The United States desperately needs to formulate a grand strategy that reinforces the domestic foundations of American power while providing strategic guidance and direction to the nation’s actions in foreign policy. America must adapt with new ideas, tools and innovations if it is going to meet the opportunities and challenges of a rapidly changing world. To be successful, this strategy must embrace several overarching themes: first, the United States must remain committed to playing a leadership role; second, American grand strategy must promote a positive, hopeful, and optimistic vision for the world that it seeks to build; third, a grand strategy will be effective only if it commands broad and unequivocal support from the American public and their policymakers; and finally, the nation is long past the age when American grand strategy can pursue “cookie-cutter” or “school solutions” to challenges. What we are proposing is the hardly radical but often overlooked principle that American grand strategy should be, above all else, agile and flexible as it responds to the demands of the American people and the challenges of a rapidly evolving world.
- As ZH has been saying for months... Draghi Will Need to Push the Euro Down Some More (WSJ) ... but careful with "redenomination risk"
- Senate Report Said to Fault JPMorgan (NYT)
- EU Opens Way for Easier Budgets After Backlash (BBG)
- China Moves to Temper Growth - Property Bubble Is a Key Concern (WSJ)
- China bets on consumer-led growth to cure social ills (Reuters)
- Italian president mulls new technocrat government (Reuters)
- Grillo says MPS won't back technocrats (ANSA)
- The Russians will be angry: Euro Chiefs Won’t Rule Out Cyprus Depositor Losses (BBG)
- China Bankers Earn Less Than New York Peers as Pay Dives (BBG)
- Investors click out of Apple into Google (FT)
- Community colleges' cash crunch threatens Obama's retraining plan (Reuters)
- Alwaleed challenges Forbes over his billions - Calculation of $20bn net worth is flawed, says Saudi prince (FT)
- Guy Hands Dips Into Own Pockets to Fund Bonuses at Terra Firma (BBG)
- North Korea to scrap armistice if South and U.S. continue drills (Reuters)
In light of today's enormous domestic and international challenges, the United States today needs, more than ever, an effective grand strategy. Without one, the nation is in a dangerous state of drift. In the aftermath of the recent U.S. presidential elections and in the midst of grueling battles over spending and deficit crises, American politics is highly polarized with the electorate and their policymakers deeply divided on domestic issues. Turning to foreign policy, the picture is equally troubling. The United States struggles without a coherent grand strategy, while the American people, its friends and allies, and competitors wonder what principles guide Washington's foreign policy. What, they must ask, does the United States want to achieve in its foreign policy, and what leadership role does it seek to play in this rapidly evolving world order. Simply put, grand strategy is a broad set of principles, beliefs, or ideas that govern the decisions and actions of a nation’s policymakers with public support on foreign policy.
- Must defend against Chinese colonial expansion and get the Nigerian oil: U. S. Boosts War Role in Africa (WSJ)
- BOJ nominee Kuroda sets out aggressive policy ideas (Reuters)
- China becomes world’s top oil importer (FT)
- Baby Cured of HIV for the First Time, Researchers Say (WSJ)
- Obama to nominate Walmart's Burwell as White House budget chief (Reuters)
- Wal-Mart Anxious to Combat Amazon’s Lead in Web Vendors (BBG)
- Nasdaq executing trades at a loss (FT)
- Spending cut debate casts pall over Obama's second-term agenda (Reuters)
- Russell Indexes to Reclassify Greece as Emerging Market (BBG)
- Bond Bears Collide With Swaps Showing Low Rates (BBG)
- Buffett Deputies Leaving Billionaire in the Dust Get More Funds (BBG)
- Brazil's leftist president fights to win back business (Reuters)
- U.S. Special Forces train Syrian Rebels in Jordan (Le Figaro)
- Carlos Slim Risks Losing World’s Richest Person Title as Troubles Mount (BBG)
Rarely if ever do we consider that we presently labor under our own woefully wrong flat world perspectives so deeply engrained within our present day mindset that we are completely and utterly blind to how wrong we might just be.
