US-Russia tunnel – a non-consensus investment idea?

If you believe the gossip emanating from Mar-a-Lago, Elon Musk is considering a Hyperloop train to connect the US with Russia.

What seems like an insane pipedream has actually been talked about since the 1860s, when a close collaborator of George Washington first proposed the idea.

Is there even a vague chance of such an ambitious undertaking ever happening?

Now that Russia has stated they would like to meet with Musk to discuss economic development, could this get onto the agenda?

And if you wanted to place an outlier bet on such a project, what should you be investing in?

Stranger things have happened

To succeed in investing, it’s not enough to be right. You have to be right AND outside the consensus. This is a little-understood quirk of the stock market.

One idea I have recently explored is whether we could see a surprise economic renaissance of Russia.

This would be a 180-degree turn compared to the country’s current situation. Russia is known for war, sanctions, and economic issues.

Could this ever change and potentially even end with a Wirtschaftswunder-type renaissance of Russia that no one saw coming?

Look no further than the history of my own people, the Germans.

Hardly anyone remembers this nowadays, but the idea of rebuilding Germany after the Second World War and reintegrating the Germans into the global community wasn’t necessarily a given.

Towards the end of the war, US Secretary of the Treasury Henry Morgenthau Jr. proposed to deindustrialise Germany. A close ally of President Franklin D. Roosevelt, he wanted to convert Germany into a country “primarily agricultural and pastoral in its character“. Morgenthau’s rationale? He felt that Germans should not get away with blaming their leadership and instead punish every one of them. (Why does that sound familiar?)

To this day, there is much controversy about the details of Morgenthau’s plan, whether it ever had a chance of getting implemented, and what the precise course of political events was. It’s safe to say that the Germans were hated the world over, not quite unlike the Russians right now. Many would have sympathised with such a plan, even if it had caused (as some warned) the starvation of up to 30m Germans.

If you are so inclined, do read Morgenthau’s 1945 book, “Germany is Our Problem“. It’s a rare book, with copies starting at USD 300 and running as high as USD 40,000 for a signed copy.

Critics of the Morgenthau Plan pointed out how the plan’s very existence would likely strengthen German resolve to keep fighting and cause an unnecessary prolongation of the war. Indeed, Hitler’s propaganda minister, Joseph Goebbels, used the Morgenthau Plan to tell the German people that the Americans would turn Germany into a giant potato patch, and one that could not sustain the population. This will have been effective in maintaining morale among German troops.

In the end, the US pursued an entirely different course altogether.

The competing Marshall Plan was enacted in 1948. It involved the US bestowing what would have been a triple-digit billion amount in today’s currency to rebuild and rehabilitate the economies of 17 Western and Southern European countries. The Marshall Plan specifically included Germany, helping the planet’s most hated people to get back on their feet instead of punishing them. The US had figured out that it needed European allies to counter the growing threat posed by the Soviet Union. Besides, many argued that prosperous European nations trading with each other would be less likely to go to war with each other again.

From today’s perspective, rebuilding Germany after the Second World War seems like a logical conclusion. However, it was far from certain at the time, and the idea had many opponents.

Could a similar rationale eventually come into play when it comes to dealing with today’s Russia? Betting website Polymarket currently shows a 70% likelihood for a ceasefire in Ukraine in 2025. It seems a good time to ask such a question.

Indeed, some question whether China isn’t the greater threat to the West. They view Russia growing closer to the Middle Kingdom as the West’s real problem, and one that can only be resolved if Russia is brought in from the cold.

Besides, the question remains whether a prosperous nation plugged into international trade isn’t the safer option to have nearby – rather than deal with an isolated, outcast nation that has few links to the Western world.

I threw the controversial question about a possible Russian Wirtschaftswunder into several WhatsApp groups, eager to see what reactions I would get.

After all, US President Trump is a businessman, and someone who is not afraid to go against conventional political views.

As it were, my thesis got a quick confirmation.

Just a week later, it emerged that the White House had been having tentative conversations with the Kremlin about deals involving Russian energy in general, and Gazprom in particular. This could even involve restarting the Nord Stream 2 pipeline from Russia to Europe. Speak of rebuilding and integrating, instead of destroying and isolating.

