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On November 02 2024 08:13 ZeroByte13 wrote: It's so crazy that in a few months it will be 3 years since the war started - and with no end in sight. Russian economy might hurt a lot but I think Russian leaders won't be willing to stop any time soon, unless there will be good enough progress so they can claim the goals were achieved.
I think they can't stop. The war is sustaining their economy and I can't imagine everyone is going to instantly start relationships again when it ends. And even less if any international companies are going to be willing to invest because they will know that at any point Putin could do this again and their investment will be all gone. My bold prediction is this war lasts for at least as long as Putin is alive.
They can’t stop but they can’t keep going either.
There is not enough labour to go around. That means that some people have to go without things, at least temporarily. The role of the extremely high interest rates is to pay Russian consumers to defer consumption and take demand out of the consumer economy. That allows the government to take up an increasing share of the labour pool.
But Russians don’t believe they’re now slaves who labour for the benefit of the government. Even though they labour making things to be consumed by the government and even though they have less to consume themselves. They believe they’re voluntarily skipping dessert today in order to get triple dessert tomorrow. And then when tomorrow rolls around they believe they’re doubling down to get nine desserts the day after.
They still believe wholeheartedly that there will be an avalanche of desserts one day when this is all over. That they’ll get back everything they skipped and more. After all wages are through the roof, times are good. Sure, an increasing share of the national output is devoted to giving Ukraine something to drop grenades on but just because nobody is making any dessert doesn’t mean there won’t be dessert. They have money, more of it than ever, and that means they’re owed.
There will come a point where they look at the thousand desserts they’re now promised today and decide they don’t need to double down for two thousand desserts tomorrow, they’re hungry now. And the economy is simply unable to provide what has been promised because non military productivity is way down. The cash rich Russian consumers will bid against each other for what little dessert there is while the central bank desperately promises them that if they skip for another day there will be way more tomorrow somehow.
Prices of consumer goods will soar and as inflation hits consumers will desperately try to spend down their cash on tangible goods, causing inflation. As the government is increasingly intervening in the economy we’ll see ineffective price controls and inflation linked pay increases in the military sector.
Stagflation is unavoidable. It’s already begun. You simply can’t take this amount of productive activity out of the economy without an impact. If Russia had shifted to a war economy and rationing on day one then they’d be okay because the Russian people would have recognized and accepted the sacrifices they were being asked to make. But for political reasons Putin opted to tell the Russian people that no sacrifice would be required on their part and that if anything they’d have more than ever. That by dramatically cutting the production of dessert we’d all be able to have double portions. There’s no way out of that at this point. It’s too far gone.
On November 02 2024 08:13 ZeroByte13 wrote: It's so crazy that in a few months it will be 3 years since the war started - and with no end in sight. Russian economy might hurt a lot but I think Russian leaders won't be willing to stop any time soon, unless there will be good enough progress so they can claim the goals were achieved.
I think they can't stop. The war is sustaining their economy and I can't imagine everyone is going to instantly start relationships again when it ends. And even less if any international companies are going to be willing to invest because they will know that at any point Putin could do this again and their investment will be all gone. My bold prediction is this war lasts for at least as long as Putin is alive.
They can’t stop but they can’t keep going either.
There is not enough labour to go around. That means that some people have to go without things, at least temporarily. The role of the extremely high interest rates is to pay Russian consumers to defer consumption and take demand out of the consumer economy. That allows the government to take up an increasing share of the labour pool.
But Russians don’t believe they’re now slaves who labour for the benefit of the government. Even though they labour making things to be consumed by the government and even though they have less to consume themselves. They believe they’re voluntarily skipping dessert today in order to get triple dessert tomorrow. And then when tomorrow rolls around they believe they’re doubling down to get nine desserts the day after.
