May 14·edited May 14

Australia will join the philippines and japan as the frontline against the war against China, and all 3 nations will be within striking distance of Chinese hypersonic and possibly conventional missiles. Depending on how far this conflict could escalate, infrastructure will definitely be a target, ie. refineries, power grids, port terminals and ammo depots. These 3 countries will bear all of the consequences of a possible war in the pacific and no american civilians will die.

With this situation at hand, it's obvious where the investment theme is if you can invest in it, and that's in Russian natural resources and agriculture. I spoke to a russian finance professional and they're very bullish on the current situation in regards to the underutilized russian agriculture complex. The main impediment to Russian natural resource and agricultural exports to the PRC is the bad railroad infrastructure. The upgrading of this infrastructure will have to wait until the ukraine war is over, I think there will be a lot of interest from the PRC in pushing for the Russians to replace Australia coming soon with the current political and military posturing.

I spoke to a person in US officer corps before about this conflict a year ago and he said that the higher ups seemed to be morbidly excited for a real conflict to kick off to face off against a peer competitor, we'll see if some aging US generals and admirals get their wish.

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Russell if we look at every example in the last 20 years, where there is s conflict between security alliances and economic interests: security has won out. Yes, Australia siding with the US against China over a Taiwan conflict will have serious ramifications. But in the event of a Chinese military blockade or invasion I don't see a situation where iron ore and LNG will continue to be shipped to China. Just like Nord Stream 2 may have made economic sense but no political sense.

Perhaps this is why the Australian dollar is relatively weak despite a high terms of trade after all?

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This is really about thinking 20-50 years ahead, and I wonder whether Taiwan would be relevant then?

Australia may be a desert island, but this desert island produces very efficiently everything the world needs - and it depends on trade - is the US always going to be there to secure sea lanes? The UK was the guarantor for many years, more recently the US, but isn’t it in the best interest of Australia to be capable of caring for itself?

In my mind this is about the long term strategic interests of Australia and the message to all powers is - Australia is happy to trade with anyone and everyone, it can take care of itself in a way that it is best to leave it well alone and just trade with it. A ‘fortress Australia’ if you will, prepared for whatever the crazy world out there throws at it.

A nice little fleet of nuclear subs makes a lot of sense in such context - certainly more sense than for the Brits to have nuclear subs?

I mean, fundamentally war is stupid and a waste - and if humans ever become as rational as they claim to be, this nonsense would stop, but until such second coming, it makes sense for Australia to build itself into a position where everyone is happy to trade with it and no one is tempted to mess with it.

Anyhow, the key point here is not to think of the next 10 years, where these subs are not relevant, but much longer term, where chances are Australia would also support a much larger population and be a more significant strategic player.

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If you think you don't have to pick a side, you're delusional.

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Nuclear subs are a superior technology that would give Australia a more potent tool to respond to aggression. Considering the distance from potential aggressors the message is that Australia would be able to strike back anywhere. It also serves future strategic aims if the Antarctic becomes a focus of conflict. This is about a much longer term thinking than just Taiwan which would hopefully be settled one way or another by the 2040’s.

For its size and extremely long coast Australia should go for the most superior technology.

Building a military force that is declared to be purely defensive, with no counter attack capabilities IS the real waste of money - what’s the point of THAT?

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Thanks for sharing. I had no idea the sub fleet would be only 8 boats and not functioning until 2040. That seems almost irrelevant, especially given the time line.

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From what I see/read, the main driver of the US-AU sub deal is just to get the sub port established in Australia so that US subs can berth there. Selling US subs is just the icing and not the main factor. That's also probably why Australia did the entire undersea scan of the Indian ocean and thereabouts post MH370 disappearance (which makes you think what really happened to MH370)

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Considerate and well spoken, Russell. Thanks!

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Interesting analysis - internal debate is clearly required.

1. The thoughts of ex PM Malcom Fraser



2. Australia's Defence Policy In 2023 shredded


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Could you please provide the sources for the countries' military spending and naval fleet data?

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Seems like Australia might be missing some diplomatic influencers, bring back a Herbert Evatt type politician (all is forgiven).

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