Worst-case — World War III 'and I am not being hyperbolic': David Rosenberg — via financialpost
Bay Street economist David Rosenberg used his widely read morning newsletter to set out his worst-case scenario for where the Ukraine conflict might lead: “It involves a World War III, and I am not being hyperbolic,” wrote the occasionally hyperbolic analyst.
To be clear, a global conflagration isn’t necessarily the bet on which Rosenberg would put his money. His best-case scenario is a diplomatic resolution, which is still probably the more likely outcome. But if we’ve learned anything over the past couple of years, it’s the folly of banking on best-case scenarios. The future Rosenberg painted was dark, but within what now counts as the realm of possibility. What if Ukraine was Putin’s first move, and not his endgame? If he is motivated by rebuilding the Soviet Union, why would he stop there? The next step would be assembling Russian soldiers on the borders of another neighbour, and then daring the democratic powers to stop him.
Will NATO really defend Estonia, for example?” Rosenberg wrote. “Will soldiers from Western Europe give their lives to protect the Baltic countries, Poland, etc.? NATO says it will, but NATO is composed of countries who are still bickering over sanctions. What will happen when they have to man the front lines?”
Rosenberg’s worst-case scenario then sees China going for Taiwan, North Korea testing South Korea’s resolve; and Iran, newly empowered by US$100 oil, baiting Israel and its other rivals in the Middle East. Rosenberg’s assessment of history is that Winston Churchill stood up to stop Hitler’s advance. He doesn’t see such a leader today. “Nobody like that exists, and all the world’s strongmen, with all their own grievances, know it too,” he wrote.
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