The military vulnerability of the West

"Tokugawa Yoshinobu leaving for Edo, looking at the fire at Osaka castle in the background."
http://en.wikipedia.org/wiki/Fall_of_Osaka_Castle

An excerpt from Sunday's Peak Prosperity podcast:

Chris Martenson:  ... One of the things I have been talking about is that a lot of it is perception. Perception rules a lot in life. In the United States, people say the United States is the world’s reserve currency. Of course, it is backed by having the most powerful military in the world. That is the perception.

John: That is the perception.

Chris Martenson: That is true if and only if you can project that power. How do we do that? We do that with this thing called a blue water Navy. We have all these ships out there. One of the things I keep telling people is you have to go onto Live Leak. You have to look at these anti-ship missiles – the Acon800 and other similar things, and the Sunburns the Russians have. They completely teach you that a Navy is no longer a useful thing. We still have the perception that it is.

I do not know if you caught this, but I love this incident. The USS Donald Cook sailed into the Black Sea last April to show the Russians a lesson. This is one of our—this is an Aegis Class Destroyer. It is packed with the most brilliant electronics in the whole world. This thing has 50 anti-aircraft missiles. It is like its own little island of death. The Russians sent one SU-24 Sukhoi jet, flew it over this thing, and jammed every electronic thing on board—just shut it down with some technology that they have.[*] Then they proceeded to fly back and forth in mock bombing runs. They would have just taken the ship out. This is our most advanced ship in the world. It was taken out by a single jet and just shut down. To me, that was a huge warning sign. I would have thought that our response to that would have been something like maybe we do not really want to poke that bear. If we lose the perception of having this indomitable military, we lose a lot, possibly including reserve currency status.

* See the original balls for public consumption (“Donald Cook is more than capable of defending itself against two Su-24s”), then an unofficial account ("After the incident, the foreign media reported that “Donald Cook” was rushed into a port in Romania. There all the 27 members of the crew filed a letter of resignation.")

John: Among other things. My most recent novel – I have three novels out. My most recent one is a near future novel called Twilight’s Last Gleaming. It actually focuses on the consequences of the United States getting itself into a situation where it actually suffers a serious military defeat. Yes, the effective destruction of a carrier task force is a central part of that.

Did you catch the story? I think it was last year. The Chinese had a submarine come up in the middle of a US military naval exercise.

Chris Martenson: Yeah, they came up and they waved.

John: They came up. They waved. They went down. Nobody had detected them. They could have carried out torpedo runs against the carrier and everything else in sight. The Chinese are turning out one after another—they are turning out these first rate very silent subs. They are turning out these light catamaran missile boats, which I think are probably going to be the prototype of the navies in the age of the cruise missile. They are small. They are disposable. They are very fast. Their basic purpose is to get within range to launch cruise missiles at something. But we are still fixated on our aircraft carriers.

The thing is this happens. You mentioned 1914. In the run up toward 1914, everybody was convinced in Britain that Britain’s survival depends on battleships. They put an immense amount of money into building and upgrading their battleship fleet. The battleships did absolutely nothing during the war. There was a Battle of Jutland, which was completely inconclusive. After this, everybody’s fleets just went home and sat out the war. Then in the run up to World War II, the British did exactly the same thing. They put all their money into battleships when smart money was going into aircraft carriers. Among other things, that is why Britain had most of its holdings in Southeast Asia and Indonesia scooped by the Japanese. The British had battleships and cruisers down there, and the Japanese simply bombed them into oblivion from the air. We are facing exactly the same situation with our aircraft carriers. At some point soon, I do not know what soon amounts to here, but at some point the US is going to send a carrier group into some situation. There is going to be a flurry of missiles from the shore. And the age of the aircraft carrier is going to end. The reputation for invincibility that the United States has is going to end too. The consequences of that are immense. Those are things that I was trying to sketch out in this novel of mine, Twilight’s Last Gleaming.

Chris Martenson: I cannot wait to read that. I love thinking things through from that. I think we have to think through the scenarios. But it has been completely obvious to me ever since an aging A4 aircraft using a French exocet missile sank the HMS Sheffield in the Falklands War. When was that – 1983 or something? ['82, as many British readers will know - Ed.]

John: Yeah.

Chris Martenson: I mean that taught me a couple decades ago. Oh yeah, ships are done. Still there is this perception that the United States has this very powerful military. It is true. But it is true only because we have not gone up against somebody who knows how to sink ships yet. We beat up on Noriega. We did a little Grenada action. We did a little Saddam action. It is really like an NFL team that has gone up against three pee-wee leagues and has decided it cannot be beat.

