than he appeared in the campaign and he will be surrounded by wise advisors holding back his silly conceptions. Besides, Europe must act now, as if it was left to its own devices, hoping for the best, but preparing for the worst.

Warfare musings

Forecasts of the Ukraine war development for the summer months were bleak. The Ukrainian defence was foreseen to break down, the invaders, apart from trespassing into the Ukrainian territory, were supposed to provocatively, yet tentatively attempt to disturb peace in the Baltic countries. Fortunately, only a minor part of those predictions proved right.

And then all of the sudden, on 6 August 2024, the Ukrainian army successfully moved the warfare into the territory of the enemy, launching the first incidence of was in the territory of russia or its soviet predecessor since WW2. The counter-attack carries on, with the invaders still shocked their own land has become a battleground.

The intrusion into a poorly-defended Kursk region were meant to prompt the invaders to shift some regiments from Donbas region, where things are not going well and the frontline is slowly progressing west. In simple words, in regions occupied since 2014, Ukraine is being defeated.

If the warfare carries on, 19 November 2024 will be the 1,000th day since its onset. The plan of the dictator was to take over Kyiv within a few days and install a mock-up government out there. Despite running rings around the capital of Ukraine, wreaking destruction and committing genocide, it has not worked out. Ukraine keeps holding strong and the war is far from settlement.

With the imminent attrition of both sides, 3 scenarios can be considered.
The first one - Ukraine wins. Despite ongoing supplies of arms from the West (leave out now who takes over as a president of the United States soon), Ukraine lacks resources to do so.
The second one - Russia wins - unlikely in short-term perspective, sadly conceivable in 2 or 3 years. It would pave the way for their next conquers, also to combat NATO countries.
The third one - both parties are fed up with the warfare and decide to sign a peace treaty. Ukraine loses part of its territory, the invaders ease up for a while. After a while the dictator rebuilds its potential and strikes again.

The old saying if you want peace brace yourself for a war has not gone outdated. With Russia ruled and weapon-equipped as it is now, we will not feel safe for many years. A full-scale invasion into CEE seems unimaginable, but a full-blown warfare is not essential to wreak havoc in the region. Deterrents must be in place, to discourage the dictator from a confrontation with NATO. Besides, unity of allies has to be manifested. For such reason I keep fingers crossed for the victory of Kamala Harris in November.

Belgorod engulfed in warfare

Since the beginning of the russian invasion to Ukraine, the attacked country wages a defensive war. In simple words, it has fought in its own territory (defined as internationally recognised borders in place until early 20214), but has not attacked the enemy’s land. Such approach gave a clear picture who had trespassed whose territory, but at some stage of war turned out to be insufficient to tip the scales towards the one we keep our fingers crossed for.

In the past days, with unhidden delight, I have kept track of destruction wrecked to the empire of evil. Each demolition of an oil refinery is a proper blow to the russian economy. Decreased supplies of fuels dent the country’s revenues (less money on armaments), impair transport as well as contribute to shortages of energy, which are detrimental to the military factories. Every day I watch the shelling of the city of Belgorod located close the Ukrainian border. This area of russia is currently war-ridden and residents who have not decided to flee are experiencing a bit of what the tormented Ukraine has endured for over the last 2 years.

Currently also the civilian infrastructure in russia is being destroyed, civilians in putin’s land are wounded and killed. Call me a scoundrel, but I could not care less. That accursed nation has to pay the price for all the evil its president is doing. Tactically, the strategy of attacking the invader’s area prompts the russian army to retreat to guard its lands, giving some relief from warfare to Ukraine. Such strategy also buys time and defers the probably inevitable confrontation between NATO and russia.

Speaking of the imminent war, I still believe with proper deterrents in place, russia might hold back from attacking any NATO country. But to make it happen, NATO countries need to get their act together to rebuild their military power (depleted by aids to Ukraine) and demonstrate their solidarity.

If the war indeed breaks out, the question is about targets and scale of warfare. Experts claim the enemy will still lack potential to trespass far and wide into NATO territories, but targeted shelling is perfectly conceivable. To paralyse life in large areas, russia only needs to destroy key elements of military and civilian infrastructure. Our homes might not be destroyed, but we might need to get used to conditions in which residents of Kiev had to live for several months, i.e. electricity outages, lost Internet connections, lack of warm water or heating.

