The far-Left president of Brazil, Lula da Silva is in the headlines after a week ago he said the following:

Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the (trade) currency after the end of gold parity?

After him, the president of Malaysia (who?!) uttered something similar and, from there on, the Cyrillic and idiograms-coughing shills started shilling. Tens of millions of words consisting of panic porn for Western audiences and hopium for ‘eastern’ audiences have already been written.

Both formats of shilling (which, by the way, is very profitable for moneyed interests) have cited some true facts – such as the dollar now representing 58% of the global reserves, down from 73% in 2001. Or the fact that the Biden administration’s fiscal policies suck.

Now, all of that is true, but does that mean dedollarization is actually happening? And if yes, at what pace? And, unless you’re a CCP shill, a Russophile or a moneyed entity (e.g. hedge fund), how is that likely to affect you?

Well, the answers are simple, but not easy: Dedollarization isn’t really happening; at the current pace (deemed “alarming” by panic porn) the yuan/renmibi will need 120 years (best case scenario!) to reach parity with America’s most profitable export. And, if you’re not a huge entity, it’s quite unlikely this will affect you in any relevant ways anytime soon (if over the age of 40 – at all in your lifetime, statistically speaking).

Graphs and numbers

Whatever your political opinion or preference concerning dollarization or dedollarization, one has to be mindful of reality.

(De)dollarization happens when enough players in the global market (both large and small) decide to trade or to no longer trade in Uncle Sam’s green notes.

While it is true that the share of dollars used for trade declined a bit in the last 12 months (as seen on the graph), that decline is mostly in favour of the Euro and the Japanese Yen, and not in favor of the renmibi/yuan, which is the only potential serious competitor (more on that further down).

This reality can be framed in propaganda terms as an inherent strength of the US dollar (which may very well be the case, though impossible to know just yet) but the more likely explanation is that the only entity that really started to use yuan/renmibi is the government of Russia. The entire economy of Russia was smaller than Italy’s before the escalation started in February 2022. Today, it’s smaller than that (though still unclear how much smaller). Of that whole pie, the government is a big player, but no more than half. The other half – the Russian people that is – continues to queue at banks for dollars and euros. And even most Russian state companies continue to hoard dollars a lot more than yuans.

So, in the end, the share of yuan/renmibi in the global trade shouldn’t have increased by much and, indeed, it did not.

Moreover, with all of the belt-and-road initiatives and other predatory loan schemes that the CCP has launched over the last decade, the share of yuan in the global debt is still to be rounded down to its nearest integer – specifically zero.

In other words, statistically nobody takes a loan in yuans. Not even Chinese semi-private otherwise huge entities such as China Construction Bank Corp. or Tencent Holdings. Even those prefer to take their loans in dollars.

Even Chinese companies who are in the business of financial predatory practices in Africa still denominate most of their stuff in US dollars, pound sterling or the local currency (which is routinely pegged with the euro or the US dollar).

Now, all of these entities could in theory decide to no longer do that. But they don’t. And won’t anytime soon because…

The CNY/RMB dual system

The vast majority of the people who write about this topic fail to mention this fundamental aspect: China has three currencies: The renmibi, the yuan and the digital yuan. Each with its own exchange rate, degree of convertibility, capital controls applied on it and a plethora of other issues.

If you have a $5 bill and you’re hungry, in more than 180 countries on Earth (including China, Russia, North Korea or Turkmenistan) you will eat something in exchange for the $5 bill. Someone will trust your $5 bill enough to give you something to eat in exchange for it. Does this hold true for the ¥50 bill? We all know the answer: and it’s a resounding NO.

The reason is not (necessarily) a geopolitical one. It’s not that most people on Earth hate China necessarily. After all, the same holds true with the Uzbek Sumy or the Zimbabwean Bond. Also, if geopolitical opinion or hate would play a role, then surely CCP and FSB officials wouldn’t be holding their own savings in US dollars.

Also read: Somali Shilling hits record 15 years high

The reason is much simpler: Convertibility. Uncle Sam’s greens are trustworthy enough to be convertible almost everywhere, almost all the time. And if you get a $50 bill in Russia and fly to Capetown, you know you can spend the $50 there too. And if you want to use it to buy American goods or services, that’ll do as well. Nobody cares you got the $50 bill in Russia. None of this holds true with the yuan.

