The expansive military build-up of Russian troops taking place on the Ukrainian border and the naval and air force intrusions in the waters and skies of Taiwan are not bluffs. The accelerating military technologies being pursued by Russia and China in hypersonic missile technology present an existential threat to the independence of Ukraine and Taiwan and the survival of tens of millions of lives of their citizens.
Since the Cuban missile crisis, the world has not been so perilously near to a catastrophic mistake by NATO, the United States, Russia, and China, resulting in the deployment of nuclear weapons of mass devastation. The military power balance that has prevailed since the conclusion of World War II and supported the world’s democracies is on the brink of collapse.
President Joe Biden has signaled that a Russian invasion of Ukraine would not compel the United States to send its military forces into Ukraine. The best the United States and NATO can do is send military equipment and resources to Ukraine in hopes of giving them the ability to fight a war of attrition.
In a nutshell, the U.S. dollar, British pound, Europe’s euro, and Japanese yen will all lose value as investors and speculators rush to convert their savings and reserves into gold and digital currencies, even if Russia invades Ukraine and China doesn’t attack Taiwan.
As investors recognize the end of the balance of power between the West, Russia, and China, cryptocurrencies like Bitcoin and Etherium could easily rise in price. An invasion of Ukraine by Russian forces would send the world’s financial markets into a frenzy.
A substantial military attack that appears to be a prelude to an invasion of Taiwan coordinated with a Russian invasion of Ukraine would trigger a much greater panic in the world’s financial markets. A nuclear version of the Axis powers declaration of war in 1941 could lead to a financial meltdown in the major stock markets of the world at a time when the Central Banks of the world have already exhausted their ability to keep the world economy afloat, battling COVID-19 with monetary and interest rate policies.
Investors and speculators will recognize the economic bind in which the “free world” would find itself and want to relocate its wealth to protect it.
A coordinated attack by Russia and China would undoubtedly also embolden North Korea, which now possesses as many as ten nuclear weapons and a standing army of over 1 million. If this shocking series of events occur, gold could easily soar.
The first moves in response to a Russian invasion of Ukraine and/or a military confrontation between China and Taiwan, or North Korea and South Korea, would include severe economic sanctions that disrupt supply chains. It would cause global economic disruptions that would dwarf those seen in the last two years as a result of COVID-19.
The United States, Japan, and NATO would be confronted with the need to accelerate their defensive and offensive capabilities in space to offset China’s military build-up in space technologies. U.S. military spending, which is now at $780 billion a year, would likely double and debase our currency.
World War II is credited with pulling the United States out of the “great depression.” Still, World War III, if one or more nuclear bombs are used on purpose or by accident, may do considerably worse to the U.S. and western economies. It has the potential to compel the United States and its allies to shift from democracies to authoritarian regimes capable of driving their idle labor forces into a war effort that will be framed as necessary for their countries’ survival.
One more point: the invasion of Ukraine, along with economic sanctions, would drive the oil price to more than $120 per barrel in the first several weeks. It will happen even quicker than a rise in gold prices or an increase in the value of cryptocurrencies.
For this reason, I believe domestic oil and gas would double in price in a Russian invasion of Ukraine. While the United States and its allies would impose incredibly harsh sanctions on Russia, the response would be to cut off its oil and natural gas sales to most of Europe and into the world market. $200 oil and $18 natural gas would not be out of the question.
For the time being, we should pray that Presidents Putin and Xi do not precipitate a third global war and that no military miscalculations result in the deployment of nuclear weapons. The heinousness of these weapons cannot be overstated. We must also pray that Kim Jong-un does not exploit the instability of a Russian invasion of Ukraine or a Chinese military confrontation with Taiwan to justify using his nuclear weapons. A nuclear strike on South Korea or a U.S. military post in the Pacific would very certainly elicit a nuclear reaction from Biden.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.