With the US and Russia in a state of (renewed) cold war for over a year now, it was inevitable that that “other”, far more important attribute of the first Cold War would soon return: the nuclear arms race.

And indeed it did just around dinner time in Russia today when speaking at an arms race fair, president Putin said that Russia will put more than 40 new intercontinental ballistic missiles into service in 2015 as part of a wide-reaching program to modernize the military.

The move is in response to what Russia has slammed as an aggressive expansion of military presence in NATO states in Eastern Europe, which as we reported yesterday would provoke Russia to respond by stationing its army on its western borders. To wit: “stationing heavy U.S. military equipment in the Baltic states and eastern Europe would amount to “the most aggressive step by the Pentagon and NATO” since the Cold War, Interfax news agency quoted a Russian Defense Ministry official as saying on Monday. “Russia would be left with no other option but to boost its troops and forces on the western flank,” General Yuri Yakubov was quoted as saying.

And since nuclear escalation usually takes place in a tit-for-tat mutual defection regime, earlier it was reported that the “the U.S. is preparing a set of various measures, and among them the placement of heavy weaponry in Poland and other countries will be very important,” according to Polish defense minister Romaz Siemoniak.

And sure enough Russia, which it says is merely responding to NATO escalation, was promptly accused of escalating even more by the same NATO that keeps parking its own forces ever since the US-orchestrated Ukraine presidential coup was meant to convert Kiev into a potential NATO country and military base.

Nato and Western leaders accuse Russia of sending soldiers and heavy weapons, including tanks and missiles, to the pro-Russian separatists in eastern Ukraine. Russia has repeatedly denied this, insisting that any Russians fighting there are “volunteers”.

 

Later on Tuesday, Nato Secretary-General Jens Stoltenberg said that the statement from Mr Putin was “confirming the pattern and behaviour of Russia over a period of time; we have seen Russia is investing more in defense in general and in its nuclear capability in particular”. He said: “This nuclear sabre-rattling of Russia is unjustified, it’s destabilising and it’s dangerous.

And just to stabilize things, NATO may well deploy some of its own tactical nukes in the region as a deterrence measure now that the second nuclear arms race is fully up and running. To be sure Stoltenberg essentially admitted that the next retaliation by NATO countries will also be a nuclear one: that “what Nato now does in the eastern part of the alliance is something that is proportionate, that is defensive and that is fully in line with our international commitments.

Here, from the BBC, is an estimate of Russia’s existing nuclear arsenal:

  • Military stockpile of approximately 4,500 nuclear warheads
  • These include nearly 1,800 strategic warheads deployed on missiles and at bomber bases
  • Another 700 strategic warheads are in storage along with roughly 2,700 non-strategic warheads
  • A large number – perhaps 3,500 – of retired, but still largely intact warheads await dismantlement

In conclusion, and as a reminder, none of this is new: we reported back in December 2013 that as one of the first nuclear moves in the current Cold War 2.0 arms race, Russia stationed nuclear-capable Iskander (ss-26) missile launchers along the polish border to deter the US missile defense system in Poland.

As such, all that the current second nuclear arms race needs is a spark.

Incidentally, recall from our post last night on how back in 1937 a comparable Fed rate hike such to the one the Fed is currently contemplating, led to a 50% crash in the stock market. More importantly, less than two years later, World War II broke out.

One hopes this time be different.


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