They still believe wholeheartedly that there will be an avalanche of desserts one day when this is all over. That they’ll get back everything they skipped and more. After all wages are through the roof, times are good. Sure, an increasing share of the national output is devoted to giving Ukraine something to drop grenades on but just because nobody is making any dessert doesn’t mean there won’t be dessert. They have money, more of it than ever, and that means they’re owed.
There will come a point where they look at the thousand desserts they’re now promised today and decide they don’t need to double down for two thousand desserts tomorrow, they’re hungry now. And the economy is simply unable to provide what has been promised because non military productivity is way down. The cash rich Russian consumers will bid against each other for what little dessert there is while the central bank desperately promises them that if they skip for another day there will be way more tomorrow somehow.
Prices of consumer goods will soar and as inflation hits consumers will desperately try to spend down their cash on tangible goods, causing inflation. As the government is increasingly intervening in the economy we’ll see ineffective price controls and inflation linked pay increases in the military sector.
Stagflation is unavoidable. It’s already begun. You simply can’t take this amount of productive activity out of the economy without an impact. If Russia had shifted to a war economy and rationing on day one then they’d be okay because the Russian people would have recognized and accepted the sacrifices they were being asked to make. But for political reasons Putin opted to tell the Russian people that no sacrifice would be required on their part and that if anything they’d have more than ever. That by dramatically cutting the production of dessert we’d all be able to have double portions. There’s no way out of that at this point. It’s too far gone.
Nice summary
Also, don't forget that Russia has also issued bonds with short term return north of 20%, which is pretty insane.
In last week’s bond sale Russia sold 15 year bonds at 17.6% interest. So even if the war ends and inflation/interest get under control they’re still locked in at a higher rate than my credit card.
To repay $1000 at 17.6% over 15 years would be about $2,850 so they really are approaching “I’ll pay you back triple, trust me bro” levels.
On November 03 2024 10:09 KwarK wrote: In last week’s bond sale Russia sold 15 year bonds at 17.6% interest. So even if the war ends and inflation/interest get under control they’re still locked in at a higher rate than my credit card.
To repay $1000 at 17.6% over 15 years would be about $2,850 so they really are approaching “I’ll pay you back triple, trust me bro” levels.
That's for long term. They have 1 year bonds at over 20%.
On November 03 2024 10:09 KwarK wrote: In last week’s bond sale Russia sold 15 year bonds at 17.6% interest. So even if the war ends and inflation/interest get under control they’re still locked in at a higher rate than my credit card.
To repay $1000 at 17.6% over 15 years would be about $2,850 so they really are approaching “I’ll pay you back triple, trust me bro” levels.
That's for long term. They have 1 year bonds at over 20%.
Yes. But a 1 year bond at 20% isn’t so bad. Total cost is 1.2x. Short term pain.
Locking 17.6% in for 15 years is very different. The markets think Russia that it’s probable that interest rates won’t go down significantly in the short term and may even rise.
If banks thought that within 3 years they’d have it under control and be back at maybe 8% inflation turn they wouldn’t require such a high rate. They’re charging so much because they’re of the opinion that a 15 year lockup comes with high opportunity cost, like not being able to loan money to Russia next year at 25%, and that Russia won’t be able to get inflation under control in 5 years or so.
1 year rates being high is indicative of a current crisis. 15 year rates being high is indicative of a vote of no confidence in the ability of the government to get out of a crisis given 15 years to work.
Thx for posting, that was actually a pretty interesting interview. You can clearly see the difference between a professional, serious journalist, and someone like Tucker Carlson who's a glorified clown. The journalist here (I'm sorry I don't know his name; edit: Steve Rosenberg) asked decent questions and actually pressed Lukashenko where it made sense, compared to Tucker who just sat there listening to a half hour history lesson from Putin and then just kept on swallowing the shit that Putin was stuffing down his throat.
You can also see the difference between Lukashenko and Putin too; Lukashenko is a useful idiot to Putin and a dictator in his own country, but he doesn't really have a filter when he talks. So he actually ends up saying the things he really thinks and answers questions directly, compared to Putin who tries to masquerade his reason for invasion through blabbering about history.
