The Mint

Copper Price per Lb: $3.18
Oil Price per Barrel: $95.09

Key Indicators for November 21, 2013

Corn Price per Bushel: $4.23
10 Yr US Treasury Bond: 2.78%
Mt Gox Bitcoin price in US: $736.79
FED Target Rate: 0.09% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,242

MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.3%
Inflation Rate (CPI): -0.1%
Dow Jones Industrial Average: 16,010
M1 Monetary Base: $2,662,000,000,000

M2 Monetary Base: $10,895,800,000,000

August 27, 2013 David Mint

Did Syria call Obama’s Bluff?

Did al Assad call Obama’s bluff or are the Syrian rebels trying to coax foreign intervention to tip the scales in their favor? Either way, Barrack Obama finds himself in a lose/lose situation, and with Russia and China waiting in the wings, the stakes could not be higher.

What is currently occurring in Syria has serious implications for all of humanity. As we do with all Geopolitical conflict, we turn to Stratfor for insight beyond the headlines. What we find in the following report on the situation, written by George Friedman, is indeed disturbing. Friedman’s report, Obama’s Bluff, is republished here with the permission of Stratfor and is a must read for anyone trying to understand what is at stake.

Obama’s Bluff

Images of multiple dead bodies emerged from Syria last week. It was asserted that poison gas killed the victims, who according to some numbered in the hundreds. Others claimed the photos were faked while others said the rebels were at fault. The dominant view, however, maintains that the al Assad regime carried out the attack.

The United States has so far avoided involvement in Syria’s civil war. This is not to say Washington has any love for the al Assad regime. Damascus’ close ties to Iran and Russia give the United States reason to be hostile toward Syria, and Washington participated in the campaign to force Syrian troops out of Lebanon. Still, the United States has learned to be concerned not just with unfriendly regimes, but also with what could follow such regimes. Afghanistan, Iraq and Libya have driven home the principle that deposing one regime means living with an imperfect successor. In those cases, changing the regime wound up rapidly entangling the United States in civil wars, the outcomes of which have not been worth the price. In the case of Syria, the insurgents are Sunni Muslims whose best-organized factions have ties to al Qaeda.

Still, as frequently happens, many in the United States and Europe are appalled at the horrors of the civil war, some of whom have called on the United States to do something. The United States has been reluctant to heed these calls. As mentioned, Washington does not have a direct interest in the outcome, since all possible outcomes are bad from its perspective. Moreover, the people who are most emphatic that something be done to stop the killings will be the first to condemn the United States when its starts killing people to stop the killings. People would die in any such intervention, since there are simply no clean ways to end a civil war.

Obama’s Red Lines

U.S. President Barack Obama therefore adopted an extremely cautious strategy. He said that the United States would not get directly involved in Syria unless the al Assad regime used chemical weapons, stating with a high degree of confidence that he would not have to intervene. After all, Syrian President Bashar al Assad has now survived two years of civil war, and he is far from defeated. The one thing that could defeat him is foreign intervention, particularly by the United States. It was therefore assumed he wouldn’t do the one thing Obama said would trigger U.S. action.

Al Assad is a ruthless man: He would not hesitate to use chemical weapons if he had to. He is also a very rational man: He would use chemical weapons only if that were his sole option. At the moment, it is difficult to see what desperate situation would have caused him to use chemical weapons and risk the worst. His opponents are equally ruthless, and we can imagine them using chemical weapons to force the United States to intervene and depose al Assad. But their ability to access chemical weapons is unclear, and if found out, the maneuver could cost them all Western support. It is possible that lower-ranking officers in al Assad’s military used chemical weapons without his knowledge and perhaps against his wishes. It is possible that the casualties were far less than claimed. And it is possible that some of the pictures were faked.

All of these things are possible, but we simply don’t know which is true. More important is that major governments, including the British and French, are claiming knowledge that al Assad carried out the attack. U.S. Secretary of State John Kerry made a speech Aug. 26 clearly building the case for a military response, and referring to the regime attack as “undeniable” and the U.S. assessment so far as “grounded in facts.” Al Assad meanwhile has agreed to allow U.N. inspectors to examine the evidence onsite. In the end, those who oppose al Assad will claim his supporters concealed his guilt, and the insurgents will say the same thing if they are blamed or if the inspectors determine there is no conclusive evidence of attacks.

The truth here has been politicized, and whoever claims to have found the truth, whatever it actually is, will be charged with lying. Nevertheless, the dominant emerging story is that al Assad carried out the attack, killing hundreds of men, women and children and crossing the red line Obama set with impunity. The U.S. president is backed into a corner.

The United States has chosen to take the matter to the United Nations. Obama will make an effort to show he is acting with U.N. support. But he knows he won’t get U.N. support. The Russians, allies of al Assad and opponents of U.N.-based military interventions, will veto any proposed intervention. The Chinese — who are not close to al Assad, but also oppose the U.N.-sanctioned interventions — will probably join them. Regardless of whether the charges against al Assad are true, the Russians will dispute them and veto any action. Going to the United Nations therefore only buys time. Interestingly, the United States declared on Sunday that it is too late for Syria to authorize inspections. Dismissing that possibility makes the United States look tough, and actually creates a situation where it has to be tough.

Consequences in Syria and Beyond

This is no longer simply about Syria. The United States has stated a condition that commits it to an intervention. If it does not act when there is a clear violation of the condition, Obama increases the chance of war with other countries like North Korea and Iran. One of the tools the United States can use to shape the behavior of countries like these without going to war is stating conditions that will cause intervention, allowing the other side to avoid crossing the line. If these countries come to believe that the United States is actually bluffing, then the possibility of miscalculation soars. Washington could issue a red line whose violation it could not tolerate, like a North Korean nuclear-armed missile, but the other side could decide this was just another Syria and cross that line. Washington would have to attack, an attack that might not have been necessary had it not had its Syria bluff called.

There are also the Russian and Iranian questions. Both have invested a great deal in supporting al Assad. They might both retaliate were someone to attack the Syrian regime. There are already rumors in Beirut that Iran has told Hezbollah to begin taking Americans hostage if the United States attacks Syria. Russia meanwhile has shown in the Snowden affair what Obama clearly regards as a hostile intent. If he strikes, he thus must prepare for Russian counters. If he doesn’t strike, he must assume the Russians and Iranians will read this as weakness.

Syria was not an issue that affected the U.S. national interest until Obama declared a red line. It escalated in importance at that point not because Syria is critical to the United States, but because the credibility of its stated limits are of vital importance. Obama’s problem is that the majority of the American people oppose military intervention, Congress is not fully behind an intervention and those now rooting the United States on are not bearing the bulk of the military burden — nor will they bear the criticism that will follow the inevitable civilian casualties, accidents and misdeeds that are part of war regardless of the purity of the intent.

The question therefore becomes what the United States and the new coalition of the willing will do if the red line has been crossed. The fantasy is that a series of airstrikes, destroying only chemical weapons, will be so perfectly executed that no one will be killed except those who deserve to die. But it is hard to distinguish a man’s soul from 10,000 feet. There will be deaths, and the United States will be blamed for them.

