A Perfect Storm is Forming in Russia

Russia has lost the Ukraine war. And some folks say that Russia reacts badly to this and does not like to lose wars. To be fair, no country likes to lose wars. But Russia has lost a few over the last 200 years. Let's start in the 19th century with the Crimean War, fought over the exact same ground where this war started. Russia lost, leading to regime change in Moscow.

Then there is the 1905 Russo-Japanese war, which Russia thought she could win because mere Asian people could not face a modern Russian army. If this sounds familiar, it is still the same rationale in Moscow over Ukraine. We cannot be losing to lesser people. Ours is the second army in the world.

Russia lost the First World War, and in the end, it led to a humiliating defeat and surrender at Brest-Litovsk. That was done by the Soviet government that succeeded the leaders of the February revolution that deposed the Tsar. In other words, that defeat led to regime change.

Finally, there is the Afghanistan conflict, which marked the end of the Soviet Union. I will argue that this war will lead to similar historic patterns and the end of Putinism. And at this point, some in Russia, not the usual suspects, are starting to talk about this. Here is an example of this, and be aware that it is quite expensive for a Russian economy that is starting to crash. The question for all of us is whether they will try to manage this, as they did in 1989, or whether we will see a civil war.

An "ideal storm" has begun in the Russian economy. A combination of a whole host of negative factors has accelerated the development of a structural crisis, which, if it hasn't already entered an acute phase, will do so in the next 2–3 months. At the same time, the authorities are diligently pretending that nothing extraordinary is happening, and are trying to deal with "temporary difficulties" in a "manual mode".

At this point, these are not temporary difficulties. These are pretty structural at this point. And how structural? Russia is reacting to the issue of gasoline prices in a very Russian, predictable way. They are now not going to share these changes with the public:

Rosstat stops publishing weekly bulletins on fuel prices

The government has made changes to the plan of statistical work, according to which the department will no longer report on the cost of gasoline and diesel. Previously, the bulletin contained detailed data by regions and thousands of gas stations.

The authorities took this step against the backdrop of record-high price increases, which were recorded in June.

🗞 Krem

This is not alien to anybody who studies Russia. This is the standard response when things start to go badly. It tells us that things are much worse within Russia than we are willing to consider or see. As I said yesterday, the flow of ice is starting to accelerate. We may be hearing water flowing at this point. And what else is going on? Well, there have been rumors for some time that a general mobilization is coming. Now we have more meat on those rumor bones:

"The roadmap for the second mobilization is very detailed."

In October 2026, immediately after the elections to the State Duma, Russia may announce a new mobilization for the war against Ukraine, according to Russian independent media. The main reason for the possible mobilization is the failure of recruiting assault troops on a contract basis and the "low quality" of those recruited.

Sources working with the presidential administration report that the mobilization is being discussed at all levels in the government structures, but a final decision by Putin has not yet been made.

This is the first time I have seen reverence for sources within the presidential administration. This, at least to me, also means that Vladimir Putin is better informed of what is going on at the front than we thought. Because going for mobilization is a recipe for issues. And by issues I mean more than just the two or three person rally.

Perhaps the noise we are hearing from the army that they are not happy is worse than we think. After all, troops are getting disarmed as they come off the line. Never mind that there is no real threat in this new way of war. Which leads to another hmm moment, and makes me wonder if Putin is getting ready to make an existential stage far right, because this is the second of his yachts that seems to be having a dry run/sea trials:

The second "Putin's yacht" has left Russia and headed to Turkey

Another yacht used by President Vladimir Putin and his mistress Alina Kabaeva has left Russia, according to data from the "Dossier" center. We're talking about the 71-meter ship Victoria. As reported by "Versiya" with reference to the MarineTraffic service, on June 26 the yacht left the Krasnodar Krai and headed to Turkey via the Bosphorus. On June 28–29, the ship was anchored in the Pendik district of Istanbul, and then set course for the resort town of Bodrum, where it is expected to arrive on Tuesday evening.

The day before, it became known that the 82-meter yacht Graceful, also associated with Putin, was heading to Turkey. It is accompanied by a Russian destroyer and the rescue ship "Voezdor". The yacht turned on its transponder for the first time since 2022, while in the Baltic Sea between the coasts of Germany and Denmark, but stopped transmitting location data after information about its movement appeared in the media. According to Marine Traffic, Graceful is currently heading to Istanbul. To reach Turkey, it will have to circumnavigate all of Europe. Its arrival is expected on July 12.

So why is Putin doing this? Because that ship movement is not something authorized by the Ministry of Defense, but rather by Putin himself. He has access to information I don't have. And this seems to indicate that he is taking measures more aligned with personal survival. See what I wrote about regime change and the end of the cycle every time Russia loses.

And if Russia loses, which is a very real possibility right now, Putin will have very little time to get the hell out of Moscow. And those vessels may be his way out. Or to be more precise, one of the ways out. As a former member of the KGB, I am sure he is aware that the Russian reach is global. And he may face defenestration even if he leaves the country in a hurry. What about his family? I have no idea. But that is how I read the ship's movement. He is likely getting ready to leave. And this is one of the reasons why that is likely coming:

The head of Sberbank called the end of the war the main issue that "concerns" all Russians

At a time when Russian officials at various levels are insisting on the unity of the people around the president and the idea of military resistance to enemies, the head of the country's largest bank stated that the key issue that concerns all Russians is the end of the war in Ukraine. This was stated by Herman Gref, the head of Sberbank, on Tuesday at the bank's annual shareholders' meeting (AGM). "What worries us, I think, worries all of us the same thing. I don't think there's a person in the country who has any other concerns besides the speedy end of military actions, it's obvious," RBK quotes Gref as saying.

