16% interest is crazy high. It completely wrecks the ability of anyone to finance things like a home, a car, or industrial expansion.
For comparison, a 30yr, $250,000 mortgage will cost:
- $1,663/mo at 7% interest
- $3,362/mo at 16% interest
It’s very interesting that there were people who claimed that the increased interest rates (although modest compared to this) that the west experienced in 2022 and 2023, were to slow the global economy to reduce oil prices to hurt Russia economically.
This could perceivably be true, as there were also rumors in the 70’s about USA manipulating global markets to destroy the Cuban economy.
It’s crazy if true, but also impressive IMO.
Anyways interest rates this high are almost sure to put the brakes on a Russian economy overstimulated by huge expenditures to finance the Ukraine war.
Or to put it another way, Russia can’t really afford the war.
The risk of overheating remains likely.
I have stated before that the Russian economy seems to be in a weird limbo between overheating while stagnating at the same time.
This to me kind of confirms it, and with continued inflation and increased interest rates, it’s very likely Russia will enter a period of recession, increasing deficits in the Russian budgets. It will be ever harder for Russia to finance the war, the sanctions are working!Is it an intelligence update or an economic one. Why is this related to UK defense.
Both, and the UK is an ally.