The military dimension is hard to define because the mission is unclear. Logically, the goal should be the destruction of the chemical weapons and their deployment systems. This is reasonable, but the problem is determining the locations where all of the chemicals are stored. I would assume that most are underground, which poses a huge intelligence problem. If we assume that perfect intelligence is available and that decision-makers trust this intelligence, hitting buried targets is quite difficult. There is talk of a clean cruise missile strike. But it is not clear whether these carry enough explosives to penetrate even minimally hardened targets. Aircraft carry more substantial munitions, and it is possible for strategic bombers to stand off and strike the targets.

Even so, battle damage assessments are hard. How do you know that you have destroyed the chemicals — that they were actually there and you destroyed the facility containing them? Moreover, there are lots of facilities and many will be close to civilian targets and many munitions will go astray. The attacks could prove deadlier than the chemicals did. And finally, attacking means al Assad loses all incentive to hold back on using chemical weapons. If he is paying the price of using them, he may as well use them. The gloves will come off on both sides as al Assad seeks to use his chemical weapons before they are destroyed.

A war on chemical weapons has a built-in insanity to it. The problem is not chemical weapons, which probably can’t be eradicated from the air. The problem under the definition of this war would be the existence of a regime that uses chemical weapons. It is hard to imagine how an attack on chemical weapons can avoid an attack on the regime — and regimes are not destroyed from the air. Doing so requires troops. Moreover, regimes that are destroyed must be replaced, and one cannot assume that the regime that succeeds al Assad will be grateful to those who deposed him. One must only recall the Shia in Iraq who celebrated Saddam’s fall and then armed to fight the Americans.

Arming the insurgents would keep an air campaign off the table, and so appears to be lower risk. The problem is that Obama has already said he would arm the rebels, so announcing this as his response would still allow al Assad to avoid the consequences of crossing the red line. Arming the rebels also increases the chances of empowering the jihadists in Syria.

When Obama proclaimed his red line on Syria and chemical weapons, he assumed the issue would not come up. He made a gesture to those in his administration who believe that the United States has a moral obligation to put an end to brutality. He also made a gesture to those who don’t want to go to war again. It was one of those smart moves that can blow up in a president’s face when it turns out his assumption was wrong. Whether al Assad did launch the attacks, whether the insurgents did, or whether someone faked them doesn’t matter. Unless Obama can get overwhelming, indisputable proof that al Assad did not — and that isn’t going to happen — Obama will either have to act on the red line principle or be shown to be one who bluffs. The incredible complexity of intervening in a civil war without becoming bogged down makes the process even more baffling.

Obama now faces the second time in his presidency when war was an option. The first was Libya. The tyrant is now dead, and what followed is not pretty. And Libya was easy compared to Syria. Now, the president must intervene to maintain his credibility. But there is no political support in the United States for intervention. He must take military action, but not one that would cause the United States to appear brutish. He must depose al Assad, but not replace him with his opponents. He never thought al Assad would be so reckless. Despite whether al Assad actually was, the consensus is that he was. That’s the hand the president has to play, so it’s hard to see how he avoids military action and retains credibility. It is also hard to see how he takes military action without a political revolt against him if it goes wrong, which it usually does.

You can read more updates on what is unfolding in Syria by following Stratfor at the links below:

The Snowden Revelations: Keeping the NSA in Perspective via Stratfor

July 16, 2013 David Mint

While the world continues to watch and wait for Eric Snowden’s next move, we have watched with bewilderment from afar. We has baffled us is how Mr. Snowden’s revelations about the NSA’s programs qualify as shocking.

To anyone who has stopped to ponder the phenomenon of the Internet, it should have been abundantly clear long ago that the structure of Internet itself is, among other things, a giant information gathering tool. To assume that those in power would not make use of this tool towards their ends is to deny the power of self interest.

However, while programs such as PRISM and many others which surely exist are disturbing, they are not without precedent in the American Imperial experience. In many respects, the Internet, while greatly facilitating the gathering of information, has likely served to make the mission of the NSA with respect to evaluating such data infinitely more difficult.

The following essay, Keeping the NSA in Perspective by George Friedman, is republished here with permission of Stratfor.

As always, Mr. Friedman does a fine job of providing the historical context for the current NSA/Snowden fiasco as well as presenting both the operational and constitutional difficulties not only of surveillance programs such as PRISM, but also of waging a war with such vague objectives as the current War on Terror seems to have.

Without further ado, Mr. Friedman…

Keeping the NSA in Perspective

By George Friedman

In June 1942, the bulk of the Japanese fleet sailed to seize the Island of Midway. Had Midway fallen, Pearl Harbor would have been at risk and U.S. submarines, unable to refuel at Midway, would have been much less effective. Most of all, the Japanese wanted to surprise the Americans and draw them into a naval battle they couldn’t win.

The Japanese fleet was vast. The Americans had two carriers intact in addition to one that was badly damaged. The United States had only one advantage: It had broken Japan’s naval code and thus knew a great deal of the country’s battle plan. In large part because of this cryptologic advantage, a handful of American ships devastated the Japanese fleet and changed the balance of power in the Pacific permanently.

This — and the advantage given to the allies by penetrating German codes — taught the Americans about the centrality of communications code breaking. It is reasonable to argue that World War II would have ended much less satisfactorily for the United States had its military not broken German and Japanese codes. Where the Americans had previously been guided to a great extent by Henry Stimson’s famous principle that “gentlemen do not read each other’s mail,” by the end of World War II they were obsessed with stealing and reading all relevant communications.

The National Security Agency evolved out of various post-war organizations charged with this task. In 1951, all of these disparate efforts were organized under the NSA to capture and decrypt communications of other governments around the world — particularly those of the Soviet Union, which was ruled by Josef Stalin, and of China, which the United States was fighting in 1951. How far the NSA could go in pursuing this was governed only by the extent to which such communications were electronic and the extent to which the NSA could intercept and decrypt them.

The amount of communications other countries sent electronically surged after World War II yet represented only a fraction of their communications. Resources were limited, and given that the primary threat to the United States was posed by nation-states, the NSA focused on state communications. But the principle on which the NSA was founded has remained, and as the world has come to rely more heavily on electronic and digital communication, the scope of the NSA’s commission has expanded.

What drove all of this was Pearl Harbor. The United States knew that the Japanese were going to attack. They did not know where or when. The result was disaster. All American strategic thinking during the Cold War was built around Pearl Harbor — the deep fear that the Soviets would launch a first strike that the United States did not know about. The fear of an unforeseen nuclear attack gave the NSA leave to be as aggressive as possible in penetrating not only Soviet codes but also the codes of other nations. You don’t know what you don’t know, and given the stakes, the United States became obsessed with knowing everything it possibly could.

In order to collect data about nuclear attacks, you must also collect vast amounts of data that have nothing to do with nuclear attacks. The Cold War with the Soviet Union had to do with more than just nuclear exchanges, and the information on what the Soviets were doing — what governments they had penetrated, who was working for them — was a global issue. But you couldn’t judge what was important and what was unimportant until after you read it. Thus the mechanics of assuaging fears about a “nuclear Pearl Harbor” rapidly devolved into a global collection system, whereby vast amounts of information were collected regardless of their pertinence to the Cold War.

