The Jaded Consumer doesn't want to amplify economic nonsense by linking to it, but the international news sources that uncritically publish economic numbers approved by authoritarian regimes aren't doing the public any favors in understanding the impact of nations' military and economic policies and appreciating the prices caused by their conflicts. This note is intended to provide an evidence-based view of the global conflict underway between expansionist tyrannies and the more democratic nations authoritarians have targeted.
Russia claimed to have bulletproofed itself against sanctions in order to enjoy normalcy as it prosecutes ongoing war against Ukraine. Claims that Russia thrives while democratic adversaries suffer economically are undermined greatly by the data. Russia's central bank's announced interest rate is worse than I've paid on credit cards. At the time of this writing the rate has been raised to 21%. Russian propagandists had been trying to convince democratic nations that imposing sanctions on Russia injured free people more than the subjects of what's left of the Russian empire. The claim Russia's economy is strong has two basic problems. First, Russia's auto industry is now wholly dependent on manufactured goods from China, and Russians buy these with funds obtained selling raw materials to China (primarily unrefined energy products). If acting as a source of raw materials while buying finished goods from one's sponsor state sounds to you like the role of a colony, you've figured out that Russia is now a de facto colony of China. The second problem is that even suffering the colonization sucks: unlike the U.S., which has got inflation in the low single digits and is close enough to its ultimate target inflation rate that the federal reserve bank is cutting interest rates to avoid allowing inflation to fall too much, Russia still has an official inflation rate that is in the high single-digits (and a real inflation rate estimated at 27%). It might be worse, but a lot of what Russians want to buy isn't available at any price. Whoops.
Russia isn't alone in living in a fantasy land. China has been making public policy on the basis of fictitious population data, and that's going to cost it. The longer China can get cheap fuel from Russia to prop it up from collapse, the longer the West has to reconfigure supply chains so as to avoid dependence on authoritarian regimes and the legal quicksand the tyranny there imposes on all who do business there.
Russia is dependent on North Korea and Iran for weapons and is burning cash while it goes all-in on Putin's dream of re-establishing the lost empire of the Russia of his imagination, with Soviet-era borders. Unless some outsider throws Putin a lifeline, he's going to drive himself and his government into the same kind of bankruptcy-driven collapse that put an end to the Soviet Union. China will just take the eastern territories Russia continues to occupy but hasn't anyone there to defend it. China has already updated its maps of Russian territory with its preferred Chinese names.
