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Fed Dissenter Right On The Money

Lone FED Policy dissenter Minneapolis Federal Reserve Bank President Narayana Kocherlakota is right on the money. By accident. Kocherlakota believe the FED should keep interest rates low until unemployment hits 5.5% and the US Economy shows signs of sustained recovery. Raising rates or tightening before that would happen would not be a good idea. 

I agree with Kocherlakota, but not due to his reasoning. There is no sustained economic recovery. A distinction should be made between sustained economic recovery and a massive credit/speculation bubble. Unfortunately, the US Economy finds itself in the latter. By tightening now, the FED risks popping the bubble once again. Well, it will pop either way, sooner rather than later, but by tightening now the FED aids in the matter. 

This is further confirmed by our timing and mathematical work. The US Economy and our financial markets will go through a severe recession and a bear market between 2014-2017. If you would be interested in learning exactly when the bear market will start and it’s internal composition, please CLICK HERE. 

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Fed Dissenter Right On The Money  Google

Kocherlakota, Fed’s lone dissenter, blasts new rate guidance

WASHINGTON (Reuters) – The Federal Reserve should have promised to keep rates near zero until U.S. unemployment falls below 5.5 percent, as long as inflation and financial stability risks are contained, said the lone dissenter to the Fed’s policy decision this week.

By instead dropping its pledge to keep rates low until the jobless rate reaches a more healthy level, the Fed is sending the wrong message on both inflation and jobs, Minneapolis Federal Reserve Bank President Narayana Kocherlakota said in remarks released on Friday.

On Wednesday the Fed, in its first policy-setting meeting under Fed Chair Janet Yellen, said it would factor in a wide range of economic measures as it judged the correct timing for raising rates.

The U.S. central bank has kept rates near zero since December 2008, and the Fed had since December 2012 promised to keep them there until the unemployment rate fell to at least 6.5 percent, as long as inflation did not threaten to rise above 2.5 percent.

With unemployment now at 6.7 percent, and the Fed’s preferred gauge of inflation little more than half of its 2-percent target, policymakers decided to jettison what many said were becoming increasingly irrelevant guidelines.

But to Kocherlakota, one of the Fed’s most dovish policymakers, dropping any reference to those thresholds “does not communicate purposeful steps being taken to facilitate a more rapid increase of inflation back to the 2 percent target,” Kocherlakota said, and suggests “the committee views persistently sub-2-percent inflation as an acceptable outcome.”

It also creates uncertainty over economic growth prospects, he said, by giving little information about how fast the Fed wants the economy to return to full employment, and even about the level of unemployment it views as being consistent with full employment.

Kocherlakota has been pressing for the Fed to promise low rates until unemployment reaches the more normal level of 5.5 percent even before the Fed adopted the 6.5 percent unemployment threshold for considering any rate rise.

The promise, he said, should be contingent on inflation rising no more than a quarter of a percentage point above the Fed’s 2-percent target, a stipulation he repeated on Friday.

New in his proposal was a caveat that low rates would also be contingent on possible risks to financial stability remaining contained, a nod to the concern that some Fed officials have over the potential for sustained near-zero rates to foster unseen bubbles.

Kocherlakota said he agreed with one aspect of the Fed’s new policy: its stated intent to keep rates below normal levels for some time even after inflation and the labor market return to more normal levels.

Russia Turns To China

After a massive assault on Russia by the Western powers, Russia moves forward with forging much closer ties with China. (see article below). Just as predicted on this blog. What most people don’t realize is that this is the beginning of the end. As I have outlined in my comprehensive report “Nuclear World War 3 Is Coming Soon.When, How & Why“, current geopolitical setup will lead to an eventual military alliance between Russia and China to counterbalance USA/NATO. Leading to an eventual war between the parties in 2029. Read the report for full understanding and decide for yourself.   

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Russia Turns To ChinaGoogle

 

Putin looks to Asia as West threatens to isolate Russia

MOSCOW (Reuters) – When President Vladimir Putin signed a treaty this week annexing Crimea to great fanfare in the Kremlin and anger in the West, a trusted lieutenant was making his way to Asia to shore up ties with Russia’s eastern allies.