There was nothing that was not potentially important, and a highly focused collection strategy could miss vital things. So the focus grew, the technology advanced and the penetration of private communications logically followed. This was not confined to the United States. The Soviet Union, China, the United Kingdom, France, Israel, India and any country with foreign policy interests spent a great deal on collecting electronic information. Much of what was collected on all sides was not read because far more was collected than could possibly be absorbed by the staff. Still, it was collected. It became a vast intrusion mitigated only by inherent inefficiency or the strength of the target’s encryption.

Justified Fear

The Pearl Harbor dread declined with the end of the Cold War — until Sept. 11, 2001. In order to understand 9/11’s impact, a clear memory of our own fears must be recalled. As individuals, Americans were stunned by 9/11 not only because of its size and daring but also because it was unexpected. Terrorist attacks were not uncommon, but this one raised another question: What comes next? Unlike Timothy McVeigh, it appeared that al Qaeda was capable of other, perhaps greater acts of terrorism. Fear gripped the land. It was a justified fear, and while it resonated across the world, it struck the United States particularly hard.

Part of the fear was that U.S. intelligence had failed again to predict the attack. The public did not know what would come next, nor did it believe that U.S. intelligence had any idea. A federal commission on 9/11 was created to study the defense failure. It charged that the president had ignored warnings. The focus in those days was on intelligence failure. The CIA admitted it lacked the human sources inside al Qaeda. By default the only way to track al Qaeda was via their communications. It was to be the NSA’s job.

As we have written, al Qaeda was a global, sparse and dispersed network. It appeared to be tied together by burying itself in a vast new communications network: the Internet. At one point, al Qaeda had communicated by embedding messages in pictures transmitted via the Internet. They appeared to be using free and anonymous Hotmail accounts. To find Japanese communications, you looked in the electronic ether. To find al Qaeda’s message, you looked on the Internet.

But with a global, sparse and dispersed network you are looking for at most a few hundred men in the midst of billions of people, and a few dozen messages among hundreds of billions. And given the architecture of the Internet, the messages did not have to originate where the sender was located or be read where the reader was located. It was like looking for a needle in a haystack. The needle can be found only if you are willing to sift the entire haystack. That led to PRISM and other NSA programs.

The mission was to stop any further al Qaeda attacks. The means was to break into their communications and read their plans and orders. To find their plans and orders, it was necessary to examine all communications. The anonymity of the Internet and the uncertainties built into its system meant that any message could be one of a tiny handful of messages. Nothing could be ruled out. Everything was suspect. This was reality, not paranoia.

It also meant that the NSA could not exclude the communications of American citizens because some al Qaeda members were citizens. This was an attack on the civil rights of Americans, but it was not an unprecedented attack. During World War II, the United States imposed postal censorship on military personnel, and the FBI intercepted selected letters sent in the United States and from overseas. The government created a system of voluntary media censorship that was less than voluntary in many ways. Most famously, the United States abrogated the civil rights of citizens of Japanese origin by seizing property and transporting them to other locations. Members of pro-German organizations were harassed and arrested even prior to Pearl Harbor. Decades earlier, Abraham Lincoln suspended the writ of habeas corpus during the Civil War, effectively allowing the arrest and isolation of citizens without due process.

There are two major differences between the war on terror and the aforementioned wars. First, there was a declaration of war in World War II. Second, there is a provision in the Constitution that allows the president to suspend habeas corpus in the event of a rebellion. The declaration of war imbues the president with certain powers as commander in chief — as does rebellion. Neither of these conditions was put in place to justify NSA programs such as PRISM.

Moreover, partly because of the constitutional basis of the actions and partly because of the nature of the conflicts, World War II and the Civil War had a clear end, a point at which civil rights had to be restored or a process had to be created for their restoration. No such terminal point exists for the war on terror. As was witnessed at the Boston Marathon — and in many instances over the past several centuries — the ease with which improvised explosive devices can be assembled makes it possible for simple terrorist acts to be carried out cheaply and effectively. Some plots might be detectable by intercepting all communications, but obviously the Boston Marathon attack could not be predicted.

The problem with the war on terror is that it has no criteria of success that is potentially obtainable. It defines no level of terrorism that is tolerable but has as its goal the elimination of all terrorism, not just from Islamic sources but from all sources. That is simply never going to happen and therefore, PRISM and its attendant programs will never end. These intrusions, unlike all prior ones, have set a condition for success that is unattainable, and therefore the suspension of civil rights is permanent. Without a constitutional amendment, formal declaration of war or declaration of a state of emergency, the executive branch has overridden fundamental limits on its powers and protections for citizens.

Since World War II, the constitutional requirements for waging war have fallen by the wayside. President Harry S. Truman used a U.N resolution to justify the Korean War. President Lyndon Johnson justified an extended large-scale war with the Gulf of Tonkin Resolution, equating it to a declaration of war. The conceptual chaos of the war on terror left out any declaration, and it also included North Korea in the axis of evil the United States was fighting against. Former NSA contractor Edward Snowden is charged with aiding an enemy that has never been legally designated. Anyone who might contemplate terrorism is therefore an enemy. The enemy in this case was clear. It was the organization of al Qaeda but since that was not a rigid nation but an evolving group, the definition spread well beyond them to include any person contemplating an infinite number of actions. After all, how do you define terrorism, and how do you distinguish it from crime?

Three thousand people died in the 9/11 attacks, and we know that al Qaeda wished to kill more because it has said that it intended to do so. Al Qaeda and other jihadist movements — and indeed those unaffiliated with Islamic movements — pose threats. Some of their members are American citizens, others are citizens of foreign nations. Preventing these attacks, rather than prosecuting in the aftermath, is important. I do not know enough about PRISM to even try to guess how useful it is.

At the same time, the threat that PRISM is fighting must be kept in perspective. Some terrorist threats are dangerous, but you simply cannot stop every nut who wants to pop off a pipe bomb for a political cause. So the critical question is whether the danger posed by terrorism is sufficient to justify indifference to the spirit of the Constitution, despite the current state of the law. If it is, then formally declare war or declare a state of emergency. The danger of PRISM and other programs is that the decision to build it was not made after the Congress and the president were required to make a clear finding on war and peace. That was the point where they undermined the Constitution, and the American public is responsible for allowing them to do so.

Defensible Origins, Dangerous Futures

The emergence of programs such as PRISM was not the result of despots seeking to control the world. It had a much more clear, logical and defensible origin in our experiences of war and in legitimate fears of real dangers. The NSA was charged with stopping terrorism, and it devised a plan that was not nearly as secret as some claim. Obviously it was not as effective as hoped, or the Boston Marathon attack wouldn’t have happened. If the program was meant to suppress dissent it has certainly failed, as the polls and the media of the past weeks show.

The revelations about PRISM are far from new or interesting in themselves. The NSA was created with a charter to do these things, and given the state of technology it was inevitable that the NSA would be capturing communications around the world. Many leaks prior to Snowden’s showed that the NSA was doing this. It would have been more newsworthy if the leak revealed the NSA had not been capturing all communications. But this does give us an opportunity to consider what has happened and to consider whether it is tolerable.

