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- cross-posted to:
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“If fiscal expenses remain at their January levels throughout the remainder of the year, the NWF reserves could vanish in just three months. And even if they don’t — as is more likely — 2025 is probably the last year Moscow will be able to fully cover its fiscal deficit by tapping into those savings.”
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Basically, Fall of the Soviet Union 2.0. The west was able to outspend the ruskies until they croaked.
EU, please, keep up the pressure, break those murderous bastards in the Kremlin, don’t let them win.
Sadly Im not sure the US wont flout or lift sanctions giving them a new source of money.
https://www.census.gov/foreign-trade/balance/c4621.html
The US traded with Russia for about 15-30 Billion $ RU -> US and a trade deficit for the US of about 6-20 Billion $ . With the sanctions it is down by about 90%
The direct sanctions are not that significant. I think the biggest impact of US sanctions is in the financial sector. I am unsure if the EU could maintain these, if the US wants to reallow all the Russian banks into the system, or if the EU and US go head to head about it, risking to blow up the global financial system. However i think this could be something where the EU stomping its feet could get Trump to comply, as his billionaire friends won’t be happy about being cut off from their foreign assets.
Explains why trump was so desperate to make a “deal” too! That’s his bonus uncle Vlad is burning in trenches.
We’ve heard all this before. “Russia will collapse within a week… err month… Well maybe a year.” Yet here we are, Russia is doing okay for itself, war effort continues, Ukraine on slow retreat. All that sponsored with my money. Let France and Italy pay for it.
Y’all aren’t even trying to hide it anymore, huh?
“OK for itself”
So they curving inflation? So what? The war is expensive, it doesn’t mean that it’s collapsing.
Lol
Short summary:
- Russia is operating with a budget deficit
- borrowing from foreign lands is blocked
- local banks are unable / unwilling to buy more state bonds, as they’d risk insolvency
- the most liquid part (estimate: about 60%) of the national wealth fund has been used up
Pressing financial issues might be impossible to postpone for longer.
There is always the good old money press.
borrowing from foreign lands is blocked.
So, no… There isn’t. There’s no source of capital to back new rubles, so it would devalue the ruble and drive inflation which is already 20+%.
I wonder what will happen when trump just wire transfers multi trillions to russia from American accounts…
Like, is that reversible or how does that work.
This pretty much nails the article.
But there are things the article doesn’t mention, so it’s even worse than that. Because the real estate market is on the brink of collapse.
And the financial institutions are not well bolstered, because they’ve been forced to lend money to the weapons industry, so the Russian state can buy weapons below cost price!
So if the real estate market collapses, the banks will collapse, and apart from the extreme economic slow down that causes, the weapons industry will simply not be able to make weapons for the Russian army!!!It’s all a house of cards, and there are many more fractures in the Russian economy than this, but this is the most obvious AFAIK.
As things are going, there is no if, It sems to be literally only a matter of time when the Russian economy will collapse. Some are guessing that it can’t hold longer than until Mid summer. But Russia has this weird tradition, where people keep meeting for work, even if they haven’t been paid for months?! This could possibly extend it a bit further.The Kremlin has no plan D to finance its budget deficit
This key point is worth mentioning too IMO. Russia is out of options, because every aspect of their economy is stressed beyond sustainable limits already.
For the Kremlin, it thus looks like this year is set to be difficult on the fiscal front.
This gave me a chuckle, it’s such an understatement.
Not mentioned in the article, but mentioned elsewhere - trains. Russia relies heavily on trains to move things. One part of train maintenance is the replacement of bearings. Russia can’t manufacture bearings for its trains and it can’t import them either because of sanctions. Russia has fewer and fewer operational trains and train cars. One very important thing that the trains haul is grain. There are reports that Russia could face starvation by the end of the year if it doesn’t get its trains repaired because they will be unable to haul food to the cities. Russia doesn’t have enough trucks and roads to replace the trains.
I’ve heard a lot about Russia not being able to make good ball bearings, so I think you are right it will impact transportation especially by train.
Regarding food, Russia is also likely to have way below average harvest in 2025 for several crops. Because they can’t import quality seeds, and have to make do with Russian seeds that have lower yields.
Note that this import is not restricted by embargo, because it’s for basic food items which have exceptions. It’s simply Russia themselves that prevent imports, probably because of lack of currency for imports.So for sure prices of basic food items will go up in 2025, also more than inflation itself would require. And this is very likely to cause huge problems for especially pensioners and other low income households.
I don’t think we will see widespread starvation, but shortages rising prices and possibly food stamps are very likely.probably because of lack of currency for imports
That makes sense. Russia is saving its money to pay smugglers to smuggle in weapons components.
I think the inevitable outcome will be China buying up a lot of Russia’s economy in the form of property, businesses, and access to natural resources.
Probably the US will do that too :)