It wasn’t exactly a propitious start for new US Secretary of State John Kerry on his first foreign trip when he referred to “Kyrzakhstan”, where US diplomats are ostensibly working to secure “democratic institutions”. Getting all those Central Asian “stans” right can be confusing - even more so when things get muddled in the “Great Game”. And it’s no easy thing following in the footsteps of Hillary Clinton. Later - after the State Department took the liberty of omitting the mention of “Kyrzakhstan” from the official transcript - it became clear that Kerry was actually referring to Kyrgyzstan (not Kazakhstan and indeed not Kyrzakhstan). So let’s look at these two countries that Kerry has inadvertently combined.
Every voice in the FOMC minutes is not a voting member. Bernanke, Yellen, Dudley are the keys and they are committed to QE. That is a descriptive claim not normative. Debt market has shown little reaction to FOMC minutes compared with the dollar and stocks. PBOC drained, but did not really tighten monetary policy. Euro zone PMI poor and gap between Germany and France grows. And what's up with Abe's trip to the US ?
5% fewer words, slightly shorter than last year but just as hope-full. From a hike (and inflation-indexed) in the minimum wage to a 140x multiplier of genome sciences investment (now that is Keynesian awesomeness); from extending homeownership (and refinancing plans) even more to energy independence; from Apple, Ford, and CAT's US Manufacturing to Bridge-Building and infrastructure spending; and from Trans-Pacific and -Atlantic Trade to cyber-security; it's all gonna be great - because as President Obama reminded us at the start... "Our housing market is healing, our stock market is rebounding," and this won't add a dime to the deficit... oh and that Student loan bubble - no worries, there's a college scorecard so now you know where to get the biggest bang for your credit-based buck. Summing it all up: Guns 9 : 3 Freedom ; Jobs 31 : 17 Tax ; Congress 17 : 40 Work ; Recovery 2 : 0 Unicorns ; Spending 3 : 2 Cutting
- The Man Who Killed Osama bin Laden... Is Screwed (Esquire)
- G7 fires currency warning shot, Japan sanguine (Reuters)
- North Korea Confirms It Conducted 3rd Nuclear Test (NYT)
- Italian Police Arrest Finmeccanica CEO (WSJ)
- Legacy, political calendar frame Obama's State of the Union address (Reuters)
- China joins U.S., Japan, EU in condemning North Korea nuclear test (Reuters)
- Wall Street Fading as Emerging-Market Banks Gain Share (BBG)
- Berlin Conference 2.0: Drugmakers eye Africa's middle classes as next growth market (Reuters)
- Barclays to Cut 3,700 Jobs After Full-Year Loss (BBG)
- US Treasury comment triggers fall in yen (FT)
- ECB Ready to Offset Banks’ Accelerated LTRO Payback (BBG)
- Fed's Yellen Supports Stimulus to Spur Jobs (WSJ)
- Libor Scrutiny Turns to Middlemen (WSJ)
- Samsung Girds for Life After Apple in Disruption Devotion (BBG)
With the world so obviously gripped in currency war even the hotdog guy has moved away from saying how technically undervalued AAPL stock is to opining on who is leading the global race to debase, it was only a matter of time before the G-7 confirmed the only strategy left is FX devaluation by denying it. Sure enough, a preliminary statement from the G-7 came earlier, in which the leading "developed" nations said, well, absolutely nothing:
We, the G7 Ministers and Governors, reaffirm our longstanding commitment to market determined exchange rates and to consult closely in regard to actions in foreign exchange markets. We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates. We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will continue to consult closely on exchange markets and cooperate as appropriate.
This follows a statement by the US Treasury's Lael Branaird yesterday in which she said that she is supportive of the effort in Japan to end deflation and “reinvigorate growth”. Lastly, the SNB's Jordan also confirmed that the Swiss National Bank will continue to do everything to crush its own currency, and will the 1.20 EURCHF floor, stating that Japan is merely doing the right thing to stimulate growth (i.e., doing what "we" are doing). In other words, let the FX wars continue and may the biggest balance sheet win, all the while everyone pretends nothing is happening.