The yuan (CNY) only exists internationally. You can use it to buy goods or services from places outside of Mainland China that also happen to accept CNY (which,… aren’t that many). If you fly to Beijing and want to use it, you first have to convert them into renmibi (RMB) which is the “people’s currency”. Depending on the amount, the degree to which the CCP despises you and your social credit score, this process may be denied to you. Imagine not being able to use your legally earned dollars in the US because you earned them in another country. This is the reality for holders of yuan.

And then there’s the digital yuan which is a form of CBDC with the worst negative aspects of it and none of the benefits. CBDCs should be convenient and easily convertible but the digital yuan is anything but.

Now, that’s not to say that the yuan couldn’t, in theory, in some future, replace the US dollar as the global currency. It could. But this yuan, as it stands now, won’t. For sure. And reforming this mess can’t be done in under 10 years and the necessary reforms won’t be made anytime soon anyway because Xi Jinping and the CCP show no interest in that (assuming they have the competence, which they might).

BRICS currency? Fun fact: NO

Beyond the yuan, there is no other potential competitor to the US dollar.

The yuan at least has the theoretical possibility of giving a shot because it comes from a large industrialized economy – but the internal dysfunctionalities of the Chinese economy are preventing this. In short: socialism is still bad for business.

In fact, given China’s size, it is indeed quite remarkable how low yuan’s share of trade financing is. As the world’s largest goods-trading nation, the CNY’s share should be bigger, but it’s not. Because internationalizing the currency is a complicated process which involves reforms that the CCP is either unable or unwilling to implement. For this reason alone (even disregarding all the other practical and financial reasons) the continued status of the dollar as a reserve currency is all but guaranteed.

The next competitor would be the Euro. But the Euro is the currency of a disparate group of 20 states with varying fiscal policies, debt, and equity markets that also suffered a significant sovereign debt crisis a little more than a decade ago. It’s the currency that tried to have inflation for years – and then got all of the wanted inflation all in one fell swoop in a single year, triggering a cost of living crisis that has still not resolved.

The chances of the Euro becoming the alternative for the US dollar in ways that matter globally are quite slim. But even if that were to happen, most €urozone countries are US allies so what you’d get would be DINO (Dedollarization In Name Only). In the end, roughly 84% of world trade is in US dollars and 6% is in Euros. And the Euro as a unified currency has been around for 24 years.

Now imagine a BRICS currency – which would be the currency of a disparate group of at least 5 states with varying fiscal policies, debt, equity markets and economic visions and models. Personally, I would love to see such an experiment attempted. The shitshow that the €uro is would look like an orderly and civilized currency compared to a BRICS currency. Though, upon further thought, such an experiment would deeply harm almost 2 billion people so… it’s better if this is not attempted.

One thing is certain though: a BRICS currency would not threaten the US dollar’s dominance basically ever. For roughly the same reasons the Euro can’t either.

B-b-but crypto?

One tool cited for advancing dedollarization are digital currencies – be them CBDCs or cryptocurrencies.

Well, just like with the Euro and the hypothetical BRICS currency – this is quite unlikely. CBDCs barely exist and are already encountering plenty of issues. For them to reach the level of trust of the people necessary to convince enough people and entities to switch to them from the US Dollar… that’s many decades down the road, if ever.

With crypto, things are even wilder. Bitcoin, barely used as a medium of exchange, saw its value in dollar terms collapse by 75% from late 2021 to late 2022 before bouncing back in April 2023. If you think enough people would be willing to denominate their real-world assets in electronic gobbledygook that varies so wildly that makes the Great Depression fluctuations look like a walk in the park… if you believe that, I have a nice beautiful bridge in Malmö for sale.

Cryptocurrencies have proven themselves to be a great speculative asset but… that’s about it. Cryptobros would argue that it’s a good store of value, but that’s a more complicated issue and quite far from the promises of the crypto evangelists (and yes, they unironically call themselves that).

But even if we grant that (at least some) cryptocurrencies are decent stores of value, that still doesn’t make any of them potential competitors for the US dollar anytime soon. When I’ll be able to take my satoshi and buy bread with it right now, then we can start that conversation.

I will also remind crypto-enthusiasts that El Salvador became known for its very tough, but highly effective, approach on law and order – not for its experiments with Bitcoin as a legal tender.

Nobody in El Salvador and nobody relevant outside El Salvador praises President Nayib Bukele for his crypto policy. But everyone is curious how the murder rate dropped by more than 50% in a single year and by more than 1300% in the last 7 years. THAT is interesting and a stunning accomplishment to study! Cryptocurrency marginal nerd stuff? Not so much.

