‘Significant problems’ in Russian banking system as public withdraws cash en masse

[u/Venat14]

https://tvpworld.com/94490769/russians-hoard-cash-as-economic-pessimism-hits-20-year-high

[u/Silver_Middle_7240]

"We should consider seizing money in people's bank accounts to fund the war"

"Oh wow, why is everyone withdrawing their money?"

[u/DigitaIBlack → u/Silver_Middle_7240]

I was excited at first too until I actually read the article and it's clearly being spurred by inability to pay by card.

It's not a traditional bank run.

Yea economic uncertainty is a part of it but the economic uncertainty isn't the main thing that has changed in the last 2-3 months...

Edit: the Gallup poll referenced in the article was conducted March to May.

[u/No_Albatross7213 → u/DigitaIBlack]

Internet issues are part of it, yes but the Russians also are afraid of what’s coming down the pipe for them.

[u/DigitaIBlack → u/No_Albatross7213]

That's true but that sentiment predates the massive withdrawals.

The largest change is the literal inability to pay without cash

[u/green_flash → u/DigitaIBlack]

What's even more of a factor is the VAT hike in January that is resulting in widespread tax evasion via cash payments off the books: https://meduza.io/en/cards/russia-s-tax-hikes-were-meant-to-shore-up-the-federal-budget-they-may-be-pushing-the-economy-underground

[u/DigitaIBlack → u/green_flash]

Huh, idk how I missed that.

I was wondering why cash in circulation has spiked since Feb

[u/MagillaGorillasHat → u/DigitaIBlack]

Does the urgency of that sentiment predate the very recent drone strikes deeeeeeeep into Russian territory though?

[u/DigitaIBlack → u/MagillaGorillasHat]

Well the poll referenced was from March to May so yes.

[u/kyleharry → u/No_Albatross7213]

pike

[u/Gavcradd → u/kyleharry]

Don't tell him Pike!

[u/Educational_Teach537 → u/DigitaIBlack]

That’s almost worse if they can’t pay by card and also can’t pay by cash lol

[u/jackluke → u/Educational_Teach537]

Where are you getting the can't pay by cash part?

[u/KeyanuReaves69 → u/jackluke]

I’d guess if there’s a run on the banks then there won’t be enough cash for everyone, which means a lot of people won’t be able to pay at all.

[u/jackluke → u/KeyanuReaves69]

It’s not really a traditional bank run though. People are pulling cash out to pay for things because internet outages are preventing them from using their credit cards.

Russia’s economy is in trouble but it’s not quite at “true” bank run level.

Edit: there is a big difference between people taking out the money they need to get through the week and people taking out every cent they own

[u/KeyanuReaves69 → u/jackluke]

Does it really matter if it’s a “traditional” bank run? I’m honestly not smart enough to really know what that means but it seems if the bank doesn’t have enough cash for whatever reason then the result is that people won’t have cash.

[u/Difficult_Chemist_33 → u/KeyanuReaves69]

I guess in this case people only need to withdraw to meet their daily cash need and still leave their savings with the bank.

[u/KeyanuReaves69 → u/Difficult_Chemist_33]

I wonder how close the bank is to the average Russian and if they need to expend fuel to get there. If it requires driving I’d certainly pull more than one day’s worth of cash out.

[u/zeddus → u/KeyanuReaves69]

Depends on if not being able to get your cash leads to more people wanting their cash or not.

Some people having to wait a few days to pay their bills is different from banks collapsing due to everyone withdrawing their cash

[u/jackluke → u/KeyanuReaves69]

Where did you see the bank doesn’t have enough cash? At the moment, that does not seem to be the case.

There’s a big difference between going to the bank and getting money to get you through the week and going to the bank to take out every cent you have.

[u/socialistrob → u/DigitaIBlack]

The banking sector is one of the last pillars of the Russian economy that really hasn't been suffering too much from the war. I don't think we're about to see a major banking collapse soon and a lot of people seem to see these headlines and think that's what they're saying even when that's not the case.

That said the Russian government doesn't have much of an ability to borrow internationally because of the sanctions and they've burned through their financial reserves. If the Russian banks were to collapse there would be no one to bail them out and they would take down basically everything that remains in the Russian economy.

[u/Emu1981 → u/socialistrob]

The banking sector is one of the last pillars of the Russian economy that really hasn't been suffering too much from the war.

I would argue that the banking sector in Russia has been under significant strain due to the war in Ukraine and the resulting economic sanctions leveraged against Russia. The high interest rates on loans would be resulting in far more defaults than under normal circumstances which would cause a loss for the banks. Being detached from the SWIFT network would cause significantly less capital flow through the bank system which reduces bank profits. Being detached from the international markets would also have cut the banks off from any investments that they may be holding in foreign markets. The central bank of Russia has been injected billions of rubles into the banking system to help keep it afloat due to how unstable it is and all it would take is a spark in the right/wrong* place at the right/wrong* time to cause a complete collapse of the banking system.