John: Yeah, that is exactly it. I mean we sent our bombers against the Serbs and the Serbs shot down one of our stealth planes. Do you remember that one?

Chris Martenson: Oh that is right, they did. They did.

John: The remains of the plane were then quickly shipped off to Russia. All of a sudden, they have first rate stealth fighters and we are stuck with the F35. We could have a long conversation about that dog.

Chris Martenson: That is just a trillion dollar program that does nothing.

John: No, it has performed brilliantly at its mission which is to completely destroy the US Treasury [laughter]. It has been enormously successful as a money sink.

Chris Martenson: It has bombed the Treasury successfully. The hit rate is 100%.

John: Exactly, it has a hit rate of 100%. It just does not do anything else well. Then nobody else thinks that there is ever going to be a hot war where the United States actually has to scramble serious planes. If that ever happens, we are in up to our eyeballs in alligators as I said.


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How does Government Debt go negative?

Today came the news that short-term German government paper was following the Swiss example and turning negative, not only that but its expected that it won't be very long until the 10-year Bund follows suit.

Quizzical isn't it? Why would anyone pay for the privilege of lending someone money?

Friends and colleagues of mine, having a hunch that I know a little more about finance than they do have been asking me about this quite a bit recently and to be honest I have struggled to give them an answer they could happily digest. Well it certainly is a "new normal" and set to spread throughout the developed world as things get worse but how and why is it happening?

In short this is what Quantitative Easing has wrought. Institutions paying for the privilege of lending their money to insolvent governments. Not because those borrowers are such low risk counterparties, but rather because now real investors must compete with totally price-insensitive Central Banks hoovering up sovereign debt with freshly 'Printed' money.

If you want to understand this mechanism in a little more detail here is an excellent blog post by David Stockman who is examining a fascinating new blog by none other than the architect of this mess, Ben Shalom Bernanke.

This is the crux of his conceit:

A similarly confused criticism often heard is that the Fed is somehow distorting financial markets and investment decisions by keeping interest rates “artificially low.” Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by “the markets.” The Fed’s actions determine the money supply and thus short-term interest rates; it has no choice but to set the short-term interest rate somewhere.

He doesn't even know what this mythical rate should be, but whatever figure he comes up with I'm sure it will be agreeable to the bankrupt sovereign states of the West.


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Pledge

Elections are all very well, but each one seems a little less sane than the last and the current charade seems to be the worst of the lot. Even the acting is crap. Although charades are not supposed to be taken seriously we are surely entitled to a touch of sparkle from the political furniture - or candidates as we tend to call them. 

I’m sure we are losing the democratic plot here. Or maybe, ghastly thought,  this is the plot. Of course plotting is what democracy is all about, but we are where we are and due vote democratically are we not? Apart from the electoral fraud, gerrymandering and rigged voting system of course.

Made-up-on-the-hoof promises seem to be all the rage at the moment but people keep making fun of them. Mark, Mac and Demetrius have posts on this most popular and topical comedy.

These soundbite-sized promises are mostly... or should I be calling them pledges?  Don’t political poseurs refer to their promises as pledges or has that word been tossed overboard because it reminds everyone of furniture polish?

Anyhow, nobody but a party loon would believe their promise/pledges and even then he or she would have to be a fringe loon. Imagine being a fringe loon. Cut off from the cynics at the centre, cut off from the great mass of uninterested normal folk, cut off from everything that makes life worth living. Crikey it’s a grim thought isn’t it? There should be a charity for them.

Speaking of charity, I’m hoping someone will promise free marzipan for pensioners. Something seasonal to go with the winter fuel allowance we are forced to spend on Christmas booze in order to kindle some inner warmth and maybe even a hint of goodwill. It’s not that I’m particularly fond of marzipan, but it has that distinctive seasonal aroma of almonds - or cyanide as we chemists often call it.

So what will the loons promise next I wonder, because I really don’t have high hopes for a cornucopia of marzipan. Cracking down on bad things, pouring money into good things and generally avoiding anything which might tax... oops, wrong word... and generally avoiding anything which might cause political offence.

So what could cause political offence apart from almost any serious discussion on any subject?

...nope I’m struggling with that one.