Following President Trump’s phone call with President Putin, The Telegraph reported on 18 March 2025: “Russia sees big prospects to work with the United States, including in the space sector, and expects to hold talks with Elon Musk soon about flying to Mars, President Vladimir Putin’s international cooperation envoy said on Tuesday. … ‘I think that there will undoubtedly be a discussion with Musk (about Mars flights) in the near future,’ Dmitriev said at a business forum in Moscow, going on to praise Musk’s efforts to push the boundaries of human achievement. Dmitriev said he was in touch with Roscosmos, Russian business and the American Chamber of Commerce in Russia.“

It makes you wonder whether a reintegration of the Russian economy into the global economy could be the ultimate contrarian investment thesis?

Much as I don’t have a firm view yet myself, the question did make my ears perk when in February 2025 I heard gossip that Elon Musk was suggesting to link the US and Russia by railway. As a socialite friend informed me, that’s part of dinner table conversations at “White House South”.

A silly idea borne out of alcohol-fuelled conversation?

As it were, media coverage about this idea goes back as far as 2013.

The dream that refuses to go away

The idea of a railway across the Bering Strait is actually less outrageous than it seems. At least, as far as politics go.

E.g., in 2015, the left-leaning The Atlantic published a fairly positive article: “A Superhighway Across the Bering Strait“. Despite a sobering conclusion about the likelihood of such a plan ever happening, the author conceded that “the discussion of the tunnel does incite my great disappointment in the collective national impasse on optimistic engineering projects. It brings up, for me at least, a sort of whimsical wish for my country to start building stuff again, great stuff, crazy stuff, even.“

Indeed, entire generations of engineers, entrepreneurs, and leaders have dreamt about the project:

• In 1890, William Gilpin, a successful entrepreneur and the first governor of Colorado, proposed building a railroad from the lower US through Alaska and Russia to connect with the Orient Express in Europe. He published a book about “The Cosmopolitan Railway“.
• In 1892, the man who built the Golden Gate Bridge in San Francisco, Joseph Strauss, developed a plan for a railroad bridge across the Bering Strait.
• In 1942, the Corps of Engineers surveyed a route from the Canadian railway system to western Alaska with the idea of an extension into Siberia.

On the surface of it, the plan of linking the US to Russia sounds somewhat feasible; after all, the Bering Strait is a relatively narrow body of water. Alaska and Siberia are separated by just 81 kilometres (51 miles) of water, and its depth is no more than 60 metres (200 feet). As recently as 11,000 years ago, humans will have walked across the Bering Strait. The indigenous people inhabiting north-eastern Siberia are said to be related to those in Alaska, who in turn then spread as far as Greenland.

The ongoing fascination with this peculiar part of the world repeatedly managed to transcend politics. E.g., in 1989, a group of Soviet and American adventurers set out to trek across the frozen Bering Strait as a way to connect the two hostile nations. Their epic trek, chronicled in “Bering Bridge” by Paul Schurke, led to visa-free travel across the Soviet-American border for the region’s native people.

However, the real-life challenges for anything but an adventurous trek across the temporarily frozen sea are countless. E.g., the Bering Strait sits on one of the world’s most active tectonic plates, which would be a major factor when trying to build a bridge or a tunnel, let alone Musk’s Hyperloop train. Never mind the hostile climate, which would limit construction work to the five months from May to September.

Politically, though, the idea never stopped bringing together people.

If you allow yourself to go down that particular rabbit hole, you can spend weeks reading through an incredible body of publications built up over the last few decades alone.

Going down the rabbit hole

From the department of crazy-but-well-intentioned comes the 93-page PowerPoint presentation “The Ultimate Peace Project – Completing World Peace with the Bering Strait and Korea-Japan, China-Taiwan Undersea Peace Tunnels“, where the Taiwanese national and self-appointed “Ambassador for Peace”, Cherng J. Guh, argues his case:

“To realize the global village – a peaceful ideal world – three undersea tunnels should be built to connect Korea-Japan, China-Taiwan and Russia-America. These links will allow people to travel on land from Africa’s Cape of Good Hope to Santiago, Chile, and from London to New York, across the Bering Strait, connecting the world as a single community.“

Such obvious daydreaming should not distract from fairly serious efforts.

E.g., in 2007, a conference was held in Moscow to discuss “an Intercontinental Eurasia-America Transport Link via the Bering Strait”. The event was heavily driven by Russia but included notable American participants such as Walter J. Hickel, who had served twice as governor of Alaska and later became President Nixon’s Secretary of the Interior. A former real estate developer and businessman turned politician, Hickel argued that “mega projects can be an alternative to war“.

Hickel’s comments and those of other participants were recorded in an 80-page publication that summarised the findings of the conference. “Forum International – Intercontinental Eurasia-America Transport Link via the Bering Strait” is available for little money on out-of-print book websites. It makes for highly technical reading and underlines that serious work went into exploring the idea.

