Russia Warns Defeat in Ukraine May Become Nuclear War

 The former Russian president and current security council chairman, Dmitry Medvedev, said, "Nuclear powers have never lost major conflicts on which their fate depends.

As soon as the conflict began, Russia threatened nuclear war against any country aiding Ukraine. The world dismissed the comments as propaganda and posturing. Medvedev frequently makes threats and ominous statements , so it may be tempting to dismiss his remarks again as more Russian propaganda and psychological warfare. Quickly ignoring it may not be wise because there is a change in his tone and something very different this time. He acknowledged that the surge of Western weapons to Ukrainian battlefields might lead to a Russian defeat. 

Russia believes NATO is committed to Russian destruction, a claim the U.S. and NATO deny. The Kremlin considers the $billions of Western weapons and foreign fighters in Ukraine are undeniable evidence that Russia and NATO are actively fighting a hot war and NATO is committed to Russia's destruction. Medvedev's comments convey that Russia either feels like a cornered animal fighting for its life or wants the world to think they feel like a trapped animal. Either way, fear is now a variable, and the nuclear threat is significantly more credible than a year ago because the Russian mentality is that a world without Russia is not a world that should exist. 

Life is filled with uncertainties and risks. When governments decide that war and destruction are the only way to preserve life, uncertainties grow exponentially. Nations don't know all their weaknesses and vulnerabilities. The book Art of War by Sun Tzu says, "So in war, the way is to avoid what is strong, and strike at what is weak." Attacking the U.S. military head-on as an opening move would be foolish. A pawn against the queen won’t end well for the pawn. However, a pawn against a queen with a rook, bishop, and knight reinforcing it is a different story altogether.

The U.S. military has the toughest men and women on the planet. Hooah. Why would anyone want to mess with the U.S. military? Instead, the enemy wants to fight places the military is not. The enemy tries to expose vulnerabilities so it can divide and conquer. When those vulnerabilities, like supply lines, get attacked, commanders divide resources to protect those vulnerabilities. The more division of the forces to protect soft targets creates a higher likelihood of success against hard targets. (Please skip the rest of this paragraph if you don't want to read a social commentary. Our country's social/political divisions are strikingly similar to the military strategy we are discussing. The division is likely a deliberate act of sabotage decades in the making leading to the overthrow of American international supremacy. The first word of our country's name is United, but now we are divided. The strength of our shared identity has diminished because of the weaknesses of individuals' feelings. They don't attack what is strong, but what is weak.)

The vulnerabilities and uncertainties of war abound. For example, two days ago, Pulitzer Prize-winning investigative journalist Seymour Hersh detailed how U.S. divers were responsible for bombing the Nord Stream pipeline in September. Russia has vowed retaliation against the U.S. Russia believes that the report should be the basis of an international investigation "bringing Biden and his accomplices to justice” .

What does that retaliation look like? Are they planning to cut internet cables under the ocean? Are they planning a cyber event to crash the market? Will it be a dirty bomb in downtown Chicago with materials smuggled across the Southern border? Will it be the slow knife of inflation and higher energy prices like what Russia created this morning by cutting oil production by 500,000 barrels per day? Where should resources be devoted to protecting against Russian retaliation? Where are we vulnerable? The key is knowing what is worthwhile enough to safeguard and secure. The answer for most people is that their family is worth protecting.

In a very real way, finances are an essential part of the infrastructure we use to protect our families. However, finances are subject to the same vulnerabilities as soft military targets. Several forces are trying to figure out how to separate you from your wealth. The government constantly spends money and finds new ways to tax. Inflation destroys purchasing power without changing the balance of your bank account. Identity theft is a dynamic and growing threat. War can destroy supply chains and market participation. When the worst happens, the paper will not protect your wealth. 

Paper assets like stocks and cash are vulnerable. Do they serve a valuable function? Of course, paper assets can be beneficial, but they are weak. Owning precious metals acknowledges the risks and uncertainties that life brings. The thing precious metals does better than anything else is protect purchasing power. Investment gains can come with precious metals, but it is wealth preservation against uncertainty first. Russia is threatening retaliation for the Nord Stream pipeline and nuclear war in the case of defeat in Ukraine. Has there ever been more uncertainty in the world than now?

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