Comparative Assessment: The Military Option

Thu, Feb 6, 2014 - 12:31am

Any true analysis of near term predictions must take into account the various military options and capabilities of the world's current powers.

Recently, and I apologize in advance for not taking the time to go back and link to it, a post appeared here discussing the Chinese military reality. There was mention of a submarine that sunk, and that the Chinese troops do not seem to have any real ability to endure field conditions or hardships.

I found that fascinating, because I am a former soldier, and nasty, miserable field conditions are just no big deal. We call that camping, and even pay dearly for the privilege.

Thinking on a macro level, though, I began to wonder about the concept of an actual outbreak of a shooting war somewhere in the world.

Going beyond the concept of currency wars, which are playing out in real time right in front of us, what would happen if shooting really started?

This thought lead to a cascade of simultaneous war game scenarios, all of which lead to a most startling question: why is there NO discussion at all about the role of an increasingly capable Chinese fighting force or the denigration of US fighting forces from logistical and personnel decreases or budgetary concerns?

Is this subject so taboo as to warrant NO MOPE at all? Or, have TPTB realized that any mention of the USA military capabilities via a via the Chinese would lead to polarization beyond that which we have now, or worse, to an honest critique of the true dire situation that the failure of western fiat paper has created?

Or, is it just that the Chinese are truly ass backwards when it comes to military capabilities? It is true that they have no professional military. But, the Soviets had their one party system, yet they fielded a most formidable military, even with conscription and less than perfect weapons systems as compared to the Americans.

Or is it something else entirely, like for example, the Chinese play a longer time frame, easily out maneuvering the hasty Americans who are bound by managers on a quarterly return basis, and by politicians focused on a narrow, two year time cycle? If this is the case, then is it not a compelling conclusion that the Chinese are playing a physical gold accumulating, hegemony altering, world commerce dominating game of thrones?

Is this not obvious who has played the best hand, and that the game is revealing itself?

Think about why Bill O'Reilly had Ms. Bartiroma as a guest tonight? Was she advocating something real, or managed? Why is she on TV, right now, advocating continued buying of the USA stocks?

I am more convinced by the day that 2014 is it. The collapse is afoot. I'm buying more gold.

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Feb 6, 2014 - 6:32am

Stathis schools Schiff

Listened to the first few minutes, and Stathis believes that the Chinese should have a social security system and not save as much as they do. As he says, they save BECAUSE there is no social security. What is wrong with that? What is wrong with being being self reliant? Does he think the western welfare model is the one to copy? Yes, with people saving less and spending more it would expand the economy through consumption. There is a difficult balance between saving and consumption in every economy as there is between safety nets and poverty, and that balance has been completely lost in the indebted nations.

Stathis has a deep issue with Jews and he likes to get personal, so Schiff is a good target for him. As for his investment calls, maybe he has a great track record? Does anyone know?

Feb 6, 2014 - 8:14am

how about a rumble with Russia? MSM blabs..

...can't believe the incessant attack on everything Russian coming lately from cnn and cnbc and bbc etc..

Why this abuse of the host of the Olympics?...bombs, gas explosions and murder going on and then there is Ukraine, that is a hot spot thanx to ???

Feb 6, 2014 - 8:17am

Boots on ground in China

Great post CL

One thing to note is Napoleon went to cash only when he took over France due to their hyperinflation.

A couple of things about China from my own experience. When I toured the country as a guest and met with locals I was struck by how much like us they were. They wanted their child to be educated, to look after their parents and they wanted the nicer things in life. Just like most people in North America. Now I know politicians are often out of sync with the people, but that is my observation.

Second thing, a client that I have turned into a stacker, owns two factories over in China. We have had many very frank discussions over the last 3 years about what I view is going on in the world and the risks of China to North America. His view is different than mine. He views most Chinese as "lazy fucks" who are good for cheap labour and that is being taken away by other countries in Aisa. His turn over of employees is huge and when the going gets tough they are likely to just not show up. His turn over is the norm not the exception and the quality of work is very poor. The only reason the plants still work economically is because of the cost advantage. He feels that will change in a decade and the jobs will come back to North America.