As for the actual contents in the interview, a few interesting points: - Lukashenko denies involvement of North Korean troops in the war - Lukashenko says he didn't give permission to Putin for invading Ukraine through his country, it's just that Putin decided to retreat those troops from Belarus through Kyiv (lol) - There actually are some indicators that Lukashenko is trying to improve his relations with the West, even though he denies it in the interview (this seems like the most interesting point to me)
On November 03 2024 10:09 KwarK wrote: In last week’s bond sale Russia sold 15 year bonds at 17.6% interest. So even if the war ends and inflation/interest get under control they’re still locked in at a higher rate than my credit card.
To repay $1000 at 17.6% over 15 years would be about $2,850 so they really are approaching “I’ll pay you back triple, trust me bro” levels.
That's for long term. They have 1 year bonds at over 20%.
Yes. But a 1 year bond at 20% isn’t so bad. Total cost is 1.2x. Short term pain.
Locking 17.6% in for 15 years is very different. The markets think Russia that it’s probable that interest rates won’t go down significantly in the short term and may even rise.
If banks thought that within 3 years they’d have it under control and be back at maybe 8% inflation turn they wouldn’t require such a high rate. They’re charging so much because they’re of the opinion that a 15 year lockup comes with high opportunity cost, like not being able to loan money to Russia next year at 25%, and that Russia won’t be able to get inflation under control in 5 years or so.
1 year rates being high is indicative of a current crisis. 15 year rates being high is indicative of a vote of no confidence in the ability of the government to get out of a crisis given 15 years to work.
Another thing that goes into calculations like that is risk. A 15 year bond at 17.6% means that the people doing the loaning think it is not unlikely that they will not get their money back, at all.
That guy is a magician. As much as I hate his dictator ass. He manage to deliver his message in a very uncringy way. Staying alive must be a full-time job in his spot.
On November 04 2024 01:34 maybenexttime wrote: When trash takes itself out. ;-)
I am kinda not happy about this statement.
Imagine being an ethical person who got into the russian military, either because you got tricked by propaganda and thought the war would be a just one, or because you got drafted. I can imagine seeing that as the only way out without becoming a monster yourself.
On November 04 2024 01:34 maybenexttime wrote: When trash takes itself out. ;-)
I am kinda not happy about this statement.
Imagine being an ethical person who got into the russian military, either because you got tricked by propaganda and thought the war would be a just one, or because you got drafted. I can imagine seeing that as the only way out without becoming a monster yourself.
The vast majority of them are there for the money. Literally committing a genocide because it's easy money. They are all well aware of the fact that they are constantly hitting civilian targets, murdering civilians, torturing Ukrainian POWs, and so on. Hospitals and residential areas don't bomb themselves. 95% of Ukrainian POWs are being tortured, as per the UN. There are russian Telegram channels with hundreds of thousands of subscribers which gleefully show all these atrocities.
They don't commit those suicides because of some moral qualms. They off themselves when they get wounded and know that no one's coming for them.
On November 03 2024 19:55 2Pacalypse- wrote: Thx for posting, that was actually a pretty interesting interview. You can clearly see the difference between a professional, serious journalist, and someone like Tucker Carlson who's a glorified clown. The journalist here (I'm sorry I don't know his name; edit: Steve Rosenberg) asked decent questions and actually pressed Lukashenko where it made sense, compared to Tucker who just sat there listening to a half hour history lesson from Putin and then just kept on swallowing the shit that Putin was stuffing down his throat.
You can also see the difference between Lukashenko and Putin too; Lukashenko is a useful idiot to Putin and a dictator in his own country, but he doesn't really have a filter when he talks. So he actually ends up saying the things he really thinks and answers questions directly, compared to Putin who tries to masquerade his reason for invasion through blabbering about history.
