The Decline of Vladimir Putin

by Greg Valliere, AGF Management Ltd.

Insights and Market Perspectives

PHOTOS OF VLADIMIR PUTIN with a blanket covering his legs, then limping at the World War II remembrance yesterday, have reinforced doubts about the Russian president’s health. His rambling speech seemed equally troubling; it resolved nothing.

MOST GEOPOLITICAL ANALYSTS BELIEVE Putin has no end-game in the bloody war with Ukraine; he doesn’t want a massive draft of conscripts; nor does he want to bargain seriously for a truce. His forces are close to bogging down in the Dombas, as his tanks and aircraft dwindle; his air force is in tatters.

SO — WHAT HAS CHANGED? We would argue a big change is in Washington. The Biden Administration, slow to react initially, is in overdrive — announcing new aid to Ukraine virtually daily. A $40 billion Ukrainian aid package — a huge plus for U.S. defense contractors — could be approved by Congress this week.

THIS RAISES A KEY ISSUE: Is the U.S. becoming more overtly involved in the war? Sources we’ve talked with in both parties believe there has been a fundamental shift: the U.S. is in this war to win, as is President Volodymyr Zelensky. Neither Biden nor Zelensky will settle for a face-saving truce.

BUT IT COULD TAKE MONTHS or longer for a resolution, which means acute shortages of food, fuel, fertilizer and raw materials will persist into the fall and beyond — still another source of inflation that will not subside any time soon.

A PROTRACTED WAR COULD BECOME EVEN MORE UNPREDICTABLE: Putin looked smaller than his generals yesterday; he appeared almost frail — and speculation about his health may increase. We think there are three options:

1. Putin declares victory and gradually withdraws, perhaps while hanging on to a sliver of eastern Ukraine.

2. Putin doubles down and uses even more potent weapons like the hypersonic missile that Russia apparently fired yesterday. Tactical nuclear weapons can’t be ruled out, but his generals don’t want them used near their troops.

3. Regime change, as Putin’s decimated and humiliated military removes him from power, perhaps citing health issues.

WE’RE BETTING ON THE LATTER but unfortunately that could be months away. Yet it’s probably coming; his own generals — and the Russian intelligence community — know that the little man under the blanket is ruining Russia for years to come.





The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

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This post was first published at the AGF Perspectives Blog.

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