Summary
Russian businesses are facing severe financial stress as the Central Bank of Russia’s interest rate hits 21%, with further hikes expected.
High borrowing costs, especially for companies with floating-rate loans, have pushed many towards a debt crisis, with interest payments consuming up to 75% of earnings.
Rising corporate bankruptcies, late payments, and stalled investments signal deepening economic distress. Key industries, including retail, real estate, and manufacturing, are especially vulnerable.
The situation is expected to worsen as the economy cools and interest rates remain high, potentially triggering a financial crisis.
If only there was some sort of stopping a 2 year long failed invasion based plan that could resolve this.
I’ll have you know, that I have it on good authority (from the ever rational and totally not an echo chamber Hexbear) that the invasion is actually very successful and Russia is winning. By a lot!
Even that wouldn’t resolve it now. All it would do is stop it from getting even worse. It is way to late to resolve it.
Stopping now would make it worse actually. Russia has retooled for wartime production and is currently running massive government deficit spending for war goods, which is why inflation and interest rates are so high… if they were to back down, their interest rates would drop, but the bottom falling out of government spending would really crash things because almost every private enterprise is catering to those needs. Putin can’t stop now or his country riots in breadlines.
The good old Nazi Germany plan - get your rich cronies to pay for everything and assure everyone that the spoils of war will more than pay them back.
I keep seeing news that the Russian economy is perfectly fine… no, wait it’s in shambles… no it’s actually even better than before… no, people can’t even find bread… no, sanctions are killing it… and so on. And this is not even from different sources; different articles on the same (I hope reputable) sources.
I know that it’s hard to get a read of these things even when not in the middle of a war with lots of disinformation happening on both sides. And I also know that indicators of the economy are tricky to read and often in contradiction. But these swings are so extreme that I don’t know what to make of these articles any longer.
“Politics in Russia is like watching two dogs fight under a rug. You can hear and see that something is going on, but aren’t able to tell the victor until the bones are revealed.”
I view it like an over-revved car. Some parts can handle the strain fine, others are over stressed. Depending what aspect you look at, you will get different results.
As the pressure rises, things will start to fail. Some will not cause additional issues, but others will cascade. Predicting when a cascade failure will happen is difficult, however.
Predicting when a cascade failure will happen is difficult, however.
But when it does it will be sudden and complete.
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The Russian crack
Here’s hoping that the Russian people get fed up with Putins ruination of the country and put an end to this madness.