As for the actual contents in the interview, a few interesting points: - Lukashenko denies involvement of North Korean troops in the war - Lukashenko says he didn't give permission to Putin for invading Ukraine through his country, it's just that Putin decided to retreat those troops from Belarus through Kyiv (lol) - There actually are some indicators that Lukashenko is trying to improve his relations with the West, even though he denies it in the interview (this seems like the most interesting point to me)
Definitely interesting! 1) He can say that without consequences, as he just 'didn't believe' Putin would do that. To be fair, when I heard about it I was also surprised, it's not something I'd expect Russia would do to project strength. 2) Here he sounds like a liar. He probably just wasn't going to be responsible for whatever happened there, but he probably knew it would be better not to intervene. 3) The guy has to balance between east and west while trying to stay in power too. I can imagine he's not pleased with the sanctions and would like to maintain a semi-neutral stance to maybe improve this.
Couldn't help but laugh at 11:58 "Ukraine seized our freight trains containing fertilizer", that just sounds like a very Borat thing to say.
So in the last week we have: 1. North Koreans proven to be on the front lines (some were recently killed in Kursk) 2. Evidence for Russia using gas attacks 3. Evidence for Russia planning and performing a "dry run" of planting incendiary devices on US civilian planes (2 devices were found)
These should all be larger stories than they are. We've gotten way too comfortable sitting on our hands doing nothing whilst Russia continues to perform terrorism and involving other countries. At this point we should be sending people to Ukraine ourselves.
On November 05 2024 03:50 Excludos wrote: So in the last week we have: 1. North Koreans proven to be on the front lines (some were recently killed in Kursk) 2. Evidence for Russia using gas attacks 3. Evidence for Russia planning and performing a "dry run" of planting incendiary devices on US civilian planes (2 devices were found)
These should all be larger stories than they are. We've gotten way too comfortable sitting on our hands doing nothing whilst Russia continues to perform terrorism and involving other countries. At this point we should be sending people to Ukraine ourselves.
In some ways, the complete and total silence gives me rare confidence the West is going to make a big move immediately after the US presidential election. Even though I have an easy time labeling western leaders as ineffective cowards, this level of inept inaction is way beyond anything I ever labeled them as capable of. So I think something is on standby for the moment polls close. But I am not convinced it will be anything more than cowardly bullshit.
The thing is that the west can do something whenever, but they just find out if it was bluffing or not. Sure it is the end of Russia, but at what cost. It would be funny if it wasn't a war we are talking about, but in a way, Russia being this weak is what is stopping anything bigger happening as they are projecting immense self-destructive behavior and extreme levels of denial.
On November 05 2024 03:50 Excludos wrote: So in the last week we have: 1. North Koreans proven to be on the front lines (some were recently killed in Kursk) 2. Evidence for Russia using gas attacks 3. Evidence for Russia planning and performing a "dry run" of planting incendiary devices on US civilian planes (2 devices were found)
These should all be larger stories than they are. We've gotten way too comfortable sitting on our hands doing nothing whilst Russia continues to perform terrorism and involving other countries. At this point we should be sending people to Ukraine ourselves.
Perun’s latest video went into the NK relationship in some depth and essentially the NK manpower isn’t the real issue, the NK shells are. NK has provided more shells alone than all of Ukraine’s allies.
Early in the war, around the time of the destruction of cities like Sievierodonetsk there was a lot of ink spent saying that Russia was going allin on a short war and depleting its shell reserves rapidly. That it was firing shells at a 20:1 ratio in some parts of the front hoping that it would win before the stockpile ran out. Obviously it did not, and Russia did subsequently run out of artillery ammunition.
The reason Russia’s offensive potential did not end with their failed allin is NK. SK’s intelligence estimates put around half of Russia’s shells fired these days as NK supplied. A lot of these count as Russian production because they’re refurbished by Russia to replace defective components but they’re NK. As many as 9m shells. This absolutely dwarfs the European commitment to provide 1m shells, a commitment they subsequently fell short of.
