Russian economy faces destruction if President stays

A currency expert has issued a dire warning to Putin that he has put himself in a “point of no return” following his invasion of Ukraine as the Russian ruble faces a ticking time bomb before it collapses. Co-founder of financial consultancy the Adamis Principle Patrick Reid told that there is a 99percent chance of the Russian economy being utterly “decimated” by the end of the year if Putin remains in the Kremlin.

He said: “Russia has put themselves into a point of no return. Putin is now a pariah. This is not the macho, strong person who was supportive of the economy and on the world stage a year ago.

“He’s probably spitting feathers because he’s put himself in a very high stakes situation. His options now are very, very limited.”

While the Russian ruble faced an initial fall after Western sanctions cripplied the country’s economy, the latest reports indicate that it has returned to pre-war levels, suggesting a surprise Russian recovery.

Many commentators viewed this as a sign that Western sanctions were failing to have an impact on the Russian tyrant’s economic power.

However, Mr Reid argued that the recovery is only the result of an emergency financial solution – and one that will not last the rest of the year.

When the war began, the CBR stopped publishing their weekly reports on reserves. Last week they began to do so again – but with a notable $40 billion fall since the start of the war, which appears to coincide with the ruble’s recovery.

This suggests that Russia has been spending heavily in order to shore up the value of the ruble against the dollar – a strategy which Patrick Honohan of the Peterson Institute for International Economics described as a “piece of monetary theatre”, designed to give the appearance of a strong Russian economy even as inflation surges.

Mr Reid stated that we won’t know until 3 months’ time if Russia continues to pump its reserves into the economy to keep the ruble afloat – but observed that, with such high quantities of money necessary, the CBR’s reserves are facing a race against time.

He said: “They have $600billion in reserve – but two thirds of that is useless, because it’s in euro or dollar.

“So their actual net amount is $200billion – which, if they keep spending the same, gives them around four to five months to prop up their economy.”

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The situation only worsens for Russia due to the complete destruction of its reputation on the world stage, and the fact that running out of reserves means it will no longer be able to pay back those who have purchased government bonds – meaning that the country has defaulted.

He said: “People trust, for instance, that the US or UK governments would pay back their gilts or bonds. If Russia can’t do so, no one is going to trust them, and they can’t get any money from them.

“My sources in that industry are predicting a 99percent chance of Russia defaulting. This would decimate their economy.”

The Russian economy has also taken a massive hit to foreign investment, meaning it will lose out on many opportunities to recover, due to the “pariah” status of its leader following the atrocities committed in Ukraine.

Mr Reid argued: “Any Western brands or huge conglomerates will think twice about wanting to go to bed with Russia. Their leader has committed genocide.

“This is where the big setback is. It goes way beyond the scope of just oil and gas.”

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The only possible way out to save Russia, the currency specialist stated, would be for Putin to go.

He said: “If Putin goes, it could be the other way around. People would be pouring money into Russia, as some faith would be restored.”

This outcome seems unlikely, with the despot arresting thousands of civilians across the country for attempts at protesting his rule, and holding allies across parliament to prevent legal action against him.

However, the resistance from the Russian people is increasing. For instance, according medical journal the BMJ, about 15,000 doctors, nurses and paramedics across Russia have signed an open letter to Mr Putin urging him to cease hostilities against Ukraine.

Meanwhile, thousands have reportedly fled the country to escape the tyrant’s rule.