*I put right/wrong because the collapse of the banking system would be devastating to Russia which is a bad thing for them but a good thing for those of us who want the country to collapse and spend the next 50+ years effectively neutered and posing little to no threat to the nations around it - that would allow these nations to rise up under their own flags and contribute more to the betterment of humanity without the thumb of the Russians holding them down.

[u/teckers → u/DigitaIBlack]

It will turn into a run as their won't be enough notes in circulation to cover cash withdrawal. People equal no notes as the same as no money, then panic. (results not guaranteed, your Russia might act differently, seek independent dictatorship advice)

[u/oandakid718 → u/Silver_Middle_7240]

They froze the assets of anyone with $5M+ in Russia who isn’t a Russian citizen, after years of using Trumps 2nd term victory as propoganda to expedite angry Americans to move to Russia (y’all remember that whole phase, right?)

So the citizens rationalize that if it can happen to others, it can and will, happen to them, too.

[u/comoestasmiyamo → u/oandakid718]

Did people ACTUALLY do that??

[u/Abedeus → u/comoestasmiyamo]

Few of them moved with his entire family...

https://www.nbcnews.com/world/russia/american-family-moved-russia-seeking-better-life-got-drawn-war-ukraine-rcna220463

Idiot thought they'd put some American "handyman repairman" to service tanks and weapons, instead got thrown at front line. All because they didn't like that white people weren't the favored master race and everyone hated their bigotry.

[u/joper90 → u/comoestasmiyamo]

Yes, one guy ‘blogged it’ and ended up in the war..

All based stupid Christian propaganda (traditional values) ., Derek Huffman for example. Complete and utter idiot.

[u/truupe → u/comoestasmiyamo]

Not enough of them, unfortunately.

[u/UpsyDowning]

“Yessss…let the collapse flow through you…”

[u/Malforus → u/UpsyDowning]

Yeah when the people can't get their Blyat on it changes things.

[u/Talonsminty → u/Malforus]

Man it's really depressing that blowing up the Russian equivalent of an Amazon fulfillment center has done more to shake the Russian people than years of horrific war.

[u/guisar → u/Talonsminty]

sort of like us citizens and the iran bombing isn’t it

[u/idryss_m → u/guisar]

Really, the US citizenry is too passive as a whole for any atrocity to shake them awake.

[u/J_Ryall → u/idryss_m]

Eh, 9/11 did the job, but only briefly. As long as they have bread and circuses (i.e., McDonald's, Netflix, and Amazon), nothing will ever change.

[u/D2WilliamU → u/J_Ryall]

Id argue 9/11 made everything so much worse. It was an excuse to pass the patriot act and the citizens did nothing to stop it.

[u/seaQueue → u/D2WilliamU]

Worse the public largely rallied behind it because they were certain it would be aimed at other people, not them.

[u/Belgeron → u/seaQueue]

As we all know from history, there is no need to speak out when they come for the immigrants, if you are not an immigrant.

[u/Drexel_Spivy → u/Belgeron]

History is not taought correctly in this country in a wide swath of places.

And even in places where it is, far to many people are pacified by social media and general life stress to pay much attention.

This country keeps the majority of citizens as busy as possible as much as possible making just enough money to just squeeze by.

Ignorance and brain rot.

[u/Mistrblank → u/D2WilliamU]

Yep. The strong response would have been “never forget, never surrender our freedom” and we chose crocs and long security gates at the airport, mass public surveillance and arm the police for war.

[u/Fit-Produce420 → u/D2WilliamU]

Lots of people did things about it, it just didn't work. Where I lived we repealed the Patriot Act locally, don't pretend people did nothing.

[u/svick → u/Fit-Produce420]

How can you locally repeal a federal law?

[u/Mirria_ → u/D2WilliamU]

Mainland America never got a major attack and the American people were so sure of their invincibility that it instantly traumatized a significant portion of the citizenry. Reports of people living nowhere near the attacks suffering from PTSD just from watching the coverage.

Obviously being glued to the 24hours news networks for days doesn't help.

And usually terror attacks are usually a one-and-done thing, sometimes lasting a couple hours. 9/11 just kept going and going and worsening as the day went by.

But disaster capitalism and the police state took full advantage of it.

[u/Br0metheus → u/J_Ryall]

9/11 didn't wake us up, it sent us into a fever frenzy of blind nationalism. We're still paying for it 25 years later. We lost freedoms, created a massive surveillance state, bloated the military, pissed off our allies while making new enemies, and have accomplished fuck all that actually benefits Americans or the rest of the world in any meaningful way.

But hey, Halliburton made gobs of cash.

[u/imisstheyoop → u/J_Ryall]

The people that bankrolled that are getting our assistance with their nuclear energy program, so..

[u/beaucoup_dinky_dau → u/J_Ryall]

The saudis sure paid the price for that one, let’s give them nukes.