His view on the Chinese military is they have numbers but no moxy. Remember what the US warthogs did to the Iraqi's on the highway in the first gulf war. You rule the sky your rule the battle field.

Just my 2 cents to this post


Feb 6, 2014 - 8:35am

China-Maybe Not Such A Threat

China may recede as a threat as its relatively lower labor rates decline. Its most critical vulnerability is its land locked status, large population and lack of natural resources. Hoarding gold is its solution.

The U.S. has a superior strategic posture with two large oceans on the east and west and favorable resources in North America. But can it back away from a military flung over the globe and use the existing advantage?

Thanks for starting to pose some of these questions, CL.

why do I even bother
Feb 6, 2014 - 8:52am

China vs Pig Ignorant Dipshits

In the Blue Corner, fighting out of Deliverance, MS - "Its most critical vulnerability is its land locked status,"


In the Red China Corner, fighting out of the Real World - "China’s coastline covers approximately 14,500 km (around 9,010 miles)"

why is it that people who haven't a clue what they are talking about always feel the irresistible urge to make utter fools of themselves? Next thing you'll be telling us that Silver is going to break above 20.50 some time this decade, or COMEX has no deliverable Gold or some other total bollocks. Be gone with you!

John Galt
Feb 6, 2014 - 8:59am

@ Dagney re: Chinese Troops in America?

Hello Dagney. I beg to differ with your comment #2 that Chinese troops cannot simply breeze across the Pacific on large, slow ships. Instead of thinking in terms of landing craft in Normandy during WW2, we should imagine container ships filled troops quartered inside modified 40' steel boxes. These boxes would get waived through customs by the thousands, and could even be delivered to destinations of choice using American rigs.

Walmarts across America would then become staging areas, and possible bases for Chinese military. (In economic terms, these Walmarts already act as bases of operations to strip wealth from America and move it offshore).

However, I do agree that if something like this was to actually happen we would then know who the real terrorists were. Many of us have already figured this out.

I personally think that China has a different strategy at play, and they have been deploying it for years. While the American military approach might be to lock and load, and rush forward with guns blazing the Chinese seem more inclined to defer to Sun Tsu's "The Art of War" which contends, amongst other things, that direct conflict should be avoided at all costs and for the victor "the best policy is to capture the state intact".

China is doing this now and it watches the West progressively bleed itself out with debt. Real assets then become available at fire sale prices, and we are now seeing Chinese "investors" moving in to buy up distressed factories in the USA to set up shop inside the borders. Of course, Obama is crowing about manufacturing coming back to America when, in fact, what is really happening is that the Chinese are being welcomed in to engage in a quiet economic occupation, as opposed to an overt military one.

Feb 6, 2014 - 9:05am

China's Lehman Moment Approaches

China Needs to Tread Carefully on Reforms

Beijing was correct not to allow Credit Equals Gold No. 1 to default.

Image Credit: Chinese currency via By James Parker February 06, 2014

China’s trust lending sector – part of the country’s shadow sprawling shadow banking system – has been in the news quite a lot recently. Pacific Money

recently outlined the salient details of the case that was the focus of much of the recent attention – a scare involving a trust product called Credit Equals Gold No. 1.

Some have argued that the failure to allow a default of this product was a kind of U-turn in the process of financial reform in China. The argument is that in order for a more market based system for capital allocation to develop, investors and borrowers have to be given some harsh medicine. A default would have been warning shot to all investors that they should be aware of the risk associated with high promised.

However, it is almost certainly too early for a dose of this kind of bitter medicine in China’s shadow banking system. A default of this trust product would probably have had very negative consequences not only for the trust industry, but for the wider economy as a whole.

A key factor explaining this phenomenon is a so-called maturity mismatch in the China’s wealth management product (WMP) business. Funds sourced from investors at short maturities (often three, six or nine months) are actually used to lend to companies and projects for durations of years. Investors who have bought these short-term products receive their cash back at the end of the investment term, but this leaves a “cash hole” on the side of the issuer, as the final borrower still has no obligation to repay the funds.

