Yale Academic Researchers Agree: Russia’s Economy is Imploding!

by James DiGeorgia Opinion | 04/12/2023 3:23 PM
Yale Academic Researchers Agree: Russia’s Economy is Imploding!

Two Yale academics report Russia’s economic stats are 'Pure invention from Putin's imagination.' This means the 500,000-barrel cut in Russian oil production will likely not happen. Russia is desperate for foreign reserves.

The kleptocratic, fascist dictator Vladimir Putin, who served in the Soviet-era KGB as a low-ranking agent, has called the collapse of the Soviet Union the "greatest geopolitical catastrophe" of the 20th century.

So, it’s amazing that Putin is repeating the biggest mistakes that lead to the collapse of the Soviet government.

The Soviets drained their economy in two ways.

First, by waging a needless war in Afghanistan for 20 years, sapping Russia of economic resources and creating a backlash among the mothers and wives of the 15,000 and roughly 30,000 soldiers maimed.

Secondly, while incurring economic sanctions over the 20-year occupation and trying to keep up with the United States military spending.

Putin is not only suffering casualties and wounded in just a little over a year that amount to over 300,000 dead and wounded. He has put Russia in a situation where over 100 countries have imposed economic sanctions. Like the Soviets, Putin is pretending that the Russian economy isn’t being severely affected.

Two Yale economic researchers have joined a growing chorus of economists that Russia's economy is in tatters, and economic stats touted by the country’s central bank are "pure invention," i.e. invented propaganda ordered by Russian President Vladimir Putin.

In an op-editorial published by TIME on Tuesday, Jeffrey Sonnenfeld and Steven Tian, two academics at the Yale Chief Executive Leadership Institute, blasted Russia's economic forecasts, with the nation's central bank painting an image of resilience amid Western sanctions and Russia's costly invasion of Ukraine.

“The central bank recently adjusted its GDP outlook, estimating its economy to grow 1% or contract 1% this year, though it previously estimated a 1%-4% contraction. But those numbers are "fictional," Sonnenfeld and Tian said.”

The two Yale academics further say…

"Since the Ukrainian invasion, our data has shown that the Kremlin's economic releases have become increasingly cherry-picked, selectively tossing out unfavorable metrics while releasing only those that are more favorable."

They also point to unreleased statistics that paint a bleaker picture of Russia's situation, including the nation's exports and imports, capital inflows and outflows, and output data for oil and gas.

"Thus, the Russian GDP number is a pure invention from Putin's imagination," the researchers said. "The Putin-selected statistics are then recklessly trumpeted across the world media and relied upon by careless experts in constructing ludicrous forecasts which are unrealistically favorable to the Kremlin."

Sonnenfeld and Tian were also particularly critical of the International Monetary Fund for helping Putin paint a distorted picture of the Russian economy. Russia's economic projections in their own analysis of the nation's economy. The IMF currently estimates Russia's GDP to grow by 0.7% in 2023.

Still, Sonnenfeld and Tian claim that the organization's economists have privately admitted they have "zero visibility" into the actual state of Russia's economy. 

Sonnenfeld and Tian insist that estimates outside of those offered by Russian officials suggest the country's economy has been battered over the past year.

By some estimates, Russia's energy revenue has tanked amid the EU's Russian oil ban and $60 price cap, and other major sectors of its economy have plunged 60%-95%, Sonnenfeld and Tian estimate. 

This is extremely important to oil investors and traders. Russia has claimed to have cut 500,000 productions of oil a day, and after OPEC’s announced cuts of 1.1-1.2 million barrels of production oil have jumped almost $7 to over $82 a barrel with many major analysts warming oil is heading back to $100 a barrel

 Yale’s Sonnenfeld and Tian aren’t the only experts that have a poor outlook for Russia's economy, largely due to the nation's isolation from global markets and its de-investment in technology. ‘

The World Bank, Morgan Stanley, and Goldman Sachs all expect Russia's economy to contract this year.

The nation could become a failed state by the end of the decade, according to one think-tank and of the opinion of WallStreetRebel.com’s Editors, James DiGeorgia and Michael London.

Yale’s Sonnenfeld and Tian say in their op-ed in Time

"Putin is losing the military war, the diplomatic war, and the economic war. He must not win the disinformation war by Western media and policymakers naively falling for his fake economic data."

The spring counter-offensive is putting Russia’s occupation of Crimea in danger. Putin’s state-owned TV stooges are threatening nuclear war in desperation while the people of Russia are starting to realize Putin has lied to them. Purges of anyone in a position to set off more discontent in Russia are being killed by Putin’s FSB thugs, the successor organization to the KGB.

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