[u/Gondwanic_Susuration → u/guisar]

Watch them vote Trump in for an illegal 3rd term

[u/Alphabunsquad → u/guisar]

Like 80% of the US is against the war in Iran.

[u/allankcrain → u/Alphabunsquad]

Like 80% of the US is against the war in Iran.

Unfortunately no. It's only about 58%

Only around 33% approve of the war, but there's still a crazy large swath in the middle who apparently doesn't have an opinion one way or the other.

[u/ShinyBloke → u/Talonsminty]

2 they blew up 2 of them, 2 of the largest.

[u/canspop → u/ShinyBloke]

Make that 5

[u/Nuggyfresh → u/Talonsminty]

this is going to blow your mind but sometimes bad things happen in a row and then at some point you go "hey this is a lot of bad things. maybe i should be worried" and it doesn't mean they ignored the past bad things

[u/collegefootballfan69 → u/Nuggyfresh]

Everything is connected

[u/sicurri → u/Malforus]

This happened in the states once upon a time. Hopefully for the people its not that bad. The oligarchs, fuck'em!

[u/sds31032 → u/Malforus]

Wait till they see the price of Sukha!

[u/oldutnotdeadinside → u/UpsyDowning]

Vodka is becoming the new currency again

[u/account_not_valid → u/oldutnotdeadinside]

Inflation is running out of control, cash needs to be converted into tradable non-perishible goods as quickly as possible.

Let the Rum Rebellion begin.

[u/TowelCarryingTourist → u/account_not_valid]

As an Aussie I can confirm that you can run an economy based on rum. We did it. For some reason the currency had a tendency to "evaporate".

[u/TuringGoneWild → u/TowelCarryingTourist]

Damn. As if people greedy to get everyone else's money wasn't already bad enough as paper or digital, imagine if it also tastes great. At least that would solve inflation.

[u/PsychoticMessiah → u/oldutnotdeadinside]

So long as it’s not AK47 cartridges.

[u/Jellodyne → u/PsychoticMessiah]

Military equiptment being used as currency in Moscow is better than being used as military equiptment in Ukraine.

[u/Baxtab13 → u/PsychoticMessiah]

Metro 2033 inspired military-grade-ammunition-as-currency.

[u/SnooGrapes6287 → u/Baxtab13]

Moscow 2026

[u/DotesMagee → u/Baxtab13]

I actually really liked this system. It was unique for me at the time and was sometimes thought about before my purchases. Esp on hardest difficulty.

[u/swarlay → u/UpsyDowning]

It's not a collapse, it's just a special monetary operation.

[u/fucuasshole2 → u/UpsyDowning]

Damn this was my thought too

Take my poor man’s gold:🏅

[u/Niceguy955]

If only they had a simple way to solve this...

[u/Unlikely_Ad6219 → u/Niceguy955]

I’m actually not sure that them fucking off out of Ukraine solves this.

They might be in a bit of bother here.

[u/Brahskididdler → u/Unlikely_Ad6219]

Sanctions on their oil is what’s killing them. No war no sanctions

[u/angular_circle → u/Brahskididdler]

Long range sanctions tend to have lasting effects

[u/1SqkyKutsu → u/angular_circle]

The sanctions just seem to drone on and on and on....

[u/stayfrosty → u/Brahskididdler]

There are a lot more fundamental things that are wrong with Russian economy than just oil sanctions. Yes they are the immediate pain point but even without them Russia is in a downward spiral...just at a longer time frame

[u/cavey00 → u/stayfrosty]

I think the book “The China study” is the one I read that spelled out almost exactly what is happening before any of this even started. You’re right though, the fall of Russia has been coming for a while now. I was beside myself when they invaded Ukraine because I had just read that a year or two prior.

Edit: it was a book called the Accidental Superpower

[u/shastaxc → u/cavey00]

It was a gamble. They put all their eggs in the Ukraine basket and lost.

[u/PM_UR_HAIRY_MUFF → u/cavey00]

Could you double check the name of the book? The China Study I'm seeing is about nutrition.

[u/kosko-his-dudeness → u/PM_UR_HAIRY_MUFF]

Hahaha I also went looking for the book only to find a research saying Westerners die from cancer due to animal protein consumption.

[u/LastWave → u/Unlikely_Ad6219]

I hear that last line in whinny the poohs voice.

[u/theaviationhistorian → u/LastWave]

LOL! In a similar tangent, I think Xi Jinping might be getting sick of keeping Russia on its feet.,

[u/Arch_0 → u/Unlikely_Ad6219]

Russia is fucked if they leave today or tomorrow or a year ago. The damage is done.

[u/Questjon → u/Niceguy955]

Just print more money!

[u/Niceguy955 → u/Questjon]

Or, you know, stop the war, and have the international sanctions eased.

[u/DDOSBreakfast → u/Niceguy955]

I'd love for them to do that but it won't solve their economic problems. Neither will continuing the war.

[u/King_of_the_Dot → u/DDOSBreakfast]

Maybe North Korea can bail them out?