To sum up

Dedollarization as a phenomenon is neither new nor something necessarily scary. In fact, Brazil in 2013 (also under the same far-Left corrupt leadership) signed an even bigger treaty with the CCP also with the intent to bring about dedollarization. Does anyone even remember that one? It’s certainly nowhere to be found on the graphs concerning global trade, so we can safely say it was all panic porn and/or good ol’ propaganda.

Other countries, such as Chile and Israel (in the 1990s) have adopted measures to reduce their direct exposure to the US Dollar in order to reduce market volatility and increase macroeconomic stability and investor confidence. The results were somewhat mixed if judged by the stated objectives but one thing is certain: None of them stopped trading in dollars. In fact, they both trade in dollars more today than before their “dedollarization” policies were implemented.

For all intends and purposes, the US dollar’s dominance is here to stay. This will change if and only if a freely traded and convertible alternative will appear and only if that alternative will gain enough confidence of enough people and entities and that alternative will be usable widely and easily for trade, reserves and finance. All of these conditions have to be met cumulatively.

That alternative might as well be the yuan. But might as well be the Indian ruppee (given that India’s economic growth is much more sustainable). But that’s way too much into the future and any prediction made now will only turn true by sheer luck. Don’t let anyone tell you otherwise!

Assuming things don’t get worse in CCP-land, the growth in Chinese trade will eventually lead to the yuan growing in importance – in the sense of going from 4%-ish now to… maybe 7 or 8, possibly outpacing the Euro. But the road to replace the US dollar is far longer and that assumes the US will always be under incompetent management as it is now.

Oh, and let’s not forget the real global currency – SDR (code XDR). Currently, the XDR basket consists of the following five currencies: U.S. dollar 43.38%, euro 29.31%, renminbi/yuan 12.28%, Japanese yen 7.59% and British pound sterling 7.44%. So, in other words, US-aligned interests hold 87.72%. I’d say the Empire is in good shape.

It took two world wars, multiple genocides, the slow-motion train-wreck of “decolonization” and quite a few other shocking financial events to finally dethrone the British pound sterling from its status as the main global currency. And, even now, it’s still relevant. Dethroning the dollar will be at least equally hard.

Governments and politicians (alongside their shills and some moneyed interests) will grumble, will whine, will complain, will grandstand, will throw a temper tantrum (see Putin) but, when push comes to shove, they will still be more likely than not to be using the US dollar as the global reserve currency for many, many years to come. Что делать? Нечего делать 🤷🏻‍♂️

Last year my home country’s state media, Danmarks Radio, made a documentary about a man traveling to the lowlands in order to seek assisted suicide. The documentary was lambasted by its critics for its one sided depiction of assisted suicide as solely positive thing, and devoid of criticism on the subject – something not even its most ardent defenders could disagree with.

In the ensuing reemergence of the topic into popular discourse, I would often wrap up the long list of reasons why assisted suicide is abhorrent up in a joke that all it’d be good for would be to cut expenses on elderly care and rid us of those god damn boomers.

It quickly occurred to me, however, that this joke, might actually be much less unlikely that I initially thought.

Part One: The Cultural aspect

The first reason for this is cultural; the youth throughout the Western world have developed a deep, burning resentment of the boomers as most of the cultural, political and economic shifts that have made modernity unbearable can be aptly laid at the feet of their boomer parents.

From leftism, to the Stakhanovite work ethic, crendentialism, over-regulation of the economy, the opening up of the Western world to mass immigration and the outright refusal to pass on any wisdom or wealth to the newer generations, boomers have done much to make the youth hate them.

Something that is further fermented by the youth worship coming from the climate crowd which has claimed over and over that the old in their ignorance have ruined the planet and it is up to the youth – by agitating for the right grifts of course – to save it.

The result? A consensus among millenials and zoomers – though still not formulated in these terms, that they have been born and raised to essentially function as serfs for their parents’ generation.

The pandemic has simply been the cherry on top. Showcasing that the boomers (through the political class) would happily ruin their children’s mental health, destroy their chances of future economic prosperity and take from them what should have been the happiest days of their lives, all so they themselves can live 89 years and 2 months, instead of 88 years and ten months.

For a personal example there were plenty of articles from left-wing youth in my home country ranging from decrying the harm that sanitary fascism had caused them, to referring to boomers as ”greedy pigs” for throwing their children under the bus, to outright calling for a generational tax as payment for the lockdown.

And this is not to mention that the topic of outright removing the elderly has been brought up in an intellectual setting. As a Yale professor recently called for the Japanese elderly to commit mass suicide, as well as ”broaching the topic of mandatory euthanasia”.

