Monday's Final Phase column listed ten indicators of war preparations within the Russian economy. The first item on the list referred to an "unusual stockpiling of nonferrous metals." In the months immediately preceding a major war, Russia will have to produce a large store of new weapons. "New military weapons (missiles, supersonic planes, etc.) require especially stable alloys," says the text of Soviet Military Strategy, a book used in the education of Russia's leading generals.

On Nov. 10 Reuters reported international "concern over Russian (metal) supplies." By mid-October the price of palladium had reached an 18-month high and platinum touched levels not seen in two years. "It is a lack of material," said metal analyst Rhona O'Connell. "There is no material coming through from Russia this year and none expected. ..."

Russia is a major producer of metal. That production is no longer being exported. It is either being stockpiled or used by Russian industry.

According to press reports, Russia's new ally -- the People's Republic of China -- is also craving platinum, buying up approximately one-fifth of the world's annual supply. Experts say that China's metals purchases are unprecedented. According to Chinese officials, China's newfound hunger for platinum is due to an increased demand for jewelry on the part of 1.3 billion Chinese.

If newspaper reports are to be trusted, approximately forty percent of the world's yearly platinum supply is being consumed by two countries -- Russia and China. Economists can believe what they want about jewelry-laden Chinese masses, but Russia and China are currently mobilizing missiles, aircraft and ships. The Russians are using Chechnya as a pretext for their mobilizations. China is using the pretext of Taiwan. Under Communist type economic arrangements, a large mobilization of troops usually corresponds with a mobilization of industry, which actually precedes it.

Of course, the fact that Russia is hoarding palladium and platinum doesn't prove anything. But if we evaluate this in the context of other economic moves, a disturbing picture does emerge. Russia is not only an exporter of metals, but an exporter of oil products as well -- including fuel oil, gasoline and diesel fuel.

In November 1998 Russian oil officials announced the accomplishment of a 25.6 percent cutback in oil exports. According to an Itar-Tass headline of Oct. 20 1998, "Russia cut export of petroleum products 26.6 percent to 30.2 million tons in eight months of 1998." At the same time, Russia was importing large quantities of oil from Iraq. According to a Dow Jones Newswire story of Dec. 8 1998, Russia had imported 107 million barrels of Iraqi oil in the previous six months, amounting to 35 percent of Iraq's total oil exports.

While the Russians were dishonestly crying "famine" in late 1998, only weeks after the supposed financial collapse of that year, a huge Russian industrial expansion was underway, fueled by domestic oil resources. But the West had no clue.

Last summer Russia further cut its exports of fuel oil, gasoline, jet fuel and diesel fuel. These products are manufactured by Russian refineries for domestic consumption and for export. The amounts of the export cutbacks have been confused by the complexity of the rules imposed on Russian exporters. But open statements by Kremlin officials suggest that Russia may be increasing its reserves. For example, there is something odd happening with Russia's jet fuel production.

On Nov. 4 Reuters carried a story with the headline "Russian Cargo Industry Worried Over Jet Fuel Costs." It seems that Russian jet fuel prices have "risen steadily this year." According to the Reuters story, between Jan. 1 and Oct. 15 Russian jet fuel prices doubled (in U.S. dollars).

Yuri Mnatsakanov, a deputy chief in Russia's leading airline, told journalists that the rise in jet fuel prices "was completely unprecedented."

Another Russian airline executive, Alexandere Pleshchakov, told Sevodnya newspaper that it was cheaper to refuel Russian planes abroad. "And that's unexplainable," he said.

But there may be an explanation. Russian jet fuel is a key item of military consumption. Before the start of a major war, Russia would want to store large quantities of jet fuel for military use. Also, Russia has conducted many all-arms military exercises this year, involving many aircraft. Logically, stockpiling for war and use in military training could seriously impact jet fuel prices, which are typically 25 percent below Western prices.

The third item on Monday's list of leading indicators of Russian economic preparations for war is large government purchases of gold. According to former CIA analyst Peter Vincent Pry, Russia's General Staff watches for large U.S. gold purchases. Russian generals believe that such purchases may indicate plans for a surprise nuclear attack.

What is the logic behind this reasoning?

