Source:
www.emptywheel.net/2022/03/04/world-war-of-economic-attrition/An important if informal assessment by Maxim Mironov, professor at IE Business School—Madrid (Instituto de Empresa, S.L.), was shared in a Twitter thread (translated here from original Russian into English):
Many people ask me to comment on the sanctions.
In short, my scientific conclusion as a professor of finance, doctor of the University of Chicago is FUCKED.
And double fucked up that the inhabitants of Russia, even the educated, for the most part do not understand what awaits them.
I explain on…
.. fingers.
Very soon, the Russians will face a shortage of basic products. I’m not talking about all kinds of iPhones, the import of which has already been banned, but about food, clothes, cars, household appliances, etc.
Russia is very strongly integrated into world trade. And already the largest operators refuse …
…send containers to Russia. But even if a miracle happens and Russia finds someone who is ready to send containers to Russia for three meters, the question is how to pay for it? Export earnings will decrease significantly, as all buyers will try to abandon Russian …
..goods. We see that even non-sanctioned oil companies cannot find buyers for their oil. Gazprom, the main exporter of gas, is already under sanctions, that is, it is generally unclear how it will receive foreign exchange earnings.
The Russian Central Bank has accumulated a huge money-box, 650 billion …
.. dollars. Only more than half of these reserves have already been arrested, and what to do with gold is also not very clear. Few banks in the world will want to buy it from the Russian Central Bank, so as not to fall under sanctions or huge fines themselves.
Many people think that Russia over the past years …
.. built a bunch of factories, only all these factories – automobile, aviation, household appliances, etc. actively use imported components. That is, in the coming months, we will face the shutdown of entire industries with all the ensuing consequences – a shortage of goods, mass…
… unemployment, respectively, a fall in tax collection and, as a result, problems with the payment of salaries to state employees.
Planes even within Russia will also soon stop flying. After all, almost all of them are imported, and the West has already been banned from supplying spare parts. Therefore, we will soon see a massive…
.. decommissioning of aircraft.
The Internet as we knew it will also be shut down. They have already blocked a bunch of information sites, one of these days they are going to block Wikipedia. Twitter and Facebook are already slowing down. Going to shut down YouTube.
About agriculture. Are you aware that..
..in Russia, the share of imported seeds is almost 40%? And for potatoes, the share of imported seeds is 90%? That is, of course, farmers will come up with something over time, but at least in the short term, we should expect a shortage of basic agricultural products and a sharp rise in prices. And that’s not all either..
..Everyone who can leave the country will start to leave. Already actively felled. The government understands this, which is why they introduced a bunch of measures today to keep IT people. Only they won’t work. Therefore, it is very likely that exit visas will soon be introduced for certain categories or completely …
… will close the country.
The only plus from this story is that those who are nostalgic for the USSR will be able to feel all its delights in their own skin. And it will not be a relatively herbivorous USSR like Khrushchev-Brezhnev-Gorbachev, but a USSR headed by a crazy dictator.
P.S.
Here is today’s news, illustrating the scenario described in the thread. Avtovaz has already stopped. And it seemed that it should not depend on imports at all
Avtovaz will suspend the assembly of cars due to a shortage of electronic components. Work was stopped for four days
(link to news article at https :// tass. ru/ekonomika/13943115 embedded)
Fucked. Double fucked. That’s Russia’s economy.