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I am an immigrant

http://upload.wikimedia.org/wikipedia/commons/a/ab/Bundesarchiv_Bild_175-S00-00326,_Fl%C3%BCchtlinge_aus_Ostpreu%C3%9Fen_auf_Pferdewagen.jpg

I am an immigrant. I was born in a country that no longer exists. My mother was born in a different country that also no longer exists.

I think there should be some system to control immigration, just as cars should have brakes, accelerators and steering wheels.

I do not think it is acceptable for the multi-party Establishment to use Goebbels' technique of the oft-repeated Big Lie to confuse economic planning with racial prejudice.

We are seeing the limitations of democracy as the people's ignorance and gullibility are used to undermine their future.

But I think the liars will win.


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Infestation in the ivory tower

Education dons gather for pre-prandial sherry in the Senior Common Room

In the Mid-Western United States, we have species of cicadas, which are referred to ’17-year locusts’. Every 17 years, the grubs emerge from the tree trunks where they feed, grow wings and swarm, mating as they go. The mess and noise that result are impressive.

There is a species of middle manager with a similar life-cycle. These are the education reformers, who emerge from the darkness every decade with a plan and a promise to fix all problems in the system. They are a parasitic and destructive organism.

While not technically predatory, they will scavenge weaker and more timid creatures. For that reason, their preferred habitats are the fields of Mathematics and Science. There, they are able to clear great swathes of space and build large numbers of flimsy and unusable structures in short periods of time.

Just before the extent of the actual damage becomes known, they retreat safely into academia, full of grant funding, and rest until the next generation emerges.

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Lost bomber

We were walking in the vicinity of Ecclesbourne Valley today, well-known locally for its heritage railway. The area is mostly rolling farmland rather than the limestone hills we prefer, but pleasant walking on a lovely sunny day.

Not far from the path on Bullhurst Hill is a memorial to the crew of a Whitley Mk V twin-engined bomber which crashed there in 1944. It's a sombre sight set in a large field with no obvious reason why the aircraft might have crashed. A reminder of just how young the airmen were too. From Peak District Air Accident Research

The crew had flown a night cross country navigation flight and were returning to their home base at Ashbourne when the aircraft dived into the ground only a few miles short.

Following the crash three of the crew could not be accounted for and were assumed by No.42 OTU to have "disappeared with the aircraft which went fifteen feet into the ground". On the 1st August the vicar of St Saviour church in Ashbourne, Canon Farrow, took the memorial service for those who had died after which he held a committal service at the crash site.

Sgt William Smith was buried at Ashbourne cemetery only a few miles from the crash site and Sgt Maurice Lyon was buried at St Helens Cemetery in Lancashire.

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A strange, subterranean battle

source

Every now and them something bright, clean and optimistic seems to show itself through the shifting fogs of repressive nonsense. Sometimes the ugly honking of professional liars dies down. For a while real life takes over. As it should of course.

It has become so easy to ignore the liars and find things out for ourselves. Or at least identify those many areas of uncertainty which the liars claim to be certain. Isn’t it easy to find worthwhile comment on virtually any issue? Isn’t it noticeable how rarely many of us go to the mainstream media for worthwhile comment?

So what does it all mean?

I don’t know.

Then what is the point of this post?

Simple – you can go elsewhere can’t you? Click. I am not a guru and neither are you. We don’t need them do we - you and I?

That’s the point – we are breeding vast numbers of savvy people, far more than we ever had before. Folk who don’t always have the facts and the arguments at their fingertips, but in one sense they know far more than most people knew only twenty years ago. Not only that, but they know how to flesh out anything of interest with a click or two.

This quiet upheaval seems to have upset the old paternalistic way of doing things, the assumptions about managing people, about politics, democracy, who tells and who listens. Who tells these days? Who listens?

Old style class rule with its unidirectional media cannot deal with it. Millions of savvy people are now collectively smarter than the elites because they are connected, interested, experienced and capable. The elites don’t have time to be interested or capable. They only have time to suck the teat of their sponsors. They think savvy can be dealt with by opinion surveys.

They muddle through by listening to a host of special advisers who do have the time to become passably savvy, but there are only a few of them while there are vast numbers of savvy folk out there – a host of virtual polymaths unrestricted by national boundaries.

Out there on the web are millions of years of personal experience. Think about that for a moment – millions of years of personal experience all available for sharing.

The old ways are creaking and the elites and their sponsors are furiously attempting to wind back the clock with a plethora of prohibitions, narratives, entertainments and controlling policies. Anything to keep the virtual polymaths at bay. It’s a strange, subterranean battle.

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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.