Economist Igor Lipits Explained What A Difficult Decision The Kremlin Will Have To Make

The collapse of the Russian economy is imminent.

Russian independent economist Igor Lipits answered the question of whether it is already possible to speak of an impending collapse of the Russian economy: “Not quite yet, but we’re close to it. A period is approaching when Putin will have to make some very bad decisions—that is, he has no good decisions left, he has no reserves left, but he has to do something because he doesn’t want to end the war. What should he do now? The choices are terrible. He either has to seize the public’s savings—which, of course, he doesn’t want to do, because that would cause a rift with his inner circle.”

In an interview with Ukrainian journalist Alexander Demchenko on YouTube.

“The fact is that Russians fall into two groups. The first group consists of the destitute, and the second group consists of the super-rich. What do I mean by ‘super-rich’? They’re roughly 3–5% of Sberbank’s depositors, who hold about 67 trillion rubles in savings, with accounts containing 100, 200, or 300 million rubles each. That’s not wealth. It’s a nest egg for a rainy day. These are the wealthy oligarchs who cluster around Putin. They withdrew their main capital from Russia long ago, but just in case they get stuck in Russia, they need to have some money on hand. This money is kept at Sberbank. “If you seize their savings, you’re seizing the money of the people closest to the regime, so the regime is a bit afraid to do that, but there are no other sources,” Lipsitz described the situation within the occupying country.

“Taxes can’t be raised; taking money from one’s own people is unwise and risks a revolt among those closest to him. Printing a lot of money is an option, but then masses of people will cease to be merely poor and become destitute, because inflation is a tax on the poorest, and the poorest are already barely surviving and don’t know how to make ends meet. The situation is such that he has practically only one option left: a transition from a contract army to partial mobilization. This saves money, but with very unpleasant social consequences,” the expert concluded.

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