Many years ago, the economic texts were simple supply and demand lines using guns or butter as an example. Do you want to produce from guns and less butter or less guns and more butter. Fortunately, since WW II, most people in developed countries have not really have to make that decision, but Russia is increasingly doing so.

In an article by Patrician Cohen of the New York Times News Service, nearly 1/3 of the country’s spending next year or $109 billion will go to the war with Ukraine or in Russian speak the special military operation. If Russia spend money on the war effort, spending for health care, education and infrastructure will go down.

19 months into the war, the Russian economy has proved to be more resilient than most Western governments assumed after imposing heavy sanctions on the Russian economy.

The Russian ruble is now 100 to the US dollar, and inflation is increasing for Russian citizens. The spike in government spending and borrowing has stressed an overheated economy. Interest rates are 13% and food basics are at higher price than a year ago.

Lower standards of living can be uncomfortable even for an authoritarian government, noted Charles Lichfield, deputy director of the Atlantic Council’s Geoeconomics Center.

Linking to dividend paying stocks, with every organization examining the budget will tell you what the priorities are for the organization. What the person says is important and what the budget actually finances can be different. There is an expectation with large profitable companies that what executives say is important is actually funded the way they say. As an investor part of your homework is to confirm this and if you agree, there is little you have to do.

There are more questions than answers, till the next time – to raising questions.