Good times are not ahead. Even if the war fortunately does not break out, we as a mankind will need to make sacrifices to prevent the planet from becoming a hell due to global warming.

Two years past the invasion

2 years and 1 days past the day the russian army launched a full-scale invasion into Ukraine, I am looking back at my coverage of those days. For some time I have not been an ardent blogger, but I carry on to save my thoughts for posterity and for myself. Those first days of war were a shock. Until recently majority of us got accustomed to the cruelty behind Poland's eastern border, especially since for months fights on the front were not moving on.

Currently there are more and more reports on scales tipped towards the invaders and military intelligence notes telling despite its failure in the Ukraine, Russia is slowly preparing for a war against NATO, which might break out in 3 to 5 years.

Politicians from countries neighbouring on russia began to speak openly about the eventuality of a war. Those at the biggest peril are:
- Sweden (not a NATO member, the country has not experienced war since 1815),
- Finland (a NATO member since April 2023, badly tainted by Soviets during WW2, having the longest border strip with russia in Europe),
- Norway (remember it borders russia at the northern edge of the continent),
- Baltic countries (used to be a part of the soviet empire for half a century, thus being a natural target),
- Poland (russia's everlasting enemy as a matter of principle) and
- Moldova (a god-forsaken land between Ukraine and Romania).

Preparations for the war should move from a verbal realm into actions, especially military training and manufacturing. It needs to be stressed Europe has supported Ukraine with its own military resources, but over that time effort to rebuild Europe's depleted defence capacity have not been taken. Several countries have run out of their stocks of ammunition or military vehicles, thus NATO's ability to ward off an attack is impaired. Even if the armaments serve a purpose of a deterrent, they are worthwhile (a decade ago I would argue military spending is a waste of public money). Nevertheless the united Europe seems too sluggish. For many years EU countries have not managed too agree on ceasing to move clocks back and forth and switching to daylight saving time, so will they be able to get their act together, especially if for Western Europe the russian soldiers are thousands kilometres away.

Putin's army did not conquer Ukraine, but incurred severe losses in the battlefields. Human-wise, its resources are limited, yet sending millions of conscripts to die in a warfare has never been a problem to the uncivilised empire. Resourse-wise, military manufacturings is running at full blast and there are signs the russian economy has been switched into the military mode. Economic sanctions imposed on russia are bypassed (through countries such as Armenia or Kazakhstan), despite being cut off from modern technologies, russia is not on its knees.

Whatever fate Ukraine meets, Europe has to support it to help the evil invader bleed out there. There era of peace in Europe might soon be over, but let's buy time to defer the moments it goes down in history.

Currently the biggest threat lies in the USA, where the presidential election is due in less than 9 months. If the narcistic, unpredictable psychopat wins, Europe will have reasons to quake. NATO's power largely hinges upon the defence power its overseas ally.

The picture to the right is the cover most recent issue of "Wprost" weekly. Keeping fingers crossed for its poor predictive power, ley ot be contrary to its cartoonist's illustratory skills.

The warfare at the tipping point?

Those who still keep track of the invasion onto the territory of Poland’s eastern neighbour might realise today is the 228^th day of the war. Most people are sick of it, or indifferent to it. The cruelty of the invaders is no lesser than in the first weeks, but humans sadly have got accustomed to it.

The good news is that the Ukrainian army, aided by the civilised world, is successful in its counteroffensive in the occupied territories, running rings around the feckless Russian regiments. The news are reassuring, yet the better the Ukrainians fare, the more wrathful the unpredictable tyrant is. I feared the date of his 70^th birthday (the day before yesterday), as Putin could have wanted to displayed his might (or actually weakness) to the world. Fortunately, he did not, but the threat of using nuclear weapons, or resorting to some form of targeted nuclear incident still looms imaginable.

Looking back at the history, both Napoleon and Hitler were defeated by Russians during harsh winters. I believe the cold season will be used by the Russian dictator this year as well, not just to blackmail western Europe, still partly dependent on supplies of natural gas, but also to provoke a humanitarian disaster in Ukraine. If large swathes of the country are deprived of energy inputs, Poland will be facing another wave of refugees, even bigger than the one witnessed in the early phase of the warfare.

I keep my fingers crossed for free Ukraine in a pre-2014 territorial shape and hope the price to pay for Ukrainians victory will not be steep.

Off to my girlfriend’s second home in Wisła for two weekends and a working week, so I will catch up with photos of the autumnal mountain areas during the last weekend of October.

