By three methods, we may learn wisdom: First, by reflection, which is noblest; second, by imitation, which is easiest; and third by experience, which is the bitterest. – Confucius
We cannot equate spending on veterans with spending on defense. Our strength is not just in the size of our defense budget, but also in the size of our hearts, in the size of our gratitude for their sacrifice. And that’s not just measured in words or gestures. Jennifer Granholm
Every good citizen makes his country’s honor his own, and cherishes it not only as precious but as sacred. He is willing to risk his life in its defense and is conscious that he gains protection while he gives it. Andrew Jackson
Be Prepared… the meaning of the motto is that a scout must prepare himself by previous thinking out and practicing how to act on any accident or emergency so that he is never taken by surprise. Robert Baden-Powell
There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. Smedley Butler
COMING DEFENSE BOOM
A number of these ideas come from Jim Rickard of Agora Financial. This story is unfolding real-time. It is a story is that Donald Trump is mobilizing this nation to replenish its defense systems. These defense systems were depleted, not supported and dropped by the Obama administration. In addition, Obama’s eight years kept this nation in a series of nation building wars. The Mideast wars and the Southeast Asia wars had virtually nothing to do with the strategic safety of this nation. However, that is history. Now the repair must begin. That is the future.
Today, Washington is dysfunctional. No one agrees on anything. Republicans do not agree with Democrats, which is understandable but the Republicans do not agree with the Republicans, that is new. Everyone seems to be fighting with everyone. Meanwhile, the nation’s business has come to a standstill. There is a problem of the budget, the debt ceiling, infrastructure’s building, the wall and funding for Planned Parenthood. In spite of this, there is one thing that everyone agrees on and it is that we need to increase defense spending.
Defense spending usually goes in waves or cycles. It is a 40-year cycle from beginning to end for a new system. Trump will be starting some of these – – – ships and remotely controlled vehicles both air, ground and sea. The 40-year cycle is usually acquire, design and introduce for 10 years and finally comes comes maintenance, replenishment and upgrade for the next 20 years. Finally, it takes about 10 years to phase out the program.
Reagan introduced the concept of Star Wars in his administration. We now have the THAAD missile defense system. The programs reflect the desires of the administration that introduce them. For instance, Carter cut defenses, Reagan, expanded defense, then Clinton cut defense, and Bush expanded it. Finally, Obama cut defense now Trump is going to expand. These waves are 8 to 10 years.
Currently, the Democrats are completely on board. There should be no surprise in this since most of the military bases are in democratic country. This is a historical fact based upon World War II. One Blue state for instance is Connecticut. This is a democratic state. However, enough large defense contractors are headquartered in that state that the state generally votes for defense spending. Connecticut has General Dynamics and nuclear submarine sites. Lockheed, Pratt & Whitney and other firms are also headquartered there. This Democratic state will vote for defense.
During a falling market, defense stocks will do well. In addition, during a rising market, the defense stocks will do very well.
A number of global geopolitical hotspots or conflicts exist that is the driving motivation to get our defenses back up to its normal level. These are –
- Ukraine – NATO and Russia
- North Korea – U.S and North Korea
- Afghanistan – US, NATO and Taliban
- Iraqi – U.S., NATO and Iran
- South China Sea – U.S. and China
In the past, Trump asked some very simple questions –
- Why are we abroad?
- Why are we fighting these wars?
- Why are we spending human treasure and blood and financial treasure in places nobody cares about?
The fundamental issue is that the liberal agenda has dominated this nation for a generation. The New World Order liberals are not interested in the nation state. They are interested in world government run by the U.N. – – – all appointed members not elected. They tested their ideas in the European Union with the appointed members. The UK left the Union. What the New World Order folk’s desire is that those nations that are in conflict by desiring their own sovereign nation must abide by one central global authority. It is not likely they will not willingly do so. Thus, they must be forced to do so. This is nation building and putting in puppet leadership that are easily controllable because they want to stay in power.
Trump has explicitly stated that he does not like the New World Order agenda of one centralized global government run by the U.N. Rather, he wants “America first”. By this, he means an independent sovereign nation. This is in direct conflict with the people backing the new world order in that it clearly shows the issue is between a nation state political order and a global state political order. Trump’s attitude and speeches comes across to the American people and they agree with him. That is the reason that he gained 53 million votes to change the system and drain the swamp of these creatures that want to get rid of American sovereignty.
