Ukraine situation

This year’s2great risks. ①Inflation, ②The situation in Ukraine

The reason the Ukraine situation is important is that it affects European natural gas and crude oil prices. Global inflation is occurring, and if energy prices rise further on top of that, the damage to the global economy would be enormous. I think a stock market crash is inevitable. The yen will initially be bought, but will likely weaken due to higher crude oil prices.

Oil supply and demand balance has been disrupted because US shale oil has effectively exited the market.

Since last year, the Russian military has been gathering near the border with Ukraine.

The confrontation between Russia and Ukraine2014 began in, essentially, Russia cannot tolerate Ukraine, a military fulcrum, moving closer to the West. Negotiations (with Ukraine and with the West) have not gone well, leading to the use of force.2014The effective control of the Crimea Peninsula worked out, so perhaps the same is desired this time as well.

The tension has risen to a high level recently. Russia, with higher energy prices and so on, likely has a decent amount of foreign exchange reserves (held mostly not in dollars but in gold), and has judged that it can go on the offense.

I am not an expert on this matter, and it is an extremely complex issue. Surrounding countries such as Turkey are involved. Still, I have tried to summarize it based on various sources without making it too long.