The coldest winter since decades ahead?

The post title should not mislead you – I am not daring to publish a long-term weather forecast. Such competencies remain beyond my capacity and given my more pessimistic than optimistic look at the life, may they stay so.

While in recent years warm winter seasons, a clear hallmark of the global warming, filled us with dread and uncertainty, many hope the 2022/23 winter in Europe turns out balmy. The worries are spurred by cut off supply of natural gas from Russia which is used to heat dwellings in most European countries. The gas has not flown into several countries for weeks, however in the warmer season, when it is used in cookers, ovens, water heating and for industrial purposes, reserves remain sufficient for a while. But as soon as the autumn draws in, the demand for gas will bump up, displaying clear negative correlation with air temperatures.

Governments of several countries, including the Polish one, warn between the lines we ought to brace for shortages of energy inputs and some forms of rationing out. Experts advise to recommend lower interior temperatures in dwellings, offices and public buildings. A prospect of having temperature capped at +18C or +19C in your house or flat looms very probable, yet is not a tragedy. I prefer to put on woollen socks and a sweater rather than make any concessions to Putler.

The scenario of shivering inside dwellings is an optimistic one. In the pessimistic course of events, deficits of natural gas would be large enough to limit deliveries to industrial off-takers. In such scenario sharply decreased supply of several industrial goods would send inflation even higher, while production stoppages or shutdowns would lead to payment gridlocks. Problems would spill over across the entire economy.

Since the end of WW2 the European societies have never experienced austerity. Currently with energy crisis on all fronts, an advent of war-time-like austerity is genuinely likely. I fear this might cause social unrest, which in turn would prompt politicians to look for a diplomatic solution which would resume gas deliveries from Russia. This must not happen, you surely realise why.

Admittedly, the price to pay for sanctions imposed on Russia is high, yet necessary. It was naïve to hope Russia would not take any retaliatory steps. The uncivilised nation under Putler’s heel, fooled by turgid propaganda, would make a lot of sacrifices to rebuild the empire and to restore the sense of national pride.

Besides, we need to remember that Putler, currently cut off the flow of technology and luxury goods, is well on track to bring the Russian economy back to where it was just before the Soviet Union collapsed. The dictator is intent to step up in his pursuit of the great Russian empire. Reportedly, the Russian economy is shifting into the war mode, meaning men left jobless as a result of economic downturn would become conscripts, while factories will begin to manufacture armaments, to make up for the losses from recent months.

Bleak times lie ahead. I hope western politicians realise no concessions must be made to Putler and that NATO unity, if put to the test, must be fiercely and firmly defended.

Wartime memories – first ten days

For some time the concept of this blog has been to save moment for posterity, therefore I have resolved to take down some notes on how the first ten days of Putin’s invasion looked from my perspective. It is not going to be a coverage of the military conflict which can be found in the media anyway. It will be just a personal record of my thoughts, musings and observations, so that one day I can revisit it and bring days the memories of dismal days which hopefully become the history soon, with a fortunate outcome.

 

Day 1 – Thursday, 24 February 2022

My phone shut down before 3 a.m. I deliberately have not left it on a charger overnight. I decide to charge it up in the morning. I get up at 5:30 a.m., eat a small breakfast and before setting off to the swimming pool, I connect the charger and switch the phone on. I check the recent posts on Twitter. I know it has begun.

After swimming I want to take a shower. For no apparent reason it does not flow. My skin stinks with chlorine, but I head home. Warsaw carries on.

Back home I learn the worst-case scenario of full-scale invasion has materialised.

A hard day at work begins. Nobody calls off business as usual due to the cruel attack on the Poland’s neighbour. Never in my lifetime has the warfare been so close to where I live. I find it hard to focus on work, like all the workmates. As we talk, it turns out most of us were hoping Putin would hold his horses. It was naïve, he is a ruthless psychopath, ready to scorch the earth to bring in his visions. Analogies between Germany after WW1 and Russia after the fall of the Soviet Union are so vivid.

As the sunset draws, panic-mongers begin to queue up to petrol stations. Those idiots firstly send money to Putin, secondly contribute to self-fulfilling prophecy that petrol stations might run out of fuel.

As the evening comes up, I feel exhausted. Partly because of tough 10 hours at work, partly because I fear how the story unfolds. The tsar is unpredictable.

