PUTIN’S WEAKEST MOMENT TELLS US THE END IS COMING

I don’t believe a word Putin said, but the fact that he needed to say it speaks volumes about where he sees his situation in respect of the war, the economy and his relationship with the Russian people.

The St Petersburg International Economic Forum almost two weeks ago led him, after his own finance minister sounded the alarm and tried to back track, having declared an imminent recession, to have to say something about it personally.

It was an odd and strangely unusual moment, around 25 journalists who seemed to have been rustled up out of nowhere stood in front of Putin and he behind a makeshift podium in a space that looked like the back of an indoor event stand.

He told them that defence was costing the country 6.2% of its GDP and that the cost of that was high inflation. He intimated that it was far higher than the official figures using words that clearly meant nothing else. He promised to reduce defence spending (by which he really means the cost of the war in Ukraine) in next year’s budget and the 28 & 29 budgets, and that would help bring inflation down. He also said NATO was making things worse by increasing defence to 5% of GDP, seemingly oblivious that he’s the cause of it.

That was pretty much his message. Seems innocuous doesn’t it? From the point of view of a western politician it’s pretty ordinary, but this is Russia and nothing is ordinary.

Putin is clearly worried that despite the propaganda, the public are getting just a bit fed up with spiraling prices their pay doesn’t keep up with. Interest rates are so high that most can’t afford, or can only barely afford, their repayments on mortgages, credit cards and loans. The cost of a very basic car without a passenger air bag is $45,000 and the cost of the air bag as much as a month’s salary if they even have one they could sell you. Car finance is around 40-45%APR. Unsurprisingly sales are low.

Credit card delinquencies shot up 70% in the first quarter of 2025. Mortgage arrears soared by 12%, personal loans and car loans all showed major default rates.

Food prices leapt 70% in a month for key basics (in Russia that’s cabbage, butter, onions, cucumber, potato, cream, the price of meat is astronomic) and many just cannot afford to buy the food they need. People are working more and more to survive. The little luxuries are now unheard of, a decent meal is now becoming a little luxury. Of course there are those who are perfectly fine, there always are, but that number is declining exponentially as inflation eats away at everyone’s standard of living.

Putin has realized that it’s reaching a point he has to make some kind of concession. He is not interested in the well being of the Russian people, any more than he is of the Russian soldiery fighting in his war. He is only bothered that they see him as the right man to be in charge – and that means recognizing their worries, and promising to do something about it, even though he has no intention of doing so.

In a year or so he’ll turn around and say something new, that it’s been impossible to reduce military expenditure. By then, in his mind, he’ll have bought time to lay out a propaganda campaign where he’ll try and double down on the need to perpetuate the war and start to move towards a ‘Total War’ economy, but for that he has to have everyone on board. They have to believe that its worth it and Putin is afraid that they don’t and they won’t. And that puts him in the position of being the bad guy domestically, a position he desperately tries to avoid. He tries to blame everyone else, then swoops in to put things right on the side of the people. It’s an act that has worn thin over the years but still works enough of the time to get him by. He’s scared that it might finally not be enough.

You remember the videos we now never see, of civilians or soldiers appealing directly to Putin personally because he would never have allowed X or Y to happen and if he only knew it would be put right? This attitude goes back to the age of the Czar’s. For a long time they placed Putin in that same category. Now the war, time and the economy have shown them that even if he does know, he can’t fix it, and his promises are no better than anyone else’s.

Putin’s gaping flaw – his decision to go to war – beyond the fact its on day 1,223 (as of July 1st 2025) of a three day war, is that nobody understood his reasons, there was no ideology. Now he seems to be trying to come up with one and nobody is buying it. It’s far too late to come up with such nonsense. And he seems to know it. The trouble is he doesn’t know how to get out of the mess he committed to.

He annoyed the Trump regime when they offered him the easiest way out imaginable, almost supplicating themselves in desperation. At that stage he thought the summer offensive would be on the doorstep of Sumy and the gates of Zaporhizia by now, that Pokrovsk would have fallen, Ukraine would be on the run without American aid. But none of it has happened, the army appears broken, tired and exhausted.

Putin’s little chat about reducing war expenditure next year was supposed to be a sop to the people, telling them he’s listening and he understands. Yet more often than not such words fall on deaf or disgruntled ears and make them feel worse. “What does he know tucked up in the Kremlin and his dacha, wearing a $560,000 A. Lange & Söhne Tourbograph Perpetual “Pour le Mérite” watch (of which there are just 50 in the world) and a $10,000 suit, standing in $4,000 Italian shoes?” None of it exactly speaks to the people.

The mere fact he said something, that he felt he had to, is absolutely showing weakness. Things are not good, militarily, internationally – the strikes on Iran were seen in Russia as deeply concerning because there was absolutely nothing they could do about it. The Iranians are especially irritated that all they got from their ally was empty words.

The economy is in shreds and getting worse – the only way out is to double down but he knows that’s no longer viable – that’s why he made that statement. What he wants to do and what he can do are no longer the same thing. The past is catching up with him, the decisions he made before are now coming home to roost, the bills have to be paid and there’s no money in the pot. Russia is running out of options, even the once barely viable ones are no longer realistic.

Putin’s freedom of maneuver is highly constrained. Domestically he knows he is pushing the people too far. The one thing that always guarantees public action and protest is when their bellies are rumbling and they have nothing they can afford to eat. There may be plenty of food in the shops but if you can’t afford to buy it that’s no help. Another harvest like last year’s bad one will merely exacerbate things.

In order to make it impossible for people to know the exact nature of how bad things are, the government will no longer publish GDP, inflation, or any other economic data of any kind.

Another bizarre decision is to not hold a ten year census so that the figures of the dead and missing will not suddenly appear obvious. Russia is in a demographic crisis that pre-dates the war, with a desperately low birth rate – 79% of 18-42 year olds surveyed recently said economic and cost issues stopped them having children. The answer is to not find out what the population is made up of? That’s a terrible decision making idea long term.

On top of that moves are afoot to increase conscription numbers by reducing exemptions. That will lead to more recruits and at the end of their year service, more to be cajoled and intimidated into signing full time contracts that will see them serve in combat. Additionally rules on getting out of your service after the contract term expires means nobody is in actuality able to exit and go home. You will die on the front one way or another. For each Ukrainian bullet there will be a Russian corpse.

Putin has displayed fear. He has shown weakness. He has told us that in effect, things are going wrong and time is running out. He has a disgruntled army in front of him and a fed up population of worried civilians who can’t pay their way and for whom good food is now a luxury, behind him.

Nothing tells us like this moment how bad things really are. Covering it up isn’t going to change the reality of it.

The clock is ticking Vladimir, the clock is ticking.