After publishing a post with a quote from the head of Sberbank, the publication removed the message, but posted it again an hour and a half later. At the same time, the note about this on the RBK website was not removed, "Meduza" noted. The speedy end of the war in Ukraine ("already tomorrow"), according to a May study by the Kyiv-based Institute of Conflictology and Analysis of Russia (ICAR), is supported by the majority of Russians (81%). This figure has become the highest since the beginning of 2022, the researchers noted.

Now read the note about mobilization in this light. Because Russians are starting to speak. And the head of a major bank saying this is different than a veteran of the war. Incidentally, that veteran was arrested already and charged with the usual charges, that is, discrediting the army and all that.

Of course, a banker can see the effect of this war on the economy. And he understands how damaging this has been to Russia. So, again, people are becoming bolder. A banker is also part of the Russian elite that has surrounded Putin. Speaking of them:

«Three things create negativity in Moscow: restrictions, fear, and lies». Political analyst Abbas Gallyamov on how drone attacks and endless war are changing moods in the capital region

Residents of the capital are increasingly talking about the futility of the war. According to Abbas Gallyamov*, closed sociological studies he has reviewed show that the desire to end hostilities as soon as possible has sharply increased in Moscow. In an interview with the program "MO", he talked about a shift in public sentiment.

💬 The mood of the capital's residents has changed dramatically over the past year, says the expert. Previously, they simply hoped that the war would end, but now they are increasingly demanding that the authorities make a decision. «A year ago, people were saying: it's hard, of course, it would be nice if everything ended soon. Now it's a completely different thing: 'If you can win — win quickly. If you can't win quickly — end your war'. This idea has become very clear».

💬 «Three things create negativity in Moscow: restrictions, fear, and lies». The first trigger is restrictions on freedoms. «Everything starts with talk about the internet, Telegram, YouTube, and then people say: the authorities have completely gone mad, they're deciding for us, what to say, what to think, and how to live». The second factor is the feeling that the war has come to one's own home. «There's a physical fear for oneself and one's children. After the last attack, this factor has intensified». The third trigger, according to Gallyamov, is distrust of official information: «People see too obvious lies. Some perceive it as rudeness, others as a sign of the authorities' complete incompetence».

💬 «People didn't sign up for this» According to Gallyamov, Muscovites are willing to endure hardships only when they consider the war inevitable. Now there's no such feeling. «People dream of just returning to January 2022. For most, neither Donbass nor even Crimea are needed anymore. They ask: why endure all this for the sake of some territorial acquisitions?»

💬 «There's discontent not only among the people, but also at the top». Gallyamov believes that drone attacks are changing the mood not only of society, but also of the elite. «All the country's leadership lives in Moscow. It's Putin who can be in Valdai, but ministers, deputy prime ministers, and the presidential administration are in the same place where drones are flying. Therefore, they don't even need to specifically explain the people's discontent — they themselves experience it and get an additional argument to cautiously point out the problem to those at the top».

💬 «A strike on the Kremlin would be a global event». According to the political analyst, any new attack on Moscow will now be perceived much more painfully than before. And a possible strike on the Kremlin would be a symbolic turning point. «For Russia, Moscow is the center from which all political signals radiate. Belgorod seems distant to most, but Moscow is something completely different. If a strike hits the Kremlin and a hole appears there, it will be a global event. Then a completely different feeling of war will spread from Moscow throughout the country».

Abbas Gallyamov is not a fan of Putin, but he is correct. The heart of the empire has come under attack. This has a way to change how people think. And his last paragraph is on the money. An attack on the Kremlin, and we had one a couple of years ago, will have a psychological effect as well.

This is not a minor thing. The Russian capital burned in 1812. It was almost captured in 1941. It is supposed to be the heart of the empire and, chiefly, safe. This is also a city that, over the course of history, has not allowed people to just move in. It is a privilege. So, at this point, many locals are installing air defense systems on the roofs of important buildings, and by this, I do not mean government buildings. And here is a second poster speaking of what the elite wants:

Kasyanov: The vast majority of Putin's entourage want the war to end

Former Russian Prime Minister Mikhail Kasyanov believes that amid Ukraine's strikes on Moscow and St. Petersburg, most people from Putin's entourage feel shame and want the war to end.

"Many of them, even the majority of them, did not want the start of this war and were stunned by Putin's decision. All these years, they have been surviving. Of course, they work for Putin, as they cannot escape the situation, but nevertheless, they wish for it to end soon. For them, it's certainly a disgrace that this is happening. We boast that 'we are the second army in the world, we are going to Europe now', but in fact, the most central city is not protected. Putin's residences are protected, but the city is not protected. Of course, this is very stressful," said Kasyanov.

So, Putin is the most vulnerable he has ever been. At this point, it makes sense why he authorized two of his yachts to go to sea. Whether they are there to prepare for his arrival, or what else is a good question? What is true is that the man is now living in a country where people are starting to get angry, and for the first time, even the elites are starting to speak.

And at this point, even China is telling Russia to find an offramp, the sooner the better. Why? I don't think China wants a civil war on its northern border. However, they may be able to secure Siberia and revise those 19th-century borders.

We are living the Chinese curse, may you live in interesting times. And the end of the year may be full of surprises. Because when Russia loses a war, things can get very kinetic very fast inside the empire. Perhaps Russia will finally grow up.