The Incredible Shrinking Russian ECONOMY

Russia’s economy has been hurting worse than we know.  It’s been sliding down the slope and about to go over the cliff.  Don’t believe me?  Take a look at this this analysis of their nearly depleted cash surplus.  I found it eye opening and I think you will too.  With little cash on hand and even that about to run out, and greatly reduced ability to bring in more the Russian economy might well collapse before their army in Ukraine does.

Russia has been in the news a lot, and none of the news has been good for them.  The Ukrainian counter-offensive got started and while it’s been tough going they are making gains in multiple locations.  Then their was the Wagner Group coup, or rebellion or whatever is the term people want to use now.  Any way you cut it not good for Putin or Russia.  Then there’s NATO and Turkey’s Erdogan who has at times played footsies with Putin finally appearing to take a firm side – and not in Putin’s favor.

First he hosted Ukrainian President Zelenskyy and allowed him to take some prisoners Russia had captured and left in Turkey’s hand back with him to Ukraine.  Putin felt betrayed because he says the deal was those P.O.W.s would stay locked up until after the war.  Maybe that was the deal, maybe not.  But those guys are back home with their families in Ukraine and the world knows it, which makes Putin look weak.  But Erdogan wasn’t content to slap Putin across the face.  Nope.  He followed it up with a kick to Putin’s balls.  With NATO kicking off its summit he announced he was dropping his opposition to Sweden becoming part of the alliance!  (If you didn’t know, ALL existing members must approve the addition of a new country and Turkey had been the only holdout against Sweden’s joining)

On top of all that Putin probably got his hopes up when Zelenskyy made very public noises that Ukraine should also be admitted.  Right away.  The public nature of the demand cause a lot of consternation and there was even talk of Zelenskyy blowing off even coming.  How much do want to bet Putin started having wet-dream fantasies about Zelenskyy, out of the blue ripping apart the solidity of NATO?  Putin is I believe realistic enough to have long ago realized his only hope was for NATO to weaken in its resolve and decide they’d done enough for Ukraine.  Just when it looked like his nemesis might set them into bickering with each other lo and behold the announcement came that not only was NATO bringing in Sweden, but that they’d pledge more support for Ukraine!  And the Zelenskyy was just fine with the assurances he’d been given.  That he was cool with a “first things first” approach to his country one day formally becoming part of the alliance.

Putin’s suddenly appearing magic carpet got yanked out from under him.

So with all THAT going on I’m not surprised that the headline of this article, or the subject matter has gotten shoved aside, lost in the noise, etc.  But it’s important.

You can’t fight a war without two things: A military (both people and equipment/supplies) and money because if it’s not over within days there’s going to be enormous costs to fix/replace stuff and make or buy new stuff.  Because the GOP stupidly let Bush 43 take us to war in Iraq on the national credit card we racked up a ton of debt but we had the standing to borrow what we needed.  Russia however does not.  It never really did.  Not if the war in Ukraine lasted for a while which is exactly what’s happened.  Yes, they’ve gotten some help but nowhere near enough to replace their losses.  And even those countries willing to help are looking at things and saying to themselves “it’s getting to the point where it’s stupid to spend OUR money in a losing cause.”

Some of them even have helped Russia get around some of the economic sanctions but it’s looking less like they are willing to keep doing so.  They can see which way the wind is blowing, and it looks like the sanctions have had more effect than we thought.

The problem with economic sanctions against a country is that they mostly affect regular folks and not so much (if at all) the leaders who cause them to be imposed.  But keep effective ones in place long enough and they can create conditions where the people decide the time for torches and pitchforks has come.  Russia is in deep trouble financially/economically.  We’ve long known they didn’t have the ability to replace all they were losing fighting the war in Ukraine.  That’s probably why NATO and other countries that align with it have doubled down this week, making it clear they’ll keep the pressure up.

However, Russia truly is almost broke.  And while we’ve seen stories about oligarch pals of Putin’s having had some troubles hiding assets and winding up having them seized I think this news is circulating in a lot of world capitols and banks.  Some Putin pal being able to point back to the mother country and say it could “back” him is less and less of an option.  Russia’s economy is sliding down a steepening slope into collapse and a lot of assets, be it cash, real estate, yachts or other stuff is suddenly there for the taking by countries everywhere.  Russia appears to be almost at the point where any govt. anywhere can look one of these oligarchs in the eye and say “We’re taking it all.  Whatcha gonna do about it?” And in most of those places a threat, even implied will mean a quick trip to a not at all comfortable jail cell.  Lot’s of these place are sketchy when it comes to due process.

This isn’t something to get all joyful about.  When a major country collapses things get very messy and very fast.  Iraq should serve as a warning.  Winning a peace is usually harder than winning a war.  More often than not it gets effed up.  But that’s another topic and I want to keep this focused so I’ll shut up for now.

Except to suggest keeping an eye on this.  It could have as much to do with ending the war in Ukraine as what takes place on the battlefield.