The solution is to issue another WMP to fill the hole (an effective roll-over). This may take a couple of days – during which many issuers are forced to turn to China’s money markets to borrow the funds.

Had a default occurred and Credit Equals Gold No. 1 investors lost their funds, investors in all of China’s multitudinous WMPs would have received a very rude awakening. They would discover (many for the first time) that the products they were investing in could fail, and that the government would not be there to bail them out.

Some would continue to invest, but many would not. The ability of issuers to issue new WMPs to fill the holes would be destroyed. WMP issuers would thus be left with a big funding gap, forcing them and their end-borrowers into distress and an increasingly vicious spiral. The liability side (investors) of their balance sheets would be in crisis, and this would not take long to affect the asset side (the borrowers).

The economic fallout as various coal, real estate, and local government borrowers (to name a few key examples) lost this source of funding would be large. There is roughly USD$1.6 trillion invested in China’s trust industry, and this is not even the entire WMP picture. Many borrowers in this sector are forced to borrow here precisely because they are not able to secure cheaper financing from other lenders. Many would fail without these channels.

Equally, the formal banking system relies on WMP to earn fee income and move assets off the balance sheet. The fallout from a WMP rout would not be easily contained. The ensuing crisis would set reforms back as the government would have to move into full fire-fighting mode.

This hypothetical example serves as a reminder of why China’s reforms must come slowly. Any negative consequences that may result from each reform must be carefully anticipated and pre-empted. The authoritarian government in Beijing cannot afford a Lehman moment.

Feb 6, 2014 - 9:08am

Here ya' go CAL

Ask and you shall receive...

China's PAL

And one more article...

China struggles to crack down on fake military officials Number of criminals making financial gains impersonating PLA officials soars amid culture of state corruption Friday 22 November 2013 08.07 EST The PLA is riddled with corruption, notoriously secretive, and enjoys weak disciplinary oversight. Photograph: Dan Chung for the Guardian

China's unbridled boomtown ethos has famously spawned a world of counterfeits. Fake Apple stores, fake pharmaceuticals and even fake meat has hit the headlines.

But in recent weeks, police have had their hands full with a more treacherous kind of sham – fake military officials.

The Beijing-based newspaper Guangming Daily reported on Friday that police in coastal Shandong province's Cangshan County arrested 15 people posing as officers from the People's Liberation army, the country's military, on 5 November.

The so-called fake military officer gang, backed by counterfeit badges and "confidential documents," had unsuccessfully attempted to convince local police that central military authorities had dispatched them to secure the release of prisoners.

On Thursday, China Business News reported that one fake military officer in the central Chinese city Xi'an lost 800,000 yuan (£81,000) to another fake military officer in an elaborate scam. "The mantis stalks the cicada, unaware of the oriel waiting behind," the newspaper wrote,borrowing a traditional Chinese expression.

The PLA is riddled with corruption. Notoriously secretive, the organisation enjoys weak disciplinary oversight and a strong tradition of camaraderie, enabling a culture of rampant graft. The sheer number of criminals to impersonate PLA officers in recent months- and the scale of their gains- testifies to widespread, tacit understanding of the organisation's grey economy.

According to China Business News, a 49-year-old man surnamed Mu first swindled 400,000 yuan from a local man surnamed Zhang - he claimed that he was a high-ranking military official, and promised that the fee would guarantee a place for Zhang's daughter in a northern Chinese military academy.

Yet Mu had his comeuppance soon afterwards, when a 50-year-old firefighting equipment salesman surnamed Hou convinced him to invest in a new military academy. A senior military official surnamed Yang, he claimed, was spearheading the project. Mu swindled an additional 800,000 yuan from Zhang for the investment; Zhang eventually reported him to the police. Police arrested Mu on 29 October, and his swindlers soon afterwards.