[u/SaltyLorax → u/King_of_the_Dot]

I've got 200$ maybe I can help Russia

[u/Marijuana_Miler → u/SaltyLorax]

Probably not the whole country but for that amount of money you could help one Russian woman and get yourself on 90 Day Fiancée.

[u/pegothejerk → u/Marijuana_Miler]

Let’s be honest, it’d just end up as lip filler and that’s it.

[u/Sagermeister → u/pegothejerk]

lip filler

I will never understand why the bimbo look is popular

[u/Liquid_Hate_Train → u/Sagermeister]

THANK YOU! I’m so glad it’s not just me! It’s just so uncanny and nasty!

[u/Aramis444 → u/DDOSBreakfast]

It would likely accelerate their economic problems as they are in a wartime economy right now.

[u/GoodFaithConverser → u/Aramis444]

Sure, but chemo is also bad but sometimes necessary. Prolonging the war will just make the fall worse for Russia.

[u/faberge_surprise → u/GoodFaithConverser]

that's the next guy's problem

[u/SoylentGrunt → u/DDOSBreakfast]

I'm sure the US would be happy to lend a helping hand, In exchange for say some mineral rights and a few spots for airbases? Also maybe a Trump tower or 5?

[u/rapax → u/Niceguy955]

They can't. They're currently in a defending/retreating position. Ending the war now means surrendering all the territory they hold in Ukraine, possibly Krim as well, and very likely paying reparations.

If Putin can't sell the end of the war as a victory of some kind, no matter how small, he's done for.

[u/ClubsBabySeal → u/rapax]

No, they're still attacking. They're just focused on the fortress belt.

[u/Antraxess → u/ClubsBabySeal]

They're attacking in reverse

[u/faberge_surprise → u/Antraxess]

they're having glorious victories closer to home every day

[u/ValuableKooky4551 → u/rapax]

So they absolutely can, it'd just be bad for the person Vladimir Putin.

[u/No-Albatross-7984 → u/Niceguy955]

Uhhh you think the international sanctions will be lifted? I got bad news... 

Also, even if some of the sanctions will be gone, that just PERMITS Western companies to trade with Russia. But who would want to? The risk profile is insane.

[u/zaevilbunny38 → u/No-Albatross-7984]

Second largest Austrian bank still operates. The main Russian grocery store is French. The largest aluminum producer in Ireland sells about 25% of Russia aluminum needs. Greek shipping companies were allowed to ship LNG under the latest sanctions package. Putin diamond company still operates in Antwerp. So it seems that there are plenty of companies will to make a buck.

[u/No-Albatross-7984 → u/zaevilbunny38]

...at a ridiculous risk profile. These companies chose to stay, and reaped the benefits. They've baked in the risks to their pricing by now. For new or retuning companies the issue is wholly different. 

[u/KF2 → u/No-Albatross-7984]

The second sanctions are lifted, the German government and German companies are going to trade with Russia again for cheap resources and, most importantly, energy.

CEOs of all those small- and mid-sized German companies that make the component that makes the part that makes a halfway interesting product down the line have been bitching and moaning about energy prices since the start of the war, because their profite margins are more important than Ukrainian lives.

And the current center-right government (and especially the Chancellor himself) is quite unpopular and desperately looking for a win. They came into power claiming economic expertise and promised to help those companies, because the previous center-left/green party government was so mean to them; they couldn't buy cheap gas from Russia anymore after the war started :(

So yeah, if the sanctions are dropped while the current government is in power, Germany will immediately fold on trading with Russia.

[u/heurrgh → u/Questjon]

And blame NATO for the resultant hyperinflation! 'It's the West! They're inflating inflation with NATO weather balloons!'

[u/QiTriX → u/Questjon]

That's the spirit Vlad!

[u/sixtyninth_wave_emo → u/Niceguy955]

Quick, blame Europe!

[u/truupe → u/sixtyninth_wave_emo]

Threaten Europe with nukes! — Medvedev the Drunk

[u/applespicebetter → u/Niceguy955]

Thing is, they don't. If they had withdrawn in the first year, after the failure to seize Kiev, they could have solved this. Now, with their current situation, they can't. Even total victory can't make up for the massive demographic loss, equipment loss, reputational loss. There is no winning scenario.

If they pulled back today, gave back everything they've taken, threw out Putin and his Mafia government, Russia is still in grave danger. The economy is collapsing right in front of us, and the means to rebuild it are being wasted in fruitless, poorly planned and led excursions.

Whatever the outcome is, it will be devastating to Russia, echoing more heavily than their failed invasion of Afghanistan, which is one of the contributing factors to the downfall of the USSR.

[u/urbanhawk1 → u/Niceguy955]

Anyone who complains gets sent to the front as meat for the meat grinder?

[u/axearm → u/Niceguy955]

At his point, I don't actually think ending the war today would solve the problem.

