Robert Gates

Waste and Fraud Are the Real Causes of the Deficit

Army Chief of Staff: “The conundrum we have is that we don’t need the tanks”

To grasp what is really occurring here we must look at how authoritarian Middle Eastern regimes (or, indeed, authoritarian regimes in general)  function. Authoritarian regimes  must maintain a cloak of authority. Tyrants do not attempt to look or sound weak; they try to project an aura of invincibility and indefatigability. We saw this during the last Gulf War, where Iraq’s information minister Muhammad Saeed al-Sahhaf — nicknamed Baghdad Bob in the American media — shot off hundreds of absurd statements during the war about how Iraqi troops were crushing the Americans, quite in contrast to the facts on the ground and right up until American tanks were rolling through the streets of Baghdad. Baghdad Bob was not deluded. He was merely playing his role, and trying to project an aura of regime invincibility — providing propaganda for domestic consumption to keep the Iraqi population loyal to Saddam Hussein. It was a dog and pony show.

And NOTHING Has Changed ...

We all know that the National Defense Authorization Act (NDAA) signed by President Obama on New Year’s Eve contained a now-struck-down provision to authorise the indefinite detention of American citizens on US soil. But did you know that the NDAA also paves the way for war with Iran? From Dennis Kucinich:

Section (6) rejects any United States policy that would rely on efforts to contain a nuclear weapons-capable Iran. Section (7) urges the President to reaffirm the unacceptability of an Iran with nuclear-weapons capability and opposition to any policy that would rely on containment as an option in response to Iranian enrichment. This language represents a significant shift in U.S. policy and would guarantee that talks with Iran, currently scheduled for May 23, would fail. Current U.S. policy is that Iran cannot acquire nuclear weapons. Instead, H. Res. 568 draws the “redline” for military action at Iran achieving a nuclear weapons “capability,” a nebulous and undefined term that could include a civilian nuclear program. Indeed, it is likely that a negotiated deal to prevent a nuclear-armed Iran and to prevent war would provide for Iranian enrichment for peaceful purposes under the framework of the Non-Proliferation of Nuclear Weapons Treaty with strict safeguards and inspections. This language makes such a negotiated solution impossible. At the same time, the language lowers the threshold for attacking Iran. Countries with nuclear weapons “capability” could include many other countries like Japan or Brazil. It is an unrealistic threshold.

The notion of a “nuclear weapons capability” seems like a dangerously low standard. Let us not forget that Mossad, the CIA and the IAEA agree  that Iran does not have a bomb, is not building one, has no plans to build one.

Anyone Who Thinks that War Is Good For the Economy Has One Eye Covered ... And Is Only Looking At Half the Picture ...

A no brainer ...

Just because China was already delighted with Obama's reception of the Dalai Lama, here come John McCain and John Kerry warning China to mind it territorial waters, because apparently US national interests are threatened. Per the FT: “We are concerned that a series of naval incidents in recent months has raised tensions in the region,” said John Kerry, the Democratic chairman of the Senate foreign relations committee, and John McCain, the former Republican presidential candidate. “If appropriate steps are not taken to calm the situation, future incidents could escalate, jeopardising the vital national interests of the United States.” The logical follow up is glairngly obvious but here it is: "China is likely to see the comments as a provocation as they echo remarks by Hillary Clinton, US secretary of state, last year that infuriated Beijing. Speaking at the Asean Regional Forum (ARF) in Hanoi last July, Mrs Clinton angered Beijing by saying the US had “a national interest in freedom of navigation . . . in the South China Sea." What is surprising is that the US is dumb enough to bait China with such provocations as the US Treasury market is now, more than at any other point in the past 3 years, reliant on Chinese bond purchases. And for all those who claim that China has no other alternative where to recycle its trade surplus dollars, we bring you exhibit i) the EURUSD, where China sells dollars and buys euros, and ii) Eurozone bonds over the past months, which it has been gobbling up ravenously. So yes: it does have alternatives, and it may very well make a rather forceful statement to that extent.

Moody's is out with a comprehensive chart of defense spending since 1946 which shows that while over the years the average yearly amount spent on defense by the US government has been around $400 billion, in the past decade this amount has surged to an all time high of just under $750 billion. And while one can debate the reasons for why America spends 20% of annual revenues on military (and debate even more why this number has continued to surge under a Nobel Peace Prize winning president), one thing is rather certain: this number will decline in the coming months and years as Washington has no choice but to cut the defense budget. And while this will likely be a multi-year process, it will have substantial implications for not only the defense companies identified, but for their respectively supply-chains, resulting in hundreds of thousands and possibly millions of layoffs over the next decade as government-sourced revenue plummets and yet another layer of overhead will have to be trimmed.