Police in Cangshan County traced their own case of fake officials to a "fake military training base" in Wuzhou, a prefecture-level city in the southern province Guangxi, and raided it on 9 November, arresting eight people.

Gang members had defrauded people across the country by promising mining permits and admission to elite military schools in return for kickbacks, Guangming Daily reported; the scam earned them 10m yuan (£1m) and 2m yuan worth of gold.

Pictures posted online show police brusquely apprehending the men, dressed in counterfeit olive-green military uniforms. One shows the gang's leader, a man surnamed Sun, apparently wetting his trousers in fright.

In late October, China's state broadcaster CCTV revealed that a 58 year-old man named Dong Xianwei had defrauded six families of 3.8m yuan since 2005 by posing as a PLA general.

Like Mu, he promised that he would help their children gain admission to elite military schools; he charged 200,000 yuan per placement. The same programme revealed another fake PLA official, Liao Heping, who made 3m yuan in two years by posing as a major-general.

Feb 6, 2014 - 9:27am

Pretty straightforward - don't telegraph your punch

>>>This thought lead to a cascade of simultaneous war game scenarios, all of which lead to a most startling question: why is there NO discussion at all about the role of an increasingly capable Chinese fighting force or the denigration of US fighting forces from logistical and personnel decreases or budgetary concerns?

Is this subject so taboo as to warrant NO MOPE at all? Or, have TPTB realized that any mention of the USA military capabilities via a via the Chinese would lead to polarization beyond that which we have now, or worse, to an honest critique of the true dire situation that the failure of western fiat paper has created?<<<

I'd suggest it's pretty straightforward: If you are seriously concerned about being in a fight for your life, either as a nation or as an individual - it isn't prudent to talk much about what you can or cannot do, or what you will or will not do. Don't telegraph your punch.

Now, if you think you can just scare the guy off, you can bluster and posture - like putting multiple carriers into the Persian Gulf to worry Iraq - and make no secret of it.

But when you're *really* worried, you keep your mouth shut, you keep your guard up, and you keep your eye on the center of mass. Eyes can lie - center of mass, not so much.



Green Lantern
Feb 6, 2014 - 9:34am


Assorted Small Arms Ammunition

Solicitation Number: 3CD-14-A-0009 Agency: United States Postal Service
Office: Supplies and Services Purchasing
Location: Office Products & Utilities CMC


There have been modifications to this notice. You are currently viewing the original synopsis. To view the most recent modification/amendment, click here
Notice Type: Presolicitation Posted Date: January 31, 2014 Response Date: Feb 10, 2014 11:59 pm Eastern Archiving Policy: Automatic, on specified date Archive Date: February 11, 2014 Original Set Aside: N/A Set Aside: N/A Classification Code: 13 -- Ammunition & explosives NAICS Code: 332 -- Fabricated Metal Product Manufacturing/332992 -- Small Arms Ammunition Manufacturing
Solicitation Number: 3CD-14-A-0009 Notice Type: Presolicitation Synopsis: Added: Jan 31, 2014 4:54 pm The United States Postal Service intends to solicit proposals for assorted small arms ammunition.

If your organization wishes to participate, you must pre-register at, the Postal Service's eSourcing tool. From the login page, click on the "Register Supplier Organization" hyperlink and provide all required information. Organizations are encouraged to have each participating representative registered individually. When registering, include 332992 as one of your NAICS selections.

Registered organizations will receive log-in credentials to the USPS eSourcing application. A separate electronic message will be sent notifying registrants when the event is opened and inviting them to participate in the solicitation.

Organizations may register at any time during the event; however, it is recommended prospective offerors complete their registration early.

This message is only a notification of our intent to solicit proposals U.S. Postal Service Announces Giant Ammo Purchase

On Jan. 31, the USPS Supplies and Services Purchasing Office posted a notice on the Federal Business Opportunities website asking contractors to register with USPS as potential ammunition suppliers for a variety of cartridges.

“The United States Postal Service intends to solicit proposals for assorted small arms ammunition,” the notice reads, which also mentioned a deadline of Feb. 10.

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