Comments by "Paul Aiello" (@paul1979uk2000) on "Why is the Ruble (Still) Declining?" video.
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I think we should remember that Russia had a rainy day fund for the war in Ukraine, they are using that to prop up the Russian economy and ruble, experts have predicted it will run out late this year, that's when Russia could be in trouble because the impact of the war in Ukraine is going to be felt far more on the Russian people, something Putin is desperate to shield them from so he doesn't lose popularity, but the hard thing to predict is how much oil and gas revenues from last year will have delayed this impact.
Another factor we should remember, sanctions usually take years to do the real damage, the damage being done to Russia is actually very predictable going on what we've seen in the past, basically, sanctions hit hard at first, the country spends a lot to prop things up, that money runs dry and then the country starts to decline, sometimes at a rapid rate, so it's not strange what we are seeing in Russia at the moment and it could have been a lot worse for Russia if Putin didn't put a lot of money aside for the war in Ukraine, after all, he thought the war would be over quite quickly, that's where the real problem is for him, he can't afford this war to keep dragging on as it's a drag on the economy they can't afford, whereas the west can afford to keep arming Ukraine indifferent because they are a lot richer and the resources is being spread out over so many big powers, so what we are seeing in Russia is a slow decline, which is I think what the west and especially the US wanted because it keeps things stable whiles weakening Russia's political and economic power over the long run.
The west very likely knew this was going to be drawn out over some time, and in some ways, it might be better to have a slow decline of Russia and not a something that falls apart overnight which can be very unpredictable in the outcome, but that is unfortunate for Ukraine, because it drags the war out a lot longer.
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@delboyg01 That's true, but they are also too dependent on tech from the world, after all, if it wasn't for help from around the world, Russia wouldn't be able to take advantage of it's gas and oil reserve and this is the case in many areas where much of the progress in Russia is thanks to help from others, especially the west over the last few decades, and with that drying up, it's putting them at a major disadvantage.
Think about it logically, Russia is blessed with a lot of natural resources, and yet they have an economy around the size of Spain, whiles having to cater to a much bigger population, that's really poor mismanagement of the economy, Russia with sound economic management would be doing far better than they are, and you really have to wonder how bad it's going to get for Russia as the sanctions really bite over the coming years.
At the end of the day, the real mistake from Putin is thinking the west, mainly the EU was dependent on his oil and gas, the truth is, the ones with the real power are the buyers of that resource, not the ones that sell it because the buyers dictate what price they are willing to pay and who they are willing to buy from, Putin is finding out the hardware that Europe is looking elseware whiles at the same time, investing more in alternative energy sources like renewable, in other words, they are cutting Russia out of the picture, and if the EU can do that, the rest can as well, that's really bad news for Putin, because it forces him to sell his oil and gas cheaper, it also means the ones that do buy from Russia have more bargaining power to lower the price, which is basically what China and India are doing, in fact, it wouldn't surprise me if much of the oil is being bought for free with China buying it by selling arms to Russia, great deal for China, poor deal for Russia because it's not really having a net economic benefit when selling much of the oil for free because they need the arms to fight Ukraine.
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