The Russian ruble’s recent surge against the U.S. dollar—a remarkable 40% increase since the start of 2025—is a striking development that demands careful consideration. While some might attribute this solely to easing tensions between Russia and the United States, a deeper analysis suggests a more complex interplay of factors at play. The narrative of a simple geopolitical détente doesn’t fully account for the magnitude of this shift.
The substantial increase in Russia’s M2 money supply, approximately 100% since February 2022, significantly impacts this ruble’s strength. This massive injection of rubles into the economy, while potentially fueling inflation domestically, is seemingly being offset by deliberate manipulation of exchange rates.… Continue reading
The ruble’s recent performance as the top-performing currency is a complex issue, defying simple explanations. While it’s true that the ruble has experienced a significant percentage increase, this doesn’t necessarily reflect a robust Russian economy. In fact, the ruble’s value remains relatively low compared to historical highs and other major currencies. The significant increase is more accurately interpreted as a percentage-based gain from a previously depressed state; a smaller numerical increase from a higher starting point would not register as significantly. This gain isn’t necessarily indicative of economic strength within Russia itself.
The current situation highlights the importance of considering the baseline.… Continue reading
President Donald Trump’s imposition of tariffs on nearly all countries except Russia, Belarus, North Korea, and Cuba has sparked mixed reactions in Russia. While some experts believe Russia will benefit from the West’s shifted focus away from the Ukraine conflict, others foresee negative consequences through global economic downturn. The low volume of US-Russia trade minimizes direct benefits, yet the resulting global economic instability presents both opportunities and challenges for the Russian economy. Diverging opinions exist regarding the long-term effects, with some predicting increased trade with Europe while others anticipate harm from reduced global demand and lower oil prices.
Read More
Russia has dramatically increased monetary incentives for volunteer soldiers, with signing bonuses exceeding $23,800 in some regions and reaching almost $47,500 in others. These escalating payments reflect Russia’s difficulties in replenishing its depleted military units. The recruits largely consist of financially vulnerable individuals and susceptible youth swayed by propaganda. This escalation follows reports of intensified military registration efforts and forced conscription in occupied Ukrainian territories.
Read More
A new IISS report reveals that Russia’s 2023 defense spending, at $462 billion, surpassed the combined total of all European nations ($457 billion), a 42% increase for Russia. This increase, projected to continue at 13.7% in 2024, raises concerns about European security, especially if US support for Ukraine diminishes. While some European nations, notably Germany and the UK, increased spending, achieving targets like 3% or 5% of GDP for defense would necessitate massive budget increases and is not currently guaranteed. Russia’s sustained military spending, despite economic strain, underscores the significant security challenge it poses to Europe.
Read More
Despite achieving key military objectives, including weakening the Ukrainian military and securing a land bridge to Crimea, President Putin is increasingly worried about the war’s negative economic consequences for Russia. High borrowing costs, intended to control inflation, have inadvertently hindered private investment, causing significant displeasure within the Kremlin. This economic strain has reportedly led some in Russia’s elite to push for negotiations to end the conflict. The war’s overall impact on Russia’s economy is now a major concern for Putin.
Read More
Russia plans to legally seize assets of Western companies on its “unfriendly” list, escalating its response to international sanctions. This new law, spurred by a May 2024 Putin decree, allows for full confiscation following a court decision, unlike previous measures that only permitted freezing or temporary control. The legislation is framed as retaliation for Western sanctions and the freezing of Russian overseas assets. The move highlights the ongoing conflict and the significant consequences for companies attempting to divest from the Russian market.
Read More
Over the past three years, Russian coal exports have significantly decreased, falling to 195 million tonnes in 2024—a 17.5 million tonne drop from 2023 and a 26.2 million tonne decrease from 2022. This decline is attributed to a confluence of factors including Western sanctions, a European embargo on Russian coal, and severe logistical bottlenecks within the Russian railway system. These issues, coupled with historically low export prices, resulted in an overall loss of RUB 81 billion (US$810 million) for Russian coal companies. Consequently, Kemerovo Oblast, Russia’s primary coal-producing region, also saw production decline by 15.8 million tonnes.
Read More
Facing its first annual loss in 24 years, due largely to Western sanctions stemming from the war in Ukraine, Gazprom is considering a significant restructuring. A board member’s proposal suggests a 40% reduction in its St. Petersburg headquarters staff, decreasing the headcount from 4,100 to 2,500. This measure, aiming to align Gazprom’s management-to-employee ratio with Rosatom’s, is driven by a need to reduce management costs, currently at approximately $486.5 million annually. The savings would potentially fund performance bonuses for retained employees, and increased reliance on automation and digitalization.
Read More
Putin’s recent declaration that “everything will be fine” rings remarkably hollow in the face of Russia’s escalating challenges. The assertion feels jarringly detached from the grim reality on the ground, a reality painted in the stark hues of significant military setbacks and mounting economic woes. The ongoing war in Ukraine, a self-inflicted wound of immense proportions, continues to drain Russia’s resources and manpower, costing the country a generation of young men. The loss of allies, such as in Syria, further isolates Russia on the global stage, compounding the already precarious geopolitical situation.
The economic consequences are equally troubling. The loss of significant gas revenue due to severed pipelines to the European Union represents a substantial blow to the Russian economy, adding to existing strains caused by sanctions and the war effort.… Continue reading
Matt Underwood 
John Q. Hosedrinker