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I Want to give a huge shout out to today's sponsor Ether. Now the Russian economy did not collapse like everybody expected. post The Invasion into Ukraine The Ruble did not turn to Rubble. We all know that, but what happened is that the oil prices have dropped and although initially spiking right after the invasion, right now we're about $75 crude.

That is a long way away from the $120 we had in June 2022. And that's a huge hit on the Russian economy, which basically makes it living off of exporting oil. And on top of it, the gas export business of Russia has pretty much stopped to a screeching hall. now.

Russia used to be the premier exporter of gas to Europe to the EU they have 40% of the entire EU gas come from Russia. Before this war started, the Ukraine war that is, it's currently at 7% Not to mention the prices of gas went down by 90% Their surpluses in 2022 were 20 $40 billion. The surpluses right now are $25 billion. On top of that, the Russian economy is now basically in a state of War which means that it went from 4% of GDP into the military to 10% of its GDP into the military.

plus nobody would lend money to Russia. It's too much of a credit risk for some and just it's sanctioned for others. And on top of it, you have a massive actual inflation. Don't trust the numbers.

The actual wages in Russia the average wages went down down from $1,200 a month just 10 years ago to $600 per month right now. So while the rest of the world is getting more and more wages 4% 5% 6% increase per year Russian wages half in a decade. That is while inflation has gone mad. And trust me, I will talk about the actual Russian inflation numbers, not the one that they're putting out.

Russia is basically facing a huge problem and that is called Supply s side driven inflation. You know inflation can be caused either by printing too much money like we had in the US or by not having enough. Goods When you have too much money chasing too little Goods It doesn't matter where the problem is coming from, it's the same thing if you have too much money or too little Goods The results are the same. And because Russia was sanctioned since the beginning of the war, there's just not enough Goods in Russia and they actually had to fight it by raising interest all the way to 20% Now their interest rates currently are at 15% it's still extremely high, and they' managed to somewhat stabilize the Russian Ruble.

But the inflation problem is nowhere close to being solved when you have an inflation that is driven by supply side. What you need is more Goods in your market, right? So what happens when you raise rates? Well, when you raise interest rates, what you cause is number one, a recession which is part of the deal, But number two, you're incentivizing people to save and you're basically paying them handsomely for not spend spending their money for keeping it in the bank. So essentially High interest rates mean people save more money and eventually what you have is even more money at the hands of the private people in the banks. So by doing that, the facto what you're creating is more money, more rubles.

But the amount of goods is still not changed. It's still quite low. So essentially by raising interest rates, they're postponing the problem. At some point, all of this money will come out from the savings account and it will go to the spending and there's not going to be enough Goods Now Russia Can't create enough goods for three simple reasons.

Number one: it is sanctioned. It doesn't have enough Partners to get raw materials from Electronics Goods It doesn't have enough. It has China It has India but it can't trade with the EU and the US. There's not enough Goods Coming in, there's not enough raw materials coming in.

also. massive flight of capital, massive flight of human capital. All the smart people, all the businessmen, a lot of them have left. these are the ones who are generating the businesses.

the GDP And on top of that, you have the war machine going full force. Which means everything gets prioritized towards. the military, all the factories, all the raw materials, all the goods. all the best.

Workforce So in this scenario, in this scenario, how would you create more Goods You simply cannot. So on top of that, Russia has to print money like crazy to pay for the war because nobody is going to lend money to Russia it doesn't have Partners to borrow money from. So this money printing makes this problem even worse. More more money into the system.

So Russia is faced with a serious problem. There's not enough Goods coming in. there's not enough foreign currency coming in. All they got is the Ruble.

But the problem is that the oil trade has basically halfed because the oil pric has dropped now. I'm not even talking about the gas trade which has gone pretty much to zero because the EU either found different Alternatives and the prices of gas have dropped generally. But the oil price went from one 20 to 75 and that hurts, That hurts bad and that causes massive inflation. And that inflation causes a lot of angry.

Russians And make no mistake about it, Putin is not a God and if people get angry, he's in serious problem. And before everybody jumps and says well, Tom look at the Russian inflation figures. they're at 4% 5% Look guys, look at the Russian inflation figures. look at February.

This year there were 11% inflation. look at March This year, all of a sudden the fairy dust came in. some magic came in and within one month Russia went from 11% inflation to 3% inflation within a single month. So if you have any Credence to these numbers I'd be very, very shocked.

I Think that the realistic inflation in Russia is anywhere from 15 to 20% right now and that hurts. and the only way to fix it is by either stopping the war in Ukraine lifting the sanctions which Russians will not do at this point because Putin is not not going to do it or absorb this inflation and risk losing your power because of a civil uprise or option number three, start a regional war in a place that has a lot of oil. Does it mean that there's going to be a regional war in the area? Who knows. But the one thing you need to understand.

Who are the Agents of chaos? The Agents of chaos right now are the ones who are pulling the strings behind the scenes. It's the Russians is the Iranians and always follow the money. You'll find out exactly why things happen. I'll see you next video.