Forcing home the symbolism of his trip, Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow’s seizure of the Black Sea peninsula from Ukraine would be counter-productive.

The underlying message from the head of Russia’s biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances.

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

“The worse Russia’s relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you’re isolated,” said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Some of the signs are encouraging for Putin. Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia.

Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow.

The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world’s second biggest economy and it opposes the spread of Western-style democracy.

Little wonder, then, that Putin thanked China for its understanding over Ukraine in a Kremlin speech on Tuesday before signing the treaty claiming back Crimea, 60 years after it was handed to Ukraine by Soviet leader Nikita Khrushchev.

Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China’s leader last year and attending the opening of the Winter Olympics in Sochi last month.

Many Western leaders did not go to the Games after criticism of Russia’s record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were “close”.

A strong alliance would suit both countries as a counterbalance to the United States.

WARM EMBRACE, BUT NO BEAR HUG

But despite the positive signs from Beijing, Putin may find China’s embrace is not quite the bear hug he would like.

There is still some wariness between Beijing and Moscow, who almost went to war over a border dispute in the 1960s, when Russia was part of the Communist Soviet Union.

State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world’s largest producer of conventional gas to the largest consumer.

View gallery

Russian President Putin attends a business conference …

Russian President Vladimir Putin (L) attends a business conference in Moscow March 20, 2014. REUTERS …

“May is in our plans,” a Gazprom spokesman said, when asked about the timing of an agreement.

A company source said: “It would be logical to expect the deal during Putin’s visit to China.”

But the two sides are still wrangling over pricing and Russia’s cooling relations with the West could make China toughen its stance. Russian industry sources say Beijing targets a lower price than Europe, where Gazprom generates around half of its revenues, pays.

Upheaval at China National Petroleum Corp, at the centre of a corruption investigation, could cause also delays, and Valery Nesterov, an analyst with Sberbank CIB in Moscow, said China also needs time to review its energy strategy and take into account shale gas and liquefied natural gas (LNG).

“The bottom line is that the threat of sanctions on energy supplies from Russia has indirectly strengthened China’s position in the negotiations,” Nesterov said.

BOOSTING BUSINESS

Russia meets almost a third of Europe’s gas needs and supplies to the European Union and Turkey last year exceeded 162 bcm, a record high.

However, China overtook Germany as Russia’s biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

If Russia is isolated by a new round of Western sanctions – those so far affect only a few officials’ assets abroad and have not been aimed at companies – Russia and China could also step up cooperation in areas apart from energy.

CAST’s Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries.

“With Western sanctions, the atmosphere could change quickly in favor of China,” said Brian Zimbler Managing Partner of Morgan Lewis international law firm’s Moscow office.

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China’s seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia’s biggest trade partner, accounting for almost half of all its trade turnover.

DILEMMA FOR JAPAN, SUPPORT IN INDIA

Sechin, whose visit also included India, Vietnam and South Korea, is a close Putin ally who worked with him in the St Petersburg city authorities and then the Kremlin administration, before serving as a deputy prime minister.

In Tokyo, he offered Japanese investors more cooperation in the development of Russian oil and gas.

Rosneft already has some joint projects with companies from Japan, the world’s largest consumer of LNG, and Tokyo has been working hard under Prime Minister Shinzo Abe to improve ties with Moscow, despite a territorial dispute dating from World War Two.

But Japan faces a dilemma over Crimea because it is under pressure to impose sanctions on Moscow as a member of the Group of Seven advanced economies.

It does not recognize the referendum on Crimea’s union with Russia and has threatened to suspend talks on an investment pact and relaxation of visa requirements as part of sanctions.

Closer ties are being driven by mutual energy interests. Russia plans to at least double oil and gas flows to Asia in the next 20 years and Japan imports huge volumes of fossil fuel to replace lost energy from its nuclear power industry, shut down after the 2011 Fukushima disaster.

