I Don't Know How I'd React

I used to be in the United States Coast Guard. As you know, the Coast Guard is a lifesaving service. But it is also other things. It does a lot of law enforcement at sea, and I used to do some of that. And it is the hard nucleus about which the Navy forms during times of war.

During our basic training, known as Swab Summer, we used to have these Marine Corps marching cadences about eating dead babies and stuff like that—lots of bravado—but we were young and stupid, and I went to school with a lot of rednecks who would have loved nothing better than to be in actual combat. Young, dumb, and full of cum. For sure, at age 18, I would have carried a gun for my country. I swore an oath.

Now, things are a little different. I’m fat and out of shape. I haven’t raised my voice in anger in years. For sure, I have grown soft enjoying the unreal prosperity that this country creates, with the geographical luck of being separated from the rest of the world with two large oceans and friendly neighbors to the north and south. It would take some balls for China, Russia, or anyone else to actually invade the United States. And if they did, what would they find here?  They would be exploded like a blood sausage.

Now, if the Chinese landed in New York, I have little doubt that the city would roll over instantly. Or San Francisco, or Seattle, or Los Angeles. But once an invader headed into the interior of the country, they would find themselves up against some very tough people. Trying to occupy the American Southeast would be like trying to occupy Afghanistan. Everyone has guns, they’re deeply patriotic, and they would fight to the death. That’s true other places in the U.S. as well—really, anywhere in the heartland. The Ukrainians are behaving admirably in the face of an implacable foe, but they simply aren’t as armed, aren’t as well-trained, or as maniacal as the American redneck. It’s fun to make fun of rednecks. Great joke material. But if the United States were ever invaded, it would be the rednecks that would make this country a living hell to occupy.

Honestly, I don’t know how I’d react if I were in the Ukrainians’ shoes. Would I flee to Poland?  Would I hide out in an apartment in Kyiv?  Would I take to the streets and fight?  I am seeing a lot of tweets filled with faux bravado, but it’s impossible to predict how you’d react in the same situation. I’d like to think that I’d behave rationally—flee if I can, stay if I can’t, and fight if cornered. Surrender simply isn’t an option. Not that I would be much help. I played paintball a few times in college and got absolutely strafed. I’d make a much better sniper—sit up on a rooftop and remorselessly plink the invaders from a perch of relative safety.

What a lot of people don’t consider is how difficult it becomes to obtain cash or supplies during times of war. This is why it is important to maintain a cash hoard outside the banking system--$10,000 to $20,000 will do. Every time I take cash out of the fucking banks, they always ask me why. I say, “I simply want cash outside the banking system.”  Put it in a safe. It’s there in case of emergencies. Around here, that usually means hurricanes—the power is out, there’s a tree on your roof, and you can’t pay the guy to take it off with a credit card. There are a lot of practical reasons to hold cash that have nothing to do with crime or drugs. Come to think of it, in case of war, the drug dealers will be better off than anybody.

It also makes sense to have a few months’ worth of food. Early on in the pandemic, I said to my wife, we are going to make some big shopping trips. We went to the grocery store a few times and came back with as much food as we could carry. We didn’t know how long the lockdowns would last, so we wanted to be prepared. And remember, the first rule of panicking is to panic before everyone else does. A day or two after we went to the grocery store, the shelves were bare. The Russians are going to find that they are in for several years of financial misery, as they are unable to obtain cash, the banking system collapses, and they find themselves standing in line for food—again.

That’s actually one of the interesting parts of this invasion, is that the international community is so united against the aggressor that it has the ability to make life really, really unpleasant for Russia. People have mixed feelings about economic sanctions. For sure, they are preferable to a military response, but economic sanctions typically hit ordinary citizens the hardest, while leaving the leadership unaffected. Of course, if the populace is pissed off about the sanctions, then there is the potential for political change—over time. In this particular case (and I am no geopolitical analyst), it seems likely to me that Vladimir Putin will be not too happy about the sanctions, and may respond accordingly. Does that mean nuclear weapons?  Is he a madman?  I assure you that it is not cheap talk on his part.  Not that I think it is likely, but as a trader, I consider all tail risks and I’m not in the habit of ruling things out.

I’m an optimist, not a pessimist, but it seems to me that people are not adequately considering the myriad ways in which this could go tapioca. Let me put it to you this way: if Putin fails or is failing in Ukraine, do you think that makes him more or less dangerous?  Putin clearly miscalculated—he thought he could take the country in a day. Anything less than total victory is humiliation. I would expect Putin to become more erratic and more unpredictable however the war in Ukraine resolves itself. And then, of course, are the obvious targets of Poland and the Baltic States. The civilized world has a big problem on its hands, and there seems to be a great deal of complacency. Putin’s very thinly veiled threats to use nuclear weapons should be taken very seriously. And knowing what I know about government and the intelligence community, it probably is. There are things going on behind the scenes that we don’t even want to know about. We’re one step closer to pushing the big red button.

Everyone thinks this is a big fucking game. Especially in my business, where everyone is trying to be a hero and call the bottom in stocks. It’s absolutely not a game, and this has consequences that extend far beyond Russia and Ukraine. The hardhats in finance are focused on energy prices, but even that is a sideshow. Gasoline prices could go up another 50% from here, and it doesn’t fundamentally change anything because demand is inelastic. Gas prices are the least of our worries. We’ve been in a period of deglobalization and pandemic for a few years now, so we have gotten a glimpse of what supply chain issues and supply shortages look like. But at the end of this, the doomsday preppers, with their three years’ worth of MREs and canned peaches may be vindicated. Nobody in this country really knows what it means to be prepared for an actual emergency. God forbid this turns into one, and makes the pandemic look like a bouncy house in comparison.

Go fuck yourself,

Jared

Music Recommendation: Miss Monique. Miss Monique is a Ukrainian progressive house DJ. She’s had an unusual career, starting off by filming herself DJing in a studio. She’s good, and she’s cute, and she went viral on YouTube, and now she plays some of the biggest venues in the world. She literally was just playing at Treehouse in Miami last week and flew back to Kyiv the day before the invasion. Nuts.

P.S. We’re Gonna Get Those Bastards will always be free. Feel free to forward to as many people as you like.