As we look at the remaining 362 days of this leap year,
some pivotal questions need to be addressed.
Is the war going to end? If it’s not, what is it going to look like?
Sadly, the answer is simple: the war isn’t going to end on Putin’s watch.
Ending the war will mean taking a gamble and messing up his hand.
What are the risks and what’s our prediction?
But first, I’d like to announce the second part of our tour. It’ll start on Jan 7 in Tel Aviv.
We’ll visit Frankfurt, Zurich, Paris, Riga, Tallinn, and Milan in January.
Follow the link in the description and come to our shows to see how we make our videos
and talk about Russia in the 2000s and now. Ok, let’s roll.
Above all, Putin doesn’t want to end the war because he’ll have to
withdraw the troops and get them back home.
Nobody can tell the exact number of Russian troops in Ukraine,
but it’s definitely north of 500,000.
These guys will return to a country that’s not going to
pay them $2,000 to $3,000 a month anymore.
They’ll be reintegrating into a society that
doesn’t want to hear a word about this war.
We’ve said countless times.
Imagine 500,000 injured and traumatized guys
suddenly coming to terms with their redundancy.
100s of thousands of these guys will be loitering around.
They won’t be able to land either a blue-collar or a white-collar job.
This will create a dangerous situation for the political regime.
The government has screwed these folks as it sent them
to die and kill others on foreign soil.
Imagine it going, “Never mind. It’s all over. Forget about it.”
It turns out the government doesn’t really care for the wrecked village
these guys have been fighting for and dying for over the past several months.
It’s hard to tell how it’s going to trigger them.
As long as the war is chugging along, the Russian troops
are a major concern for the Ukrainian army.
Once it’s over, they’ll be a major concern for Putin.
The unprecedented generosity of “let’s donate all we have
for the special operation” will suddenly be aborted.
The returning troops won’t feel comfortable sleeping
in their beds as opposed to the dank trenches.
The survivors will feel like they’re getting fired from a high-paying job.
Their wounds and PTSD will make this realization even worse.
Part of human psychology is that brooding over our losses
is far more intense than yearning to gain more.
If you slap your employee with a $50 fine,
it’ll affect them much more than a $150 bonus.
Once the war is over, the vets will go through a painful drop in their social status.
Those who will have spent two years getting used to violence
will suddenly feel the need to vent.
If we look at things through the lens of Putin’s sole goal of taking
his power to his grave, the vets will pose a huge risk.
Which means they’d better never get back.
But there are other reasons. For instance, the Russian economy pivots on this war.
They can brag about the high-paying jobs in the manufacturing sector,
vanishingly low unemployment rates, or a surge in real estate prices all they want,
but, without a shadow of a doubt, it all hinges upon the gargantuan war costs.
Thousands of families are getting at least $70,000
in compensation money for their dead family members,
which is the cost of two first-class apartments in a provincial city.
100s of thousands of families are getting paid
hefty sums if their family members are boots on the ground.
War-related industries involving battle tanks and uniforms as well
as construction projects in the occupied provinces are operating to the limit.
These industries are dominating the labor market and offering sky-high paychecks.
These aren’t just abstract figures in a mobile banking app.
These heaps of cash are driving up the demand.
Those who previously dined at a fine restaurant twice and were only invited there
for a wedding party are now frequenting these posh places.
They’re getting more expensive and quality clothes and cars.
They can now afford to take out a mortgage loan.
It triggers a multiplier effect.
The businesses capitalizing on the increased demand are getting richer.
The demand for other goods and services is on the rise, too.
The businesses are growing and creating new jobs.
Russia’s current economy can be compared to a circulatory system
or a huge nationwide network of pipelines.
Each capillary gets filled with lots of money,
but the system entirely depends on a single resource pump.
It comes at a price, though.
The money is finite, and you can’t be plugging the gaping hole in the state budget
with the Russian National Wealth Fund money forever.
Besides, this money will be increasingly offset by the growing inflation rate.
Sure enough, it’s manageable for quite a while, but what if the pump goes bust?
Then, this artificial economic growth will be reversed at the same breakneck speed.
Another reason why the system benefits from the war
is that the war has become the biggest issue,
even though they may argue for the opposite.
The Russian public has been on tenterhooks for two years now.
Overall, things may look the way they used to be,
but there’s a constant threat in the air.
