I study a lot of history, and a moderate amount of finance.
An observation I made some time back -- it seems like most military conflicts post-gunpowder are won or lost far more by logistics and supply than individual combat ability. Gunpowder is what put an end to Parthian/Hunnish/Mongol-type mobile mounted archery warfare. There hasn't been any "we don't need logistics" type of wars since then, assuming both sides has at least some semblance of military discipline, cohesion, and leadership.
Even blitzkreig -- the archetypical fast strike -- doesn't work without lots of gasoline, jeeps, ammunition, and railroads. And if you run out of gas -- literally -- you lose. See: 1941, Operation Barbarossa, Stalingrad and Moscow.
But what if you've got an overwhelming economical and logistical advantage, like the Union had over the Confederacy? Or what Imperial Britain had after Napoleon's defeat over, well, the whole world?
This is where a model looking at liquidity is somewhat interesting.
Keynes famously said, “The market can stay irrational longer than you can stay solvent.”
In the rare instance that a nation has well-trained soldiers, good unit cohesion, good morale, good cooperation among society, experienced officers, individual large-scale and individual advantages in combat -- and a large logistics/supply advantage -- it's basically undefeatable in any one-off combat.
Rome was frequently in such a position in the early Imperial period. The technology, tradition, unit cohesion, officer corps, economy, and logistics were so vastly superior to anyone else nearby. Thus, they could enforce their agenda anywhere from Spain to Britannia to Germany to Africa to the Near East, or further...
...but not all at the same time.
Whenever an Emperor or Consul pulled legions off the Rhine or away from the Near East, they put themselves into a weakened position where there'd be opportunities for usurpation, unrest, killing and looting the local Romans, driving off cultural ambassadors and traders, and otherwise setting back the Roman agenda.
Thus, Rome had immense military power -- but only when it was liquid.
As soon as the forces were committed to long engagements and tied down, their logistical and supply ability fell dramatically. They would have to abandon a campaign to re-deploy soldiers if a larger problem emerged, which would leave behind a rallied, inspired, battle-hardened enemy. Or, they leave their troops tied down as new problems emerge. Horns of the dilemma, etc.
We saw effectively the end of the British Empire when Europe was overrun by the Nazis simultaneously with their Asian colonies being overrun by the Japanese. While Britain might have been able to outlast, counter, and endure the Nazi threat -- maybe -- by relying on its overseas colonies for economy, Imperial Japan overrunning all of Britain's Asian colonies in rapid succession from 1941-1942 is what most likely spelled the end of the British Empire.
From this perspective, it starts to make more sense why the British turned to appeasement at first with Hitler. They had basically two options that would not put them at serious risk: stay out of war with Hitler, or crush Hitler rapidly so that troops and economy are not tied down into a long and hard fight.
You can certainly argue that an Anglo-French-Czech resistance in 1938 might have been the right time to put Hitler to bed once and for all -- the Czech had a modern and well-trained soldier's corps, but not enough to stand up to the Nazis without backing. That was an option they perhaps should have taken and did not.
But once they didn't, trying to engage in diplomacy to get Hitler to cease expansionism doesn't look insane -- when you realize that if British forces became tied down in a long and hard war, the nation was incredibly vulnerable.
And that's precisely what happened. With a peaceful Europe, reinforcing and repelling the Japanese Empire would have been trivial for Britain. The British Navy and British naval tradition were stronger than the Imperial Japanese; British troops were better-equipped and more experienced.
But, they were illiquid in a sense -- British troops were committed to protecting the British Isles and liberating Europe, due to previously failing to stop Hitler either diplomatically or militarily. Thus tied down, the Japanese easily overran British positions in Asia, destroying morale, confidence, and collaboration between Britain and its soon-to-be-lost colonies. The sight of British regulars fleeing across India, burning crops and machinery so the Japanese could not seize them, was particularly terrible for British-Indian relations, and a major contribution to the end of the Empire.
But if we take a step back, a difficult step to take back, we can perhaps start to understand the first moves to appeasement. Committing forces to a long-term engagement makes all other engagements precarious.
When Sulla left eastwards to fight Mithradates, the Marian faction re-started civil war, conquered Rome, and executed Sulla's friends and allies. When British forces became tied down in Western Europe, the Japanese overran Asia.
And the flipside, when Abraham Lincoln was fighting to preserve the Union, he saw the European powers ready to intervene -- and used diplomacy and moral authority to not allow a new aspect of the war to open, when the Union was stretched to the brink of breaking. Afterwards -- reconciliation and consolidation, and a period of relative peace.
It's not a new conclusion, but once a nation has committed to a protracted war, it becomes more vulnerable across the board, everywhere, to all threats. This is informative as to why history plays out the way it does.