The Next Phase of the U.S.-Russia War

On Thursday, NATO's senior body on nuclear matters made it clear that any nuclear attack by Russia would provoke serious retaliation. 

The consequences for Russia would be unprecedented, they said, and would almost certainly draw a military response. 

I believe that’s true, and I think Vladimir Putin does too. And that’s just one of the many reasons I think we’ll avoid a live nuclear war. 

But that doesn’t mean we’re going to avoid war with Russia. Because the truth is we’re already at war with Russia. 

That’s not just my opinion, either. 

It’s something that’s now being acknowledged at the highest levels of our respective governments.

“The post-Cold War era is definitively over and a competition is underway between the major powers to shape what comes next,” the Biden administration declared in its official National Security Strategy brief.

Meanwhile, with regard to Ukraine specifically, Russian Foreign Minister Sergei Lavrov says “the Americans have been participating in this war for a long time.” 

“This war is being controlled by the Anglo-Saxons,” he told Russia’s state TV.

Obviously, that last bit isn’t true. That’s some Soviet-style propaganda. But the first part is indisputable. 

Since Russia invaded Ukraine in February, the United States has deployed $15 billion in aid. That includes some of the most fearsome and effective war-fighting technology we have to offer — weapons that have turned the tide of the war.

In fact, those weapons and the Ukrainians wielding them have been so effective that Russia has resorted to retaliating with non-conventional warfare.

No, not nukes, but rather cyberwarfare. 

Indeed, NATO countries have been hit with an unprecedented volume of cyberattacks since the war’s outbreak. 

We witnessed this firsthand earlier this week when a Russian cyber unit known as Killnet conducted a series of cyberattacks on more than a dozen American airports. 

The group jammed up their websites with fake users, forcing them offline. It also attempted to infiltrate JPMorgan’s network infrastructure and assailed websites of three U.S. states (Colorado, Kentucky, and Mississippi).

It’s not just us, either. 

Countries across Europe, including those that aren’t on most Americans’ radar, have been slammed by Russian cyberattacks too.

Montenegro, Estonia, Albania, and Finland have been among the hardest hit. 

Montenegro was targeted with ransomware attacks so sophisticated they had to call in the FBI to help out. 

And Albania suffered a cyberattack so great that it considered invoking Article Five of the NATO charter, necessitating a collective defense from the alliance. That attack was attributed not to Russia proper but rather to its ally Iran. 

“It’s like bombing a country,” said Albanian Prime Minister Edi Rama.

Of course, that’s a bit of an exaggeration, but the notion that NATO should collectively respond to a cyberattack is gaining traction. 

"Hybrid and cyberattacks can trigger Article 5," NATO Secretary-General Jens Stoltenberg following the sabotage of the Nord Stream pipeline and Deutsche Bahn, Germany’s national railway operator. 

Attacks like these, and (probably) not nuclear deployment, is what will bring NATO and Russia into direct conflict. 

Again, if he’s desperate enough, Putin could turn to nuclear weapons, but that would be crazy. 

And I don’t think Putin is crazy — I think he’s an asshole. 

I think he’s someone who walks right up to the line and flirts with it. Nukes are a bright-red line. Cyberattacks and sabotage are murkier, but if they go far enough, the new cold war we’re clearly fighting could turn suddenly hot. 

That’s what we have to watch out for in the weeks and months ahead. 

In the meantime, I’d continue to invest in defense contractors as a safeguard — especially in this environment. 

And a good place to start would be my latest report on the company that’s been tasked with countering the new superweapon that’s been developed by Russia and China. 

You can find out more about that here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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