The TV shows feature morbid nuclear war fantasies
while the new wave of mobilization is still on the cards.
It all looks like a phone scam where the elderly victims are getting robbed
of their money after getting the fake yet stressful news about their loved ones.
The key is to send the victim freaking out.
That’s when even the most reasonable folks start making terrible calls
they would never even conceive of making otherwise.
Now, imagine the phone conversation is suddenly over.
Once the victim bounces back from the initial stress,
it dawns on them what has just transpired.
They’ve transferred the money to a complete stranger without even thinking
that their son doesn’t even have a driver’s license let alone own a car.
He couldn’t have caused a car crash.
Sometimes a bamboozled senior citizen doesn't even have kids, but they’ve already
transferred all of their savings to get them out of trouble.
Once the war-related stress is over, people will go, “What the hell was that?”
Living through an eventful saga is one thing.
In it, Prigozhin’s recent mutiny may already feel like an ancient Roman chronicle
and a load of BS to the tune of “it’s either us or them”
or “once you pop, you can’t stop” feels like the most pressing matter.
But once you regain your senses and look back
on the two years of madness, you’ll go, “Whaaat?”
You’ll go crazy over the entirely surreal universe
you inhabited for two long years where you would scroll through
the early-morning feed full of battlefield news
and death toll updates and wouldn’t even bat an eyelid.
By rewinding the events, people will realize that two years ago, the government
announced a special military operation, a quick excursion,
as was the case with the occupation of Crimea.
The excursion was never supposed to involve mobilization,
Belgorod attacks, or heavily armed convicts headed to Moscow.
None of that was ever part of the deal.
But this realization isn’t happening so far.
There’s a big difference between living through a situation and looking back on it.
You’ve transferred the money to a scammer, but then you go,
“What the hell? It can’t be me. How could I do this?”
The painful conundrum here is that restoring peace is just
as stressful for the system as starting the war.
Putin’s idea of stability is simple. Stability means having him at the helm.
As long as the war keeps going, he’s there.
But what happens when it’s over and people start asking questions is anyone’s guess.
The world is tempted to believe Putin’s hints at peace talks.
But everything we know about this guy is pointing to the opposite.
He believes time is his biggest and trustiest ally.
He thinks he has enough resources to keep it going for two to three years,
and then he’ll capitalize on some black swan event.
The answer to the question, “What’s the purpose of this war?”, is simple.
The goal is to keep things the way they are.
War is the new stability. They don’t need any victories.
Their victory is keeping it going. And the current federal budget proves just that.
If everything depends on Putin’s will, there’s zero chance
you’ll get a break let alone see this war end in 2024.
True, something unexpected may happen, like the plummeting oil prices
that will screw the war economy or a terrible crisis in China.
But these are unpredictable developments that can’t be factored in by a forecast.
DREADFUL PROSPECTS
Today, there’s no end in sight.
Neither belligerent can get out of the trench warfare standstill,
and both have the resources to keep it going.
Throughout 2023, we’ve been hearing the same bunch
of geographic names hashed over time and again.
Chances are, that’s what we’re going to be hearing
throughout 2024 and maybe well into 2025.
That’s a dreadful prospect.
On the one hand, the Russian army is severely undermanned.
Offering five-digit payments for a contract and seizing migrant workers suggest things are rough.
On the other hand,
this army isn’t limited to defensive action, as the understaffed army is supposed to act.
Instead, it’s in the middle of a large-scale offensive.
It acts as if it could afford to lose plenty of manpower and as if
the losses couldn’t mess up their battlefield positions.
It looks like they aren’t afraid of running out of manpower.
Perhaps we aren’t the only ones to believe that the new wave of mobilization is real.
The top brass may even know that’s what’s going to happen for a fact.
It may seem that to be able to maintain this gruesome brand of stability,
proceeding with the current routine will be enough.
Offering eye-watering paychecks, pardoning the convicts, and seizing defenseless migrant workers.
This may not be 1,000 recruits a day, as Minister Shoigu wants it to be,
but it may still be enough to keep the war effort chugging along.
On the other hand, the Russian system believes that once they get over
the electoral hump, they’ll be having a field day.
In 2012, a suite of crazy repressive bills that have shaped our current lawless reality
came on the back of the presidential election.
Putin’s 2018 win led to a bill that raised the retirement age.
It’s the inexplicable magic of the procedure.