Oil imports from Russia rose almost 45 percent in 2013 and accounted for about 7 percent of supplies.

But if the dilemma is a tough one for Japan, it is unlikely to cause Putin much lost sleep.

“I don’t think Putin is worried much by about what is said in Japan or even in Europe. He worries only about China,” said Alexei Vlasov, head of the Information and Analytical Center on Social and Political Processes in the Post-Soviet Space.

Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea – saying India had shown “restraint and objectivity”.

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia’s ties with traditionally non-aligned India to flourish.

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

Putin’s moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. “Russia has legitimate interests,” he added.

For Putin, the Crimea crisis offers a test case for ideas he set out in his foreign policy strategy published two years ago as he sought a six-year third term as president.

He said at the time he wanted stronger business ties with China to “catch the Chinese wind in the sails of our economy”. But he also said Russia must be “part of the greater world” and added: “We do not wish to and cannot isolate ourselves.”

Two years on, he is closer to securing the first goal, but it is not yet clear how his population feels he has done on the second

Putin To Obama: Next Time Take The Bus To The Space Station

As sanction and Cold War 2 continue to escalate I don’ believe we are that far off from the point where Vladimir Putin actually tells President Obama to take a hike and to take a bus to the space station next time. Now, that would be sanctions.   

If you are not aware, the US Government and NASA now pay the Russians to take Astronauts to the space station and back. Since 2011 and with no plans to relaunch its space program. Trust me, this is much more important than some fu#$ing Crimea. What was once a great space exploring nation is now paying our “enemies” to get us into space. It’s a sad state of affairs when instead of science and exploration we choose war.  

NASA Budget: $16 Billion.
PENTAGON Budget: $682 Billion.     

Enough said. “Put your sword back into its place, for all those who take the sword will die by the sword” – Some dude named Jesus.  

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Putin To Obama: Next Time Take The Bus To The Space Station Google

CNBC Is Negative On Gold. Time To Buy?

CNBC and their guests are negative on Gold. Based on economic growth, supply/demand, gold overvaluation, higher upcoming interest rates, calmer geopolitical environment going forward, technical setup, etc…..anticipating gold to crater.

Here is what they don’t get.   

None of them can anticipate nor predict the bear market of 2014-2017 and a severe recession that our mathematical and timing work so clearly shows. Further, even though most people anticipate Janel Yellen to continue tightening and raising interest rates, it’s not going to happen. Not when the US Economy slips into a severe recession and the stock market craters. If nothing else, Janet Yellen will be trying to re-inflate the market by pumping a lot of credit/money into the system around this time next year.

I am a firm believer that Gold is starting to signal just that.  Any break above $1,420 will be a confirmation of the fact. Based on our mathematical work, Gold Bugs don’t have that much longer to wait. If you would be interested in learning when the bear market of 2014-2017 starts and it’s internal composition, please CLICK HERE. 

CNBC Idiots

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CNBC Is Negative On Gold. Time To Buy?  Google

 

Did Yellen just ruin the gold trade

It was all working for gold. And then Janet Yellen spoke.

In her first news conference as the Fed chairwoman, Yellen seemed to imply the Fed might raise short-term rates sooner than many market participants expected.

Immediately following those remarks, gold continued to head south, capping off a four-day stretch in which the shiny metal has lost almost 5%. The move also marks quite a reversal for gold, which was in the midst of its best Q1 performance since 1985.

So is that as good as it gets for gold? According to some traders: Yes

“Gold is a competitor to cash in a zero interest rate environment,” said Kathy Lien of BK Asset Management.  “But when interest rates are on the rise, or expected to be, gold becomes a far less attractive investment.”

Traders point to some recent changes in the overall market that could provide significant headwinds for gold; higher rates, a stronger dollar and an easing in geopolitical tension.  

Now that Ukraine has cooled, “the need for safe haven seems decreased,” said Gina Sanchez of Chantico Global . 

Those factors are unlikely to change in the near-term. 

