Russia Peaked. Ukraine Hasn’t Even Started.

The Kremlin’s War Machine Is Dying in Slow Motion

The reckoning has begun.

On Friday, Putin announced that Russia will cut its military spending next year.

“But now, here is the most important thing. We are planning to reduce defense spending. For us, next year and the year after — over the next three-year period — we are planning for this,” Putin said. “But overall, everyone is thinking in this direction. And Europe is thinking about how to increase its spending, on the contrary. So who is preparing for some kind of aggressive actions? Us, or them?”

Ahhh. So cute.

• Europe didn’t think Putin would launch a three-day blitz to capture Kyiv — and fail gloriously.

• Europe didn’t think he’d be willing to sacrifice a million Russians for his dystopian dream — and still be ready to throw in a few million more.

• Europe didn’t think a country like Russia, with a GDP under $2 trillion, would spend 20% of it annually on a so-called “special military operation.”

And only now, in 2025, is Europe starting to realize it needs to invest in defense if it wants to protect its freedom from dictators who fantasize about gobbling up territory and resurrecting the Soviet Union.

Anyway, that statement Putin made wasn’t aimed at us. It was for two audiences: First, for Russians who want to stay deceived. Second, for ultranationalists — both in Russia and embedded across the West, especially a select few in the United States.

This move aligns perfectly with my May 2025 assessment: Putin has three to six months left before he’d be forced to cut spending.

It was one of the easiest assessments to make.

For three years, Putin has been running deficit budgets — spending more than the state earns and plugging the gap with money from the National Wealth Fund. According to sources, the liquid part of that fund is now around $30 billion. I think it’s lower.

If that number drops below $10 billion, the entire Russian state will be one external shock away from a dramatic economic collapse. Either the economy will break under its own weight, or the war will tip into a decisive defeat — which will force the collapse anyway.

But here’s what’s even more threatening for Putin: if the oligarchs — the real power holders — see those savings deplete to dangerous levels, they’ll deliver him the pink slip. My calculus was simple. Putin had no choice. His throne is what’s truly at risk.

I still believe he’ll start cutting spending in the fourth quarter — not in 2026. The process may already be underway.

Ukraine on the other hand is in a completely different position. This is the first time since the beginning of the war that Ukraine is receiving over €50 billion in direct defense aid. This is the first time they have a daily artillery supply rate nearing 8,000 shells. The first time they're producing 10,000 to 22,000 drones per day. The first time they have two early warning aircraft — and more than 30 Western jets in their air force.

Ukraine’s peak combat power is way into the future and Russia’s peak combat power was somewhere in the last 12 months. At some point this imbalance is going to come face to face. Putin wants to delay that intersection as much into the future as he possibly can, Ukraine wants to do the exact opposite.

All of this leads to one unavoidable conclusion.

If I could see this coming a month ago, there is exactly a zero percent chance that the vaunted U.S. intelligence apparatus didn’t have the same data — and more. They know. They know Putin is nearing the end of his runway. They know his war machine has passed its peak. They know that if they slapped full-spectrum sanctions on Russia or helped Europe enforce a lower oil price cap, the war would end — not gradually, but decisively.

And yet, they’ve refused to act.

Obama didn’t stop Putin. Biden didn’t stop Putin. Trump doesn’t want to stop Putin.

Every one of these Presidents — in their own way — helped shield the Putin regime. And unless something breaks from below, expect that protection to continue for a little while longer. The good news? That little charade is reaching its expiration date.

The Russian army can be defeated — fair and square.

But before we go deeper into the battlefield variables, let’s settle one economic myth: Russia’s economy is not going to collapse on its own. It’s extremely vulnerable — yes. Exposed to external and unforeseen shocks — absolutely. But without a trigger, it won’t just fall apart. It needs a push.

Putin knows this. So now he’ll try to hold a few coins in the savings account. He’ll cut state and war spending just enough to stay under total revenue. He’ll deepen the economic conversion into a permanent war economy — and pray he can keep the system alive long enough to avoid collapse.

Eat grass, but stay in the fight.
That’s his position now.

Of course, he’ll be dining on fine wine and imported meat. It’s the great patriotic average Russians who’ll be chewing the grass. And Putin? He’ll start shaking the state for pennies.

So what does winning actually look like?

It looks like two paths. One is hard. The other is just hard enough.

The hard path: an absolute win. It requires supplying Ukraine with 2 to 6 fighter jets every single month — for at least a year. That’s 24 to 72 jets. Fully armed, fully operational. To make that happen, Europe must act in unison — not as 25 fragmented states but as one coherent bloc with a wartime production mindset. That’s the challenge.

The easier path: a decisive battlefield edge. This one doesn’t require the entire continent to move. It requires just one man.

Armin Papperger.

The CEO of Rheinmetall, Germany’s defense giant, controls the lever that matters most right now — artillery shell production. If Europe’s daily output crosses 10,000 shells — and stays there — Ukraine will enter a phase of combat dominance that Russia cannot match. Not this year. Not next year. Not ever, under current conditions.

That might sound impossible, considering Europe is currently hovering around 3,000 to 4,000 shells per day. But here’s the other fact: Armin Papperger already took Rheinmetall’s annual output from 70,000 shells before the war to over 700,000 in less than three years.

1. Tell him you need 10,000 shells yesterday.

2. Tell him he can have anything he wants.

3. He will deliver.

That’s it. One factory system scaled up. One industrial brain making the right choices. Europe can win the war by supplying fighter jets or by feeding the guns. Both would be ideal. But even one will do.

And that’s the final truth here: Russia’s war machine has peaked. Ukraine’s has not.

Time and production are on Ukraine’s side — if Europe has the will to act, and if the United States stops playing games.

The reckoning has begun. Putin is on borrowed time, and he knows it. What he fears most is not defeat — it’s insolvency. And what Ukraine needs is not miracles — just production lines that work and leaders who act. The war will end when someone forces it to. The question is who, and on whose terms.

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