No one doubts the outcome, but once the election is called,
the system lets out a sigh of relief.
Like, wow, we’ve got six more years where we can give up
on public opinion and keep them powerless.
That’s why the upcoming election spells trouble.
Anything can happen.
The rumored issuance of war bonds intended to boost the budget means
there’s a virtual top-secret folder titled “Lousy Decisions. Open After Election.”
But we can’t even begin to imagine what’s inside.
Putin is feeling great.
Being a chav, he’s bolstered by a mumbling opponent seeking a deal.
Perhaps the U.S. and the E.U. will find ways to bypass the Republicans
and Viktor Orban and provide new aid packages to Ukraine.
But their endless gabfest along with their top officials’ inability to deliver on
their promises in a timely manner is a huge motivation for Putin.
To him, a new mobilization drive may look like a shot at delivering a crushing blow
on the battlefield that trumps the risk of domestic unrest.
It’s his shot at making the Western mumblers start negotiating on his terms.
I don’t mean to say the odds of this happening are real.
But reality has never been a factor here.
These calls will depend on one guy’s intuitions.
This guy likes the fact that he’s able to produce hundreds of missiles
while Western politicians are plucking up the courage to supply dozens of those to Ukraine.
ACTION PLAN
One thing we need to know about 2024
is that if Putin cruises to an electoral win, we’ll be dealing with a self-assured dictator
who believes that the world has been bent to his will and he’s gotten away scot-free.
That’s akin to a casino effect.
If a guy shows up at a Vegas casino for the first time and ends up wasting all of his money
and contemplating a ride home over a meager meal at a schlocky diner, he’s not coming back.
The gamblers that keep feeding the casinos are the ones who won big
and thought they’d gotten the system by the balls.
An avid gambler may have an endless losing streak but they’ll remember the big day
they won it all, and that’s going to fuel their game.
Those who think the juice was worth the squeeze will keep upping the ante.
That’s human psychology 101.
But euphoria doesn’t just prompt dicey calls.
Groundless euphoria can easily devolve into panic.
“I’m in control, and they abide by my rulebook”
and “It’s over, I’m losing the power” may look like the opposite vibes.
In reality, though, the switch between the two comes easy.
Moreover, both will lead to the same outcome. More people are going to die.
On the one hand, he may think, “I can recruit another 500,000 troops and win the war.”
On the other hand, he may go, “If I don’t, I’ll lose tomorrow.”
The thought process may look different, but the result is the same.
We have no feel-good prediction for 2024. It’s going be a year of the war.
While there’s no reason even to put it on hold,
there are plenty of reasons to escalate it further.
Once the election is called, the system will no longer
be bothered to hide the ugly facts of this war.
The worst thing you can do in 2024 is think the threat is over
and things will keep unfolding the way they are now,
a faraway disaster in the making that has no bearing on you or anyone,
for that matter, except the poor folks who are boots on the ground or attack survivors.
I know it sounds like a terrible piece of advice,
but for lack of a better option, expect the unexpected.
Ponder a scenario where one day you’ll bump into an e-draft notice
in your inbox and your driver’s license and travel passport
are toast because you’ve failed to show up.
No matter how much you like to have a 15% to 16% yield off your bank deposit,
the government is salivating over the prospect of seizing your money.
The war bonds, an unlikely free market asset, are looming in the distance, too.
If you work from home and your work revolves around major international platforms,
plan for a scenario where YouTube and other Google services along with Telegram
and professional apps will be blocked and outlawed.
Here, it’s better safe than sorry.
Our biggest duty is to “out-time” Putin.
He may step down or kick the bucket at any moment,
but you want to be around once it happens.
Take a long cold look at your life. What part of it is the most vulnerable?
Plan your actions to minimize the damage.
Is something jeopardized by the government your only backbone?
That’s the kind of questions that need to be addressed both
by those who stayed in Russia and those who left.
Am I well-equipped for a scenario where the Russian government tries to screw me over?
Do I have the back-up copy of the travel passport while it’s still legal?
Do I have all the official records and government-stamped papers I may need?
If I absolutely need to go back to Russia at a certain point in the future,
what prevents me from going now?
We’re all sick and tired of it.
We’d love to live in an alternative reality where there’s no war and no Putin.
But it pays to bear in mind that as long as he’s in power and the war keeps going,
the risks are on the rise—and not vice versa.
See you tomorrow!