“You still have increasingly hawkish central banks and overly bullish sentiment in gold,” said Enis Taner ofriskreversal.com. “That’s probably not changing anytime soon.  I expect gold to be range-bound between $1,200 and $1,400 for the next few months.”

Unfortunately for gold bugs, the technical set up isn’t looking much better. In fact, according to Steven Pytlar of Prime Executions, the charts point to more pain for gold. 

Said Pytlar, “we could see a substantial drop to $1200.”

What Ron Paul Thinks About Russia and Crimea

In short, same thing that I do. The US has no business in being in that region (6,000 miles from home), starting the next Cold War. I will let Ron Paul tell you. Watch the video.

“I think it was wrong for us to get involved and participate in the overthrow of the government,”exclaims Ron Paul in this brief clip, adding the US is “stirring up trouble in Crimea.” The American people are “tired of it,” and “it would be best for us to stay out.” The US doesn’t need another war – and certainly can’t afford it – and “we don’t want trade wars.” Simply put, he concludes, “it’s best we stay out.”

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What Ron Paul Thinks About Russia and Crimea Google

China Enters Bear Market Territory. USA To Follow?

z23

Hang Seng Index “officially” entered into a bear market territory after being down 20% since December of 2013. Irrelevant or a leading indicator? I believe it’s the latter. Based on my mathematical and timing work, the bear market in US Equities will begin shortly. When it it’s all said and done it will take 2.5 years to complete. If you would like to know the exact start date for the bear market as well as it’s internal composition, please Click Here.   

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China Enters Bear Market Territory. USA To Follow?  Google

China stocks enter bear market, here’s what it means for you

China’s benchmark Hang Seng index wasn’t having the best stretch since late last year, but Janet Yellen’s comments that a tightening of rates could come sooner rather than later did not sit well in the Far East. Chinese stocks dropped nearly 2%, sending the Hang Seng index into the dreaded bear market since it is now down 20% since December 2nd.

U.S. stocks are faring better today, but ripples abroad do tend to make waves, eventually. “You are interested in the Chinese market,” says Jon Najarian, co-founder of optionMONSTER in the attached video. “Over the last week or so, Chinese internet stocks are down 15 to 20%, some of them that much in a day. So that’s been a real area of concern,” he says, and rightfully so. “The revenue that they were generating…that was already accounted for, and the numbers were still so bad.”

But it’s not just high-flying Chinese internet stocks. Chinese commodities and materials companies are down, including Warren Buffett’s big bet on electric cars, BYD. The battery and electric vehicle maker slid an astounding 14% today, hitting a five-year low.

Najarian voices concern that many have suspected, that there is a severe demand problem for goods in China outside some of the major cities.  Not to mention issues that have occurred with accounting. “I’m one of them,” Najarian says of individuals frightened by the lack of proper accounting standards in China.

Weakness in China may also affect one of the most hotly anticipated IPOs, Alibaba’s. Wall Street is expecting Alibaba to push over $150 billion in valuation, possibly raising more than $16 billion in a U.S. filing, which would be the largest IPO since Facebook (FB). “If China continues in a weak mode,” Najarian says, “that’s not good for the Alibaba IPO,” since Alibaba’s value is predicated upon growing demand among the Chinese for goods and services.

Najarian ultimately concludes that longer term, you do want be owning certain Chinese stocks, but that you need to “scale into them,” or buy small chunks on weakness.

Stock Market Update. March 20th, 2014 InvestWithAlex.com

Daily Chart March 20, 2014 investwithalex

A good follow through today with the Dow Jones up +108 points (0.67%) and the Nasdaq up +11 points (0.26%). 

Thus far, the stock market continues to perform just as anticipated. Even though we are starting to see a lot of fairly “unenthusiastic” economic data, massive imbalances, outright speculation and a number of geopolitical/macroeconomic issue, the market continues to climb as if completely oblivious to all of the above. 

This type of a setup drives the bears up the wall. Understandably so. Listen, the market is doing exactly what it should be doing. It is tracing out an exact mathematical structure behind the scenes. It will only start the proposed bear market when the time is right. Only after an important mathematical point of force is hit will the market be ready to roll over. That time is fast approaching. In fact our premium members got the following data on the upcoming turning point. 

