Russia/Ukraine War Update - June 21st, 2022

 *** MILITARY SITUATION ***

-Kharkiv was struck hard over the past 24 hours by Russian missiles. According to Oleh Synyehubov.

-There are signs from the Russian side that its military is ramping up heavier bombardments of Ukrainian command and control centers, with the defense ministry (MoD) on Sunday claiming a major direct hit on a command target, killing "dozens" of officers - though the statement couldn't be verified. Russian state sources asserted that "Russian warships have destroyed a Ukrainian command center with Kalibr cruise missiles, killing dozens officers, Moscow's Defense Ministry reported on Sunday."

"More than 50 generals and officers of the Ukrainian Armed Forces were killed," the official MoD statement said, detailing that it took place near the Shirokaya Dacha in Dnepropetrovsk Region, allegedly striking a compound that was being used as a meeting of trop brass from multiple Ukrainian army units.

The ministry additionally detailed that "Kalibr missiles were also used to destroy 10 M777 howitzers and up to 20 armored vehicles that were recently delivered from the West, and had been stored inside a factory building in the southern city of Nikolayev," according to the readout in state media.

-Absolutely amazing video of Russian SU-25SM pilots flying entire multi-strike combat missions at essentially treetop level to evade any remaining Ukrainian Buk-M1s, Osas and S-300s. Reports are that US Produced shoulder launched Stingers have performed dismally against Russian combat aircraft and are obsolete on the modern battlefield. Russian ECM systems employed being effective counter measures.

-Russian officials said Monday that Ukraine has attacked Russian Black sea oil drilling platforms.

*** ECONOMIC & POLITICAL ***

-Fed's Bullard (2022 voter) said he expects the economic expansion to continue this year and that the Fed must meet market expectations for rate hikes, while he added that effects of Fed guidance on the economy and CPI are taking hold. Bullard also stated that high inflation has come up like a storm and the economy is slowing to the trend rate of growth, as well as noted that the current balance sheet reduction is a good place to begin with and they may not need to go as far on QT as it might seem, according to Reuters.
    
-US Treasury Secretary Yellen said 2017 tax cuts were not successful in boosting private investment and the goal should be equitable and sustainable growth. Yellen also said that once some countries implement a global corporate minimum tax, other countries will follow suit or lose revenues, according to Reuters.

-US Treasury Secretary Yellen said she does not see resuming the Keystone XL oil pipeline as a short-term measure that can address high oil prices, while she added it would take years to have an impact. Yellen also commented that evidence is mixed on the level of pass-through from a gasoline tax holiday to lower prices and said that an exception or ban on insurance for certain Russian oil shipments would effectively provide a price cap on oil, according to Reuters.

-Canadian Finance Minister Freeland said she cannot think of a more appropriate source of funding to rebuild Ukraine than confiscated Russian assets and that the Russian economy is only now beginning to feel the impact of restrictions on exports to Russia, according to Reuters.

-IAEA report stated that they verified Iran was ready to feed uranium into a cascade of advanced IR-6 centrifuges at Fordow that has not been used for enrichment before and Iran informed the IAEA that passivation of the cascade, which is a process that is carried out before enrichment, began on Sunday, according to Reuters.

-Lithuania’s Foreign Ministry on Monday handed a note to Moscow’s chargé d’affaires in the country explaining the application of EU sanctions on the transit of a number of goods between mainland Russia and Kaliningrad, a Russian exclave nestled between Poland and Lithuania. Vilnius insists that it has not outright banned transit between the exclave and the rest of Russia and has not introduced any additional restrictions. Lithuania maintains that the transit of passengers and goods not subject to EU sanctions will continue through its territory as usual. “Lithuania has not imposed any unilateral, individual, or additional restrictions on the transit. Lithuania has consistently implemented EU sanctions, which have different transition periods and deadlines for entry into force,” read the note. Earlier, Lithuanian Foreign Minister Gabrielius Landsbergis stated that the decision to impose these restrictions was made by Vilnius after consulting with the European Commission and was implemented under its guidance.

-The Dutch joined Germany and Austria in reverting to coal power on Monday following an energy crisis provoked by Russia's invasion of Ukraine.
Advertising. The Netherlands said it would lift all restrictions on power stations fired by the fossil fuel, which were previously limited to just over a third of output. Berlin and Vienna made similar announcements on Sunday as Moscow, facing biting sanctions over Ukraine, cuts gas supplies to energy-starved Europe.

-Reuters is reporting that the Russian foreign ministry will summon the European Union ambassador to Moscow Markus Ederer over the ban of the transit of goods by Lithuania through Kaliningrad. Lithuania banned the transit of goods under EU sanctions through Lithuanian territory to and from the Russian exclave of Kaliningrad, which is sandwiched between Lithuania and Poland.

Anton Alikhanov, Kaliningrad’s governor, went on Russian television on Monday to discuss the situation. “This is, of course, a situation, that can be resolved by diplomatic means,” Alikhanov said. “As far as I know, tomorrow Marcus Ederer, the European Union ambassador to Russia, will be summoned to the foreign ministry .... and he will be told of the appropriate conditions involved here.”

-Charles Michel, president of the European Council, is calling for the European Union to grant candidate status to Ukraine and Moldova. As expected, Michel stopped short of recommending candidate status for Georgia, another former Soviet state seeking acceptance into the EU. Next week, EU leaders will decide whether to grant these three states EU candidate status, although full membership will likely take years.