10,000 North Korean troops are irrelevant compared to those shells.
The Soviet Union was, for all its faults, capable of fairly advanced military tech in a few key areas like rocketry, submarines, nuclear miniaturization and so forth. The manufacture of a nuclear weapon to be dropped out of the back of a plane is 1945 tech, and that’s as far as NK has gotten. They can set one off in a bunker under a mountain but they can’t get one to SK, let alone to Japan or America. That is what NK are getting from Putin. Kim recognized that they were stuck on missile tech and that only the fish were afraid of them. Trading their rusting 1960s shell stockpile for tech that would make them a genuine threat to the US directly was a colossal win for NK.
On November 05 2024 03:50 Excludos wrote: So in the last week we have: 1. North Koreans proven to be on the front lines (some were recently killed in Kursk) 2. Evidence for Russia using gas attacks 3. Evidence for Russia planning and performing a "dry run" of planting incendiary devices on US civilian planes (2 devices were found)
These should all be larger stories than they are. We've gotten way too comfortable sitting on our hands doing nothing whilst Russia continues to perform terrorism and involving other countries. At this point we should be sending people to Ukraine ourselves.
Perun’s latest video went into the NK relationship in some depth and essentially the NK manpower isn’t the real issue, the NK shells are. NK has provided more shells alone than all of Ukraine’s allies.
Early in the war, around the time of the destruction of cities like Sievierodonetsk there was a lot of ink spent saying that Russia was going allin on a short war and depleting its shell reserves rapidly. That it was firing shells at a 20:1 ratio in some parts of the front hoping that it would win before the stockpile ran out. Obviously it did not, and Russia did subsequently run out of artillery ammunition.
The reason Russia’s offensive potential did not end with their failed allin is NK. SK’s intelligence estimates put around half of Russia’s shells fired these days as NK supplied. A lot of these count as Russian production because they’re refurbished by Russia to replace defective components but they’re NK. As many as 9m shells. This absolutely dwarfs the European commitment to provide 1m shells, a commitment they subsequently fell short of.
10,000 North Korean troops are irrelevant compared to those shells.
The Soviet Union was, for all its faults, capable of fairly advanced military tech in a few key areas like rocketry, submarines, nuclear miniaturization and so forth. The manufacture of a nuclear weapon to be dropped out of the back of a plane is 1945 tech, and that’s as far as NK has gotten. They can set one off in a bunker under a mountain but they can’t get one to SK, let alone to Japan or America. That is what NK are getting from Putin. Kim recognized that they were stuck on missile tech and that only the fish were afraid of them. Trading their rusting 1960s shell stockpile for tech that would make them a genuine threat to the US directly was a colossal win for NK.
The shells aren't that big of a problem actually. Reports say that about 60-70% of NK shells are defective for one and the other problem Russia is facing is that they're kinda running out of stuff to shoot those shells with. Recently there were some reports with images of Russian supply depots with artillery and most of it is all but gone (no more mortars, most of the bigger things also gone).
The problem with NK troops is the question if it's a one time thing (10-15k soldiers) or a monthly occurance. If NK is going to provide troops every month this will seriously disrupt the fragile balance in this war. Right now UA and RU are roughly equal in terms of how many troops they are able to make fit for the front each month (around 25k). If one of them suddenly gets to beat the other's replenishment rate by 50% it's a problem.
For now though there are way too many unknowns though. If Russia is taking the NK troops but has to supply them with weapons, ammo and other gear themselves this might be an issue for them as they don't seem to be running high on basic supplies for the soldiers (even providing cans of meat that turn out to be just full of dirty water).
Decades of corruption are catching up to them now. You could hide equipment misapropriation and other stuff when the stocks were huge but as they're running out a lot of it is coming to light and they find themselves in a precarious position where they don't really have what they thought they had.
