Biden: “We’re running low on 155mm caliber shells”
Geopolitics and The New Cold War Arms Race
The US will have ramp its production of ‘normal’ high explosive shells from pre Ukraine war level of around 175,000. The stated goal is to quintuple production of these shells by 2028.
US National Security Advisor Jake Sullivan- July 7th
Note: In April of this year, GoldFix did a 42 point piece on the Geopolitical changes and tried to show *why* the Cold War was back.
This TS Lombard piece shows *how* such a Cold War will likely manifest both politically and in recurring capital flows.
Good Luck
TL; DR From Shock and Awe to Muck and Mire
The Ukraine war brings to light three problems militarily.
The face of war has changed again and we are unprepared for it
Right now, there is a shortage of shells for conducting the war we are in.
Going forward we likely will have more of these type wars to fight
The TS Lombard report first discusses the smart hindsight trade of hedging against the early 2022 "no-Russian invasion" consensus with long positions in leading defense sector stocks. This has shown significant outperformance over the past 18 months. It then contemplates whether this outperformance is a temporary trade or a fully-fledged investment theme.
Contents (1100 words, 6 min.read):
War: Urgency, Justification, and Sustainability Bullets
Investment Thesis
War is Both Chronic and Acute Now
Cold War 2.0: Current and Future War Duration Risk
Rearmament Headwinds
Bottom Line Geopolitically…
….and for Investors.