Obama pulled us out of Iraq, which caused a vacuum that Iran stepped into. Iran introduced 30,000 troops and now de facto controls Iraq. Iraq has become a Shiite theocratic state with a light glaze of secular government. The reigning political authority does not like the Kurds within their jurisdiction but puts up with them since they are the de-facto “marines” of Iraq.
An aside but an important one – Kurdish women fight beside the Kurd men. They are fighting to free the Kurds and create their own nation. It is a Muslim Shiite belief that not anyone killed by a woman in battle will not go to Heaven with the 76 virgins. This fact overrides the reason some of these men fight. They believe that they are fighting a holy war and that they will go to Heaven if they die in battle. Being killed by a Kurdish woman in battle nullifies that.
Iraq does not treat Sunni Arabs the same way ti treats Shiite Arabs.
One must remember that there is a difference in war that will be waged in the near and distant future. It will not be one based upon brute force. Rather, it will be one based upon smart warfare. It costs more but fewer Americans will be killed. For instance, a good percentage of the new F-35 fighter program costs are due to anticipatory artificial intelligence smart systems. There will come a day when there will not be a need for a man in the cockpit. It is not here yet but that is what is being worked on.
For years, the U.S. used appeasement policies with North Korea. It cost this nation billions of dollars and now we have a monster that we created sitting on a global platform. This is ego and desperation talking in Jung Un. He knows what happened to Saddam Hussein and Khadafi when they took on the U.S. They lost their lives, their country and their families. He knows that when his threat of nuclear attack ends, then his personal life is ended. He has never come up against an American president that does not back down.
Jung Un’s threat against the island of Guam got America’s attention. Guam is a major base for the U.S. in the Pacific. It has a major airfield that is the base of B-52s. It has major military storage including nuclear and housing facilities. It is the launch pad for the U.S. Military in the Pacific. However, it is in range of the North Korea missiles that it has been flying over Japan. They work and Guam is in range.
They chose to fly the missiles over Japan because they have minimal defense systems. Japan is the major partner of the U.S. for the Pacific region. The U.S. has major agreements to protect Japan if it ever comes under attack from anywhere or anyone. To fly an intermediate range missile across Japan without their permission is an act of war.
The U.S. had a WWII treaty with Japan that forced them to downsize their military. They have built this “no major military” into the constitution. The basis, of course, is that they do not need a major military because the U.S. would protect them. This has been the approach since 1947. Now we are seeing comments from our government officials that Japan should build a military to protect themselves. This could mean Nukes on Japanese soil with Japan controlling them. China would not like that at all. North Korea is looked upon by China as a buffer state between China – Communism and South Korea – Democracy.
Trump would be irresponsible to allow North Korea to continue on the path that they have chosen. On the other hand, appeasers in Congress and the U.S. see nothing wrong with this Chamberlain policy that has never worked in the past. It is a delusion.
You only have one alternative with a bully – – – you must stand up to them. This goes for North Korea and China. Southeast Asia is the worst hot spot / conflict area for the U.S. It is only a matter of time before the U.S. must step up and challenge both North Korea and China. Further, the U.S. must maintain their relationship with other nations in South East Asia that look to the U.S. for protection from China.
If we had war, it most likely will be with North Korea. We would try to limit it to the military targets. However, North Korea would launch everything they could at their enemy South Korea – a democracy and Japan – a democracy. This could easily escalate out of control and include China.
Trump’s trip to China next month is critical. I believe that Trump and Xi Jinping will come to some meeting of mind about North Korea. It will be a tradeoff. If the U.S. joins the Chinese Belt Road that Xi Jinping wants is his legacy. If Trump works with China to help build this multi trillion dollar naval and road network to link the world, then world peace could ensue for the next 75 years. It is that significant. China would then contain and possibly replace Jung Un. You are witnessing a geopolitical negotiation between two global powers.
In the meantime, the U.S. Congress must be prepared for everything failing.
Washington is a dysfunctional place these days where no one appears to agree on anything. Republicans do not agree with Democrats, which is understandable, but the Republicans do not agree with the Republicans, which is very short sighted. The Republican establishment is not in functional agreement with the New Republicans that Trump brought to the party. Further, some Republicans either together or separately do not agree with the White House agenda. Accordingly, everyone is fighting with everyone else on the issues that are on the table –
- The budget
- The debt ceiling
- Trump’s wall
- Infrastructure spending
- Funding for Planned Parenthood
The good news is that there is one thing that everyone seems to agree upon – – – defense spending. This means the both the Democrats and the Republicans agree on this. They all agree we need to increase defense spending.