One look at the most recent naval update maps shows that in addition to global insolvency (courtesy of the broke European dominoes and a potentially technically broke US), a UK on the verge of a parliamentary scandal courtesy of a media baron whose empire is crumbling, and not to mention yet another downward inflection point in the global economic slowdown courtesy of the end of QE2 and no replacement yet, market watchers may have to start factoring in geopolitical risk yet again. While the fact that Syria, Yemen, Egypt, Tunisia, and now Turkey, are ever more increasingly on edge is apparently something Mr. Market has managed to internalize, when it comes to geopolitics everyone stops to listen when renewed Iran-Israel rumblings reappear. Which may just be the case. As the most recently updated naval map from Stratfor demonstrates, the CVN 77 G.H.W. Bush has just entered the Persian Gulf, the first time a US aircraft carrier has passed through the Straits of Hormuz in months. What is also notable is that the LHD 5 Bataan amphibious warfare ship has just weighed anchor right next to Libya: this is odd since the coast of Tripoli had been left unattended for many weeks by US attack ships. And topping it all off is that a third aircraft carrier, the CVN 73, is sailing west from the South China seas, potentially with a target next to CVN 76 Ronald Reagan which is the second carrier in the Straits of Hormuz area. Three carriers in proximity to Iran would be extremely troubling, yet fit perfectly with the story of CIA veteran Robert Baer, the man played by George Clooney in Syriana, who as Al Jazeera reports, appeared on KPFK Los Angeles, warning that Israeli PM Netanyahu is "likely to ignite a war with Iran in the very near future." It gets worse: "Masters asked Baer why the US military is not mobilising to stop this war from happening. Baer responded that the military is opposed, as is former Secretary of Defense Robert Gates, who used his influence to thwart an Israeli attack during the Bush and Obama administrations. But he's gone now and "there is a warning order inside the Pentagon" to prepare for war." The punchline: "There is almost "near certainty" that Netanyahu is "planning an attack [on Iran] ... and it will probably be in September before the vote on a Palestinian state. And he's also hoping to draw the United States into the conflict", Baer explained." For the betting public out there, an September CL call may not be the dumbest trade possible...

Who says Mutual Assured Destruction is to be used only by bankers: our military leaders appear to have mastered the strategy of getting what they want to warning about all hell breaking loose, just as effectively. Reuters reports that should Congress pursue a resolution to withdraw from the humanitarian Libyian oil liberation force, currently headed by Sarkozy, it would send
an "unhelpful message of disunity" to allies and foes alike. "Pentagon Press Secretary Geoff Morrell said that "once military forces are committed, such actions by Congress can have significant consequences," particularly on relations with members of the North Atlantic Treaty Organization. "It sends an unhelpful message of disunity and uncertainty to our troops, our allies and, most importantly, the Gaddafi regime," Morrell said in a statement in Singapore, where Defense Secretary Robert Gates arrived on Thursday to attend a security dialogue with Asian allies...Kucinich's measure would invoke the 1973 War Powers
Resolution to direct Obama to stop the U.S. participation in the
war. Kucinich says Obama violated the part of the law that
prohibits U.S. armed forces from being involved in military
actions for more than 60 days without congressional
authorization." Kucinich seems to forget that reminding a constitutional lawyer about constitutional abuses is actually racist. And more importantly, what excuse will those hundreds of billions in "defense spending" by the US government have if America's military is relegated to "bankster" status in terms of utility.

The helicopter carrying Navy SEALs malfunctioned as it approached Osama bin Laden’s compound at about 3:30 p.m. ET Sunday, stalling as it hovered. The pilot set it down gently inside the walls, then couldn’t get it going again. It was a heart-stopping moment for President Barack Obama, who had been monitoring the raid in the White House Situation Room since 1 p.m., surrounded by members of his war cabinet. “Obviously, everyone was thinking about Black Hawk Down and Desert One,” a senior administration official recalled. The SEALs disembarked. “The assault team went ahead and raided the compound, even though they didn’t know if they would have a ride home,” an official said. The special forces put bombs on the crippled chopper and blew it up, then lifted off in a reinforcement craft just before 4:15 p.m., capping an astounding 40 minutes that gave the United States a tectonic victory in the 10-year war on terror touched off by 9/11. The sick chopper turned out to be a tiny wrinkle in an astounding military and intelligence triumph. Bin Laden was shot in the face by the SEALs during a firefight after resisting capture. He was buried at sea less than 12 hours later. He was 54.

Two Members Of The Joint Chiefs Of Staff 'Dis America's Hyper-Aggressive Imperialism ... Newly-Leaked Documents Show that Innocent People Were Thrown Into Gitmo Because They Wore Casio Watches Or Were Al Jazeera Reporters … Al Qaeda Assassin Worked for MI6 … And – Yes – the Iraq War Was for Oil

But by launching his campaign with outrageous demagoguery, Pres. Barack Obama “made it clear” he will avoid fundamentals. He counts on emotional appeals to self interest – private and corporate welfare recipients, elderly who make old age a profession out of human tragedy, all interests vying for favor at the public trough.