My pal Jeff Hummel despatched me a hyperlink to a latest 28-minute interview that DW Information did late final month with Jeffrey Sonnenfeld of the Yale College of Administration. Jeff requested me to judge it. I discover it extremely credible.
The massive backside line: Russia’s economic system is within the tank and the explanation many people have thought in a different way is that Putin actually makes up the numbers.
Listed below are some highlights:
2:00: Rosstat, Russia’s official company that estimates GDP, acknowledged that the economic system contracted by solely 2.1% in 2022.
2:14: The interviewer says that the IMF expects the Russian economic system to develop by 0.3%.
3:00: Sonnenfeld says that the World Financial institution and others get their data from Rosstat. One little drawback is that Rosstat has had a change of management 3 instances. Why? Sonnenfeld says it’s as a result of Putin is on the lookout for lackeys (my phrase) who will state the info he desires acknowledged.
3:30: As a member of the IMF and the World Financial institution, Russia is required to submit knowledge to the IMF and World Financial institution. “They aren’t submitting.” By the second quarter of 2022, Russia stopped submitting the info.
4:00: Putin wakes up within the morning and decides what the GDP must be.
(My financial historian’s thoughts clicked in right here. I keep in mind studying, in John Flynn’s e-book on FDR titled The Roosevelt Delusion, that after FDR took the U.S. off gold, he awakened within the morning and determined what the value of gold can be. Right here’s the related phase from that e-book:
Thereafter every day Morgenthau and Roosevelt met, with Jesse Jones, head of the RFC, current, to repair the value of gold. They gathered round Roosevelt’s mattress within the morning as he ate his eggs. Then “Henny-Penny” and Roosevelt determined the value of gold for that day. Sooner or later they wished to boost the value. Roosevelt settled the purpose. Make it 21 cents, he dominated. That could be a fortunate number- 3 times seven. And so it was carried out. That evening Morgenthau wrote in his diary: “If individuals knew how we fastened the value of gold they’d be frightened.”
Why do these items appear to occur within the morning?
4:45: The Russian economic system is in a tailspin.
5:40: Each key industrial sector is down. The auto trade is down 99%.
6:30: The work pressure is much more of a authorities work pressure than it was earlier than the warfare. Whereas Sonnenfeld doesn’t say it explicitly, it’s clear that he understands that that’s not good.
7:10: Hundreds of fridges are being torn aside to reap chips that can be utilized by the army. [I had recently heard this from another friend who follows the Russian economy.]
9:45: Russia is dropping cash on vitality. He goes into this later intimately after concerning the 19:20 level.
10:45: Ruble (not ruple—his pronunciation) is just not being traded.
12:10: Yellen, Raimondo, and Blinken all say that Sonnenfeld’s staff has knowledgeable them on this.
12:40: Corporations which have pulled out of Russia.
16:14: Koch Industries has pulled out and gone from a grade of F to A.
17:30: Corporations shouldn’t solely settle for a loss however ought to settle for an entire write-down and “it gained’t price them a penny.” In case you assume Sonnenfeld is pulling a Kramer (the Seinfeld character) and saying they “write it off,” he’s not. What he’s getting at, with out utilizing the time period, is sunk price. They acknowledge that an asset that’s valued on their books at $X is absolutely price roughly 0. And by getting out, they keep away from additional losses.
18:14: Doing good and doing properly should not antithetical.
19:20: The economics of Russia’s oil provide. Why Russia is at finest breaking even.
20:30: Russia’s economic system is smaller than that of Chile.
21:15: Russia can not acquire again its enterprise in Western Europe even in spite of everything that is over. Fascinating story about liquefied pure gasoline. The market comes via.
23:20: Putin can’t promote pure gasoline to India and China as a result of he doesn’t have the pipelines he would wish.
25:25: The mayor of Moscow, till he was silenced, admitted in April that a whole bunch of 1000’s of idled employees “had been within the streets with nothing to do.”
25:50: 3 million extremely refined employees have fled Russia. [DRH comment: Biden should allow a bunch of them in. They wouldn’t go on welfare and would help us.]
This is among the most informative movies I’ve seen in months.
I’ve one concern, and it’s not concerning the fact of Sonnenfeld’s statements. I put a excessive chance on the concept that he’s right.
No, the priority is that he appears to have fun implicitly the destruction of the Russian economic system. However Putin’s not struggling. It’s Joe Six-Pack, or possibly Sergei Vodka Bottle who’s struggling. Additionally, Sonnenfeld and I each agree that Vladimir Putin is an evil man. What does an evil man with nuclear weapons do when he’s taking place? That issues me.
