Subject: Re: Let’s See If This Pans Out for Putin
Do folks here agree that these are the 2 most likely scenarios? Does any other outcome seem plausible?

A third likely scenario is what we've been discussing - Ukraine loses neither sovereignty nor any significant territory. Instead, Ukraine keeps fighting with Western support, and Russia eventually abandons their plans of conquest and invasion in order to avoid having to perpetually devote so much of their military resources into the unending maw of a forever war. I happen to think that's more likely than either of the two the WSJ mentions.

This could happen slowly, if Russia is successful in finding resources to give it the ability to keep burning up massive amounts of military assets in a fruitless effort to conquer Ukraine. Or it could happen more quickly, if Russia's jerry-rigged war funding effort falls apart, as some economists suspect could happen this year. While Dope is correct that Russia's still getting some financial resources from their energy sales despite the sanctions, the reality is that they are mostly funding the war effort by a combination of drawing down their sovereign wealth fund and massive debt financing - both of which are becoming increasingly difficult to sustain. That's the Russian side of the "war of attrition."

"The most critical shortage, however, is budget financing, as Russia's last liquid reserves are likely to run out in the fall of 2025," Åslund wrote in an op-ed for Project Syndicate on Tuesday. "Budget cuts will then become necessary. In the meantime, the war economy might also require price controls and rationing — the old Soviet sins. As the risk of a financial crash rises, Russia's imperiled economy is about to pose serious constraints on Putin's war."

The rapid decline in Russia's wealth fund has been partly driven by Western sanctions, which have prevented Russia from borrowing from other countries. The nation's total foreign debt has collapsed over the last decade, with foreign borrowing down from $729 billion in 2023 to around $293 billion in September 2024, Åslund noted.

Russia's limited ability to finance the war is also spells bad news for the health of its economy, which is plagued by a myriad of other issues.



https://archive.is/MtyZM