So how many more years before they eventually run out of budget for this war?
this post was submitted on 20 Jan 2024
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This fund will last this year and depending on how much money Russia needs and the oil price next year as well. However nobody looses wars due to running out of money. You loose on the battlefield or due to the suffering of the population being to bad. The fund running empty just means average Russians will get worse government services and economic support is going to fall. If Putin cuts back too much, he has a revolution on his hands.
Arguably, that revolution is due to running out of money.
Wars often are lost due to economics.
I think what he was trying to point out is that you should not expect a direct visible effect of the dwindling funds on the events on the battlefield. It will be much more indirect and delayed by month, maybe years.
Eh, you're probably right. It just seemed to be a very definitive set of statements.
A government can just print money. So looking at a governments budget does not reveal how long they last. It shows how they balance military and civilian spending.
Printing money has very real affects on the economics of the country. Go wild with it and you get hyperinflation and a complete breakdown of the economy. There is no free lunch.
Sure, but do you seriously go to Putin and tell him that you do not have the budget to continue the war or do you just print the money? I am very certain Putin is much more afraid of Ukrainian drones, then of a number. All of that is also easy to manipulate and almost certainly is. Especially inflation with high interest rates.
To really see an economy collapse, you have to look for shortages of basic necessities. We start to see that. That is the part that not accounting trick can manipulate. Everything to do with government budgets, inflation and so forth can be to a massive extend. It stops when the streets show it is broken.
I'd argue that Germany lost World War I due to ruining out of money. Some wars are lost due to attrition.
Financial attrition is a type of attrition
After WW1 Germany had more then enough money, but nothing to buy with it. Hard to say they ran out of money.
They started spending that money after starting the war, so it's use is related to the war in question. Thus, when they will run out, whatever they were paying for (war related) will stop getting money.
It might not be a direct financing of the battlefield activities, but while the victory will be in the battlefield, the biggest chunk of the battle actually happens in preparation and logistics.
In other words, I'm hopeful that this will have a major impact on the invader's ability to cause harm.
Since they've entered true wartime spending, a while.
This is the best summary I could come up with:
The stash of liquid assets in Russia's national wealth fund has fallen over 44% since Moscow invaded Ukraine, according to a Bloomberg report of Russian finance ministry data on Wednesday.
The massive slump in the national wealth fund's liquid assets came as its holdings in Russian companies and in infrastructure bonds surged by 2 trillion rubles, per Bloomberg calculations.
Russia's finance ministry also used around 3 trillion rubles from the fund to cover its budget deficit in 2023 after it doubled defense spending in the same period.
Russia could be running out of time and money soon as it keeps funding the war in Ukraine, which is soon heading into its third year.
While Russia's economy still appears resilient, it is dealing with a swathe of Western sanctions and weak international oil prices that have fallen about 10% over the past 12 months.
Alex Isakov, an economist at Bloomberg Economics, said Russia's national wealth fund's liquid assets will last for another year or two if the country's oil export prices fall below $50 a barrel.
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