Defense spending historically goes in waves or cycles. The total cycle is about 40 years from concept to finish. It takes about 10 years to build and create a system and another 20 years of use by the military of the new military system. The last 10 years is the phase out or discontinue phase.
Each president has his own priorities. Reagan had the special thing called Star Wars, which resulted in the THAAD antimissile system. These are land-based missiles that can shoot down missiles. The cycle also runs between Democratic and Republican administrations. For instance – Carter cut defense, Reagan expanded defense, then Clinton cut defense, and then Bush expanded it, Obama cut defense and now Trump is going to expand it. However, this time it will be expanded massively. Consider $750 billion between NATO and Saudi Arabia over the next 4 years. Superimpose $1 trillion for the U.S. defense buildup.
I am in the final stages of completing a college level course called Economics for Entrepreneurs with two bonus chapters that show the global hot spots / conflicts (who), why they build up, how much they will build up and which U.S. stocks will most likely be affected. It will soon be available on www.ravengeopolnews.com under books.
This will be a huge expansion. It will also be multi-year because we are talking about weapon systems and they take years to develop, test and deploy. It is not surprising that the Democrats are completely on board. The reason is that so many military bases were located in Democratic territory during World War II. This is their military constituency. Even in Connecticut, which is a blue state, they are very positive for defense buildup because they have major defense contractors in the form of Pratt & Whitney and General Dynamics headquartered in their state.
With respect to the stock market, one must be cautious because it is overpriced. On the other hand, if the market drops defense stocks will drop less. In addition, if the market rises, defense stocks will rise faster. This is due, of course, to Trump’s focus on creating hundreds of billions of dollar contracts for the defense industry.
One of the biggest areas in future wars is going to be cyber warfare. The Navy is already testing unmanned ships and submarines. The USAF is flying armed drones. Not stated by the papers is the fact that the best cryptologists and hackers work for the US government in NSA. That is much of what they do.
We know that Trump is committed to defense because he just gave 4,000 more troops to Gen. Mattis in Afghanistan. This added to the troops, both American and NATO would provide Gen. Mattis 40,000 combat personnel to command. We have been at war in Afghanistan for 16 years. On the other hand, Gen. Mattis says we have fought 16 one-year wars not a real war. He is about to change that.
North Korea provides a special case for the United States. By avoiding the issue over the last 20 years, the U.S. has created a monster. Further, upon investigation, one would probably find that both China and Iran were silent partners of North Korea with their nuclear development. Jung Un was either smart or dumb by mentioning Guam as his target. Guam is a U.S. western pacific major base for defense. It is a B-52 base, nuclear storage site, massive arms and troop’s site. To hit Guam would be a clear act of war. However, the range of the North Korean missiles makes this possible. Jung Un does not like the U.S. and South Korea doing joint maneuvers and says, “I won’t shoot if you maintain good behavior”.
We have had such weak presidents for the last 20 years, our potential adversaries have gotten used to US threats but no action. This time they have a man who does not bluff very often. Trump does what he says he will do.
In the past, China has tasted the U.S. wrath from a president and will not push it too far. Little known but factual since it was just released after 40 years being stamped Top Secret is that during the Korean War, President Eisenhower called the premier of India and told him to pass a note to the Chinese premier, that if they did not stay behind the 38th parallel, he would use nukes. Eisenhower knew better than to get into a ground war with China and its billion people. The result was that China backed down and pulled back to the 38th.
Trump has asked China to control its pawn, North Korea, and it is doing so. How? It moved 50,000 troops to North Korea border – to keep the North Koreans behind their borders – – and – – – it shut down buying coal and textiles from North Korea. This represents over 50% of the North Korean GDP. Jung Un is getting the message.
The U.S. message is clear to the Chinese. The U.S. will not allow the U.S. to be threatened with Nuclear weapons. On the other hand, wars start by the two parties misunderstanding each other’s true intentions. Finally, our nuclear submarine fleet could be lethal to all of South East Asia including China. This is addition to the 1,200 Minuteman in silos in the U.S… Today, they are on a Minutes launch enabled ability to go into China or Russia. Because of the MAD, Mutually Assured Destruction, I do not believe we will have actual nuclear war – just threats.
The budget process was beginning to look like that it was heading for a train wreck by September 29. The US budget year runs from October 1 at midnight on September 30. Trump negotiated an extension until late December. This means that he must do something before January 1.
