01/19/2023 (Thu) 17:41
Russian Foreign Minister Lavrov yesterday stated that Ukraine is being used as proxy by the West, or are “waging war against our country with the same task: the ‘final solution’ of the Russian question…Just as Hitler wanted a ‘final solution’ to the Jewish question, now, if you read Western politicians…they clearly say Russia must suffer a strategic defeat.” In contrast, Western foreign policy analyst Ulrich Speck recently put it that “Either Russia’s defeat will deal a decisive blow to its imperial ambitions, or any Russian achievements in the war will encourage it to continue reshaping the continent by force.“ Where is the Lennon in all this Nazism vs. Imperialism?
In Davos, Henry Kissinger says Ukraine should now join NATO, and neutrality is no longer an option, reversing his previous stance after seeing what happened with Finland and Sweden. Germany says it will only supply Leopard 2 tanks to Ukraine, and allow them to be sent there by anybody else, if the US provides Abrams tanks too: NATO either goes all in, or it doesn’t go in at all, is Berlin’s message. So, which will it be, if Russia declares war and/or mobilises?
Consider the economic impact of a further escalation. The war would shift from military inventories to military production, and between a war economy and an anything-but-war economy. Yet the CSIS already point out it will take 2.5 to 18 years to rebuild key US arms inventories Ukraine is depleting even before any escalation. Another report notes ‘The US Can't Make Enough Plutonium Triggers for Its Nuclear Warheads’, as Russia and China accelerate their nuclear arms programs.
Of course, defense spending in most Western countries is small beer compared to the rest of the economy – but that is the point: it would need to rise rapidly, and stay high. And it would do this in a very tight labour market: would those losing tech jobs producing trigger warnings have to be reallocated to producing triggers? The point is a serious one behind the pun.
Even if all this scares you or bores you into focusing only on what stocks or bond yields did yesterday, consider the rate implications of military escalation needing more production; and broader political-economy structural questions, given high debt levels; and global systemic ones, given the risks to markets from economic war of various forms. Or don’t – but you don’t then get to act all surprised again.https://www.zerohedge.com/markets/goldilocks-dreadlocks-2023-has-its-own-surprises-us