Yes, 16% for a 10 year note is very expensive but what’s the alternative? They can’t sell debt on the international market, so that leaves domestic borrowers . The war cannot be ended without a glorious victory and there’s only so much other spending to cut, so do they pay for it?
Resource sales won’t be enough. Maybe something funny like ~~seizing ~~ borrowing people’s bank deposits with a promise to repay them at a later date?
Domestic borrowing is helpful, but in Russia’s case, they will need to fully control every aspect of their economy as well, from capping prices on all consumer goods to directly propping up critical domestic manufacturing companies.
I won’t pretend to know all the details of how mostly isolated wartime economies function. Still, borrowing from the public is a huge part of this, but most of it based around simply keeping the people thinking their currency has value while giving everyone jobs to manufacture goods for the war effort. (If taxation becomes extreme, then they start manufacturing bodies for the war effort from people who can’t pay or doge.)
Russia still has active trading partners and can still barter raw materials for other things. The gas shortages due to fires at refineries caused by “careless smokers” is really hitting them hard though…
But yeah, like I mentioned before, wartime economies are a thing and they can function for quite a number of years. Up to and during WW2, deficit spending and taxation for Germany was insane. (Most of that debt was cancelled after the war as Germany had no economy left to pay it back.)
They just fake their economy for while, until they can’t. That’s an extremely simplic way to put it, but for idiots like me, it’s easier to understand.
Simply “printing more money” doesn’t work and the “real” economy becomes mostly goods, services and guns. Extreme inflation will drain bank accounts naturally, I speculate.
Feel free to completely correct me here, but there seem to be way to drain bank accounts without having it perceived as government theft, is my main point. (TBH, currency value makes little sense to me with the ways governments print and burn it at massive rates. It’s just all … fake to me.)