On November 05 2024 03:50 Excludos wrote: So in the last week we have: 1. North Koreans proven to be on the front lines (some were recently killed in Kursk) 2. Evidence for Russia using gas attacks 3. Evidence for Russia planning and performing a "dry run" of planting incendiary devices on US civilian planes (2 devices were found)
These should all be larger stories than they are. We've gotten way too comfortable sitting on our hands doing nothing whilst Russia continues to perform terrorism and involving other countries. At this point we should be sending people to Ukraine ourselves.
Perun’s latest video went into the NK relationship in some depth and essentially the NK manpower isn’t the real issue, the NK shells are. NK has provided more shells alone than all of Ukraine’s allies.
Early in the war, around the time of the destruction of cities like Sievierodonetsk there was a lot of ink spent saying that Russia was going allin on a short war and depleting its shell reserves rapidly. That it was firing shells at a 20:1 ratio in some parts of the front hoping that it would win before the stockpile ran out. Obviously it did not, and Russia did subsequently run out of artillery ammunition.
The reason Russia’s offensive potential did not end with their failed allin is NK. SK’s intelligence estimates put around half of Russia’s shells fired these days as NK supplied. A lot of these count as Russian production because they’re refurbished by Russia to replace defective components but they’re NK. As many as 9m shells. This absolutely dwarfs the European commitment to provide 1m shells, a commitment they subsequently fell short of.
10,000 North Korean troops are irrelevant compared to those shells.
The Soviet Union was, for all its faults, capable of fairly advanced military tech in a few key areas like rocketry, submarines, nuclear miniaturization and so forth. The manufacture of a nuclear weapon to be dropped out of the back of a plane is 1945 tech, and that’s as far as NK has gotten. They can set one off in a bunker under a mountain but they can’t get one to SK, let alone to Japan or America. That is what NK are getting from Putin. Kim recognized that they were stuck on missile tech and that only the fish were afraid of them. Trading their rusting 1960s shell stockpile for tech that would make them a genuine threat to the US directly was a colossal win for NK.
The shells aren't that big of a problem actually. Reports say that about 60-70% of NK shells are defective for one and the other problem Russia is facing is that they're kinda running out of stuff to shoot those shells with. Recently there were some reports with images of Russian supply depots with artillery and most of it is all but gone (no more mortars, most of the bigger things also gone).
The problem with NK troops is the question if it's a one time thing (10-15k soldiers) or a monthly occurance. If NK is going to provide troops every month this will seriously disrupt the fragile balance in this war. Right now UA and RU are roughly equal in terms of how many troops they are able to make fit for the front each month (around 25k). If one of them suddenly gets to beat the other's replenishment rate by 50% it's a problem.
For now though there are way too many unknowns though. If Russia is taking the NK troops but has to supply them with weapons, ammo and other gear themselves this might be an issue for them as they don't seem to be running high on basic supplies for the soldiers (even providing cans of meat that turn out to be just full of dirty water).
Decades of corruption are catching up to them now. You could hide equipment misapropriation and other stuff when the stocks were huge but as they're running out a lot of it is coming to light and they find themselves in a precarious position where they don't really have what they thought they had.
Yeah I agree with a lot here. I think its possible Russia can offer enough to North Korea to get a substantial troop commitment. I think this is a resource many people failed to account for or undervalued. Among the nations Russia has. close ties to, Russia has significant military technologies to offer in exchange for soldiers. North Korea is basically the perfect fit for Russia. They have an insanely large military but also extreme economic and technological weaknesses.
In a situation where Putin can secure 100,000 quickly mobilized North Korean soldiers in exchange for highly coveted technology, I think he will go for it. As many people seem to agree, this war as a whole will determine Russia's future. You could argue Russia has very little to lose by providing North Korea with a significant technological leap.
It all comes down to this: North Korea could likely send 100,000 troops straight into Ukraine if they have a good enough reason to do so. Even poorly armed and poorly trained troops could be used effectively within the context of this war of attrition. What would Russia be willing to pay for 100,000 "ASAP" troops? Probably just about anything.
EPT
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