investorpolitico

While the media are silent things are moving in the background that signal a real preparation for war.

3 aircraft carrier groups are now in the Pacific.

The US moved over 812k munitions to forward bases in Japan.

A new squadron of F35 arrived in Japan.

At least 2 nuclear subs arrived in the area and the Seal “decapitation” team.

The B52 fleet is in high alert (this news has been disallowed, but no one knows why iybhas been announced to Fox news in the first place.

And this is what you can find freely.

Plus now there is starting to be a consensus in the US that the only solution is striking. In the Pentagon estimates probability of war is now 30% and the chance that war could provoke a major war (China) 50%.

PM Abe’s just got overwhelmingly re-elected and the Japanese index is at its best for the last 10 years.

The implication of a rising Japan are multiple. It will be definitely another centre of power contrasting China and especially North Korea.

One of the major targets of PM Abe is to change the Constitution that does not allow Japan to  have an offensive army (and for all pacific purpose, Japanese army budget was already the world 7th military budget in 2015).

And it is already aligned with India (the other anti-Chinese superpower in Asia).

Definitely North Korea has started an arms race in Asia and Japan will keep pace.

And if you like the movies like Terminator…..look no further than Japan. It is the most advanced country robot-wise and its army, for how well trained and well equipped it is, is just a fraction of the size of the Chinese one – due to population.

It will be able to inflict pain to China – but never win in a confrontation. Unless you have Terminators and a long view. Japan is one of the few democracy that have a long view notwithstanding the election cycles.

On the economic side – there are still issues – but Japan is one of the better positioned countries with  continuing QE.

This morning the news was out that Trump placed the B 52 bombers (also nuclear) on high alert. (fox news). The statement was promptly retreated.

The fact is that B52 are already in Guam and not really sitting ducks. My take is that the “gaffe” it is a way of messaging Kim that time to play is ending fast.

My worry is that Trump is now quite silent, but, behind the scenes, there is a consensus building between the generals, the CIA and some congressmen that a confrontation with North Korea is unavoidable.

And if really the US want a non nuclear North Korea there is no other choice as North Korea will never stop their nuclear program unless the US leaves South Korea.

If it did not cost us (taxpayers) so much money, it would be funny.

Now we found that NBN not only does not work, but also will never make money.

The politicians are even thinking of limiting the 5G mobile network as it would be faster than NBN.

Unfortunately politicians cannot reason in a logical way. In 2013, when I started this blog, I posted that it was nonsensical and that by the time it was rollout, the mobile networks would be faster and more efficient.

And it wasn’t like I invested millions in studies (like the Government).

Simple logic…first Apple phone with a decent speed was out in 2007, by 2013 we had quite fast phones like the Samsung Galaxy S4.

As technology advances are fast it was logical that by 2017/2018 a cabled NBN was not needed and they should have invested in a wireless system.

The Congress has kicked off and President Xi consolidates the power (the most after Mao!) and present his vision.

-China will grow with the mandate of Party first and its unique form of Chinese socialism

-China will point to be the foremost power by 2050 (in to phase 2020-2035 and then 2035-2050)

-China will point at quality over quantity (he did not hint at GDP targets)

Other points:

Monetary and Fiscal integration, reigning in speculation, more open economy for foreigner and freer Yuan, housing not for speculation.

In essence President Xi privileges the Party over reforms.

One of the best politicians in the world, but still fail to address some Chinese issues which could endanger his vision.

Rising wages, automation (which is positive due to the shrinking workforce cause by the 1 child policy) and specially the soaring debt  (IMF indicates that it will be 300% of GDP by 2022).

But the biggest threat to Xi vision will come from external events such as the President Trump administration, North Korea, a faster economic deceleration due to the debt level.

Anyway, much better than the Western politicians (not a high bar, but still a bar).

The first clear message from the Chinese Congress is…houses are for living and not for speculation.

mmmmhhh maybe we should tell PM Turnbull?

The Kurds , as the Islamic State is defeated, declared a referendum and independence.

As usual, they got used and now discarded as both Turkey and Iraq (which is an Iranian pawn) does not want it (in and around Kirkuk there is a lot of oil).

Already the Kurdish fighter are in full flight against the might of Iran which gave them an ultimatum.

Both the US and Russia have the hands tight as they are allies of the party involved (but only the Kurds are easily dismissed).

The only help they could have would be Israel – but even for Israel a direct confrontation so far from its border would be unsustainable (but probably they will help black-op style).

I am quite sad that one of the main forces that defeated IS (together with Iranian/Russian forces) again has been used and then discarded. Unfortunately it happens often.

Geopolitics 1 0 1

President Trump- still proceeding with its dismantle anything Obama, charged against Iran.

Geopolitically it is a supremely unthoughtful thing to do – even if he toned down its own version.

1. You do not open a second front when you already confronting North Korea – specially as North Korea and Iran have been proven to collaborate on weapon system.
2. Iran had quite serious internal problems between the various factions – the push will probably embolden and unite the military side that President Trump wanted to hit.
3. The agreement has been supported by various side and specially the European allies of the US – so this introduce another split between US and Europe.
4. Iran has an incredible war machine – specially in asymmetric warfare. So much so that, in running battles with Israel, it is the only side that sometimes wins and sometime lose against the almighty Israeli army (usually the other side just gets beaten)
5. There is already an alliance Turkey, Iraq and Iran that encompasses the entire North Middle east.
6. Iran can easily hit the US asymmetrically in Iraq and Syria at least. Or reinforce the Houthi in Yemen. And these are just easy targets.

Opening such a second front is really dangerous.

Saudi Arabia has changed is mind and decided to sell its crown jewel Armco (the owner of all Saudi oil) via private sales and not IPO. Or at least IPO make it to the market in minor flavour in 2019.

There quite large geopolitical repercussions if the move.

The private buyer will probably be China. This has implication both as strategic positioning (already with the Russian arms deal the Saudis were distancing from the US) and also for the USD. The USD has been the currency reserve of the world specially after the win of the 2WW and the pact to price oil in USD in 1971. And China is already testing a gold backed Yuan oil transaction system.

On the other side is an admission that even the Saudis cannot control the oil prices with fracking and EV vehicles on the rise.

North Korea is more and more tilting towards war.

North Korea advised that they will restart usuing the Kaesong shared industrial facility (but without agreement from the South).

Several reports from Russia hints to a probable real ICBM (12,000km radius) missile test.

The war of words (now insults) is going on.

On the US the tempo of “friendly” military exercise is growing (4 this month!). Also some new weapon systems have been put in place (aircraft carrier and sub at least).

One dark theory is that there is a strange race going on. Republicans are really starting to get tired of President Trump, but they need to keep him until the tax reform is passed.

For President Trump a way to stop being impeached or deemed unfit for command would be to start a war before that as those proceedings are almost impossible to achieve in war time.

Unfortunately it makes sense. A doom race.