Unexpected ‘Black Swan’ Situation For Russia

6.08.2024, 17:14
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This crisis appeared out of nowhere.

Amid the global decline in stock exchange prices, the price of oil has dropped sharply. A barrel of Brent has not been as cheap as it is now since last year. Futures fell from $80 to $75 and the decline continues.

In normal times, the collapse of world stock exchanges could not have caused me any good emotions, but now I even feel some optimism.

Most likely, the world economy will now begin to cool down, even a recession is not excluded. This means that prices for raw materials (primarily oil, but not only) will fall to their lowest levels in a long time.

Accordingly, Russia will be left without a significant share of its income.

Crises of this kind usually hit developing countries with transition economies the hardest. Asia is also falling especially quickly now. Accordingly, it is quite logical to expect the aggravation of problems and acceleration of the crisis in China. Stock indices there have already gone down. In India, the situation is the same — uncertainty and collapse of stock indices.

Thus, the main buyers of Russian oil are facing particularly severe economic difficulties. The cooling of the global economy will lead to a sharp reduction in their oil consumption.

For Russia, this is a classic “black swan” situation. This crisis, the collapse of oil prices, appeared out of nowhere, and on the horizon — a severe shortage of money.

I have said many times that the Russian economy (in its current form) will not survive 2025. In connection with the onset of the Asian crisis, which can become global, I am only becoming more confident in this.

By the way, remember how the arms race, colonial war and the fall in oil prices in the mid-1980s led to the collapse of the USSR?

Unexpected ‘Black Swan’ Situation For Russia

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