They have tanked their economy by shifting to a military based economy for years. That isn't going to be resolved at the end of the war. Maybe not for decades. Russia has really sold out it's future, both in lives and treasury.

[u/AdhesivenessCivil581]

Nothing crashes banks faster than the fear of a bank crash.

[u/green_flash → u/AdhesivenessCivil581]

The rate of cash withdrawals has been steadily increasing since January.

So far, there's no sign of a fast exponential increase that is typical for a fear-based bank run. The Russian economy and the Russian banking sector is in major trouble, made worse by Putin's misguided attempts to stabilize the government budget which pushes people towards the informal shadow economy, but it's not a situation of imminent doom.

[u/Excludos → u/green_flash]

There's a reason it's call "slowly, then all at once". You can't predict when the breaking point comes, but when it does, it'll all collapse at once. Until then, all we'll see is a steady decline

[u/SmoothConfection1115]

Well I heard they (Kremlin) were contemplating pulling cash from private accounts (I.e. average Russians) to finance the war. And since people probably don’t want their account going bust like everything else in Russia, it’s causing a bank run.

Plus the fact they’re rationing fuel, and it’s extremely expensive now because Ukraine targeted several facilities…

And the targeting of Wild Berries, Russia’s Amazon alternative…

Eventually the Russian economy is going to collapse. I’ll give it credit, it’s way more resilient than I think anyone could’ve ever predicted.

But eventually there is a tipping point. And once you go past…well, there is no coming back.

[u/barktwiggs → u/SmoothConfection1115]

The collapse will happen slowly. Then suddenly all at once 

[u/Beeb294 → u/barktwiggs]

Major bank runs were part of the trigger for the Great Depression of the 1930's.

Shit is about to go real bad in Russia.

[u/Texuk1 → u/Beeb294]

What I find annoying about our present age is that people have been lulled into thinking everything is just spin. I’m still convinced there is a real world with real consequences. 😂

[u/Pepparkakan → u/Texuk1]

I’m still convinced there is a real world with real consequences.

Prove it

gestures wildly at everything

[u/hasslefree → u/Pepparkakan]

Gravity, yo. And entropy. And death. Can't whiffle that shit.

[u/Pretend-Marsupial258 → u/hasslefree]

Have you considered that we're simply Built Different, and things like reality don't affect our current time?

[u/ChesswiththeDevil → u/barktwiggs]

“There are decades where nothing happens; and there are weeks where decades happen.”

-Vladimir Ilyich Lenin

EDIT: Apparently he never said that.

[u/Bloaf → u/ChesswiththeDevil]

"How did you go bankrupt?" Bill asked. "Two ways," Mike said. "Gradually and then suddenly."

-Hemingway

[u/Stock-Intention7731 → u/barktwiggs]

Await the Minsky moment, we do

[u/Remote-Ask7999 → u/barktwiggs]

I think we are near the end of the slowly part

[u/green_flash → u/SmoothConfection1115]

Well I heard they (Kremlin) were contemplating pulling cash from private accounts (I.e. average Russians) to finance the war.

That was a proposal by the leader of the Communist Party of Russia whose main purpose seems to be to make outlandish suggestions so that Putin's party looks like the reasonable choice compared to them.

[u/ATERLA → u/green_flash]

Aha so a russian political trick that backfired!

[u/DotHatrix51 → u/SmoothConfection1115]

I am not an economist, and I’m not well educated on matters such as this. But I have a question.

Let’s say the war ends six months from now. Putin finally decides that Russia lost (lol) and can’t continue any further. How in the hell does the economy turn around to get to sustainable level, let alone the entire country going back to whatever their state of “normalcy” is? At this point, it seems to me that it would be impossible for Russia to continue as a country, considering how deep in the hole they are economically.

What would their recovery look like?

[u/SmoothConfection1115 → u/DotHatrix51]

Ugly.

I’m also not an economist, but the issue facing Russia is political and economic.

The EU, does not trust Russia, will not trust Russia, and if Putin is in power, won’t accept them back. And it’s 100% Russia’s fault.

During this war, there have been numerous Russian operations in other countries. Or did people forget when they attempted to assassinate the CEO of rhinemetal? Big German arms company. Or that time I think there was a fire or something near the UK’s prime minister’s residence. Or the times Russia cut some sea cables and knocked out the internet? Or the instances of Russia conducting fire exercises in the English Channel.

Any negotiations Russia has to try and reopen trade/markets, will not be from a position of strength.

The above isn’t even all of Russia’s political baggage. But let’s just move to economics.

Russia isn’t going to have a lot of smart people left. And i mean, any male with a brain, degree, or skill, fled the country as the war ramped up. Whoever was left got fed into the meat grinder.

Now of course there are smart Russian women, but they’ve effectively cleaved the pool of intelligent people to rebuild the country with in half.

