"US Prepares For "Kinetic Strikes" Against Syria"
by Tyler Durden
“The chart below will likely come as a surprise to most. It shows total nominal US defense spending, more importantly it shows that such spending has been rapidly declining since 2010. And while on the surface it is great news the US is becoming more “pacifist” (apparently mass killings using drones are relatively cost-effective) and the result for the US is even better as it means lower deficits, there is one person who is very unhappy with this outcome- Ben Bernanke.
Why is Ben unhappy? Simple- as a reminder, the only reason Ben is even contemplating tapering has nothing to do with the economy. After all the Fed chairman (and/or his successor) is willing to send the stock market into stratospheric overdrive and would be very happy to add not subtract from the monthly QE $85 billion notional since it means more “wealth effect” and thus brings the US closer to the “Keynesian successful endgame” (that the logic here is completely inverted is well known to all but the most die-hard Keynesian fanboys and is not in the scope of this article).
However, the fact that the gross US debt issuance is declining (if only until the demographic and healthcare crunch hits in 2015 and deficits explode once more) means Bernanke has less primary issuance to monetize. Were Bernanke to maintain his monetization run rate into a lower deficit regime, the Chairman would destabilize the liquidity in the already increasingly illiquid Treasury market in which the Fed now holds over 30% of all 10 Year equivalents and its holdings increase by 0.3% every week. This illiquidity is manifesting itself most directly in the “special” repo rates that have become a norm in the past few months especially in the 10 Year, and which indicate an ongoing shortage of TSY collateral.
Of course, there is a very simple and elegant solution to declining defense spending, one which has been used time and again in US history when the US government needed to provide the Fed with more securities (i.e. deficit) to monetize: war.
According to RT that, or rather its more politically correct equivalent “kinetic strikes”, is what may be just over the horizon. RT reports that President Barack Obama is considering using military force in Syria, and the Pentagon has prepared various scenarios for possible United States intervention. Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said the Obama administration is deliberating whether or not it should use the brute of the US military in Syria during a Thursday morning Senate hearing. Gen. Dempsey said the administration was considering using “kinetic strikes” in Syria and said “issue is under deliberation inside of our agencies of government,” the Associated Press reported from Washington.
The pre-story here is well-known to most: in a repeat fabulation of the Iraq “WMD” lie, the US and the entire developed world “found” Syria to have crossed a red-line when it used chemical weapons, despite subsequent reports that it was the Syrian rebels, aka Qatari mercenaries, who were the party responsible for chemical weapon use. No matter though: the public media campaign was hatched, and merely waited for the catalyst. That catalyst may be imminent, although there is a substantial dose of skepticism this time around: “Pres. Obama said previously that the use of chemical weapons would cross a “red line” and likely trigger American intervention. When the White House concluded Assad had relied on chemical warfare, Rhodes said, “both the political and the military opposition is and will be receiving US assistance.”
And from the AP: “Amid an increasing clamor among President Bashir Assad’s opposition for active U.S. involvement, Army Gen. Martin Dempsey said during congressional testimony that he has provided President Barack Obama with options for the use of force. But he declined to detail those choices, saying “it would be inappropriate for me to try to influence the decision with me rendering an opinion in public about what kind of force we should use.”
All of the above, of course, is smoke and mirrors. The ultimate decision will come not from Congress but from the Fed. So what may have spooked Bernanke and the sudden reappearance of the Syrian war as a real and credible possibility? Why is the US, or rather Federal Reserve, desperate for a war with
Syria? Here is the one chart
that matters:
As for the downside? What are some irrelevant Syrian lives in the grand scheme of things, when the status quo’s wealth must be preserved at all costs. Costs including the death of thousands of innocent civilian Syrians and/or other nationalities should the conflict just happen to spill outside the Syrian borders.
In brief: to allow the Untaper once the Taper ends, the US needs to find much more deficit funding needs, and as always there is no place better to achieve this than to spike the contracting spending budget by engaging in war. And now, the ball is in Putin’s court.”
Source: http://coyoteprime-runningcauseicantfly.blogspot.com/2013/08/us-prepares-for-kinetic-strikes-against.html
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I dug up this website to illustrate all the wars we have been in over the last century, and didn’t realize how hard it is to define “war.” The list is incredible, especially because the site lists so many kinds of things not included on the list.