The Kremlin's phrase "the full restoration of Russian-US relations is in Russia's interests", many people have only heard the call for reconciliation, but have ignored the frozen number behind it - the ruble this week again fell to $100, the yield of the state debt jumped to 17%, and then dragged down, and the Treasury Department, coupled with the state government's salaries, had to remove the eastern wall to replenish the west.
Russia's military spending accounted for nearly 6% of GDP last year. An average of US$300 million is poured into Donbas every day. The bill is not just ammunition, but also pensions, maintenance, and outsourcing logistics. The defense industry can work in three shifts, but raw materials and foreign exchange are not printed casually. By 2025, officials 'internal forecast growth rate may fall to 0 or 4%, which is almost stagnant.
The Kremlin’s account is red.
Putin's diplomatic turn must first start with Russia's domestic economic situation. The "price tag" of the huge meat grinder of war has been posted from the distant front line to the doorsteps of ordinary Russians.
Money, to be honest, the exchange rate of the ruble to the US dollar has dropped the psychological threshold of 100 to 1, government-issued bonds, yields soared to a staggering 17%, what is the concept?
In the first half of this year, the deficit of the federal budget has reached 3.694 trillion rubles, accounting for 1.7% of GDP. If this momentum continues, it is not impossible for the annual deficit to reach 6 trillion or even 7 trillion. Where did the money go? On the one hand, it is the bottomless pit of war, and on the other hand, it is the narrowing of financial roads.
Oil and gas revenue, the lifeblood of Russia's economy, plunged by 16.9% year-on-year, which directly led to the emptiness of the national treasury. Some internal forecasts believe that this year's economic growth rate may fall to a pitiful 0.4%, which is basically stagnant. The consumption of the war machine is even astronomical.
Last year, military spending was about to make up 6% of GDP, counting out, the average daily money spent on the frontline was up to $300 million, this money, is the blood drawn from the muscles of the economy, the macro figures will eventually pass into the lives of everyone.
People's livelihood problems in the country have begun to erupt. Want to repair a car? Sorry, there is a serious shortage of auto parts. Want to see a doctor? There is a long queue in front of the MRI equipment in the hospital, and even the ticket prices of public transportation for commuting to and from work every day have quietly increased. No matter how powerful the publicity machine is, it cannot completely cover up the people's true feelings in life.
Some sharp comparisons began to appear on the Internet. Some people put the cost of a shell on the front line together with the price of a can of baby milk powder in China. This simple comparison is precisely the truest portrayal of folk dissatisfaction.
So when Putin said that the restoration of relations was “in Russia’s national interests,” the real understatement behind this was that it was “in Russia’s financial and livelihood interests.”
He even assessed the style of American behavior, saying that they are "direct, not hypocritical, putting their own interests first", which sounds like a praise, but a deeper interpretation is that he thinks the Trump administration is a businessman, so that everything can be talked about, everything can be dealt with.
This is a very classic Russian strategy: while exerting pressure with a tough military stance, it also throws out an olive branch, implying that there is room for negotiation.
Such examples are not uncommon in history. Brezhnev took the initiative to seek contact with Nixon because he was overwhelmed by the arms race. The Afghan War, which dragged down the entire Soviet Union, was even more a wake-up call over the Kremlin.
To be honest, diplomacy has become an important tool to ease internal economic pressure, and Putin needs to use the negotiating vocabulary to fight for his precious time, to stabilize the front, and to stabilize the domestic economy and people's hearts.
The calculations of allies are also cracking
If Russia’s bookkeeping is “in and out”, then the bookkeeping of the western camp is “complex division”, on the surface, the United States, led by 32 NATO countries, has formed a overwhelming siege of Russia, but in reality, this so-called unified front, inside has long been scratched.
Everyone is settling their own small accounts. The cost of aiding Ukraine, the risk of economic backlash, and their respective domestic political agendas all constitute a strategic window that Putin can use.
Let's look at Washington first. The United States is in an election year, and domestic political calculations are cracking. A US$60 billion aid bill for Ukraine has been stuck in Congress and the positions of the two parties have become significantly divided.
The Biden administration must speak tough to avoid appearing weak in front of voters, while Trump's camp has constantly hinted that a ceasefire could be reached quickly if he came to power.
The aid to Ukraine has turned from a foreign policy issue to a heavy domestic political burden, turning the eye to Brussels.
The cracks inside the EU are even more apparent, with Germany as Europe’s economic driver, itself falling into a recession, which greatly weakens its long-standing support for Ukraine’s gas, Hungary and Slovakia, and more openly opposed to adding aid budgets to Ukraine, and more importantly energy issues.
Due to factors such as the Red Sea crisis, natural gas futures prices in Europe fluctuate violently and the market is very fragile. Against this background, some people within the EU have begun to use their brains, hoping to contact Russia to stabilize energy prices. This idea is undoubtedly a stab in the back of the united front. The deeper concern is the "boomerang effect" brought about by the sanctions themselves.
The West has imposed more than 30,000 sanctions on Russia, of which the United States accounts for more than 6400, making Russia the most severely sanctioned country in the world. These sanctions have indeed hit Russia hard. For example, the attack in Ukraine paralyzed nearly 40% of Russia's refining capacity, and oil export revenue in August fell to its lowest point since the conflict.
But sanctions are a double-edged sword. The West is also worried about a situation: If Russia is pushed to a corner, will it simply frantically dump cheap oil into the Asian market?
Once this happens, international oil prices are likely to return to a high of US $100 per barrel, which is definitely a new nightmare for Western economies that have just climbed out of the quagmire of inflation.
