Sanctions arent a magical stop when not everyone follows them, Russia still trades with China, India and some others. Europe is still buying their gas. This has avoided a worst-case scenario for them but their limited buyers know this and can get more from Russia for cheaper. Gazprom stock is down 20% over 5y. The point isnt to kill them just weaken. Sanctions are a large reason behind Russian inflation which as of March 2025 was at 10.3% yoy. Theyre why protests still happen even in Moscow despite the fear. Hell a couple years ago now their main finance minister tried to resign because of the sanctions and war effects on the long-term economic outlook in Russia.
Usually high inflation is a driver of domestic upset at those in power. Biden had a couple months around 9% despite a yoy of around 5% and he got skewered for it. Sanctions have also allowed the capture and sale of some oligarch assets to help fund Ukraines defense. Economic collapse driven by sanctions is not immediate but a long-term effect, there are months-years of signs such as inflation before it comes crashing down.
Usually high inflation is a driver of domestic upset at those in power.
“Domestic upset” - Russia is a prison society. Those upset think it’s the elite’s right to humiliate them. Or are afraid. Or can’t sacrifice their life and their relatives’, because they know most people won’t.
And now the poorest and the dumbest men have either died or got war experience.
Anyway, all I personally want is for oil and gas money stream to dry out completely. That will make all of the world’s politics healthier. Despite Russian economy stagnating for many years, you don’t realize how much harm that money has done to the world in those years.
It’s normal for a war economy to “grow”. When a government is buying all the tanks, guns and bullets it can, that’s absolutely amazing for the economy as a whole. Government spending increases generally drive growth (never mind that this just drives debt up and can send your country into a spiral)
Inflation, usually as a result from the former, also makes numbers go up. And if you intentionally undercount accidentally underestimate inflation, it goes up even more! You can always increase interest to keep up (if you dont have massive debt from the former).
You reduce exports of cheap raw materials and start using them yourself to make expensive war materials that look great on your books (but which don’t actually make your country any money, unlike the raw materials).
Getting more soldiers is great for employment numbers, and industry will also need more people. Governments competing with industry drives wages up (and government reserves down).
War generally requires new infrastructure, which is great for countries that have neglected it for decades (unfortunately getting bombed tends to make said improvements rather short term, and only to places nobody wants to go).
So as long as you’re not collapsing under debt (and if you can steal from private citizens, you can keep going for a bit) and your civilian industry hasn’t quite collapsed yet (Russians excel at suffering) and you haven’t undergone population collapse (15 and 70 make for great soldiers, right?) your economy looks great to anyone not looking too closely.
All of your points are great, but if you looked beyond monetary value, many industries that used to produce things that increase the welfare of your citizens are now used to wage war.
A weird but well known example in history was sewing machine companies that switched to producing automatic weapons in times of war. Their profits might have increased, but the people couldn’t buy new sewing machines. So while on paper the country’s GDP might be bigger, more people are wearing rags because they can’t access better clothes, making them de facto poorer.
All of your points are great, but if you looked beyond monetary value, many industries that used to produce things that increase the welfare of your citizens are now used to wage war.
Exactly! that’s the entire point. On page 2 of the summary it looks great on paper, but if you actually start looking at the reports, you’re going to see it’s actually getting worse and worse.
I love your example, and it’s a great way to show the difference between spending and investing. Buying a an expensive gun is spending money looks good right now but it doesn’t DO anything. Buying a cheap sewing machine is investing, maybe not much, but over time you’ll add value to the entire economy.
Sanctions arent a magical stop when not everyone follows them, Russia still trades with China, India and some others. Europe is still buying their gas. This has avoided a worst-case scenario for them but their limited buyers know this and can get more from Russia for cheaper. Gazprom stock is down 20% over 5y. The point isnt to kill them just weaken. Sanctions are a large reason behind Russian inflation which as of March 2025 was at 10.3% yoy. Theyre why protests still happen even in Moscow despite the fear. Hell a couple years ago now their main finance minister tried to resign because of the sanctions and war effects on the long-term economic outlook in Russia.
Usually high inflation is a driver of domestic upset at those in power. Biden had a couple months around 9% despite a yoy of around 5% and he got skewered for it. Sanctions have also allowed the capture and sale of some oligarch assets to help fund Ukraines defense. Economic collapse driven by sanctions is not immediate but a long-term effect, there are months-years of signs such as inflation before it comes crashing down.
“Domestic upset” - Russia is a prison society. Those upset think it’s the elite’s right to humiliate them. Or are afraid. Or can’t sacrifice their life and their relatives’, because they know most people won’t.
And now the poorest and the dumbest men have either died or got war experience.
Anyway, all I personally want is for oil and gas money stream to dry out completely. That will make all of the world’s politics healthier. Despite Russian economy stagnating for many years, you don’t realize how much harm that money has done to the world in those years.
It’s normal for a war economy to “grow”. When a government is buying all the tanks, guns and bullets it can, that’s absolutely amazing for the economy as a whole. Government spending increases generally drive growth (never mind that this just drives debt up and can send your country into a spiral)
Inflation, usually as a result from the former, also makes numbers go up. And if you
intentionally undercountaccidentally underestimate inflation, it goes up even more! You can always increase interest to keep up (if you dont have massive debt from the former).You reduce exports of cheap raw materials and start using them yourself to make expensive war materials that look great on your books (but which don’t actually make your country any money, unlike the raw materials).
Getting more soldiers is great for employment numbers, and industry will also need more people. Governments competing with industry drives wages up (and government reserves down).
War generally requires new infrastructure, which is great for countries that have neglected it for decades (unfortunately getting bombed tends to make said improvements rather short term, and only to places nobody wants to go).
So as long as you’re not collapsing under debt (and if you can steal from private citizens, you can keep going for a bit) and your civilian industry hasn’t quite collapsed yet (Russians excel at suffering) and you haven’t undergone population collapse (15 and 70 make for great soldiers, right?) your economy looks great to anyone not looking too closely.
All of your points are great, but if you looked beyond monetary value, many industries that used to produce things that increase the welfare of your citizens are now used to wage war.
A weird but well known example in history was sewing machine companies that switched to producing automatic weapons in times of war. Their profits might have increased, but the people couldn’t buy new sewing machines. So while on paper the country’s GDP might be bigger, more people are wearing rags because they can’t access better clothes, making them de facto poorer.
Exactly! that’s the entire point. On page 2 of the summary it looks great on paper, but if you actually start looking at the reports, you’re going to see it’s actually getting worse and worse.
I love your example, and it’s a great way to show the difference between spending and investing. Buying a an expensive gun is spending money looks good right now but it doesn’t DO anything. Buying a cheap sewing machine is investing, maybe not much, but over time you’ll add value to the entire economy.