Further, experts estimate that the treasury is out of cash. This means to me two things happening at the same time. As of September 29, the best estimate is that the treasury twill run out of cash and the government is going to run out of time and we are going to shut down the government.
How does one prevent this? You must use legislation. The Republican leadership generally is supportive of Trump. They will have to raise the debt ceiling. Further, Congress must have a continuing resolution to keep the government open. The problem right now is that votes are not there. You are looking at many Republicans who will not vote for continued resolution or a debt ceiling increase unless they get some of their wish list. This includes defunding sanctuary cities, defunding Planned Parenthood, building Trump’s wall and Obama care fixes. Trump has already acted – he notified sanctuary cities that they must comply with Federal law or Fed funding will be pulled.
Trump has moved quickly. He has already ordered the wall. It now needs funding. Further, by executive order, he has extended Obama care across state lines and allowed insurance companies to create and offer lower cost insurance policies rather than one policy fits all. This means insurance programs can be written throughout the country and become competitive with features that do not require a single male to pay insurance for maternity benefits.
Most importantly, by the end of the year, Trump may change the rules of the game that Congress and the Fed are playing. For instance, Trump currently has four seats to be filled on the Fed governing board. By February, a fifth seat, Chairwoman Yellen’s seat, will also have to be filled. He is looking for a replacement now. If he fills five of the seven seats on the governing board before February, the negative posture of the Federal Reserve could be turned around to be positive for his infrastructure building and defense buildup.
Finally, Jim Rickard of Agora Financial predicts that by November Trump will announce that he wants to get rid of the Fed fiat dollar and replace it with a treasury gold backed dollar. This would be revolutionary since it would put us back to the Constitution where we would use the Treasury to create our money and not use the banking cartel called the Federal Reserve. The Fed Reserve Act of 1913 has never been tested against the Constitution by the Supreme Court. If it were, I do not believe that it would be found Constitutional.
The use of a gold backed Treasury note would change the game because it would remove the private banking cartel Fed from its influence over the US economy. Further, it would provide stability in interest rates looking into the future, which is precisely what entrepreneurs and businessmen need. They cannot make intelligent decisions, if they do not know what the future looks like, they will not invest. A gold backed Treasury note would mean that interest rates would stabilize, investment would increase and the country would start growing.
There is going to be a coming defense boom orchestrated by Donald Trump that will amount to approximately $1.4 trillion over the next five years. This will be announced somewhere in the November timeframe is backed by both the Democrats and the Republicans. It will happen…
Today, Washington is dysfunctional but they all agree that we must increase our defense spending. There are hotspots and conflicts in the Ukraine, North Korea, Afghanistan, Iraq and the South China Sea.
The liberals dominated this nation for a generation. They moved tens of billions of dollars from the defense budget into social programs. Now the pendulum is swinging the other way.
One of the biggest issues is with North Korea where Jung Un is launching missiles over Japan and threatening to do so over Guam. If he fires one missile across Guam, it will probably be shot down and we will be at war. Guam is a major Western base for the US government. It houses B-52s, nuclear warheads, major military installations and an inventory of military armaments. It is being used as the launchpad for anything that happens in the South Pacific.
Jung Un is making these threats because is desperate and afraid. He knows that if he drops the nuclear threat that he may be killed. He remembers very vividly, what happened to Saddam Hussein and Khadafi. He does not want it to happen to himself and he feels that his shield is the threat of nuclear war.
Trump’s trip to China next month is critical. Xi Jinping wants a Belt Road built. It is his legacy and in fact once built will change the world. If Trump joins Xi Jinping in building this road, the world will change. Peace will be possible for the next two generations. The infrastructure of the world will be dramatically improved and mankind will be better off. Allied against this happening are the world bankers and the defense industry who need wars to maximize their incomes.
The Washington bureaucrats do not want to fund Trump in his expansion efforts until they get some of their problems fixed. These include modifications to the budget, increasing the debt ceiling, building Trump’s wall, infrastructure spending to revitalize America, and funding for Planned Parenthood. The holdouts want it all. On the other hand, both the Democrats and Republicans know that they have to increase and want to increase defense spending. No one knows how this will work out but I believe that it will be worked out.
I believe the Trump’s trip to China next month will be critical in getting Xi Jinping’s agreement to contain North Korea and to get Trump to join China’s Belt Road. Further, Trump may in fact replace the Federal Reserve and create a gold backed US treasury note. If he does, the price of gold will accelerate to $10,000 an ounce in order to cover the massive amount of debt that exists on the books. This can be written off, but I doubt that it will be for political reasons.