The Gods of War

Costly mistakes, a changing of the guard and the unintended consequences of rushing to battle...

(Antique statue of Greek god of war Ares (Mars in Roman mythology). Situated in Summer Garden in St. Petersburg, Russia. Source: Getty Images)

Bill Bonner, reckoning today from San Martin, Argentina...

One of the nice things about two countries going to war… when you are not one of them… is that you get to watch. And learn.

But you can’t trust the mainstream media to report the facts honestly. America’s press has taken sides. So its ‘news’ is more like propaganda than real intelligence.

For example, the media tells us – with unconcealed glee – that the Russians are “bogged down.” They are “taking heavy casualties,” including “many generals.”  They are running out of food and ammunition, etc. etc.

Apparently, the Ruskies are getting whipped. Here’s The Guardian:

Russia’s war in Ukraine is not going according to plan. The sinking of the Moskva – the flagship of the Black Sea fleet – is the latest major military setback. In the course of almost two months, Russia has lost six major generals and between 15,000-20,000 troops, all the while failing to secure any appreciable gains.

Reports of low morale and defection, coupled with sightings of mercenaries deployed by the Kremlin, hint at recruitment problems. This, along with Russia’s apparent inability to replenish lost military equipment – a consequence of western sanctions – has led some observers to wonder whether the Russian war machine is running out of road.

The real facts on the ground may not be so one-sided. Both sides are losing men and materiel. Both must be making mistakes.  

A Changing of the Guard

But one thing must be troubling Pentagon observers – the loss of heavy tanks and the Russian ship, the Moskva. Retired Army colonel David Johnson comments:

Is the value of the tank in modern warfare zilch? That’s the lesson many observers are taking from a flood of images depicting Russian tanks mired in the mud, their turrets blown off, having been ambushed and destroyed by Ukrainian forces armed with cheap anti-tank weapons. These images are often pointed to alongside feeds from Turkish-produced drones destroying tanks, seemingly with ease. After the recent Nagorno-Karabakh war, in which Russian-produced tanks were destroyed by the same model of drones, this is heady stuff for those ready to proclaim the death of the tank.

We already see comparisons of armor advocates to the battleship admirals before World War II, who refused to see the importance of carrier aviation, or Maj. Gen. John Herr, the last U.S. Army chief of cavalry, who continued to insist on the relevance of the horse on the battlefield even after the Nazi blitzkriegs against Poland and France.

… Army chief of staff Gen. George C. Marshall used his executive-order authority, given after Pearl Harbor, to get rid of all the horses in the Army — and Herr.

…The question before us now is whether the tank is the modern equivalent of the…horse.

We will pose a different question: is this how the empire dies?

By our reckoning, the US empire peaked out in the 1960s. It diddle daddled until the late ‘90s… and then, with the ‘war against terror,’ began a serious dive to the downside. Since then, by almost every measure you can think of, the US has sunk.

But empires do not go gracefully into that good night. They rage… and make things worse for themselves. That is what we have seen thrice this century – in the response to the terrorist threat (whatever it was)… in the attempt to prevent a correction on Wall Street in 2008-2009 and more than a decade of negative interest rates, (in which the Fed tried to stimulate growth back to pre-decline levels)… and in the Covid Panic, with its trillions in gimmie/stimmie schemes, again, trying to make up for real lost output with ‘printed-up’ dollars.

The American people understood better than their leaders what was going on. Given a chance, they voted to “Make America Great Again” in 2016.

But the slippage got worse, not better. And the only solution the elite could think of was to spend more money. But where could they get the cash? They had to print it.   This is what led to today’s inflation.  And left unchecked, it will lead to civil disorder, war, recession, economic chaos and poverty.

Costly Errors

The end of one empire is usually marked by the rise of another… and often accompanied by a decisive battle, in which the gods of war switch sides and the dying empire loses.  

America has a huge, very costly military with a gilded officer class. It was hard to imagine how it might be humbled on the field of battle. But now, even the New York Times is able to read the writing on the wall:

The sinking of the Moskva on Thursday was a grave blow to the Russian fleet and a dramatic demonstration of the current era of warfare in which missiles fired from shore can destroy even the biggest, most powerful ships… 

The sinking of the Moskva is a clear sign that the future has arrived.

“You go to war with the army you have, not the army you might want or wish to have at a later time,” said Donald Rumsfeld, who wisely went to war with an enemy that had, in comparison, no army at all.  

The problem with going to war with today’s US armed forces is now on display. Too much money begets too many old, slow-moving armies with too much brass and too much bureaucracy. The US has more tanks and ships than anyone else.  But these WWII-era armaments are extremely vulnerable to new, faster, smarter, cheaper weapons. We will be going to war with thoroughbreds, in other words.

In Afghanistan, for example, the Taliban had no navy… no air force… no military pensions… no veterans’ hospitals… no military bands… no tanks… no armored troop carriers… and no phalanx of lobbyists to angle for more money. The amounts it spent would scarcely be enough to finance the Pentagon’s officers’ lounge. But over 20 years its fighters persisted… and won.

And the trouble, beyond the obvious ones, with going to war with horses today, is that your tactics must be those of cavalry officers. The US is loaded up with cumbersome, complex, sophisticated weapons. Its battlefield tactics are built around its equipment. And its equipment is what you get when you have a lot of money and an invincible corps of lobbyists to push for bigger and more costly weapons systems.

But if its tanks and ships can be put out of service quickly… and cheaply… the US will be defeated.

Whether that will actually happen… or not… we don’t know. But the gods of war wouldn’t be especially surprised if it did.  

Regards,

Bill Bonner

Joel’s Note: We’ve mentioned the potential of a Gold Backed Ruble in these pages in the past. So too have we observed the growing tensions in Europe over what - if anything - to do about the unfolding conflict on the eurasian steppe. Many countries talk a tough game… but will politicians be willing to hold the line when their voting constituents are paying through the nose for energy? Or living in the dark?

Along with other “unintended consequences” of the sanctions war comes further news of the bifurcation of the world’s financial system…

Did you notice, for example, that Israel just announced it would begin adding Chinese yuan to its central bank reserve allocation? And that it was, simultaneously, reducing its dollar-denominate allocation percentage? Or that China is cozying up to Russia, and is reportedly looking at purchasing some of Shell’s Russian LNG assets?

We take no sides here… but merely observe the facts as they present themselves.

Meanwhile, back in the land of “Promise ‘n’ Print,” the US Federal Reserve balance sheet is exploding, with $8 TRILLION added since the 2008 financial crisis, vastly undermining the greenback’s position as the world’s de facto reserve currency.

What does this mean going forward… for your savings, your investment, your retirement and your cost of living in general? And how can you prepare your portfolio to safeguard you wealth and even grow your investments?

They’re the big questions we are focused on a Bonner Private Research. It’s what keeps investment director, Tom Dyson, and macro analyst, Dan Denning, burning the midnight oil. If you’d like to gain access to their research - including twice-weekly market updates, a monthly newsletter, extensive research reports, invitations to Zoom calls with Bill’s private network of analysts and plenty more - simply click the button below.

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