The threat posed by PRISM and other programs is not what has been done with them but rather what could happen if they are permitted to survive. But this is not simply about the United States ending this program. The United States certainly is not the only country with such a program. But a reasonable start is for the country that claims to be most dedicated to its Constitution to adhere to it meticulously above and beyond the narrowest interpretation. This is not a path without danger. As Benjamin Franklin said, “They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”

U.S. Naval Update Map: June 6, 2013 | Stratfor

Gallery June 11, 2013 David Mint

The private intelligence firm Stratfor publishes a weekly report on the positioning of US Naval assets using non-classified, open source information available to the public. While this week’s report does not appear to contain any surprises, they can provide valuable insight into the movements of the primary means by which the United States projects its military power across the globe.

The complete report and graphic are republished here with permission of Stratfor:

U.S. Naval Update Map: June 6, 2013

The Naval Update Map shows the approximate current locations of U.S. Carrier Strike Groups and Amphibious Ready Groups, based on available open-source information. No classified or operationally sensitive information is included in this weekly update. CSGs and ARGs are the keys to U.S. dominance of the world’s oceans. A CSG is centered on an aircraft carrier, which projects U.S. naval and air power and supports a Carrier Air Wing, or CVW. The CSG includes significant offensive strike capability. An ARG is centered on three amphibious warfare ships, with a Marine Expeditionary Unit embarked. An MEU is built around a heavily reinforced and mobile battalion of Marines.

Carrier Strike Groups

The USS Dwight D. Eisenhower CSG with CVW 7 embarked is conducting missions supporting Operation Enduring Freedom, maritime security operations and theater security cooperation efforts in the U.S. 5th Fleet AOR.
The USS Nimitz CSG with CVW 11 embarked is conducting maritime security operations and theater security cooperation efforts in the U.S. 7th Fleet AOR.
The USS Carl Vinson is underway in the Pacific Ocean for routine training.
The USS Harry S. Truman CSG with CVW 3 embarked is conducting a sustainment exercise in the Atlantic Ocean in preparation for an upcoming deployment.

Amphibious Ready Groups/Marine Expeditionary Units

The USS Kearsarge ARG with the 26th MEU embarked is underway in the U.S. 5th Fleet AOR supporting maritime security operations and conducting theater security cooperation efforts.
The USS Wasp is underway in the Atlantic Ocean for routine training.

U.S. Naval Update Map: June 6, 2013 is republished with permission of Stratfor

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December 5, 2012 David Mint

Egypt and the Strategic Balance via Stratfor

More insight into what is happening in Egypt and what it means for the balance of power in the Middle East. Will the Egyptian military intervene? Enjoy another insightful report by Stratfor on the events unfolding now and what it all means:

Egypt and the Strategic Balance via Stratfor

Economics, Financial Dashboards, Services, Strategy, The Mint

What is a Virtual CFO?

December 3, 2012 David Mint

12/3/2012 Portland, Oregon – Pop in your mints…

What is a Virtual CFO? At The Mint, we like to sum it up in the words of one of John Travolta’s greatest characters, Chili Palmer from the classic Get Shorty:

“Bo Catlett: Harry called you his associate. What exactly does that mean? I mean, I never heard your name, or read it in Variety, or The Star, or anyplace.

Chili Palmer: It’s what he said, I’m his associate.

Bo Catlett: You must bring something heavy to the deal.

Chili Palmer: I do: me.”

To help readers to fully grasp this captivating analogy, we have prepared the following legend to accompany the above movie quote:

Harry: You, our client

Bo Catlett – Any banker, vendor, potential investor, potential partner, government regulator, tax collector, client, CPA, attorney, or loan shark.

Chili Palmer: The Mint (us) as your Virtual CFO.

Associate: The Virtual CFO.

If you need a CFO, but don’t want or need to pay one full time, we’re here to help.

As your Virtual CFO, we take care of your high level number problems, plain and simple. As an entrepreneur, you know your business like the back of your hand, and you can tell by feel when things are going well, and when they are not.

However, there comes a time when every Entrepreneur begins to panic. They understand that they have generated a flurry of activity in which money changes hands. They may even have a vague understanding of which of their actions are profitable and which ones cost them money, on net, to perform.

The entrepreneur is also painfully aware that their time is limited. In order to take their vision to the next level, they need to know, with absolute certainty, that what they are doing is scalable, meaning that it will continue to be profitable as it expands.

What many entrepreneurs do at this point, in the midst of this all to common panic attack, is to engage a CPA to help with their company’s financial management. The CPA, in turn, begins to bill on the order of $150 per hour as the entrepreneur passes along problems to the CPA that most well trained bookkeepers can handle, or worse, the entrepreneur begins to spend their priceless time mired in the details of the accounting of their organization. Again, a task generally best left to the well-trained bookkeeper.

As the CPA fees begin to mount, the entrepreneur then relents and decides that they need a CFO. They are not certain why, but they believe that this magical individual can help to reassure them that the numbers are working in their favor as well as eliminate their CPA bill.

What the unhappy entrepreneur finds, once the CFO is hired, is that not only has their CPA bill not gone away, but they now have a staff person who, all in, represents between $100,000 to $200,000 USD of direct annual costs and any number of indirect costs as they begin to hire their friends, recommend large investments in accounting software, and create incessant demands on the already overworked and underpaid, above mentioned, well-trained book keeper, the non-key position that it seems always needs to be filled by an expensive recruiting agency by someone who sees it as a stepping stone to their next gig.

As a result, the unhappy entrepreneur is left rolling the dice with the integrity of their financial data and often must resort to hiring an expensive consultant to piece together the rubble of his or her precious financial data, from which they had hoped, before the nightmare of the full time CFO began, to glean useful information from by which to guide their entrepreneurial activities.

There must be a better way.

Enter The Mint’s Virtual CFO service, where we offer all of the benefits of having a CFO, without the high direct and indirect costs, which are often associated with the creation of a position that all too often morphs into a sinecure.

Our value proposition is simple: For $1,000 each month that you engage our services, you and your company receive 10 ours of our undivided attention, with no strings or golden parachutes attached.

What will we do for you in those 10 hours each month? Depending upon your needs, we will take the financial statements produced by your happy, well-trained bookkeeper on a monthly basis and perform one or all of the following:

– Create a detailed ratio analysis in the form of a dashboard containing ratios and other financial metrics specifically tailored to gauge your company’s financial health and forward looking prospects.

– Benchmark your dashboard data against that of your competitors to the extent possible.

– Participate in on-going Strategic Planning.

– Make specific recommendations for improving profitability.

– Perform risk assessments for proposed transactions.

– Perform information systems assessments and oversight for finance, operations, and administrative systems.

– Provide a framework for and assistance in the enterprise budgeting process and create related forecasting activities.

– Create projections of results, cash flow and cash positioning.

– Assess organizational structure and create recommendations for optimization.

– Assess our company’s capital structure and make recommendations for optimization.

– Perform business valuations and financial due diligence for potential acquisitions.

– Review of contracts.

– Create requests for proposals to engage banking, credit, audit, tax, accounting software, payroll software, and treasury management services to ensure you get the best value and a product that works for your company when engaging these services.

– Act as a true, independent advisor.

– Much more.

In short, as an Entrepreneur, we’ve got your back so that you can do what you do best.