Date: XXXX
Price: XXXX

As I have indicated on this site since the beginning, the bear market of 2014-2017 is about to start. If you would like to find out the exact date and the internal composition of the upcoming bear market (short term moves) please Click Here.  

Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start. 

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Stock Market Update. March 20th, 2014 InvestWithAlex.com Google

As Cold War 2 Starts, Pentagon Says It’s Not Ready

As Cold War 2 between the US and Russia continues to escalate, according to the article below, Pentagon is not ready to fight a war with Russia. Even a cold war. I guess it’s a little bit more difficult than blowing up a 1981 Toyota Pickup full of Taliban fighters

“For years there have been only a handful of people consistently talking about Russia and China building highly advanced systems for use against our ‘Cold-War era’ aircraft, missiles and ships”.

Let me get this straight. The US spends more money on defense than the next 10 countries combined, is expected to spend $1.5 Trillion on new F22/35 fighters and it’s still not ready? Just another illustration how out of sinc our government is. Take a look at this chart….

pentagon expenditure

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As Cold War 2 Starts, Pentagon Says It’s Not Ready  Google

Pentagon Not Ready for Cold War 2

There’s an old saying in the military that we’re always training for the last war, so fixated on the lessons of our most recent conflict that we’re blind to the emerging threat.

For years, that last war was the Cold War, and the emerging threat was the insurgents of Iraq and Afghanistan. Slowly, painfully, eventually, the military reoriented itself. The result? After more than two decades of post Cold War re-alignment, the military is less prepared than it has been in generations for a confrontation with Russia.

No one in Washington is calling for the U.S. to go to war over Crimea and there are plenty of reasons why, at this point, military intervention could be a dangerous and foolhardy course. But if circumstances change and political leaders start looking to the military or the bargaining power that comes from a credible threat of force, they will find their options severely limited.

Over the course of the wars in Afghanistan and Iraq soldiers and marines have trained for maneuvering and fighting in small units over the landscape of the Middle East. Counter-insurgency (“COIN”) doctrine, which stresses engagement with local civilian populations and tactics for fighting loosely organized forces employing light weapons, has become the military’s new bible. It’s about as far away as you can get from the principles used in the Cold War.

According to retired General David Deptula, who served as the Air Force’s top intelligence officer, “we’ve been focused on the far left end of the spectrum of operations,” by which he means the protracted, low-intensity conflicts in Iraq and Afghanistan. But, he says, “if we want to maintain superpower status we need to be prepared to succeed across the full range of operations, not just the left end of it.” 

Even the few strategists that weren’t pre-occupied by Iraq and Afghanistan were planning for the much-touted Asia pivot, envisioning a future, one they’d argue is still looming, defined by Chinese hegemony. Russia, meanwhile, was considered by many to be an historical relic; still big enough to wield real power but no longer capable of threatening U.S. vital interests and a second or third order afterthought when evaluating threats the military needed to plan for

“For years there have been only a handful of people consistently talking about Russia and China building highly advanced systems for use against our ‘Cold-War era’ aircraft, missiles and ships,” Deptula says.

He’s talking about himself and some of his closest confidants at the Air Force, who pushed for continued production of high-end weaponry like the F-22 stealth fighter—right when the Iraq insurgency was at its peak. It made Deptula and his gang seem like Mach 2 dinosaurs, pining for a conflict with an imaginary enemy while the real bad guys were blowing up Marines in Fallujah. Understandably, Robert Gates, the Defense Secretary of the time, wanted the military to focus on the wars America was actually fighting at the moment. And so eventually, many of Deptula’s colleagues—including Gen. Michael “Buzz” Moseley, the Air Force’s top officer—were shown the door when they opposed Gates once too often. According to Deptula, “those people were ignored by [former Defense Secretary] Gates, and some were fired because they had the courage to speak truth to power.