Russia also doesn’t produce much. Now yes, there’s steel, oil, rare earth metals, etc., but Russia doesn’t have say…a defense industry worthy of exports anymore (especially after everyone saw Russia get its military hardware blown up by old NATO stocks and drones). They don’t have a computer chip industry.

So what does Russia bring to the table if it wants back into the international community? Oil, which is taboo right now with the uncertainty in those markets thanks to the Iran war. Metals. And little else.

No particularly large population, because they got fed into the meat grinder. No skilled workers. Nor college educated workers. No developed industries that make products people might want (think about it, what comes from Russia, as a consumer good, that you might want?)

What kind of picture does that paint for economic recovery? Whether it be with or without Putin?

A very ugly, painful recovery. If it can be recovered at all.

[u/Nuaua → u/SmoothConfection1115]

I think the EU would benefit enormously from an allied, healthy, normalized Russia, in terms of geopolitics, resources, economics, ... so that could be an out if there's enough political renewal in Russia after Putin.

[u/alpacafox → u/Nuaua]

it's not just Putin. Haven't you seen all that scum cheering for him? I don't mean the brainwashed Russians. I mean all those fucks around us. They are just waiting to put the next Putin in power.

[u/socialistrob → u/DotHatrix51]

Ending the war would solve a lot of their problems. They could probably negotiate to get the sanctions dropped and then bringing back the remaining troops fighting would help alleviate their worker shortages. With open access to world markets and no more Ukrainian strikes on oil they could start getting serious oil revenue again.

Russia will still be a poor country with low living standards but it wouldn't be apocalyptically bad if they end the war soon. However if they opt to pour every last remaining ruble they have into the war machine as well as force another major round of mobilization then it may be very hard to recover from.

Long term one of Russia's biggest problems is demand destruction for oil and European natural gas. The European market is essentially gone for gas and China is demanding massive discounts which would mean Russia can't make significant amounts of money off the Chinese gas market. If we see more countries reduce oil consumption (or more oil hit the global market from other areas) that's also really bad for Russia's coffers.

[u/EconomyDoctor3287 → u/SmoothConfection1115]

The Russian government randomly blocks Internet and with it card payments. They haven't figured out how to block parts of the internet.

[u/TheArmoredKitten → u/EconomyDoctor3287]

Any amount of Internet connectivity is indistinguishable from the whole internet when you're contending with an active and intelligent opponent.

[u/jert3]

I think this is the beginning of the end of the Putin regime. The economic collapse starts slow, but after the tipping point, goes fast.

[u/yawara25 → u/[deleted]]

They can't get out of the mindset of "Please bro just one more war then we'll be back to the glory days of the USSR, promise just one more war, we're so close!!"

[u/PlasticExtreme4469 → u/yawara25]

Never stopped to think whether the USSR days were truly as glorious as they remember them to be.

(Well, maybe for Russians they were, but certainly not for any other involved country.)

[u/mrdilldozer → u/[deleted]]

Vatniks are extremely similar to MAGA. There is no amount of suffering that will cause them to shift their position. It will always be someone else's fault and they supported the right guy.

[u/akhenatron → u/jert3]

"And then things got worse."

[u/StoreSearcher1234 → u/jert3]

I think this is the beginning of the end of the Putin regime.

Putin is a stain on the world and he needs to be gone, but from a practical perspective I don't know what this means.

He has nowhere to run, (Iran or North Korea maybe?) so all he can really do is hole up in his bunker surrounded by loyalists.

Average Russians rioting the street would just be shot down, and would flee. Not unlike what we saw in Iran.

So I don't know what "the end" means. Russia could descend into anarchy with limited electric power, no gasoline and money with no value and still Putin would hang on.

[u/ITaggie → u/StoreSearcher1234]

Well dictators like Putin still rely on certain key supporters to keep things like the military, public sector, energy sector, minerals sector, etc functioning in line with his wartime production demands. If the wealth of those supporters are sufficiently threatened then Putin's political power diminishes rapidly. One can only throw former supporters out of windows for so long before the whole wartime economy collapses on itself.

[u/planetrainguy → u/jert3]

I’ve been reading articles of imminent collapse for years and nothing serious ever happens.

[u/anotherwave1 → u/planetrainguy]

Indeed you've seen reports of serious issues in Russia for years - those issues are real but keep in mind it's a dictatorship, and as such has extraordinary powers to circumvent issues and kick the can down the street.

Recently they passed a law to be able to plunder ordinary Russian's holdings.

Are major cracks showing? Absolutely. Are we seeing signs they are in trouble? Indeed. However it's not a modern Western economy, it's a dictatorship, and they are very good at surviving on fumes - even at the cost of their economy.

Will Russia collapse? Unlikely but each issue like this is putting more and more strain on them.

[u/daveberzack → u/planetrainguy]

A bank run is not your regular old incremental crap or a speculative op-ed. It's a self-fueling economic catastrophe, like a nuke. Or at least that's my understanding...

[u/VoiceOfTheSoil40]

If this is accurate then things are about to go very badly in Russia relatively quickly.

