Breakfast on Wall Street: Battle Lines

Battle Lines

The world is entering a dangerous new phase as the world’s nations choose sides in what appears to be a precarious decade. Skyrocketing defense spending and stockpiling weapons do not improve the situation, but they may be necessary in a new era of conflict. This comes at a time when the West is facing declining military recruitment, as well as pressure from higher interest rates and giant debt loads (see below), although some of these Elements may soon need to change to adapt to the new environment.

Quote: “In Europe and Canada, NATO allies will increase their defense spending by 18% this year, and 23 allies will spend 2% or more of their GDP on defense,” said the NATO Secretary General. NATO, Jens Stoltenberg, during a press conference with President Biden. earlier this week. “It’s also important for the United States to know that much of this money is actually being spent here in the United States. Allies are buying more and more equipment from the United States. So NATO is good for American security, but NATO is also good for American jobs.”

Stoltenberg separately revealed consultations on the number of nuclear warheads that should be removed from storage warehouses and placed on standby, and pledged to increase the number of NATO troops on alert by more than sevenfold high, reaching more than 300,000. Ensuring the assurance of its allies is also a top priority for the United States at present, as Russia seeks to challenge what it calls “the hegemonic West and imperial.” Alliances are strengthening to create a more formidable anti-US axis, with Russia reaching out to China, Iran, Cuba, Venezuela and, most recently, North Korea.

A new agreement between Moscow and Pyongyang was signed on Wednesday during the meeting between Vladimir Putin and Kim Jong Un, which commits to military cooperation and outlines a new mutual defense agreement that would help the two countries in the event of an attack. It wasn’t long ago that the Biden administration allowed US weapons to strike in mainland Russia, and a formidable rival to counter Western-led NATO may finally show its face (and not the CSTO). The agreement also presumed that the flow of munitions supplies and technologies needed for advanced weapons programs were also presumed to be in the agreement.

Economically speaking : Other important elements of the Comprehensive Strategic Partnership Treaty concerned ways to neutralize economic sanctions imposed by the United States, as well as expanding trade and investment cooperation. This can include the export of Russian consumer goods and energy supplies to North Korea, as well as other economic relationships that often prove advantageous in a long, drawn-out war. Last week, the G7 also approved $50 billion in financing for Ukraine using interest income from Russian assets frozen in Western financial institutions, which is sure to trigger counter-attacks. -similar measures and widespread legal challenges.

The roof of the world

Nvidia (NVDA) has overtaken Microsoft (MSFT) and Apple (AAPL) to become the world’s most valuable company. Shares of the chip giant have increased by 180% Since the beginning of the year and more than tripled in value over the past year, driven by growing demand for its AI chips. At the Seeking Alpha Investing Summit on Tuesday, Knox Ridley, portfolio manager at Tech Insider Network, said Nvidia “will own the AI ​​market for the same reason Apple owns mobile,” and that its market cap will reach probably $10 trillion by 2030. valuation totals $3.3 billion. (108 comments)

Hybrid planes?

Hybrid vehicles are very popular, so why not take them to the air? GE Aerospace (GE) is advancing the development of a hybrid electric motor for narrow-body aircraft through a partnership with NASA. The project will integrate electric motors/generators into a turbofan engine, and initial component testing, as well as a basic engine test before integrating hybrid electric parts, has been completed. If successful, the new technology could help reduce the carbon footprint of the aviation industry, which accounts for more than 2% of global emissions.

red ink

The federal budget deficit is expected to reach about $1.9 trillion this year, according to the Congressional Budget Office, which is higher than its previous estimate of $1.5 trillion. This takes into account increased spending on student loans and Medicaid as well as the recently passed $95 billion foreign aid package. The national debt is even poised to exceed $56 trillion over the next 10 years, or 122% of GDP, surpassing the 106% seen in 1946 after World War II. Meanwhile, the Eurozone is facing its own debt problems, with the ECB warning eight of its members – including Belgium, France and Italy – over their excessive budget deficits. (25 comments)

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