Russia’s Economy Hemorrhaging: Déjà Vu All Over Again!
Putin Learns Nothing from the Evisceration of the Soviet Communist System—Declining Economy, Increase Spending on Worthless Armaments!
Congratulations Putin! You are true to your roots of being an Ex-KGB Operative. Keep on repeating the mistakes of the past and watch as Russia teeters on the brink of bankruptcy. This time, it was not the Communists who destroyed Russia, but the arrogance and financial ignorance of you, Putin. It is unfortunate for the Russian people that in the 21st century they had elected the ‘village idiot’—someone who goes around town spouting nonsense as the town, or in this case Russia, is falling apart.
The lessons of the Soviet Union’s dissolution were not complicated. At the RAND Corporation in Santa Monica, I learned about two important fissures in the Soviet Union. One was it’s faulty economy producing useless goods of absolutely no value. The second important variable, was the fact that the Soviet Military, as brilliant as it had performed in WWII under Stalin, could no longer sustain a force structure that was credible as a deterrent.
It took the USG 30 years of “regime change” to transform the dysfunctional Soviet System into a viable Russian Federation. Now, unfortunately for Putin, he alone has been able to achieve the destruction of that viable Federation. Like all intelligence operatives who are obsessed with self-grandeur yet are paranoid about their immediate environs, Putin will go into a twirling self-destructive mode.
For some time now, I have been warning Putin that his own dynamics would inevitably draw him into a vortex of self-implosion. Hopefully, the Russian Federation can bail itself out before he takes everyone down with him. Here are the hard numbers on what Russia must endure as the price of world oil [brent oil down to $70-80] tumbles precipitously because of America’s incredible entrepreneurial ability to bring more capacity on line and break the spell of OPEC [bye-bye Saudi Arabia, UAE, Qatar, Algeria, Libya].
The Kremlin Apparatchiks and potential ex-Kleptocrats who have stolen trillions of dollars from Russia are now faced with the harsh reality as outlined by OSINT, Stratfor, 11/4/2014:
▪ Presently the Russian cabinet is holding meetings to revise the Revenues [80% comes from oil] based on $100 a barrel. Intelligence reports indicate that the more knowledgeable technocrats are basing the Russian 2015 Economy on $80-$90 per barrel.
▪ There are some indications that an immediate future scenario of revenues may even be based on the more realistic price of $60 per barrel.
▪ At any oil price below $80-90 a barrel, Russia must dip into its Rainy Day Funds allocated for such a major deficit in the budget.
▪ Example: Russia has about $582 billion USD in reserves to spend on the budget deficit. $409 billion in currency reserves [immediate cash flows]. $83 billion in National Wealth Fund; and $90 billion in the National Reserve Fund [must be liquidated].
▪ $70 billion has already been spent on plugging up the financial hole created by the US/EU economic warfare.
▪ It is suspected with a high amount of certainty that another $250 billion USD will also be used to patch up Putin’s Sochi and Ukrainian “Follies”- exorbitant expenditures that would have placed him in the Gulags under Stalin; or even the drunkard, Boris Yeltsin.
That’s not the worst, right now there is about $100 billion in flight capital, and that’s a gross approximation. Putin has no idea of how to run the Russian Regional Governments, remember that Russia has 11 time zones and the USA has only 4 time zones. Those regional governors are no fools and they are correctly demanding that their collective debts be immediately discounted and restructured, placing immense economic pressure on a ‘bankrupt Kremlin’. Putin’s troubles have not even begun. The Russian banks which have been hit hard by our economic warfare have requested a major cash infusion in the 100s of billions of dollars in order to keep them solvent. Putin’s thugs have no knowledge of how to manage their Rosneft owned bank, the honey pot of corruption which may soon not exist, thanks to financial illiteracy.
This is the real piece de resistance. Just as the Soviets had done before, (true to my past and current assessment of their behavior) Putin demanded increased weapons spending while his country is broke. From my humble point of view, Russia is ready to go down in a flaming blaze of insolvency, having been hit by the “Mohammed Ali double punch” of a blow to the economy, while straining to maintain a credible force structure. As a result, I believe that Putin’s so-called popularity, ranging somewhere between 80% and infinity will not mean a damn thing when oil gets closer to $50 a barrel. At that price, Russia will be knocking at the International Monetary Fund[IMF]; as well as the World Bank.
I hope that I am wrong; because, I have always admired the fortitude of the Russians and its magnificent culture. However, when the Putin is allowed to mutter nonsensical words; while, at the same time, tries to burn down his straw-hewn village, then something, or someone has to go.
Vsyovo Haroshovo! All the best Russia.
Next time pick someone who is CULTURANI! Cultured and smart. Preferably a master chess player.