For these reasons I doubt the understanding that assisted suicide will lead to the elderly euthanized against their will do much to dissuade the masses from its implementation.

If anything it’ll likely increase enthusiasm for the practice among some age groups.

Part Two: Economics

The other part of this is simple economics; The pension system was never intended as a simple means of care for the old, by design.

As most parts of the modern welfare state, the pensions were an invention of Prussia.

However, the stated goal of this system – a tax on the citizenry that’d go to provide for the elderly when they became too old to earn their own living, was never the intended goal of the Prussian state, as most Prussian citizens taxed for it would die before being able to enjoy the benefits of the system.

The actual goal of the pension taxes where simply that. Taxes to further finance Der Preußische Staat and fuel its war machine.

While most of the West no longer spends much of its budget on military, the pension system still serves its goal as a well propagandized tax.

It is here worth mentioning that the pensions paid to the State are not put in a personal savings account for the individual taxpayer, but treated as any other part of the state income. While the pension expenses are being paid out to those currently on pensions at any given time.

What is immediately striking about this system is how much it resembles a pyramid scheme.

In order for it to work there must at any given time be more people paying into the system than there are being propped up by it.

That will cease to be the case once the boomers hit retirement. Simply due to the shear size of their generation compared to the millenials and zoomers.

The resulting collapse of the pension system – as well as the exodus of such a huge part of the workforce, will likely be severe enough that it could crash national economies, should the state actually maintain the system.

As it is inevitable that the boomers will retire over the next ten or so years, governments will be pressed to deal with this issue under threat of financial collapse. And assisted suicide to slowly remove the excess retirees seems a simple solution. Especially as a centralized authority wouldn’t even need to enforce mass euthanasia.  The hospitals and retirement homes, doubly so in the public sector, will happily euthanize any patients exceeding their budgets on their own.

Especially as any type of workplace tasked with helping people who cannot fight back will inevitably become flooded with sociopaths in search of easy victims to play with.

Conclusions and predictions

There will at least be a strong attempt to implement assisted suicide across the western world.

Due to the economic nature of trying to alleviate pressure from a dysfunctional status quo, the most likely parties to implement it will, in my eyes at least, not be ones on the far left, but the corrupt, managerial corporatist parties of the center.

The countries most likely to implement it will be Germany, and Denmark. Germany due to its predominant managerial corporatist politics, rampant progressivism and deeply totalitarian culture and Denmark due to it’s heavily ingrained disdain for its elderly.

The rest of Scandinavia I am less sure about; Norway has the most totalitarian culture in Scandinavia, but also has enough oil reserves that it could afford a pension crash. Sweden is undergoing too many social changes as a result of not only mass immigration but also a resurgent right to make accurate predictions for.

The last of the likely candidates for implementing assisted suicide is Italy, as it has already seen a push for a referendum on the practice (although one that was shut down by the Constitutional Court), has an already geriatric population and is well known to follow whatever trends are declared on high from the European Union. Should Berlin follow Brussels in implementing the practice, Rome will be quick to follow as well.

One last, though less likely candidate would be the United Kingdom, due the increasingly authoritarian states in the archipelago that have already done much to imitate their former colonial subjects (Canada, Australia and New Zealand, with the US being a notable exception). My guess is that it would first be implemented in Scotland by the SNP, though it would still be probable that the Tory government force it through in England.

Assisted suicide will likely not gain 50+1% support, nor does it need it.

The topic merely needs to be high profile enough in the popular discourse that it gives an excuse for implementation.

Since most of the public either does not understand that the policy will lead to mass killings in the retirement homes or view it as a good thing there will not be a public outcry, let alone any actions that’d actually prevent the policy from being passed.

And the aforementioned radical minority in support of the practice, will make it easy to maintain for decades to come.

And in this regard I most sincerely hope that I am wrong.

 

At the beginning of Russia’s war of aggression against Ukraine, multiple countries (and not just Western ones) imposed various types of sanctions on the Russian economy. The imposition of the sanctions’ regime was relatively well executed but very poorly communicated to the public.

The public was told (or was given the impression) that the Russian economy would collapse within months because it’s the toughest sanctions regime ever imposed on a country. The latter part was absolutely correct, but the former was clearly not entirely honest.

As a result, the public’s trust in the sanctions regime was needlessly shaken due to the high expectations – leading some to lean on exaggeration in the other direction, so far as to believe Putin’s claims that the sanctions had little or no effect. That’s also wrong. So, how’s it going?

