• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Macro Central Banks

Sleepwalking Down a Road to Armageddon — Part Two

Like 0

By Jim Rickards, Wednesday, 05 April 2023

Today we continue this series of articles from Jim Rickards, which delves into the war in Ukraine and its implications. If you missed part one of this series, you can read it here. In this part, Jim outlines how the threat of this escalating to a nuclear war is there, as well as the severe impact such an escalation could have on the world. Read on…

In the context of this ongoing war, there’s a critical story involving the likelihood of nuclear war. It would be reassuring to believe the chances of using nuclear weapons in Ukraine were trivial. They’re not. The world is facing the greatest risk of nuclear confrontation since the Cuban Missile Crisis.

I began studying nuclear warfighting in the late 1960s and continued my studies through the depths of the Cold War in the ’70s and ’80s. It seemed that knowledge was moot after the fall of the Berlin Wall in 1989. It wasn’t.

Of course, my academic studies were not my first encounter with the reality of nuclear war. Like most people my age, I participated in nuclear bomb drills in elementary school in the 1950s. These included taking the duck-and-cover position under your desk to protect against flying glass from the blast and blistered skin from scalding heat waves.

It didn’t stop there. We studied concentric radii of blast, heat, and radioactivity emitted by a Hiroshima-type bomb and the new, more powerful thermonuclear devices.

We learned how to identify radioactive dust (it’s light grey) and how long to remain in bomb shelters until the dust dispersed from the wind and rain. We knew which radio stations to tune in to for civil defence updates. We knew our local civil defence (CD) volunteers by name and easily recognised the yellow hard hats they wore with the CD logo on the front. We knew how much water and food to store in a bomb shelter.

We were ready

This childhood training seemed about to prove its worth in the Cuban Missile Crisis of October 1962. I recall seeing the front page of The Philadelphia Inquirer with a map of the Northern Hemisphere from Cuba to Canada and concentric circles showing the range of Soviet nuclear-tipped missiles being delivered to Cuba. I quickly determined that my hometown was within range. Nothing else seemed to matter.

When my academic studies on nuclear war began in 1969, the topic already seemed quite familiar. I read the leading treatises, including On Thermonuclear War (1960) by Herman Kahn, Nuclear Weapons and Foreign Policy (1957) by Henry Kissinger, The Delicate Balance of Terror (1958) by Albert J Wohlstetter, and many other works.

I went on to receive a Master’s degree in international relations from The School of Advanced International Studies in Washington, DC, the top-rated academic institution in its field and a leading centre of studies in American Foreign Policy.

Later, I spent time inside the top-secret Los Alamos National Laboratory, where the first atomic bombs were developed. I was studying the complex dynamics of simulating nuclear tests without actually detonating devices.

Nuclear tests were banned in the atmosphere and underwater by the Limited Nuclear Test Ban Treaty of 1963. All testing, including underground, was banned by The Comprehensive Nuclear-Test-Ban Treaty of 1996, but the US did not ratify that treaty. From childhood to graduate school and beyond, my immersion in nuclear war-fighting strategy seemed complete.

What I learnt about the threat of nuclear war

Many dismiss the topic as too theoretical because ‘there has never been a nuclear war’. That’s not true. The US conducted the first and only nuclear war from 6–9 August 1945, when we dropped atomic bombs on Hiroshima and Nagasaki in Japan and killed about 200,000 people (the exact number is unknown). Japan surrendered on 15 August 1945, shortly after the bombings. There was nothing theoretical about it.


Source: BBC

[Click to open in a new window]

The basics of nuclear war-fighting include counterforce (aiming at military targets), counter-value (aiming at civilian targets and infrastructure), first-strike capability, second-strike capability (ability to strike back after you have been hit first), and the doctrine of mutually assured destruction (MAD).

MAD refers to the condition where both sides have second-strike capacity, but neither side will strike first because they know they will be hit in return and both sides will be destroyed. MAD is sometimes compared to two scorpions in a bottle.

What both sides can agree on

Despite the many theoretical contributors and evolution of strategies over the decades, all experts on nuclear war agreed on one thing — don’t go there. By this I mean, with the possible exception of a crazed dictator, no leader would ever launch a nuclear war out of the blue or at the beginning of a conflict.

If a nuclear war ever happened, it would be the result of escalation. A conflict that started with conventional weapons could end up as a nuclear war if the belligerents were nuclear powers and the two sides escalated to the point where one side felt cornered and had no options except to use nuclear weapons.

Ironically, in that situation, the non-cornered party might use nuclear weapons first in anticipation of a strike by the cornered party in order to avoid relying on its second-strike capability. So, it goes into the world of game theory.


All the best,


Jim Rickards Signature

Jim Rickards,
Strategist, The Daily Reckoning Australia

This content was originally published by Jim Rickards’ Strategic Intelligence Australia, a financial advisory newsletter designed to help you protect your wealth and potentially profit from unseen world events. Learn more here.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Jim Rickards

Jim’s Premium Subscriptions

Publication logo
Jim Rickards’ Strategic Intelligence

Latest Articles

  • The first place to look thanks to the US/China truce
    By Callum Newman

    My colleague Greg Canavan, a true contrarian, is positioning in a spread of energy companies to take advantage of the very investor disinterest and lack of supply growth I just described. We know, too, that one of Warren Buffett’s last moves was to load up on American energy. Personally, I prefer something more durable and permanent…

  • The trade war is over. Tax cut chaos is next.
    By Nick Hubble

    Trump isn’t just imposing tariffs. He also wants to cut taxes. If the tariff tantrum gave us a taste for how he’ll go negotiate, hold on tight!

  • The Untold Tariff Story
    By Callum Newman

    The real tariff story isn't what you're reading in the headlines. It's not about short-term market volatility or quarterly earnings impacts. The true story – and the massive investment opportunity – is about the fundamental restructuring of American manufacturing that's now underway. Trump's tariffs are accelerating AI adoption in American industry. Today, I want to show you the companies that are emerging as the backbone of this transformation.

Primary Sidebar

Latest Articles

  • The first place to look thanks to the US/China truce
  • The trade war is over. Tax cut chaos is next.
  • The Untold Tariff Story
  • The Big Payday: Chasing Profits in Risky Places
  • China’s plan to pop the AI bubble and sink Mag7 for good

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988