What we don’t do:

– Sign contracts on your behalf or act as a direct agent for your company (unless you explicitly request us to and then, only under parameters which you set and are comfortable with.)

– Day to day accounting entry, accounts payable, bank reconciliations, and data entry. This is what you pay your well-trained, happy bookkeeping staff to do at a fraction of the hourly cost of our services.

– Tell you how to run your business. You are still the boss and the one with the most skin in the game, after all!

– Take an equity stake in your company in exchange for services. We work on a fee basis, which helps us to better help you with the objectivity required to act in your best interests. Granting equity stakes, while ultimately being an incredibly expensive way to finance expansion, often comes with the nasty side effect of unnecessary hard feelings and, or, the destruction of your precious enterprise. Tempting as it may be to be to get in on the ground of the next IBM, we generally advise against granting equity stakes unless it is part of a well structured and documented equity financing plan which is crystal clear to all involved.

What if I require more than 10 hours of your time?

We generally work very efficiently and strive to over deliver to every client. At a minimum, you will receive a financial dashboard, benchmarking and ratio analysis, and a brief state of the financial union memo with recommendations and relevant forecasts.

However, if you are contemplating a large acquisition, negotiating a merger, senior debt sale, bond issuance, or restructuring existing debt, converting a software system, etc, we will do whatever humanly possible with whatever time remains. Anything over the allotted 10 hours we bill out at $150 per hour.

We are efficiency freaks, which is good when it comes to numbers and finance, and many production processes (save wine, cheese, and the like). With the proper data, equipment, and communications devices, we can generally accomplish in 10 hours what many CFOs accomplish in a month.

Finally, if you need us to bring something heavy to the deal, we will help you to make sure that the deal is valuable enough to you that our $150/hr fee will be a pittance compared to what is gained by our involvement.

What industries do we serve?

Over the course of our professional career, we have had the good fortune to gain a wide variety of experience in the areas of Accounting, Finance, Information Systems, business valuation, Auditing, and Tax matters for a wide variety of companies, both for profit and non profit, in industries as varied as translation and writing to Health Services, Real Estate Development, Property Management, Social services, and packaging. We have even done a stint in the barricade business.

Intrigued? Contact us today for a free consultation to see if your company would be a good fit for our services. Our joy is in your success.

After all, $1,000 a month is a small price to pay for piece of mind as your business grows. It looks even better when you run the numbers on hiring a full time CFO.

Stay tuned and Trust Jesus.

Stay Fresh!

November 29, 2012 David Mint

Key Indicators for December 3 2012

Copper Price per Lb: $3.63
Oil Price per Barrel: $88.92
Corn Price per Bushel: $7.49
10 Yr US Treasury Bond: 1.63%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,719 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.9%
Inflation Rate (CPI): 0.1%
Dow Jones Industrial Average: 12,966
M1 Monetary Base: $2,377,300,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,302,300,000,000

72 Hour Call, Daily Default, Events, Personal Finance, Strategy, The Mint

The time to short Apple, as in $AAPL, is nigh

11/29/2012 Portland, Oregon – Pop in your mints…

Here at The Mint, we don’t generally comment on individual stocks. In general, we see equity prices as subject to monetary policy whims and HFT (High Frequency Trading) bots. As such, it is rare that the perceived fundamentals of a stock match its bid in the markets at any given time, no matter how perfect the market’s knowledge may be.

Add to this the fact the Corporations are, at their base, socialist enterprises, and you too, fellow taxpayer, will begin to see equities in a whole new light.

That said, sometimes things come to us so clearly and are of such significance that we can ignore the fact that we are talking about an equity and simply study the phenomenon which it represents. In the case of Apple, the brainchild of Steve Jobs that has given the world the IIe, the Macintosh, and the Ipod-phone-pad craze, among other things, the phenomenon we are witnessing demands a response.

In summary, we believe that about the time that Santa Claus makes his annual jaunt around the world, dropping Apples I-whatevers in the stockings of children, both young and old, of well heeled parents all over the world, it will be time for wise investors to short Apple, big time.

Why such a bold call? Other than a hunch, confirmed by a recent analysis we were fortunate to read, we will attempt to articulate our reasoning for this prediction as follows:

1. Reliance on patents as a business plan is equivalent to capitulation in the technological sector. A short time ago, we wrote briefly regarding the lawsuits which Apple has launched against Samsung and others who have dared to “imitate” its mobile technology:

Apple’s use of Patent Law indicative of an inferior product offering

Relying on litigation either for revenues or to protect revenue streams is a losing strategy. It not only hurts your competitors, but the public in general. Since innovation got Apple to where it was, why not continue? It shouldn’t be difficult with the largest cash hoard in corporate history at their disposal.

We once “got in” on an IPO for a company called “Caldera Systems,” and hung on for dear life, waiting for them to profit from the rising tide of Linux Operating Systems. We then watched helplessly as their strategy degenerated from trying to profit from open source software to changing their name via an acquisition to SCO Group and initiating a lawsuit against IBM which boiled down to a few lines of code that SCO claimed was theirs.

As far as a business strategy, pursuing Intellectual Property claims is last ditch effort to save face.

2. Steve Jobs is gone. Mr. Jobs was a rare creative genius as well as the gravitational center of Apple. Without him, Apple was bound to turn into the technological equivalent of the break up of the Roman Empire, or any Empire for that matter, with brutal wars for territory and resources, no matter how abundant they may be, which will eventually leave the Empire a shadow of its former self.

3. Fund Manager window dressing. Apple stock has minted a 44% return year to date at the time of this writing. It has also become a big part of the Nasdaq and S&P 500. As a consequence, many institutional investors have large direct or indirect stakes in Apple which has a juicy return that is begging to be booked before year end. Sell.

4. The moronic Fiscal Cliff. This is crushing business confidence and by extension, the US Consumer. The combination of the unprecedented uncertainty surrounding legislation with wide ranging economic consequences, such as Obamacare and the Dodd-Frank act, coupled with the debt ceiling, spending sequester, and sun setting tax provisions has utterly paralyzed American businesses as some 1,000 in Washington bicker over numbers they do not understand. Washington will get a deal done and it will be bad for all involved. Unless the payroll tax holiday gets extended, the US consumer is toast.

This is why we think Apple is ripe for the picking. However, we learned long ago to ignore our gut feeling until it is confirmed.
Enter Chris Vermeulen. In a recent post over at the Market Oracle, Mr. Vermeulen defines the terms for the upcoming demise of Apple’s stock price in terms of the psychology of market swings. For specifics on the phenomenon at hand and a possible short signal (which, as near as we can tell, will be when $AAPL touches $640 in late December), we refer you to his insightful article:

Apple, How Market Booms Turn to Busts, Trading from New Paradigm to Despair

In our humble assessment, which should be taken with the same grain of salt which all free advice must be taken, we believe that Mr. Vermeulen has put into numbers and graphs what we have felt, generally, ever since we purchased our first Android: Apple’s days as king of the mobile computing realm are numbered. People will not pay for things that they can have for free, and, as the commercials from Designer Imposters long ago reminded us.

“You can patent a mix of chemicals, but you can’t patent a smell.”

Two words: Short Apple

Stay tuned and Trust Jesus.

Stay Fresh!