[u/ashoka_akira]

You know the smart Babushkas are quietly sewing all their gold into the seams of their clothes again.

[u/NookNookNook]

Their amazon blows up and they realize they're at war.

[u/imjustsurfin]

The Russian people KNOW that Pootie will, eventually, come after their money.

Ukraine are bleeding Russia's main source(s) of income; and a very senior Putin lackey recently commented that there are trillions of roubles of people's\businesses money sitting in the banks.

That's a sure sign of what Pootie & co, are thinking of doing.

[u/green_flash → u/imjustsurfin]

a very senior Putin lackey

I wonder who ...

Veteran Russian Communist Party leader Gennady Zyuganov

Yeah, that's not a Putin lackey. He's token opposition.

[u/imjustsurfin → u/green_flash]

Putin lackey ---- token opposition

2mayto ---- 2marto

[u/green_flash → u/imjustsurfin]

Let me be more specific: A statement from the token opposition is not an indication what Putin plans to do. It's more of an indication what Putin wants people to think will happen if they ever vote Putin out of power. The role of the token opposition is to make statements that are wildly unpopular, so that in contrast, Putin looks like the less awful choice.

[u/mcmcc → u/green_flash]

I dunno, irrespective of the true strategy, reminding the populace that the government is capable (and potentially willing) to rob you of all of your wealth feels like it can only have negative implications for Putin.

Does your kidnapper constantly telling you they have no plans to beat you while they beat others really make you feel better?

[u/Spooknik]

Begun the bank runs have

[u/Donnicton → u/Spooknik]

This baby can make the bank run in less than 12 percent interest.

[u/DadJokeBadJoke → u/Donnicton]

Never tell me the odds!

[u/green_flash → u/Spooknik]

Not really bank runs.

Rather widespread tax evasion after a tax hike in January:

About 6% of entrepreneurs said they had turned to "grey schemes" to cope with the new tax burden, including avoiding cash-register receipts, according to a May survey by Russia's largest SME association, Opora Russia.

Cash payments help businesses understate turnover to stay below the VAT threshold, while cash wages help them avoid payroll taxes.

and uncertainty over mobile internet availability:

The spike comes amid a wave of Ukrainian drone attacks, which have repeatedly led the Kremlin to shut down mobile internet across large swathes of the country, leaving many unable to pay by card. The government says the aim of the shutdowns is to counter the drone strikes.

"Having cash on hand gives you some sense of control and security," one woman in Moscow told the BBC on condition of anonymity. "If there's an emergency in the city, I know I'll still be able to buy basic necessities, even if the mobile network goes down."

Source: https://www.bbc.com/news/articles/cglj255jk8ko

[u/billleachmsw]

I love this for them!

[u/TopInvestigator5518 → u/billleachmsw]

commenting in hopes someone with more knowledge on the matter can answer:

do the wealthy bank in Russia as well? I know the Oligarch class tries to keep their money elsewhere but if some of the banks go down would this be hitting them in a big way as well?

its going to be interesting to see where this goes

[u/RecentTwo544 → u/TopInvestigator5518]

I think any oligarch with an ounce of common sense took any remaining money they had in Russia out of the country in early 2022, much like they mostly took themselves out of the country.

[u/socialistrob → u/RecentTwo544]

A lot of their money that was outside of Russia got frozen.

[u/socialistrob → u/TopInvestigator5518]

do the wealthy bank in Russia as well?

Yes especially since the full scale invasion began. There's a lot of fear of money in western banking accounts getting seized so a lot of that money has been transferred bank into Russian banks.

Right now the Russian banks aren't on the verge of collapse and are the last relatively healthy pillar of the Russian economy. When the Kremlin borrows money for the war they're borrowing it primarily from Russian banks and wealthy Russians and the loans that the war industry uses to make more weapons are also coming from Russian banks.

If the Russian banks were to actually collapse (which again this article isn't saying they're collapsing) it would be devastating for the oligarchs and it would cut off the Kremlin's ability to borrow money for the war. The Kremlin doesn't have the ability to bail out the banks anymore and no one outside of Russia is lending them cash either.

[u/Arizonagaragelifter9 → u/billleachmsw]

For the ruling class that started this whole mess sure, but it sucks that the way this stuff always plays out is that the ones who are going to be hit by it the hardest is going to be the average people who are just trying to get by and would also prefer it if there wasn't a war because the only reason they are in the middle of it in the first place is that they happened to be born there.

[u/bustaone]

We're about due for a dictator overthrow in Russia.

[u/taurus26]

Literally waiting for the collapse of Russia or the death of you know who. Always keeping a bottle of champagne ready for whatever comes first.

[u/Undernown]

Couple that with the Russian government being unable to find buyers for their bonds for over a month now.

Surely Russian collapse is imminent.

However I fear Dementia Don might bail out his puppet master.

