What is the emergency meeting of the Duma about? What about all the laws further closing the Russian state that read like the Stalinist code of the 1930s? What about backyard chickens and rabbits? Well, now it’s clear. We have had rumors of how badly the Russian economy is doing.
We have seen rumors of industrial strikes, and the ever-so-popular fights for sugar. Russia has presented a happy face to the world as it goes about telling us that the sanctions were not affecting them. We saw signals to the contrary early on. They cannot produce modern tanks for example. They use modern western components. For that matter, the car industry is dead for all intents and purposes. This from Reuters covers both.
Here is the tale of this emergency meeting from one of the liberal channels on Telegram.
Today the council of the Duma may issue the prescribed valiant whistle and appoint an extraordinary session of the chamber for July 15.
Since the holy terms of the parliamentary recess are at stake, it is clear that they will gather not because of trifles. It is alleged that “urgent government initiatives” are awaiting consideration, but under this sauce they can take radical, militaristic, and criminally punitive measures.
And although the State Duma is a long-standing and proven source of danger to society, it is precisely at moments of such emergency meetings that the anecdotal essence of a mad printer fades into the background, and the threat emanating from parliament is felt as real. “Exhaled”, “passed”, “not today”. If you manage to say all this on the evening of the 15th, then you are lucky, and this time you were afraid in vain. Remarkable state structure
Yes, they know this is serious. So do I. So how bad is the economy doing? Well, here is this, via a Siberian paper. It matters a lot. And while this part speaks in the language of economics, arrears means they are behind in payments.
It also points out why this has taken so long to be felt. It’s the pandemic. Russian companies, which is not dumb, started to work within a six-month lead time instead of a quarter, meaning three months.
Everyone will feel the collapse closer to August, — says Maxim Mironov, Professor of the IE Business School, Doctor of Economics (a graduate of Novosibirsk State University, master’s degrees of the Russian School of Economics and the Higher School of Economics). — Yes, the companies are already left without counterparties, who are without customers, but they still have a stock of funds, resources, Therefore, we do not yet see the full effect of war and sanctions. Traditionally, these reserves are created for at least three months, but against the background of interruptions in the pandemic, the terms have increased to six months. That is, approximately by August, all business savings will be depleted and we will see a real picture of how war and sanctions have affected the Russian economy.
According to state statistics, the largest salary arrears were accumulated by manufacturing industries — 55.4% and construction — 12.1%. Agriculture, hunting and logging in third place — 8.5% of the total debt; water supply, collection and disposal of waste in the fourth — 5.8%, transport in the fifth — 5.4%. On the sixth — mining and 4.4% of the total salary arrears.
The car industry and aviation are already almost dead. This can be most vividly traced by comparing production volumes and sales volumes. After all, car sales in the same April fell “only” by 78%. But let’s look at the fall in car production volumes in April by almost 90% and understand that this is just the beginning (which was confirmed to us by May with a drop in sales by 83.5%) and there will simply be nothing to buy further. With these areas (as well as film distribution, for example), it is clear that they were left without important foreign components due to sanctions. In second place are all manufacturing industries left without machines and raw materials. As a result of the shortage of metal and the rise in price of other raw materials — the shutdown of the construction industry, — lists Mironov. — But you can not really delve into who will be worse. It will be worse for everyone, because all related service industries “fly” along with the basic industries. Logistics that served them, shopping centers, office and warehouse centers in which they were located.
We are talking of at least a recession, given that the unemployment rate is expected to go to at least nine percent. I think they are hopeful here. Inflation rates in Russia are already close to twenty percent, that is the happy face of the central bank. They have been artificially supporting the Rubble. They will run out of ways to do that. This could lead to hyperinflation.
It’s a house of cards.
While they are promising volunteers real money for six-month contracts in Ukraine, we also have seen rumors that troops are not getting paid or a lot less.
One of the factors for the Soviet collapse was precisely not paying the Red Army. It was a signal that western intelligence missed until after the collapse.
So back to the extraordinary meeting of the Duma. I know this. They know this. None of these people are stupid. It’s about further closing the Russian state and trying to prevent the troubles. I have talked about this and how even the nationalists know it’s coming.
They will also soften some prison sentences because the prison colonies are a possible source of riots, once conditions worsen. This is reading increasingly like the conditions that led to 1917. If there is something Vladimir Putin and the elite fear is a color revolution, or worse, a 1917 type of event.
So once more Russians feel this, and it becomes very real, those tectonic plates will start to move faster. What Putin unleashed with this war is momentous and historic. It’s just not in the way he planned it.
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