Withdrawal of major companies

For once, someone in Academia actually did something useful for the public. So the Chief Executive Leadership Institute from the Yale School of Management went into the enormous undertaking of actually tracking down all of the big non-Russian corporations with business in Russia to see if they actually do make any move as (so many of them) promised.

1586 companies ended up on Yale’s list which gets upgraded at least once a week (last update on February 26, 2023), graded from A (complete exit from Russia) to F (digging in).

The result? 521 companies fully exited Russia (grade A) and another 500 curtailed most or all operations (grade B). On the opposite end of the spectrum, 238 companies either continue as normal or are actively expanding in Russia (“digging in” – grade F).

This in itself is extraordinary. Over 2/3 success rate in fact beats the previous attempt at a global boycott, which happened against Apartheid South Africa 35 years ago.

With that said, there is still room for improvement. There are many companies from Austria, G*rmany, France, Italy, the USA or the United Kingdom that are on the “grade F” list.

Cloudflare, Buzzi Unicem (Italy), BT Group (UK) or Doka (Austria) are some of the Western companies that are still operating in Russia that can still be… persuaded into no longer doing so.

Industry

The automobile production in Russia took a nosedive by 67% – and that’s according to Rosstat (the official Russian Statistic Institute, hardly a trustworthy source). The Russian automobile plants churned out 450.000 cars in 2022, according to Kommersant. That’s less than Romania, whose plants churned out 507.000 cars in 2022, which is not a record for Romania. Keep in mind that of those ~450k cars produced in 2022, quite a few of them are Soviet-era Moskvich which we don’t even know if they work.

75% of car-related transactions in Russia are of used cars, mostly second or third-hand from Japan. The overall number of transactions and production are lower than the 2009 global financial crisis.

To make things worse, there are no chips for anything. Russian leadership hoped to replace what they can’t get from the West by buying from China. There’s just one problem: the Chinese-supplied chips have an enormous failure rate. 40% of the chips delivered to Russia are defective. Such a failure rate makes any sensible production planning impossible. And the goods that are produced with the non-defective ones, obviously, end up being more expensive.

Other industries are under all sorts of weird pressures. So, for instance, Russia can produce its own steel, right? Well, yes, but… some raw materials used to be sourced from Kazakhstan. But Kazakhstan is no longer willing to sell. So the Russian plants now have to source it from within Russia but from further away from the plants (geographically speaking).

Speaking of Kazakhstan, the country bounces between refusing to sell steel to Russia to selling enormous amounts at dumping prices – distorting the Russian market in unpredictable ways. This is reported by Kommersant, which can’t be suspected of a pro-sanctions or anti-Russia bias.

Workforce

The Mayor of Moscow wrote in an official blogpost that things will get rough as hundreds of thousands of people are simply left with nothing to do in the city as everything relevant for them is closed or will be closed. That was in April 2022. Since then, the mayor has been subjected to a special persuasion operation to shut up about it. Even so… the numbers he presented were still real.

In response to multiple such situations (not just in Moscow) the government responded by trying really hard to absorb as many people as possible into various furlough schemes, fake or real government jobs or early retirement. Sure, over the short run, this eases the tension. But for how long can this be sustained? And who funds it? (more on that in a bit)

Nobody really knows how many people left Russia. According to research by The Bell, at least 512,000 people left Russia and did not come back (as of December 2022). This number is the most conservative estimate and most likely wrong, given that just Kazakhstan reported a bit over 200,000 border crossings one way (from Russia to Kazakhstan) without any returns.

Whatever number you choose to believe, one thing is certain: Almost all of the people that left are resourceful (and thus a lost tax base for the State).

This exodus (called “relocation” on Russian groups) strained the public resources of Georgia in particular but, eventually, slowly, things settled down on the host countries. Keep in mind that the exodus isn’t over. The industrial park in Tashkent (empty at my visit there in August 2022) is now full. With “relocated” Russians. After all, someone’s gotta fix the thermal energy distribution of the city, which is in dire straits, so why not fighting age Russian men?

Finance

In late August of 2022 I wrote an article about how unimportant is the official exchange rate of the Rouble given that it’s not a convertible currency. Since then, one thing has changed: Now nobody can exchange Roubles at anywhere near the “official” rate. Not even Raiffeisen Bank, which even went as far as to recognize Putin’s republics, can’t exchange Roubles at the official rate. Raiffeisen is now under an OFAC investigation in the USA. Insh’Allah they get sanctioned.

