As shown in the chart above, ever since the Russian military incursion into Ukraine began the Russian economy has been in a state of free fall.
At present, the MICEX stock index is down 15% from its February high, having shed roughly $100 billion in value. The chart shows how the free fall radically halted and reversed on March 3, and there’s only one possible explanation for that event: The Kremlin entered the stock market and began furious buying Russian shares in order to artificially increase demand and stabilize prices. But the Kremlin can’t afford to do that forever, and when it stopped the market went right back into free fall.
The stock market isn’t alone in its woes. The bond market has been obliterated as well, interest rates are soaring and and the value of the ruble is plummeting, meaning inflation on foreign goods, which the Russian consumer depends upon, is raging.
The falling ruble forces the Kremlin to make Russia’s foreign currency reserves to double duty: it must not only buy Russian stocks but also buy the currency itself, in order to prevent devaluation from turning Russian pocketbooks inside out.
And the worst is yet to come.
The EU and USA have just announced that they will soon impose draconian economic sanctions on Russia, choking off already feeble Russian economic growth and putting even more pressure on the ruble and the stock market.
Are the people of Russia really prepared to make such horrific sacrifices in order to pursue bloodthirsty imperialism in Ukraine? Do they even know that such sacrifices are being asked of them? Kremlin-controlled broadcast TV is certainly not telling them, and the Kremlin has just liquidated yet another independent news source, the respected Lenta.ru website.