 

Day 2 – Friday, 25 February 2022

With the invasion it became clear that accounts which used to spread pro-pandemic and anti-vaccine disinformation have now become pro-kremlin and ant-Ukrainian overt trolls.

The VPN in my company notebook keeps disconnecting itself for the second day in a row. A coincidence?

In the evening I team up with my mates from Szlachetna Paczka. I devise a plan of setting up “starter kits” for refugee families which would settle down locally. My mates immediately agree to join, so I let the mayor of Ursynów know about our initiative. He promises to keep us informed.

 

Day 3 – Saturday, 26 February 2022

In the morning I walk to the Lidl shop next door and buy two bags of hygiene materials and cosmetics (Rexona and Dove away from my basket), pack the stuff into a cardboard box and drop it to a local collection point. I ask to hand it over to the Ukrainian side of the borders, where it would be more necessary than in Poland.

If I could, I would send them weapons! But more and more countries declare such form of support to Ukraine, which is reassuring.

The spurt of Poles rushing to help Ukraine is spirit-lifting, but will it be long-lasting? It will be a marathon, not a sprint.

When I think of sanctions levied to Russia by the civilised world, I believe the main reason for some countries’ reluctance towards them is the cost of financial isolation. Yes, we have to pay the price for keeping Russia at bay, but the lost profits now are a good investment is the payoff is the absence of Russian tanks in the territory of Poland.

Americans urge their citizens to leave Belarus immediately. They are in the know again.

I pop by to some petrol stations and learn temporary shortages of fuel are a fact. Not only those who panic are to blame for it. Several people take trips in their private cars to the Ukrainian border and fuel up their vehicles in advance, thus boosting demand for fuel (and sending money partly to Putin’s pocket). The aid should be better co-ordinated, I believe.

 

Day 4 – Sunday, 27 February 2022

In the morning my father and I drop my mum off to the cardiac hospital in Anin for a planned treatment (ablation) for a few days. I realise she is stressed-out, not only by the planned surgery, but also since she knows she will be sorry for Ukrainian personnel working there. Admittedly, the willingness to keep company to my mother dragged me away from the involvement in aid to Ukrainians this weekend. But given the social response, I do not need to feel guilty.

In the fourth day of war, Ukraine is doing definitely better than expected, with Ukrainians proving not only bravery, but also shrewdness.

After a few days of silence, Putin threatens to use nuclear weapons. In his paranoia, he is capable of turning large swathes of land into nuclear deserts.

Freezing Russian central bank’s assets will be more painful than exclusion of most of the country’s commercial banks from SWIFT payment system. I fear how markets react tomorrow.

 

Day 5 – Monday, 28 February 2022

In a conversation with my workmates I strongly posit the only way out would be to kill Putin. Easier said than done. He is protected too well to make an assassination doable for a foreign intelligence agent, but Putin will not be alive for long. Irate oligarchs or infuriated military officer might be the ones to liquidate him.

My Facebook account gets restricted on account of posting a derogatory film mocking at Putin. The blockade is imposed by an algorithm, hence I file a complaint. Thus I become a passive user of the platform.

At work there is no major turmoil. For many years lending to companies involved in doing business in Russia was an excessive risk to my employer. Today the restraint pays off.

Boycotting goods with bar codes starting from “4 60”? Noble, yet you will find few of them in the shops, as Russia manufactures little. If you want to spite Putin, turn off the radiator in your dwelling and walk, cycle or take public transport whenever possible. Besides, time to boycott Polish companies which carry on doing business in Russia.

This is the first day of actual carnage of civilians in that war. Shelling residential estates in Kharkiv and shooting civilians on the city’s streets bear out Russians are barbarians. This is genocide.

Besides, conceivably the premises near the Polish-Ukrainian border might be attacked by Russian aircrafts.

 

Day 6 – Tuesday, 1 March 2022

Putin has done what no man has not done for decades. He messed with nearly everybody across the world and brought so many united against him.

My Facebook account gets unlocked after a verification by a human.

There is evidence Russia used vacuum bombs in Ukraine, so far not against civilians. Such weapons are prohibited by conventions and kill even people hiding in shelters.

Russian trolls work at full blast in the Polish Internet to sling muck at refugees from Ukraine. Poland must not fall victim of disinformation!

 

Day 7 – Wednesday, 2 March 2022

I learn with antidepressants I still take, though in lower doses, I cannot be a blood donor, while blood is what Ukrainian hospital need to rescue the injured soldiers.