November 21, 2012 David Mint

Key Indicators for November 29 2012

Copper Price per Lb: $3.52
Oil Price per Barrel: $86.62
Corn Price per Bushel: $7.60
10 Yr US Treasury Bond: 1.62%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,719 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.9%
Inflation Rate (CPI): 0.1%
Dow Jones Industrial Average: 12,985
M1 Monetary Base: $2,329,700,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,303,600,000,000

Full Disclosure and friendly warning: We do not own any shares of $AAPL, nor do we plan on shorting them with our own money, as stock market speculation is a great way to lose a ton of dough if one doesn’t know what they are doing! Furthermore, we are hardly qualified to give specific stock or portfolio advice to persons we do not know or do know but do not have intimate knowledge of their finances and tax situation. If you choose to do so as a result of reading this article, you do it completely at your own risk or reward.

Events, Forgiveness, Peaceful Resistance, Strategy, The Mint

On Thanksgiving, a glimmer of hope for Peace in the Middle East

11/21/2012 Portland, Oregon – Pop in your mints…

Today, the rockets around grounded in the Holy Land. For how long, is anybody’s guess. It appears, as most negotiations are, to be a mixed outcome, as both Egypt and the US are involved in the role of policing the agreement.

The current cease fire, which has, for the moment, halted aggressions between Hamas and Israel, appears to call for the Egyptian government to guarantee the conditions are being met with big brother, the United States, monitoring the situation.

If indeed the rockets, in particular the longer range Fajr-5s, remain neutralized, Israel will have gained a key objective. However, according to Stratfor, it appears that, for the moment, only Hamas and Israel have assented to the cease fire. The Palestinian Jihad remains a variable, and how long the cease fire will last likely hinges upon their willingness to observe it, as any projectile launched into Israel from Gaza will likely trigger the imminent Israeli ground invasion.

It is difficult to tell if Israel is strategically better off assenting to what is being reported as a tentative cease fire. While humankind benefits, this will slow progress towards what we perceive to be the Israeli’s ultimate goal with this operation, the disabling of Iran’s nuclear program.

On the other hand, Israel now has the US firmly engaged, raising the odds that US assets will be called into the region. In a sense, they have been hovering there for the past 11 years.

The United States has a gigantic problem of its own, namely, a Fiscal train wreck which is nearing impact with an ETA of January 1. The train wreck has already done a great deal of damage, as assumptions across the board are being reset in anticipation of Washington punting or worse, bungling the situation.

Unfortunately, it is the type of problem that the Keynesians who dominate economic thought at the highest levels have openly advocated war, the ultimate economic stimulus in a self destructive, insane, “debt is money” system, as a remedy.

As the winds of war continue to swirl about the Middle East, let us be thankful for the gesture made by Hamas and Israel, and pray that it will bear the fruit of an everlasting peace in the region. For in the deepest despair lies the potential for the greatest hope, and consequently the greatest good.

At this hour there have been few specifics as to what the terms of the cease fire are, but the mere fact that the hostilities have ceased comes as a great relief and gives those of us celebrating Thanksgiving, the wonderful, unique, and perhaps purest holiday celebration that we know of, an extra reason to celebrate tomorrow.

We continue to pray for the peace of Jerusalem and beyond, for peace is merely a matter of erasing borders and choosing to forgive.

For a lasting peace to prevail, the deadly “Might Makes Right” mentality must be renounced in favor of IMMEDIATE FORGIVENESS, and it is up to each one of us to choose to forgive and be forgiven. Only then, when there is peace in our hearts, will the world know peace.

Happy Thanksgiving, may you and yours dine on forgiveness and drink in grace this Holiday Season.

Stay tuned and Trust Jesus.

Stay Fresh!

Key Indicators for November 21, 2012

Copper Price per Lb: $3.47
Oil Price per Barrel: $87.65
Corn Price per Bushel: $7.41
10 Yr US Treasury Bond: 1.69%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,729 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.9%
Inflation Rate (CPI): 0.1%
Dow Jones Industrial Average: 12,837
M1 Monetary Base: $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,333,800,000,000

November 20, 2012 David Mint

Middle East Conflict Analysis: Will Hillary Clinton’s visit to Middle East will result in US engagement?

11/20/2012 Portland, Oregon – Pop in your mints…

Here at The Mint, we have been following with great interest the recent escalation in the conflict in the Middle East. It is understood by many that the grievances between the Israelis and the Palestinians are seemingly irreconcilable. Today, we will attempt to provide a bit of background, along with details we have gathered from various sources regarding the current dynamic, and engage in speculation as to potential outcomes.

Background

While the divisions in the region have deep historical roots, we have attempted to gain what understanding we can of the modern conflict. Our reading on the matter has been limited to The Bible, The Haj, and The Source, as such, we recognize that our bias is Pro-Israeli.

From these sources, we have cobbled together the following understanding: Beginning in the early 1900’s as Jewish settlers began to populate Palestine in an attempt to create a homeland where the Jewish people, who had suffered persecution in every other land on the planet, could relocate to escape said persecution.

The logical place to do this, from the Jewish point of view, was to purchase land in the area where the ancient Kingdom of Israel had been. The Jews then worked to establish settlements and to encourage Jewish pilgrims and refugees to come home. In 1947, after the ethnic cleansing that the Jews suffered during World War II, the Jewish settlers appealed to the United Nations for statehood and recognition by the International Community.

On November 29, 1947, with the UN divided on the matter (which required a 2/3 majority vote for passage), the Philippines relented to pressure from the United States and cast the deciding vote in favor, and Israel for all practical purposes was recognized by the UN.

{Editor’s Note: We present the UN vote as an EPIC FAIL of large scale “democracy by proxy,” and again make the case for small scale democratic systems left to operate in a large scale anarchic environment, which would allow peace to prosper as the small scale systems tacitly work towards the stalemates presented in “The Strategy of Conflict“, which is a discussion for another day.}

On May 15, 1948, when the British Mandate in Palestine officially expired, the predominantly Arab countries surrounding Israel attacked her and were repelled. It could be said that hostilities in the region have continued on and off ever since. Naturally, the Arab States refuse to recognize Israel’s existence to this day, and the situation in Palestine may be the most marked example of how the simple drawing of border lines has caused ceaseless bloodshed and heartache for those involved, with the ultimate losers being the inhabitants of what is today understood to be Palestine, those lands in Palestine which are not part of the Jewish state. These refugees were evacuated from their lands by the Arab states with the promise of inhabiting all of Palestine once the Jewish state was eliminated, and are now held hostage, in a sense, by both the Arab states and Israel.

We now fast forward from what undoubtedly is a biased History lesson to the present situation and, again more importantly, what is likely to occur.

The Present Dynamic

In the most recent escalation in hostilities, which began on November 15, 2012, both Hamas and Israel have continued their mutual assaults despite rumors that a cease fire is being negotiated by Egypt. To summarize recent events, a number of short and medium range rockets, amongst them the Fajr-5, which has now been used to target both Tel Aviv and Jerusalem, have been launched from the Gaza strip at Israeli population centers.

In response, Israel has called up reserves and is preparing a force of roughly 100,000 for a ground assault into Gaza, with the goal of neutralizing the longer range threat that the Fajr-5 presents.