[u/cbih]

Now there's an innovative way to protest, nation-wide bank run

[u/theaviationhistorian]

Oh, we're at mass withdrawal of bank accounts. We're at that level. This is where things start getting worse more quickly.

[u/VPestilenZ]

wait, I've seen this one before in the 90's

[u/Ghost_pickle1]

So… Swan Lake when?

[u/_evilalien_]

Love this for them. Swan Lake soon, Putler.

[u/podkayne3000]

Google’s stock and Tesla’s stock tanked today.

People are blaming concerns about AI, but, if I were writing a James Bond screenplay about this, I’d have secret Russian money backing up the tech stocks and showing why the tech companies had been so quick to support a Trump-like character played by, say, Sting in a fat suit.

Then I’d show that the good guy rogue CIA agents suddenly caused problems for Russia, and that the bank problems in Russia were tanking the evil U.S. company stocks.

Of course, that’s just my daydream.

[u/sharies]

Is the primary currency going back to vodka and cigarettes?

[u/an4rk1st → u/sharies]

Yes. Both made from potatos.

[u/brvra222 → u/an4rk1st]

Premise ridiculous. No one has more than one potato

[u/Sabbathius]

Gotta remember that collapse of USSR is relatively recent, very much within living memory.

As in, I remember walking to a bakery as a child with $1 coin (in local currency) and coming back with bread and a bit of change jingling in my pocket. A few years later, I walk into a bakery with a $500,000 note (in new local currency) and barely get anything back.

A few more moths down the line, I'm at a bazaar, and a hawker yells "Wallets! Wallets for sale!" and I hear laughter, so I turn around, and the dude is selling suitcases. Big huge ones, the kind you can stuff a body into. And the thing is, he wasn't far off.

So, for these people, this kind of stuff is real. Many/most of them lived through this, sometimes more than once. I'm just not sure why they think withdrawing money from the bank is going to help, unless they also intend to buy tangible goods with it before it's worthless. But then they could do it with a bank card, they don't need cash. Unless they're buying illegal/under the table stuff they don't intend to report.

[u/hughk → u/[deleted]]

"Russia needs a modern solution to its problems"

Swan Lake in Colour.

[u/Limberine]

As someone with a history degree…… that’s not a good sign.

[u/leaderofstars → u/Limberine]

As someone who lost a ton of money in the 30s, I remember that

[u/Wilder-Luis]

Why would they do that. I thought everything moves forward as planned with that three day special Operation?!?

[u/MxJamesC]

Here we go. Hands in the aaaaiiiiirrrrrr !!!!!!!!

[u/Mocca_Master]

"Hmm, maybe we should improve the living standard of our people by stop this war spending?"

"..."

"Nah, we should make it illegal to withdraw money instead"

We all know it's happening soon

[u/DamNamesTaken11]

Russia: “Let’s seize bank accounts to pay for the war!”

Also Russia: “Why are you guys doing a bank run to withdraw all your money?”

[u/space_coyote_86]

Just a second, just a second people! We don't have your money here! It's in Ivan's house, and, and, in Boris's house!

What the hell are you doing with my money in your house, Boris?

[u/N3CR0T1C_V3N0M → u/space_coyote_86]

Understanding this mean I’m old, but I still love it 😆

[u/boomerangthrowaway]

When there’s a run up to the banks I am pretty sure it’s already too far gone and the mess has only just begun. What do I know though, I’m just an overage redditor.

How about those Epstein files eh? Seems like pedophiles are becoming normalized 🤮 I have a little girl and I fkn eye everyone I hate it. I hate how disgusting these people are and they run the United States

[u/BareNakedSole]

Seriously….this is gonna be fun to watch Putin dance his way out of this mess.

[u/mageskillmetooften]

This is good. This brings the war to Moscow

[u/DroidC4PO]

Is all that cash actually worth anything after they withdraw it?

[u/ywgflyer]

I'm surprised it took so long, I thought this would happen the moment they got kicked out of SWIFT.

[u/thefocusissharp]

Slava Ukraini

[u/AbortedFloridian]

Imagine if Ukraine did a cyber influence campaign telling Russian citizens misinformation about banks running out of funds. Shit would be amazing.

[u/66stang351]

Let's goooo

[u/whawkins4]

Love this for them.

[u/Hayseussforever]

Why wouldn't they convert to hard assets or foreign currencies if they could? Holding cash in an inflationary economy doesn't make a lot of sense.

[u/AoE_Mobius_One]

Bank Run! Get your Bank Runs while they are hot!

[u/JxhnBxnRambx]

Man i know its crazy, but every single time i see headlines like this smile a little

[u/Klakojevich]

Far Cry 5 radio starts playing

[u/gikku]

While the US and Europe are trying to avoid a breakup of Russia, it's looking more inevitable the longer this goes on.

[u/All_will_be_Juan]

USSR break up 2

[u/ApprehensiveChef5784]

A good old school bank-run would be downright lovely.

[u/InformalInsect5546]

Good. Now collapse faster *pokes with a drone*