As the White House and Pentagon planners consider what to do if Russia invades Eastern Ukraine or deploys its forces elsewhere in the region, the limited choices available reveal just how profoundly the military has changed since the Cold War.

For half a century, Cold War military strategy focused on containing Russia and winning in clashes between large conventional forces. On the ground, that strategy called for mass formations organized around tanks and heavy weaponry. In the skies it relied on dominance in Top Gun style style air-to-air fighting prowess, radar evading stealth technology, and powerful bombers that could drop massive munitions to destroy enemy armor and fortified installations.

Since the end of the Cold War, that strategy has been completely overhauled. Training and doctrine have focused on small unit tactics while new weapons and vehicles have been designed with squads in mind rather than divisions. Super-sophisticated dogfighters, like the $187 million-a-pop F-22, suddenly seemed too fancy to actually use. Who would fit the bill if one actually went down? Instead, drones costing less than a tenth the price littered the skies over Afghanistan and Iraq.

But those drones are useless against any military with a half-decent system for shooting down enemy aircraft. And Russian has one of the best air defenses on the planet. Suddenly, it’s those iconic Predator drones that seem obsolete.

“Hopefully the situation with Russia and Ukraine will be a bucket of cold water on those who believe all we need to be able to do is counter-insurgency operations,” Deptula told The Daily Beast.

And now, there are signs that the U.S. Air Force’s long-held technological advantage may be eroding.

The new generation of Russian fighter plane, the T-50, isn’t yet fully operational but it “will be produced much sooner that Gates and his crowd predicted,” Deptula says. He adds that “once the T-50s are produced in sufficient numbers there won’t be anything in the NATO fleet that can deal with them except the F-22s and F-35s.”

David Axe, the long-time military tech writer notes that the T-50, which can fire long-range missiles while flying both high and fast, may be able to “exploit critical vulnerabilities in U.S. and allied forces and level the air power playing field for the first time in a generation.”

An independent Australian think tank, Air Power Australia, drew a more severe conclusion.  “If the United States does not fundamentally change its planning for the future of tactical air power, the advantage held for decades will be soon lost and American air power will become an artifact of history.”

While Russian aircraft rely on speed and long flight times, the U.S. fleet is largely built for stealth so it can evade detection and anti-air weapons to engage targets at closer ranges. But the stealth capability, is now being challenged by advances in Russia’s radar detection platforms and anti-aircraft weapons.

“Today,” Deptula said, “the Russians have an extant significant advantage in their surface to air capabilities.” And that with the exception of the U.S.’s small number of highly advanced 5th generation aircraft, “the Russians can conduct area denial of any airspace within range of their defenses if they want to deny access to aircraft.”

Since 2001, the Pentagon has had good reasons for prioritizing spending for troops on the ground in Iraq and Afghanistan over speculative needs for future wars, but a consequence has been that we now have what Deptula calls “a geriatric Air Force and Navy fleet.”

No one, not even Deptula, is suggesting that there’s about to be some all-out showdown between Moscow’s military and Washington. But it’s not at all unlikely, given the new and chilly climate, that American forces and allies could wind up in skirmishes with proxies equipped and trained by Russia. The U.S. used to be able to count on an overwhelming technological advantage. Tomorrow, maybe not.

Foreshadows of this are already being cast. Already, Russia is outfitting the Assad regime in Syria while America runs guns to the rebels there. It’s the Russian side that’s winning.

The change isn’t just about equipment or tactics, though, American forces trained in counter-insurgency who are stationed in Europe could still be deployed to hold the line against Russian advances. But there are drastically fewer forces left in Europe available to be called upon in such an event.

An analysis of Defense cuts published by the conservative American Enterprise Institute in 2013 reported that “the Army alone has closed 100 installations in Europe since 2003 and plans on returning an additional 47 installations to host nations by 2015.” The same report notes, “the Navy has also been consolidating and decreasing its European bases” and “since 1990, the Air Force has reduced aircraft and forces stationed in Europe by 75 percent.” Addressing the future of America’s military footprint in Europe, the paper concludes that the Pentagon is “planning to continue reducing the US presence in Europe by approximately 15 percent over the coming decade.”

