“Interestingly, Bloomberg just ran an article as if to help me to partly answer your question – Putin Clans Gridlocked Over Arrest as Sanctions Bite.

“Though I would not talk about anti-“siloviki” people as prime-minister Dmitry Medvedev’s group. Medvedev is currently widely seen as no more than statist. Almost all of his not numerous liberal moves in economy, law, technical modernization made during his presidency were annulled after Putin had returned to the top post. There are a number of good (I would say ‘normal’) economists still working in the government – heads of ministries of finance and economics, as well as of the central bank. You can call them “realists” because they understand in what dire state the economy is and that everything that can go in the wrong direction, goes. But their resources are dwindling rapidly, they are losing ability to influence the country development since Putin’s policy undermines all their efforts. Besides, they have to a large extent lost, as we say, “access to the body”, i.e. Putin now consults mostly “siloviki” and not officials in charge of the economy.

“Several days ago I spoke to a prominent private economist who had recently visited a private party where those official economic policymakers were present. According to his words, they are “visibly on edge”, because they have to follow the course they believe is wrong and have few means to correct. Also, according to the economist, Russian economy has entered a three-year period of (at best) staganation even without any western sanctions, just becase of its structural weaknesses, but it is absolutely impossible to forecast what will happen afterwards.

“This is maybe the only point where experts agree – it’s impossible to forecast how long the current situation will prevail. The vast majority of Russians today support Putin and his policy (the annexation of Crimea sparked a huge burst of enthusiasm), especially since this policy once again, as in Soviet time, opposes Russia to the Enemy (not enemy, but Enemy), which is the West. And modern means of propaganda are much more efficient than during Soviet times. Today’s FT opinion piece provides a good look into current perception of the situation from within Russia (Nikonov views are widespread both between officials and ordinary Russians) – Russia through the nuclear looking glass.

Please click on this link if you would like to see the rest of this informative email – highly recommended.

David Fuller's view

Thank you so much for this incisive analysis, the best that I have seen on the subject, and certain to be of interest to many subscribers. 

Students of political history will recognise a familiar story.  Ruthless, narcisstic dicators in this deadly game of poker eventually overplay their hands.  From that point on they increasingly lose touch with reality, alienating international allies, weakening their economies and turning on once trusted colleagues.  As paranoia replaces reason, they hide behind a tough facade, trusting only those who provide little more than unquestioning loyalty. 

This is a dangerous situation, largely because Russia is a significant military power.  However, if Europe and the US hold their nerve on sanctions, there is a chance that Putin will be removed from power by his own people within the next several months.