Why Has Russia Not Collapsed Yet?

Video Summary

Russia’s economy has not collapsed despite unprecedented sanctions since its invasion of Ukraine. Despite being a significant exporter of energy and having a robust agricultural sector, Russia remains deeply integrated into the global economy. To understand this, we need to look at the concept of the industrialized world’s fifth horseman of the apocalypse, access to energy.

Russia’s energy independence has allowed it to maintain economic stability, while its willingness to conscript and mobilize a million soldiers underscores its commitment to the conflict. However, a collapse of the Russian economy can still occur if the war continues to deplete Russia’s resources. The United States Federal Reserve Chairman Jerome Powell has two primary mandates: price stability and full employment.

In the case of the Strategic Petroleum Reserve, the US has consistently drawn down its reserves over the years. This should be a cause for concern, as the US strategic petroleum reserve was established in the 1970s to reduce the impact of disruptions in oil supplies and to carry out obligations of the United States under the International Energy program. Despite being energy independent, President Biden has continued to sell oil from the reserve in an effort to bring prices down.

The drawdown of the Strategic Petroleum Reserve has a direct correlation with the rise in US unemployment rates, which directly affects the recruitment goals of the US military. Many people join the military motivated by financial incentives, not patriotism.

The military is struggling to meet recruitment goals due to the employment rates being at record highs. The Fed wants the unemployment rates to go back up just a little bit, which could help the military meet its recruitment goals and reduce the strain on national security. The layoffs being seen in the tech sector, with companies such as Amazon and Microsoft letting go thousands of employees, is a trend that could potentially slow down economic activity and weaken Russia by reducing demands for global energy.