Update: S.KOREA RAISES MILITARY READINESS LEVEL, YONHAP REPORTS, South Korean news agency Yonhap says U.S., China informed about the North Korea nuclear test on Monday
Just because it has been off the headlines for a while, the time has come for North Korea to remind everyone it is still there, somewhere, with what appears another underground nuclear test, a few short years after that last one from May 2009.
- N. KOREA TEST ‘LIKELY’ TO BE NUCLEAR: S. KOREA DEFENSE MINISTRY
- S. KOREAN DEFENSE MINISTRY CONFIRMS DPRK NUCLEAR TEST
- USGS says earthquake of 4.9 scale detected in North Korea near to known nuclear test site - RTRS
- Seismic activity has been detected in North Korea. North Korea is not prone to seismic activity, it could indicate a nuclear test - RTRS
- Seismic activity detected in DPRK... believed to be "man-made" per various ROK sources - VOA
- Artificial earthquake detected in N. Korea - Yonhap
- S. Korea's presidential office checking reports of artificial quake in N. Korea - Yonhap
Of course, since this won't have any impact on the only wars that matter, the currency ones, it is unlikely that anything but more jawboning, and hard language out of both South Korea, the US and the UN, will come out of this attempt by DPRK to appear relevant.
We now live in an entirely fabricated fiscal environment. Every aspect of it is filtered, muddled, molded, and manipulated before our eyes ever get to study the stats. The metaphor may be overused, but our economic system has become an absolute “matrix”. All that we see and hear has been homogenized and all truth has been sterilized away. There is nothing to investigate anymore. It is like awaking in the middle of a vast and hallucinatory live action theater production, complete with performers, props, and sound effects, all designed to confuse us and do us harm. In the end, trying to make sense of the illusion is a waste of time. All we can do is look for the exits…
- Tunisian opposition politician shot dead, protests erupt (Reuters)
- China says extremely concerned after latest North Korea threats (Reuters)
- Postal Service to cut Saturday mail to trim costs (AP)
- Debt Rise Colors Budget Talks (WSJ)
- Obama proposes short-term budget fix, Republicans swiftly object (Reuters)
- S&P Analyst Joked of Bringing Down the House Before Crash (BBG)
- Dell’s Bigger Challenge Ahead in Turnaround After Buyout (BBG)
- Some of the Mark Carney Gloss Is Coming Off (WSJ)
- Japan Official Says BOJ Tools Sufficient as Shake-Up Looms (BBG)
- S&P Lawsuit Undermined by SEC Rules That Impede Competition (BBG)
- Heavy Clashes Erupt in Syrian Capital (WSJ)
Exactly ten years ago to the day, Simon Black was in the Kuwaiti desert waiting for George W. Bush to ‘make his decision’. He knew it was going to happen. At the time, he was a rising intelligence officer, his head still filled with ideals of national duty from my time at West Point. It all came crashing down ten years ago today. On February 5, 2003 Colin Powell, four-star general turned US Secretary of State, made a case to the United Nations that Saddam Hussein had weapons of mass destruction. Now, we won’t bother delving into the inaccuracies of the intelligence he presented. In Powell’s own words, making that presentation to the UN was “the lowest point in [his] life” and a “lasting blot on his record.”For Black, it was pivotal. At that instant, he knew without doubt that his government had reprehensibly lied through its teeth. And if they were lying about this... what else were they lying about? As destructive as these politicians are, though, they’re easy to defeat. Individuals who take action early have plenty of options to buy precious metals, move a portion of their savings abroad to a stable banking jurisdiction, and scout out locations overseas in case they ever need to get out of dodge.
The globalists have stretched the whole of the world thin. They have removed almost every pillar of support from the edifice around us, and like a giant game of Jenga, are waiting for the final piece to be removed, causing the teetering structure to crumble. Once this calamity occurs, they will call it a random act of fate, or a mathematical inevitability of an overly complex system. They will say that they are not to blame. That we were in the midst of “recovery”. That they could not have seen it coming. Their solution will be predictable. They will state that in order to avoid such future destruction, the global framework must be “simplified”, and what better way to simplify the world than to end national sovereignty, dissolve all borders, and centralize nation states under a single economic and political ideal?