SIPRI Military Spending → Commodity Bull — Killed April 2026

Hypothesis: Surges in global military spending (SIPRI World Military Expenditure database) lead commodity price booms by 2–4 years, via industrial mobilization and increased demand for raw materials (metals, energy, food).

Battery result: 0 of 4 tests passed. Kill type: DIRECTIONAL INVERSION.

The finding: Over the 74-year SIPRI record, commodity returns following military spending surges averaged +6.64%. Commodity returns following military spending declines averaged +8.05%. The stated direction — surge leads bull — is inverted in the historical record. Periods of declining military spending produced better commodity outcomes on the tested horizon.

What went wrong mechanically: The demand-pull mechanism (mobilization consumes raw materials) is real in extreme historical episodes (WWII, Korean War). But in the modern SIPRI-era dataset (1960s onward), global military spending changes are too gradual and too offset by substitution effects to produce a reliable commodity premium. Declining military budgets in the post-Cold War period (1990s) coincided with the commodity supercycle driven by Chinese industrial demand — a structural factor that dwarfs any military spending signal. The mechanism was operationalised on too coarse a timescale and against a confounded commodity basket.

Test 1 — Monte Carlo null: The hypothesis direction fails the null at every horizon.

Test 2 — Blind era-split replication: The inversion is present in both the Cold War and post-Cold War sub-samples, suggesting structural rather than regime-specific failure.

Failure mode: DIRECTIONAL INVERSION. The mobilization-demand mechanism exists in the historical record but is not extractable as a reliable forward signal from annual SIPRI data at commodity-basket level. The direction inverts over the available modern dataset. The hypothesis was well-reasoned but wrong.