Why Putin is finally negotiating
Why Putin is finally negotiating – POLITICO
"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."
Short summary:
Pressing financial issues might be impossible to postpone for longer.
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.
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.
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 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.
not only money runs out, it's also some categories of military equipment. i mean, it's not like russia will run out of tanks entirely, because they still have ongoing production, but most of what goes to front are increasingly old rustboxes reanimated in tank factories - because it's faster than building new one, but that happens too.
according to perun, they'll start running out of tanks, ifvs, apcs, things of this type somewhere in 2025 - that is, storages will be emptied and any replacements would have to be new, which means that replacements will come something like 5x slower. it's a bit harder to say with artillery, because barrels have limited number of shots and it is known that barrels can be taken from towed guns to put them in self-propelled guns. but it's also bad, even if it means there's another year there
This only makes sense under the neoliberal assumptions that the financial side of the economy faithfully represents the real side. If they're really doing the whole hullabaloo with the banks, dipping into funds, I guess they also believe that and are practicing neoliberal economics. If the real economy doesn't suffer from lack of resources, and whatever they can't make can be important from say China in exchange of oil and gas, they can go like this until they run out of something, people, oil or gas, or China stops buying those and/or selling other goods to them. I'm not rooting for the Russians to keep their war effort going but I think looking at the financial side alone has mislead us before. For example when we were promised they're gonna buckle under the sanctions in short order.
People keep repeating that we were promised the sanctions would have an almost immediate effect. Could someone tell me where that promise was made?
I don't think that was ever promised, really.
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.
So right at the moment Putin is finally over a barrel, Trump has arrived to bend over swoop in to save the day.
Europe has a chance to pull through for Ukraine.
I hope Europe does. Ukraine shouldn't have to pay for Americans' stupidity, credulity, and absurdity.
Unfortunately Trump could completely undermine Europe by opening trade with Russia, financing them.
All this time money, effort, Ukrainian lives lost and property destroyed to get to this point just for Trump to swoop in and save... Russia
Let Ukraine keep nailing them with EU and Canadian weapons. Fuck Putin and screw Trump for being raw dogged by Russia and actively destroying democracy.
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.
Can sanctions be over turned by executive action? If not how well republicans convince the choir that Russia has learned its lesson?
That's a really important question.
Financial sanctions are administer by the department of the treasury, and export sanctions are under the department of commerce, both of which are executive departments.
So yes.