Even casual observers will note that 100,000 troops is quite a bit of manpower, in fact, it exceeds the number of troops that the US currently has deployed in Afghanistan. Why would Israel, which should hold a clear technical advantage over its adversaries (leading many observers to sympathize with the Palestinians, a phenomenon known as “Underdogma” made famous by Michael Prell), call up so much firepower to deal with Gaza? One response is the prospect of prolonged urban warfare in Gaza City, where a portion of the Hamas rocket cache may be located.

Speculation on possible outcomes

However, given the timing of the Israeli response, just weeks after the US Presidential elections, it is just as likely that Israel is using the current conflict as a launch pad towards a unilateral operation to destroy Iran’s nuclear program and eliminate what Israel sees as its most urgent existential threat.

Benjamin Netanyahu, the Israeli Prime Minister, more than alluded to this in his September speech at the United Nations as he all but called for an invasion of Iran. With the re election of the Obama administration in the US, historically Israel’s closest ally, Netanyahu understands that the US is likely to stay on the sidelines in the near future and is taking the Iranian matter into his own hands.

Nadeem Walayat, the clairvoyant analyst at The Market Oracle, speculates that the ground campaign in Gaza is the first phase of a three phase operation. In order to attack Iran with minimal civilian casualties, Israel must first remove the threat of short and medium range rocket attacks by Iranian proxies on its population centers as such attacks would immediately begin were Israel to immediately attack Iran.

According to Walayat, Israel would attack Gaza and then Hezbollah in Lebanon, hoping to seal up these theaters of conflict before launching what by any account would be a risky assault on Iran. Either Iran is desperately close to developing a nuclear weapon, or Netanyahu is desperately seeking reelection. Whatever the motive, it should be clear that Israel is intent on dismantling Iran’s nuclear capabilities and that they view the present circumstances in the region give them the best opportunity for success, meaning neutralizing Iran’s nuclear program with limited fallout in the region or beyond.

Another part of the regional dynamic which is may greatly aid or hurt the Israeli strategy, depending upon how it plays out, is the conflict in Syria. The protracted conflict in Syria has caused Hezbollah to conserve rockets and other armaments which they would otherwise train on Israel in anticipation of a possible civil war breaking out in Lebanon. The recent international recognition of the Syrian opposition has only increased this threat.

At this point, Hezbollah could just as easily be drawn into deeply into a conflict in Lebanon as it could be in Israel. The current state of events in Syria favors the Israeli plan, if indeed Mr. Walayat is correct. However, should Israel be drawn into a protracted operation in Gaza, Hezbollah could choose to strike the Israelis first and open up a second front, which would begin to stretch Israel’s armed forces and slow their strategy which, in order to be successful, must be carried out in a matter of months.

Another wildcard in a situation that is full of them is that the recent spillover from Syria into Turkey has the potential to draw German troops and NATO assets into the theater.

Against this backdrop, Washington DC is panicking (as a result of having no strategy in the Middle East) and has dispatched Secretary of State Hillary Clinton to bring the big brother (or sister, as it were) element into the mix.

Clinton, along with Egyptian officials, will attempt to broker a ceasefire between Israel, Hamas, and the Palestinian Islamic Jihad, which, according to Stratfor, is in control of at least some of the Fajr-5 rocket cache in Gaza.

The most recent report from Stratfor on the matter indicates that the Palestinian Islamic Jihad and Hamas will negotiate together. The key demand of Israel is the grounding and confiscation of rockets in Gaza to neutralize the threat. If this can be achieved via a Cease fire, which would likely mean Israeli or even US involvement overseeing the removal of the weapons and preventing further rockets from entering Gaza, Israel will have achieved its objective and a ground assault into Gaza would be unnecessary.

If this is the outcome, expect Israel to concentrate both diplomatic and military efforts on the Iranian threat and ignore Hezbollah, as they will perceive that the US has their back, both literally and figuratively.

If, on the other hand, the Egyptians insist on assuming the role of policing the rocket removal and preventing shipments, a condition that Israel is unlikely to agree to, we anticipate that Israel will proceed with their ground assault into Gaza.

Here at The Mint, half the world away, we hope for the best. Perhaps the militants in Gaza will throw their rockets into the sea, and both Iran and Israel dismantle their respective nuclear programs. Seeing this example, all of humanity will immediately lay down their weapons, dismantle their nukes, and sing kumbaya. Anything is possible if those involved engage in IMMEDIATE FORGIVENESS and begin to live by the Golden Rule.

As this seems unlikely, we must all prepare for the worst, a middle east conflict launched in the name of self defense, which draws all of the world’s powers once again into armed conflict.

In the words of Jesse Ventura, “Nobody likes to see that…nobody.”

Stay tuned and Trust Jesus.

Stay Fresh!

November 15, 2012 David Mint

Key Indicators for November 20, 2012

Copper Price per Lb: $3.49
Oil Price per Barrel: $87.11
Corn Price per Bushel: $7.43
10 Yr US Treasury Bond: 1.66%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,728 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.9%
Inflation Rate (CPI): 0.1%
Dow Jones Industrial Average: 12,789
M1 Monetary Base: $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,333,800,000,000

Events, Politics, Strategy, The Mint

Escalation of Hostilities in Gaza as Israel prepares a ground campaign

11/15/2012 Portland, Oregon – Pop in your mints…

While politicians and bureaucrats in the US continue to posture and dig up dirt on one another in an attempt to place the blame on the “other guys” as the US goes off the Fiscal Cliff, something entirely more important is unfolding half a world away.

What happens in the Middle East is important for a variety of reasons, and it is important to pray for the peace of Jerusalem, not only for Jerusalem’s sake, but so that there will also be peace in our hearts. We must leave pondering this truth for another time as we endeavor to bring you the latest on the events developing in the Holy Land, namely the recent escalation of hostilities between Hamas and Israel.

As always, Stratfor is on the case, providing on the ground intelligence and analysis to help the layman understand what is occurring, why it is important, and most importantly, what is likely to occur as a result. Without further adieu, we turn to “Considering an Israeli Ground Assault in Gaza,” an insightful report, republished here with permission of Stratfor:

Considering an Israeli Ground Assault in Gaza

The Israeli air force continues to bombard targets within the Gaza Strip, but thus far ground forces have not yet begun an incursion into the territory. Whether the current air campaign escalates to a ground assault will largely depend on the mission that the Israeli military is trying to accomplish.

