I think most Americans don’t pay attention to the incredibly vicious war in the Ukraine, which is reporting casualties on a rate not seen since world war 2. The Russians are now firing ICMBs from the 80s in order to waste or spend through Ukrainian missile defense and its gotten to a point that they are running out of ways to stop Russia’s $30,0000 drone strikes with $3m missiles.
Based upon the laws of Darwinism, it is impossible for Ukraine to ever beat Russia. At this point, Ukraine is a wholly owned subsidiary and vassal state of America. Without America, this conflict would’ve ended in the first month — not due to lack of resolve but due to lack of ammunition. The air defense issue is so bad in Ukraine, we are now sending Patriot missile batteries to help. The only problem with the patriot batteries, aside from it being a sub par and old system — it also takes 6 months of training to operate. We should assume NATO soldiers will be manning these too, as they have been manning the HIMARS. At some point, we will come to learn just how many NATO “mercenaries” have been killed over there and I suspect the numbers will be far greater than anyone expected.
On the issue of American defense.
The industrial capacity is far less than many of you think. We have a gigantic budget of $750b per annum for the military, but most of it is waste or benefits. We only spend $141b per annum on making weapons. For example, we only make 20-60 heavy tanks per yr, 48 HIMARS systems, and only 160 Patriot missiles.
We are in no way prepared for a war with Russia on an industrial scale like we are seeing in Ukraine. NATO has all but depleted its weapons stores in an attempt to defeat Russia and it doesn’t seem like it’s going to be enough. As of now, Russia is teeming on the Belarusian border with anywhere from 80-200k men, hundreds of tanks, and their industrial production to replace them are running at a feverish pace.
We could see a situation over the next month where Russia cuts off Ukraine from Poland and sends in their reserves to overwhelm Ukrainian forces, at which point America will have to choose war or defeat. A defeat in Ukraine spells the effective end of Pax Americana — something the demon portal atop the White House would be very much against. Ergo, and this goes without saying, expect escalation.
As for markets: I am +30bps due to smart hedging and remain hedged because it’s over and I refuse to get wrapped up in the idea of Satan Claws and pivots and other retarded things that keep fooling people into believing all is well — because it’s not.