My mother’s ablation is called off or rather put off until Friday. She is stressed-out and it also affects me. Her health is a yet another reason for concern to me.

In the neighbourhood I spot three cars on UA number plates. Glad somebody has played host to them. I admire people who let Ukrainians stay at their homes. I am afraid that would be beyond my comfort zone. Besides, such accommodation might last months.

 

Day 8 – Thursday, 3 March 2022

A week into the war, most people have shaken off the shock and are slowly coming to terms with the new reality, meaning the war is waged just across the border. With time indifference will grow.

I no longer take it for granted the war does not spill into Poland. The membership into NATO might scare off Russia, but the attach on the Treaty will bring the world on the brink of the nuclear war. I sadly have very little impact on the course of events, hence I convince myself not to worry in advance.

Three cars on UA number plates parked outside my block of flats. Will there be many more? Or is it just a stopover?

Brent oil price reaches nearly 120 USD per barrel, while USD/PLN trades around 4.30. I see double-digit inflation coming to Poland and the threat of stagflation to the whole civilised world. The least civilised part of its will be back into the misery of late 1980s.

 

Day 9 – Friday, 4 March 2022

Wake up to the news Russian missiles nearly missed the biggest nuclear power plant in Europe. Given the lack of precision of the Russian obsolete and run-down military stuff, I suppose we were lucky to have averted a nuclear disaster. Have the invaders lost control or are they trying to blackmail the civilised world?

I somewhat fear the aggressor might attack the Polish-Ukrainian border and civilians aiding there. With the uncivilised enemy, everything is conceivable.

NATO keeps holding back from getting involved in the conflict. I believe the fear of WW3 is the key reason for their restraint. Hoping their words about getting prepared for the worst-case scenario are not just hollow declarations.

In the afternoon my mother has her ablation. Preliminarily doctors say the treatment is successful.

 

Day 10 – Saturday, 5 March 2022

So far over 700,000 (exact numbers vary depending on source) refugees from Ukraine crossed the border with Poland. Will they be able to returns to their homes and rebuild their country soon? Will Poles exhibit so much hospitality towards them as they do these days? Will European Union help Poland take the burden of allocating refugees across the member states? Are the just past the first wave of migrants? Is it just the beginning? So many questions remain unanswered.

Helping Ukrainians will be a marathon, not a sprint, while people who rush to aid are sadly likely to run out of energy and resources far too soon. I recall the beginnings of the pandemic, the spurt of responsibility and solidarity which gave way to fatigue and indifference several weeks later.

If this all is hopefully over, there will come the time to bring to account those who advocated Russia recently. The first to be cracked down on will be the deputies of Konfederusja, mentally ill Grzegorz Braun and eccentric nutter Janusz Korwin-Mikke. Support for the far-right party declined below 5%. Hope they won’t make it to the parliament in 2023.

Oil price crash

The black gold, or to be precise, fluctuations of its prices, have had a substantial impact of world’s economic history in recent decades. Surges in crude oil prices plunged economies into recessions or exacerbated economic downturns which were about to come to a pass, yet on the other hand helped the resource-rich grow their fortunes. Oddly enough, the price of crude oil was very volatile in its history, implying quotations of the commodity have been prone to overreact to variations in fundamental factors driving oil prices.

Brent crude oil quotations over the last decade saw period of both stability and volatility. The rapid increase set off in 2007 and then price soared in the first half of 2008. The underlying of the 2008 rally still remains puzzling to me. In early- and mid-2008 the banking crisis began to unfold and monetary policy in most economist was already tight, in response to partly oil-driven inflation. Bear markets took over on almost all stock exchanges in the world, as equities already anticipated the imminent economic misery (but not its scale). The only asset classes to have stayed immune to the turmoil were emerging markets currencies (upshot of carry trade) and… commodities. The collapse of Lehman Brothers Bank in September 2008 spilt over to both financial markets and real economies and incited speculators to unwind their long positions in emerging market currencies and commodities. Both assets classes saw their valuations plummeting. As a consequence, Brent oil price fell from 148 USD per barrel in July 2008 to less than 40 USD in late December 2008. Over the next months, in the wake of unprecedented monetary easing, financial markets were flooded with hollow money and oil quotations rebounded. Since late 2010 until September 2014 Brent crude oil traded in a fairly stable range between 100 and 120 USD per barrel… The was no bubble in sight, so no bubble could burst.