It built on the content of the slightly whackier, 1997 publication “EIR – Special Report: The Eurasian Land-Bridge – The ‘New Silk Road’ as locomotive for worldwide economic development“.

Never mind all the scientific and historical articles available online, such as:

For those more inclined to read outright fiction, there are two novels that are written from a retroperspective, assuming the project had been realised and the author looking back at how it was done:

So much material exists that it makes you wonder if at some point it’s not going to be realised, somehow.

What’s with the gossip from Florida?

Will Musk, Trump or their key advisors be aware of any of this?

None of them have said anything about the subject yet. Musk has two ambitious ventures that would fit into the overall context: The Boring Company aims to create safe, fast-to-dig, and low-cost transportation tunnels while Hyperloop is a public transportation system in which passengers and cargo travel at airline speeds but at a fraction of the cost. Both ventures generated a lot of hype in the mid-2010s but have since taken a backseat in Musk’s burgeoning empire. They are still around, though.

Would the man who wants to turn humanity into an interplanetary species like the idea of a planetary transport system?

What about Trump’s ambition to create peace and prosperity through novel means?

Everyone will have their view about the players involved.

However, a few objective conclusions lend themselves to be drawn, even at this early stage.

Insurmountable challenges – but spin-off investment ideas

The idea of a transport link across the Bering Strait is a fascinating one to read up on, and no one would object to prosperity and peace fostered through closer transport links and trade.

However, even with a can-do American attitude and Musk’s undoubted ability to mobilise even a triple-digit billion-dollar amount, the political, engineering, and financial challenges do seem to be formidable – and that’s putting it mildly.

Surveying the existing literature, a few factors stood out that make it seem unlikely we’ll see such a project anytime soon:

• Both on the US and the Russian side, a connection through the Bering Strait would connect two areas of vast nothingness. Transport links would have to continue onwards for several thousand more kilometres (or miles) to reach more economically active regions. A link across the Bering Strait could be the ultimate, proverbial “bridge to nowhere” – even if it was a tunnel.

• It has often been claimed that transporting cargo by railroad rather than container offered better economics. However, upon closer inspection and considering how well-established the global shipping system is, the claim seems sketchy.
• Transporting oil and gas from Russia to the US once looked like a good prospect. Some claimed that cheap energy from Russia could be a good enough reason to fund the entire project. However, given the degree of energy independence that the US has achieved in the meantime, this would now also be less valuable.
• Given the Western world’s dire need for infrastructure improvement, it’s more likely that politics will focus on more achievable, local projects than such a pie-in-the-sky idea. Fixing New York’s Penn Station (as recently discussed in a Weekly Dispatch) seems a more likely winner when it comes to competing for political support, funding, and public attention.

There are a couple of related subjects, though, that do warrant further attention:

• There is a growing sense that railway travel and transport will experience a renaissance globally, even in the US. I would keep an eye on that as a potential secular investment theme.
• Now that Russia-related exposure is gaining attention again, it could be worth taking a look at Globaltrans (ISIN US37949E2046, AIX:GLTR), a leading freight rail transportation group with operations across the CIS countries. It was listed as GDR on Western exchanges, but had to relist on the Astana International Exchange (AIX) in Kazakhstan as a result of sanctions against Russia. The company had been buying back stock at USD 4.30 but the share price recently fell to USD 3.50 – contrary to many other securities that offer Russia-exposure rallying. It appears Globaltrans has a market cap of just USD 350m.
• Don’t discount the idea of Trump eventually pushing aggressively towards making Russia economically successful as a way to counter China. Germany’s controversial former chancellor, Angela Merkel, promoted a similar idea summarised in her slogan “Wandel durch Handel“, i.e. “trade facilitating change“. Will Trump take a page out of Merkel’s former playbook? If Russia experienced a turnaround, it’d be worth keeping an eye on the Russian stock market, given that it’s currently trading at a price/earnings ratio of 6. This may be the same valuation multiple as German and British small-caps, which come with more liquidity and better governance. However, you can use JPMorgan Emerging Europe, Middle East & Africa Securities (ISIN GB0032164732, UK:JEMA) to buy Russian stocks at a 60% discount – as I had explained early on to Undervalued-Shares.com Lifetime Members. In other words, you could currently invest indirectly into Russian stocks at a price/earnings ratio of 2. This may be worth exploring, even after the share price of “JEMA” has nearly tripled since last year.