-The Americans captured in Ukraine have been described by Moscow as “mercenaries” engaged in illegal activities and should take responsibility for their “crimes”, reports say. Kremlin spokesman Dmitry Peskov said that the detained men were not covered by the Geneva convention as they were not regular troops, adding that they had shot at at Russian servicemen and put their lives in danger, according to a report from Russia’s RIA news agency.

-Treasury Secretary Janet Yellen said that “unacceptably high” prices are likely to stick with consumers through 2022 and that she expects the US economy to slow down. “We’ve had high inflation so far this year, and that locks in higher inflation for the rest of the year,” she said Sunday on ABC’s “This Week.”  “I expect the economy to slow,” she said, adding: “But I don’t think a recession at all inevitable.” US inflation accelerated to 8.6% in May, a fresh 40-year high that signals price pressures are becoming entrenched in the economy. Those figures dashed any hope that inflation was starting to ebb, prompting the Federal Reserve to unleash its biggest interest-rate increase since 1994.

-The White House earlier this month reaffirmed its stance that the Taiwan Strait constitutes "international waters" following the latest US warship sail-through, which had put China's PLA Eastern Theatre Command on high alert. As Reuters reported last Tuesday, "The United States on Tuesday backed Taiwan's assertion that the strait separating the island from China is an international waterway, a further rebuff to Beijing's claim to exercise sovereignty over the strategic passage." This prompted Beijing to issue its own statement and definition, hitting back that the strait is not "international waters" - thus placing limits on the movements of foreign military vessels in the waters - and further reasserting that it constitutes the mainland's exclusive economic zone.

Bloomberg reports Monday that Biden administration officials are "increasingly concerned the stance could result in more frequent challenges at sea for the democratically governed island, according to people familiar with the matter." And further, "Chinese officials have made such remarks repeatedly in meetings with US counterparts in recent months, Bloomberg reported last week." The report underscores that this marks an escalation, given the international legal status of the passageway wasn't previously center of debate as it is now: While China regularly protests US military moves in the Taiwan Strait, the legal status of the waters previously wasn’t a regular talking point in meetings with American officials. Washington is alarmed over the timing, not only given the ongoing fallout from the Russian war in Ukraine, which Beijing has refused to outright condemn, but especially because a week ago China's President Xi Jinping has signed an order which fundamentally expands the conditions under which People's Liberation Army (PLA) troops can be deployed.

Depending on how far China wants to press its definition, the most extreme scenario could involve the PLA military moving to close the strait. This further means that Xi is hinting he could use the PLA military to begin enforcing the newly articulated position that the Taiwan Strait is not "international waters" - however vague the Chinese position may remain.

-Ukraine is planning to tour an exhibition of destroyed Russian military vehicles across Europe, as it strives to maintain public attention on the conflict. “We’ll help to ensure that Russian tanks are in Europe, but as scrap,” Defense Minister Oleksii Reznikov told Polish broadcaster Polsat in an interview. Ukraine plans to start the exhibition in Warsaw before moving on to Berlin, Paris, Madrid and Lisbon. Ukraine claims Russia lost some 1,477 tanks and 3,588 armored vehicles since the invasion began in February. Some of the missiles, burnt Russian tanks and other military vehicles are currently being displayed in downtown Kyiv.

-Turkey said it does not consider next week’s Nato summit as a final deadline for resolving its objections to Finland and Sweden joining the military alliance.

-The United States is in talks with Canada and other allies to further restrict Moscow’s energy revenue by imposing a price cap on Russian oil, Treasury Secretary Janet Yellen said on Monday. Speaking to reporters in Toronto alongside Canadian finance minister Chrystia Freeland, Yellen said: We are talking about price caps or a price exception that would enhance and strengthen recent and proposed energy restrictions by Europe, the United States, the UK and others, that would push down the price of Russian oil and depress Putin’s revenues, while allowing more oil supply to reach the global market. We think a price exception is also an important way to prevent spillover effects to low income and developing countries that are struggling with high costs food and energy.” Yellen said a price exception is an effective cap that could be achieved through a mechanism to restrict or ban insurance or financing for Russian oil shipments above a certain amount. The United States, Canada, Britain and some other countries have banned imports of Russian oil, but the European Union remains highly dependent on Russian crude. Asked if US President Joe Biden planned to seek consensus on an oil price plan at the G7 leaders summit in Germany next week, Yellen said: “We are very active, actively working on this with our partners.”

-Admiral Sir Tony Radakin said Russia was suffering heavy losses, running out of troops and advanced missiles and would never be able to take over all of Ukraine. “This is a dreadful mistake by Russia. Russia will never take control of Ukraine,” Tony Radakin told PA Media in an interview published on Friday. The country’s highest-ranking military officer said the Russian president, Vladimir Putin, had lost 25% of Russia’s land power for only “tiny” gains and it would emerge a “more diminished power” while strengthening Nato. . . .“The Russian machine is grinding away, and it’s gaining a couple of – two, three, five – kilometres every day,” the admiral said. “And Russia has vulnerabilities because it’s running out of people, it’s running out of hi-tech missiles. “President Putin has used about 25% of his army’s power to gain a tiny amount of territory and 50,000 people either dead or injured. Russia is failing.”