On December 9, 2024, I gave a fairly broad interview to the Glavred online publication. Together with the journalist, we ran through the entire perimeter of economic problems and determined that the current financial resources of the Russian Federation would be enough for 3-6 months, then they would need to look for new ones.
It would seem that everything is clear to everyone. But it is not. The New Year began. Finally, the faltering of the Russian economy was noticed in the West. And calls from acquaintances began with questions: “Did you see the article?” On January 6, an article was published in the Swiss Neue Zürcher Zeitung, where they predict stagflation. On January 11, a blog by former BOA analyst Greig Kennedy was published about how the Russian Federation is hiding war debts. With all due respect to Mr. Kennedy, did he only notice this at the end of the third year of the war?
Forty-five state and quasi-state banks of the Russian Federation, the largest laundromat in the modern history of finance, the creation of a monopoly in the Russian military-industrial complex based on Rostech – all this has only been noticed now. After all, on January 12, an article was published in the Financial Times, in which Mr. Kennedy is again quoted, about the fact that the Russian economy is increasingly resembling a house of cards,.
The final point is our telethon with experts on all issues. Of course, we need to do a story, since the Financial Times itself wrote about the possible collapse of the Russian economy. It would seem that we can rejoice that the allies have finally noticed that the Russian Federation has problems with the economy. It is not so simple, however. There are at least two alarming trends.
First, the same Neue Zürcher Zeitung (when read carefully) concludes that the Russian Federation is threatened by stagflation (a decline in the economy with high inflation), but this will not stop the war as such. Surprisingly, a respectable newspaper picks up exactly the messages that are being spread among economists in the Russian Federation by an “opposition” analyst who has long been financed from the Russian budget. It seems that there will be an economic crisis in the Russian Federation, but it will not be enough to stop the war. In fact, this is an element of propaganda, because the speed of the crisis is regulated not only by the Russian Federation, but also by Ukraine and its allies. This is happening through sanctions, strikes on refineries, oil storage facilities, etc.
Neither Zubarevich, nor a Swiss journalist can assess the depth of our strikes on the Russian economy. But the fact that they already agree to stagflation is a good thing. However, since November there have been many signs that the Russian economy is already in a state of stagflation, and their inflation is of a monetary nature. Rosstat simply hacked up the deflator in 2024: it significantly underestimated inflation and overestimated the GDP growth rate.
The so-called “state opposition experts” from the Russian Federation simply already know that after some time the problem will become so large that it will not be possible to hide it by manipulating macrostatistics. If Ukraine and its allies do not stop, then we may not be talking about stagflation in the Russian Federation, but about an economic depression similar to the depression of the 1930s in the USA. I would call this a working scenario. It is not yet guaranteed, but we need to work on it.
Secondly, a deep analysis of Kennedy’s theses indicates that he does not understand how the Russian economy works. Sometimes, he simply does not understand that he is dealing with falsification of statistics, or with schemes that reflect corruption mechanisms in the official sector. If you read him carefully, he formulates the idea of ending the war due to the exhaustion of resources. I think this is his greatest merit.
However, Kennedy himself is more inclined to use the economic condition of the Russian Federation in negotiations. I do not know his motives when he wrote his conclusions, they are better than what was written in the Neue Zürcher Zeitung. However, both publications lead to the idea of the need for negotiations with the Russian Federation, although the Swiss hint at worse conditions.
In both cases, as with the Financial Times, we are dealing with the conclusions of specialists whose experience in analyzing the Russian economy is limited, and the level of insight into the real state of affairs is superficial. The Russian economy is more similar to the Ukrainian, and we understand better what is happening there and how to influence the economy so that its condition really serves as a trump card in negotiations with the Russian Federation on the side of Ukraine.
Thus, my conclusion is unequivocal: they are heading for a great depression, and the speed of their progress depends on Ukraine and its allies. We must not give up or even allow Russian propaganda to penetrate the offices and minds of high-ranking officials of our allies. Unless the war stops, the Russian Federation has no way to get off this “carousel” without fatal losses compatible with scenarios of its collapse.
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