Gold has been used to store wealth for thousands of years. Most of the world's currencies are fiat money -- merely paper. In the event of a nuclear war, paper currencies might lose their value overnight. Therefore, if a country is anticipating nuclear war, then large gold purchases would be a logical economic step.

In this context, Russia's central bank has -- in the first ten months of 1999 -- bought around 50 metric tons of gold since January, compared with 34 metric tons in the whole of 1998. If the Russian generals themselves see such purchases as a sign of danger, how should we regard the situation?

Russia is supposedly broke and they are buying up gold. They are supposedly without means, yet they are experiencing an industrial expansion. This expansion is not to increase the supply of consumer goods. It is to increase the military power of Russia.

In a Nov. 1 Reuters story headlined "Russian Electricity Demand and Output Up, Says UES, the entity that controls the Russian power industry, "we learn that Russia's electrical output steadily rose in the first nine months of 1999 by 6.7 percent.

On Nov. 4 Reuters reported that Russia suddenly had "a newly healthy economy." In fact, Reuters quoted Russian Prime Minister Vladimir Putin as saying, "We have succeeded in achieving industrial growth. ..." But the same Reuters story reported that annual retail sales in Russia had plummeted 14 percent in the first nine months of 1999.

How can you have an industrial expansion with a financial collapse plus a 14 percent decline in retail sales? What's wrong with this picture?

The increase in Russia's industry seems to be centered on the Ural mountain region and the Russian Far East. According to an Itar-Tass story of Nov. 8, entitled "Far Eastern Railway Boosts Freight Haulage by Over 40 Percent," the volume of freight traffic on the Russian railroad system east of European Russia has jumped by over 42 percent. Of course, Russia has warehoused most of its tanks, artillery and other military equipment east of the Urals.

The kinds of changes we're seeing in the Russian economy are not normal. They are not changes you would expect in an economy that is adapting to market conditions. In fact, there is every indication that the Russian economy isn't oriented toward markets. An argument can be made that it is oriented toward military production.

According to a leading Russian military text, "One of the most important aspects of the economic preparations for war is ensuring the viability of industry, particularly heavy and defense industry."

Russian refined copper output reached 185,765 metric tons in the first nine months of 1999, up 29 percent from the same period last year. In fact, the heavy equipment for an entirely new copper industry has recently been shipped to the Urals. Production facilities now under construction will encompass the whole copper cycle from ore output to copper cable and cathode copper. Russia's new Urals copper industry will have an output capacity of 360,000 metric tons of refined copper per year -- a further staggering increase.

"Many nonferrous and rare metals are required for military production," says the text of Soviet Military Strategy, a chief source of Russian thinking on war preparedness.

But why is Russia planting its new copper industry in the Urals?

As it happens, Russia has been building huge underground cities in the Urals, like the one at Yamantau Mountain. These spaces could be used to house Russia's heavy and military industries in the event of nuclear war. "From the viewpoint of antinuclear defense," says Soviet Military Strategy, "it is preferred to place particularly important industrial enterprises underground in spaces prepared in advance for this purpose."

The military education of Russia's current generals was centered on a number of books that emphasize preparedness for nuclear war. Here are a few of the main titles: "The Armed Forces of the Soviet State"; "Marxism-Leninism on War and Army"; "Soviet Military Strategy"; "The Offensive"; "The People, the Army, the Commander."

Col. M. P. Skirdo, a Doctor of Philosophical Sciences and a senior instructor at the General Staff Academy, wrote the last title listed above. After making the usual charges against American "imperialism," Skirdo wrote that "war is a continuation of politics by ... means of armed struggle." According to Skirdo it is important to understand what a future war will be like.

And what will a future war be like?

It will be "missile-nuclear" (raketo-iadernoe). "It is obvious that in a future war," wrote Skirdo, "... wide use will be made of massed nuclear strikes." Foresight about this fact is decisive. Such foresight, said Skirdo, leads statesmen and soldiers to prepare the armed forces, the economy and the people.

The Russian military philosophers of the past 40 years are very clear, and very objective about this situation. According to Skirdo, "A nuclear missile war will serve as a harsh, merciless test of the economic, military, moral and political potential of the belligerent states."

According to the Russian text, Soviet Military Strategy, "The preparation of industry to operate in wartime conditions constitutes the most important part of the entire preparation of the country's economy."

If you are smart, if you know what is coming -- so you prepare.