This economic account greatly limits the extreme pressure capacity of the West, so you see, the situation in the West is also embarrassing, and their policies are swinging back between “must win” and “price too high.”
This huge uncertainty is the best ground for Putin to launch diplomatic temptations at this moment. He has seen that there is a division of people in his opponent's camp.
The final card on the table.
The game, which has gone beyond traditional economic and military cost calculations, has gone to a more advanced level: the two sides are using their most unique strategic assets in an attempt to fundamentally change each other’s cost expectations, which is an invisible “balance sheet” match, with Russia holding a few asymmetric bills, the first one, the “power”.
You may not expect that Russia controls 44% of the world's enriched uranium supply, and even the United States needs to import 20% of its enriched uranium from Russia. This is an absolute strategic resource. Therefore, Putin's statement this time included a very critical sentence: He made it clear that he was willing to continue to supply uranium to the United States.
This is not a good demonstration, it is a naked transaction code, he meant very clearly, wanting my foul, you have to make concessions elsewhere, the analysis of the U.S. think tank CSIS: Russia's so-called "comprehensive relationship", the substantive demand is "first lifting financial sanctions, then talking about military issues", the second sign, is nuclear deterrence.
Russia also hinted that it may withdraw from subsequent nuclear weapons reduction treaty negotiations, which is tantamount to artificially increasing global nuclear risks and raising the cost of strategic uncertainty, so as to put pressure on its opponents. Of course, the United States also has extreme pressure in its hands. The tool of pressure is precision strike capability.
The United States is considering providing Ukraine with Tomahawk cruise missiles, which have a range enough to cover Moscow and, once deployed, will constitute a major strategic deterrent.
This is no longer simple military assistance. This is the United States using technical means to directly increase the cost of the war in Russia and force the Kremlin to re-evaluate how much it costs to continue the war. In addition, the United States has approved the provision of intelligence to Ukraine to support their long-range strikes on Russia's energy infrastructure.
In response, Putin issued a stern warning, saying that providing such weapons would lead to a "substantial escalation" of the situation and "destroy the hope of diplomacy". This just shows that he feels a real threat.
In this battle, there is one ultimate, invisible asset—time.They both race against time, but the goal is the opposite.
Putin wants to use negotiations to stall time. He is betting that as long as it drags on, the internal division of the West will become more and more serious, and eventually it will be self-defeating. He needed time to stabilize the domestic economy and rearm. Ukraine and some Western intelligence agencies believe that time is on their side.
The Ukrainian intelligence agency has predicted that if Russia’s export revenue drops by another 15 percent, the ruble could fall below the 120-point mark.
They are betting that Russia's economy will collapse before Western unity collapses. Therefore, the winner or loser in this game is not just about who has more money and whose shells are harder.
More importantly, who can use the strategic assets in their hands more effectively, so that the other party can take the lead in feeling that the cost is too high to bear if it continues to be consumed like this.
Therefore, when we look back at Putin's remarks on October 2, it becomes much clearer. It is not a white flag of surrender, but a signal gun for the cost game to enter a new stage.
It marks that all parties involved in this conflict have begun to calm down from their initial passion and anger, and have accounted for their own "ledgers" more soberly and cruelly.
Whether it’s Moscow’s fiscal deficit, Washington’s ballot, or Brussels’ gas prices, all point to the same cold reality: war is costly, and this cost is becoming increasingly unbearable.
I'm afraid that only when Russia's financial ledger, the Western political ledger, and the strategic balance sheets of both sides all point to a conclusion will it really open.
conclusion
The conclusion is that the cost of continuing to beat down is clearly higher than the cost of compromising. Before that day, all the diplomatic gestures we saw, hard cries, and even saws on the battlefield were only part of this multi-line cost warfare. Their purpose was to fight for a better position for themselves at the final negotiating table.
Next, there are several key observations that will be important indicators for judging the direction of this game: whether the U.S. Congress will approve the stuck aid budget for Ukraine before spring. What policy adjustments will the EU make in response to fluctuations in natural gas prices?
And whether Russia's central bank can continue to maintain its current high interest rate policy without triggering a systemic banking crisis. The answers to these three questions will largely determine whose "ledger" will not hold up first.
Source of information:
Global Times - restoration of comprehensive relations with the United States?
China News Network-Russian Ministry of Finance: Federal budget deficit in the first half of the year was 3.694 trillion rubles
IEA: Russian oil and fuel exports declined in August
Sina Finance-Russian refineries under the threat of Ukraine: global energy markets face shocks
European Commission approves 19th round of sanctions against Russia
Economic Daily - Russia's budget adjustments in response to energy cuts
The United States has already imposed more than 30,000 sanctions on Russia.
CCTV News-US officials say Trump has approved intelligence supply to Ukraine
Putin vowed to fully restore relations with the United States, but warned that military aid missiles to Ukraine would escalate the situation
Xinhuanet-Trump: Russia is a "paper tiger" Putin: So what is NATO?
Reference News-Putin: The Russian army will win the Russia-Ukraine conflict
Considering providing Ukraine with "Taxic" missiles covering Moscow, the US government's stance on the Russian-Ukrainian issue is reversed?
Guangming Daily-Putin talks about "paper tiger", Trump sells "tomahawk"
Trump: Decision has been made regarding the supply of "war ax" missiles to Ukraine, Putin: If the US provides "war ax" will destroy Russian-US relations
Reference News-Russian media: Russia remains the largest supplier of enriched uranium to the United States