But, Raiffeisen notwithstanding, the fact remains that nobody buys Roubles. Which means the current “official” exchange rate is wholly artificial and meaningless.

And since nobody buys Roubles, that means nobody is buying Russian bonds either. So how is Putin financing the enormous deficits? Well… the foreign currency reserves. According to the Central Bank of Russia, the state consumed between 7 and 11 billion dollars worth of foreign currency per week. That sounds bad, but not so bad.

Just one problem: All of the statistics officers from both Rosstat and Банк России have been replaced at least three times since the onset of the war. Before the war, they used to be replaced every 6 years or so.

Energy

Here’s where things are a bit more complicated than both the West and Russia are willing to admit.

The EU countries “sold” the sanctions to their people as relatively easy to implement. The practice showed that it was a bit more complicated than previously thought. With that said, all things considered, things turned out quite okay. Europe didn’t freeze to death and, compared to other historical energy crises, countries of Europe fared better than expected.

Russia, on the other hand, “sold” to its people the message that Europe can’t decouple from Russia and that, if things really go south, there’s always India and China eager to buy in huge amounts as both countries are big consumers of fossil fuels.

Just one problem: Saying so is easier said than done.

It takes at least 6 years to build the necessary pipelines in order to deliver gas to China or India. So far, not a single centimeter of a new pipeline has been built. Translation: Russian isn’t selling excess gas to Asia. It can’t.

On oil, the logistics are easier, but India and China put a downward pressure on the price. Or, in common parlance, Russia is selling oil to India and China at a steep discount and routinely at a loss.

You see, extracting oil is not rocket science but it’s still a technologically complex process if you want to also be able to deliver it at a competitive price. And a year of sanctions and the departure of Western energy companies (and with them, their know-how) is taking its toll. Russia’s production price is now higher than the global norm. And continue to climb up as installations start to break down and fixing them is no longer that easy as it was in January 2022.

Ironically, it is in fact desirable that India and China continue to buy more and more oil from Russia at higher and higher discounts because, in doing so, it makes Russia lose money at an accelerated pace. And I have no doubt that’s exactly what’s going to continue to happen because China has no qualms in pillaging Russia for its natural resources.

What we don’t know

Russia stopped filing its paperwork with the IMF, the World Bank, the ITO and other institutions in July and hasn’t allowed the minimum scrutiny required ever since. In parallel, Russian ethnics within the IMF replaced the missing data with the reports from the Kremlin (unverified, even minimally, by anyone). This led to the IMF, World Bank et. al. to publish effectively Kremlin propaganda for months on end.

The situation has been discovered mostly by accident basically last week and hasn’t been corrected yet. So any report from IMF, World Bank, etc. on the GDP of Russia or any other economic data is, for the time being, untrustworthy.

Same goes for the Rosstat reports on some aspects of the economy (especially labor force and demographics) for the second half of the year 2022. the people working on them have been changed/reshuffled at least three times in the last 12 months. That’s a lot.

Even if we were to presume this was not done in order to get yes-men apparatchiks in place, that would twist the numbers to lie for the Kremlin – the mere disruption in the workflow is enough to render the reports for the second half of 2022 at least untrustworthy until further rectification. And there is no reason to assume any of that.

So when Putin says the Russian economy fell by 2.1% in 2022, there is no way to check whether that’s true. Same goes when a Western analyst says that it actually fell by X%. That guy doesn’t know that either. We have some reliable data (I presented some of it above) but we’re still missing quite a bit on other variables in order to make a semi-decent projection.

Some conclusions

So, do the sanctions work? If by “work” you mean the way they were sold to the public in March 2022, then the answer is no.

However, if by “work” one means “steadily and consistently eating away at the economical foundations of the modern part of the Russian economy” – then the answer is yes. Faster than I expected, quite honestly.

I had expected that inertia will take 15 months at the very least to catch up but, as it turns out, many aspects worked-out faster.

Imposing sanctions was a good idea, all in all. But it was a mistake to sell them to the public as a silver bullet against Russia, because such framing needlessly lowered the Western public’s trust in them and gave free talking points to Solovyov et. al. for no benefit.

Luckily, for all of us, the quality of Russian propaganda also took a nosedive lately. And visibly so for anyone who has been following this topic for more than three years. It could be because some of the people at RT and other places were in fact Ukrainian and are now refugees in Kazakhstan.

And while I’m glad that Russian propaganda took a nosedive, it is alarming that the West’s strategic communication is in such a terrible shape. Слава Богу we’re facing Russia of 2023 and not Russia of 2014 in the propaganda department.