In mid-September 2014 one still had to pay almost 100 USD per barrel, but in the second half of the ninth month quotations started to decline. At first drop in oil price was offset by appreciation of the US dollar. Since the correlation between the two assets is highly negative, the first explanation for drop in oil price was the strengthening of the American currency, buoyed up by the relative out-performance of the US economy. Then the scale of the plunge only got deeper. Currently, the 3-month rate of return reached –37%, justifying even the use of word ‘crash’ to describe this downward price movement.

There are several theories and factors which are said to be have contributed to the sell-off of the black gold. One could mention:

(1) increasing supply and inventories,
(2) lower dependence of the US economy on imported oil,
(3) discord between OPEC members, unwilling to cut extraction,
(4) a “conspiracy” aimed at enfeebling countries reliant on oil exports,
(5) unwinding speculative positions and taking opposite ones.

The last cause cannot be played down when analysing the recent panic-driven continuous slide.

A sudden drop in oil prices is a classic example of positive supply shock; an external factor which, holding everything else unchanged, should boost the economy. Price of crude oil is a component of price of virtually any other good, so a drop in Producer Price Inflation should result in drop in Consumer Price Inflation and in current macro environment in intensified deflation. Because producers will definitely try to seize some of the decline, their profits should rise, increasing investment spending, consumption, but remain neutral for government proceeds (higher corporate income tax inflows to be offset by lower VAT inflows). Lower oil prices will also be passed on to customers whose discretionary income will rise; they in turn will be able to spend or save more.

A place where decrease in oil prices is most visible are petrol stations. Back in mid-2012, one had to fork out almost 5.90 PLN for a litre of unleaded-95 petrol. The price of the same petrol crossed the barrier of 5.00 PLN in the third decade of October (my benchmark is the local petrol station by Auchan hypermarket) and descended to 4.39 PLN this weekend (down from 4.61 PLN last Tuesday). The decline grew apace when USD/PLN quotations levelled off between 3.30 and 3.40 and after the last week’s 8% plunge there is still room for petrol prices to go down and nearing the 4.00 PLN barrier is conceivable, albeit it would take a further sell-off in London, where Brent is traded.

Oil producers profit and loss accounts will suffer a one-off shot of downward inventory revaluation (reported as cost of goods sold under IFRS), however their long-term profitability should not be undermined, since it hinges upon different factors (margins earned on refining and differentials between types of oil, for Polish oil behemoths, PKN Orlen and Lotos, spread between Russian Ural oil and Brent oil) and those parameters have been enormously favourable for the oil industry in the recent weeks.

Disinflation or deflation spurred by fall in oil prices is an external factor and as such should be cautiously taken into account by central banks in their decisions on pursuit of monetary policy. Drop in oil price must not give rise to monetary easing, since the very decline in oil prices already bolsters economies and seeking excuse in prolonged deflation to further cut interest rates is adding fuel to the fire rather than fostering economic growth. Nevertheless, plunge in oil prices may prompt the Federal Reserve to put back monetary tightening. For no apparent reason, stock markets’ reaction to oil crash was underperformance (although only the oil and gas industry might be actually aggrieved) and since unsurprisingly the US Central Bank has recently targeted financial markets more than real economy, policy of near-zero interest rates might be kept up in a horizon of more than a few months.

One of not implausible explanations for the oil price collapse is the US-steered conspiracy to afflict Russia. It somehow takes my fancy, although I will not dare to guess how much truth is in it. Economic sanctions imposed on Russia, by nature ludicrous since they hit more the West, only uncover a free-market failure. Had the sanctions not been in place, trade between Russia and Western entrepreneurs would have thrived, heedless of Crimea invasion and war in Eastern Ukraine. But when Russia suffers on account of balancing supply and demand and free market mechanism lays bare Russian economy’s reliance on resource exports, I judge matters fall into place. I personally favour more sophisticated economic weapons than simple trade restrictions.

And having said all that, I confess plead I am not particularly delighted to observe Russia being knocked down by low oil prices (the scale of disaster is offset by unmatched depreciation of Russian Rouble). Russia faring well was less perilous to the world than Russia economically kneeling. The less Mr Putin has to lose, the more unpredictable political bets he will be inclined to make to shield his rule and underline supremacy of Russia in world politics might be.