The military can’t be equally prepared for every threat and if its focus has been on counter-insurgency, that’s because those are the wars we’ve been fighting for the past twelve years.

Generations of veterans who fought in Iraq and Afghanistan have been raised and bled on COIN doctrine but, as combat demands, they have also learned how to be agile. Individual leaders on the battlefield are able to adapt quickly; it’s the military bureaucracy that’s like a tank: a slow, immensely powerful machine that’s only capable of plotting one course at a time. Quick turns are not an option.

Without many viable military options to counter Russian aggression what’s left for U.S. leaders seeking to punish Russia and assure our NATO allies that we’ll protect them? Cunning diplomacy, maybe.

Crimea is Russian now; that’s not changing any time soon. Condemning the invasion and the fixed terms of the referendum have no more bearing on the current situation than the reasons Russia gave for annexing Crimea—some of them legitimate—ultimately had to do with the duplicity and force they used to take it. 

The real question, and the subtext in much of the current talk about Crimea, is whether Russia will stop there or proceed to further conquests. 

Despite it’s show of force in Crimea, Moscow has a lot to lose if the conflict broadens and draws in the U.S. and NATO. Russia has gas to sell to Europe, oligarchs counting on feeling comfortable in their London townhouses, a new middle class looking for normalcy that’s already taken to the streets in protest, and the memory of Chechnya, a brutal war that took thousands of lives, fresh in the national memory.

If U.S. officials can present a deal that satisfies American aims while appealing to Russia’s self-interest, they may be able to prevent a larger conflict. But a new age of competition with Russia? That may be even harder to head off.

Guillotine Sales Booming In Europe

Earlier we initiated coverage and issued a BUY recommendation on Guillotine International, Inc (Nasdaq: HEADOFF) on anticipated surge in sales here in the USA. To our surprise, sales first initiated their surge in the Eurozone  where unemployment remains at 12%. With forecasted decline in the unemployment rate of only 1% over the next four years we expect this sales trend to continue.

Further, with the bear market of 2014-2017 and global recession just around the corner we anticipate the sale of GI new “5 Heads At Once” model to do very well around the globe. Particularly, with youth unemployment at close to 50% in both Spain and Greece, we expect to see triple digit growth in such markets. With the company selling at 1X it Book Value, it’s a Strong Buy. 

guillotine

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Guillotine Sales Booming In Europe Google

‘Dire’ consequences loom for jobless Europe

While there are reasons for “cautious optimism” as the euro zone shows signs of economic recovery, high unemployment in the region will fall by just one percentage point in the next four years and in some areas it will spike before dipping, a new study finds.

Stubbornly high unemployment rates not only pose a real threat to the recovery, as consumer demand will remain subdued, but young people are also at risk of spending less time in employment, creating potentially “dire” consequences for businesses.

Unemployment in the euro zone is currently sitting close to a record high of 12 percent, and is forecast to fall at a very slow rate over the next two years before reaching 11 percent by 2018, according to the spring EY Eurozone Forecast (EEF).

Figures from European Union’s statistics agency show approximately 19.175 million are without a job across the euro zone and in Greece, unemployment is set to climb to 28 percent this year before it falls by 3 percent in 2018.

Youth unemployment in both Greece and Spain have reached a staggering 50 percent, presenting “major concerns” in terms of social tensions, education and labor mobility, the EEF said.

“In countries such as Spain, where half of young people remain out of work, with little prospect of a job, the risk of a “lost generation” is very real,” the report found.

“This waste of human capital, alongside a lack of fixed capital investment, means that productive capacity is lost over time and sustainable growth becomes more difficult. The consequences for businesses could be dire.”

Within the 18 member states, unemployment differs “wildly”, with Austria set for a jobless rate of 4.6 percent in 2014-18, unemployment in Greece is still projected to be close to 25 percent in 2018.

Young people who spend significant period of time out of work tend to spend less time in employment and on average earn lower wages over the rest of their lives according to the study.