Hello from home. Welcome to my home office. I haven’t been here in awhile. There’s been some really fun news out in the last few days. Specifically, I’m talking about the new deal between the United States and the United Kingdom to provide new military equipment to the Australians. 

Now, this abrogates a deal that the Australians had with the French and provides the possibility of the Australians getting some nuclear powered submarines. So, I mean, it’s a very, very sexy story. It’s got submarines and it’s got nuclear propulsion. It’s got the French getting pissed off. I mean, there’s something for everybody here.  

And of course, everybody in France is all up in arms and everyone in America is like, oh, we had no idea there was a deal. 

And there’s a lot of stupid diplomacy going on and it’s just hot, hot, hot. 

Everyone of course was looking at the wrong thing. This is not just a deal about providing Australia with some very high end submarines that’ll either be our Virginia class or based off of them. 

This is a broader technological exchange in military technologies among the Australians, the United Kingdom, and the United States of which nuclear powered submarines are only one small part of it.

A far bigger piece is that the Australians will very soon have air- and sea-launched cruise missiles, some of which have a range in excess of 1500 miles. And that makes this deal all about China. 

Now, for those of you who have been following me for a while, you know that I really don’t worry about the Chinese at all from a strategic point of view.

Yes, they’ve got a lot of ships in their Navy. Something like 600, 700, but only 10% of them can sail more than a thousand miles from shore. And that assumes no one’s shooting at them. So they really only have a handful of ships that can go a long distance that’s necessary to protect any sort of power. And it’s not enough ships to project power. 

So you put that into the context of what’s happening here.  

Right now, the United States can wipe the floor with the Chinese Navy, anytime, anywhere except in sight of the Chinese homeland. The Japanese can do it in the deep sea no problem. The Indians can do it in the Indian Ocean, but everyone else is either too far away or they’re a local power so that the Chinese can bring their air force to bear. 

That means powers that actually punch well above their weight like Korea or Singapore or Taiwan can only take on the Chinese if they’re willing to suffer some very serious blows to the Homeland. And honestly that goes for the Japanese as well. So it’s really just India and the United States.  Until now.

Australia is over 3000 miles away from the Chinese coast. The Chinese don’t have weapons systems that can strike in any meaningful volume at that range. I mean, if they took their entire long reach maybe, the very small handful part, and sailed it all at Darwin, they could do a lot of damage, but the Australians now have the ability to launch weapons systems from their homeland, not even using their outlying islands from their homeland and strike Malacca, which means that Australia is now one of three countries on the planet that can shatter Chinese supply lines and the Chinese political and economic system, because China is 100% dependent upon accessing raw materials the world over and accessing markets the world over, and now Australia has the capacity to interrupt shipments through Malacca, which means that tiny Australia with 26 million people now has China by the throat.

That is the biggest geopolitical development of the year to date.