Israeli soldiers on the Israel-Gaza border on Nov. 15
Jack Guez/AFP/Getty Images
Israel Defense Forces’ official statements have emphasized that the goal is the severe degradation of Gaza militants’ ability to launch rocket strikes, particularly the new Fajr-5 rockets that are purportedly capable of striking Tel Aviv. Halting rocket attacks was also the mission during Operation Cast Lead, Israel’s most recent large-scale military operation involving Gaza, which took place in late 2008 and early 2009 and consisted of an air campaign similar to the current one followed by a ground invasion. Examining how Operation Cast Lead developed could provide useful context for how an Israeli ground invasion of Gaza could unfold.
Analysis
Operation Cast Lead can be separated into two distinct phases: air and ground. The air phase lasted for about one week and targeted suspected rocket smuggling routes, storage locations and firing positions, as well as targets of opportunity that emerged as hostilities progressed. This is very similar to what the IDF is doing currently, primarily with air assets but also assisted by naval and land assets capable of attacking from a distance.
The second phase was the ground attack. This phase consisted primarily of two distinct geographic theaters within Gaza. In the southern theater, Israeli units moved in and set up blocking positions near Rafah and Highway 4 in order to cut Hamas’ logistical supply lines running north toward Gaza City. Air and naval strikes were also used to enforce the border between Gaza and Egypt, where a strategically significant road known as the Philadelphi route is located. In the north, Israeli forces penetrated into the Gaza Strip to the north, northeast and slightly southeast of Gaza City itself. This served to isolate Gaza City and clear out initial rocket firing positions as well as defensive positions located in the immediate rural regions. After this initial move, follow-on forces were brought in to thoroughly search and clear identified enemy rocket launching sites, logistical hubs and command and control structures. Notably, Israeli forces did not venture deep into major population centers such as Gaza City and Rafah City to avoid the potentially higher casualties and more serious infrastructural damage associated with urban combat.
A ground operation now would likely look very similar to Cast Lead in design and tactics, since Cast Lead was considered an operational success and its mission was similar to the current one. However, there are two notable differences. First, in the southern theater during Cast Lead, Egyptian security forces worked to secure the Rafah crossing from their end and allowed Israeli forces to engage the Philadelphi route. Egypt now has a very different government, which brings into question its willingness to support a ground operation. Cairo has already announced that the Rafah Crossing will remain open. This creates an even more serious imperative for Israeli units to cut the supply lines in the south of the Gaza Strip to Gaza City. Israeli ground forces may need to physically occupy the Egypt-Gaza border because naval strikes and airstrikes may not accomplish the mission. This would be a slight expansion on the action taken in 2008-2009 and could bring Israeli forces into uncomfortably close contact with Egyptian forces.
Second, in the north, the potential range of the Fajr-5 missile expands the potential firing zone that needs to be cleared. As stated earlier, Cast Lead focused on Gaza City and its surrounding areas in clearing operations. In order to degrade militants’ abilities to reach Tel Aviv with the Fajr-5’s expanded range, the IDF will need to clear all potential firing areas to just south of Nusayrat. In theory, this would require the isolation of a larger area and the potential use of more forces or require more time to accomplish.
Visit our Israel page for related analysis, videos, situation reports and maps.
Tactically, IDF troops entered the Gaza Strip during Cast Lead by operating at night and creating their own crossing points as opposed to using previously established points. They also relied heavily upon combat engineers, armored construction equipment including unmanned D9 bulldozers, and dog teams to establish their own avenues of approach instead of using common routes through Gaza. Ground units also worked in heavy conjunction with air assets for reconnaissance and close air support, and had access to comprehensive artillery support. This allowed them to avoid improvised explosive devices, heavily mined primary access routes, ambushes and counterattacks militants had planned near the assumed IDF approaches.
In a likely ground incursion, we can expect IDF to use similar tactics that have been refined even further over the past four years, but we must assume that militants in Gaza will not make the same mistakes twice and will use different tactics in order to inflict more damage on ground forces. Already in this round of fighting, unconfirmed reports have emerged saying that militants are using MANPADS. If these rumors are true, it could force a more limited role for rotary-wing air support as well as anti-tank guided missiles and thus seriously hamper the firepower, cover and protection provided by armor.
Many of the conditions, geographic settings and stated goals of the current mission are similar to Operation Cast Lead, so one can assume that the potential upcoming ground phase would be similar as well. That being said, some differences have emerged that would likely force an expanded role for ground forces, and the mission stays the same only until the first exchanges of fire happen, as militants and other political actors would also be able to influence how events unfold. With the evolution of the battle, a ground operation is becoming increasingly likely and with the transition to the ground phase of operations casualties, tensions, and political ramifications will only intensify.

It is worth reiterating that Egypt has a completely different government than the one which was friendly to the Israeli cause during their 2008-2009 operations. Iran’s further isolation also make it likely to engage on some level against Israel if and when the ground offensive begins.

Again, pray for the peace of Jerusalem, Gaza, and all of Palestine, for hostilities there can throw the entire world out of balance. If you need proof, just watch the Western stock markets react as events unfold.

Stay tuned and Trust Jesus.

Stay Fresh!

Key Indicators for November 15, 2012

Copper Price per Lb: $3.46
Oil Price per Barrel: $84.50
Corn Price per Bushel: $7.21
10 Yr US Treasury Bond: 1.59%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,716 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.9%
Inflation Rate (CPI): 0.1%
Dow Jones Industrial Average: 12,542
M1 Monetary Base: $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,333,800,000,000

September 25, 2012 David Mint

The China-Japan Island Conflict – What does it mean?

At the Mint we, along with the rest of the world, follow current events with a wary understanding that the world is slowly destabilizing.

As international trade continues to collapse, energy that would otherwise be spent on productive activities is increasingly directed towards military preparations as nationalistic animosity rises to take its place.

As we studied our MBA in Barcelona back in 2003, our EU history professor speculated privately to us that the US invasion of Iraq had more to do with keeping an eye on China than any existential threat that Iraq posed at the time.

Circa 2012, his words seem almost prophetic. Now, as the Israeli/Iranian nuclear rhetoric continues to escalate, there is a new conflict over an old dispute in the East China Sea between China and Japan which, if it continues to escalate, could theoretically force the US into hostilities with China.

It is hard to image a worse scenario in both Iran and China. At the same, it is hard to imagine a more likely scenario as world governments increasingly look for distractions to a failure of domestic economic policies.

As always, Statfor provides informed insight for the geographically challenged such as ourselves in the following report. Enjoy and stay fresh!

Understanding the China-Japan Island Conflict

By Rodger Baker
Vice President of East Asia Analysis

Sept. 29 will mark 40 years of normalized diplomatic relations between China and Japan, two countries that spent much of the 20th century in mutual enmity if not at outright war. The anniversary comes at a low point in Sino-Japanese relations amid a dispute over an island chain in the East China Sea known as the Senkaku Islands in Japan and Diaoyu Islands in China.

These islands, which are little more than uninhabited rocks, are not particularly valuable on their own. However, nationalist factions in both countries have used them to enflame old animosities; in China, the government has even helped organize the protests over Japan’s plan to purchase and nationalize the islands from their private owner. But China’s increased assertiveness is not limited only to this issue. Beijing has undertaken a high-profile expansion and improvement of its navy as a way to help safeguard its maritime interests, which Japan — an island nation necessarily dependent on access to sea-lanes — naturally views as a threat. Driven by its economic and political needs, China’s expanded military activity may awaken Japan from the pacifist slumber that has characterized it since the end of World War II.

An Old Conflict’s New Prominence

The current tensions surrounding the disputed islands began in April. During a visit to the United States, Tokyo Gov. Shintaro Ishihara, a hard-line nationalist known for his 1989 book The Japan That Can Say No, which advocated for a stronger international role for Japan not tied to U.S. interests or influence, said that the Tokyo municipal government was planning to buy three of the five Senkaku/Diaoyu islands from their private Japanese owner. Ishihara’s comments did little to stir up tensions at the time, but subsequent efforts to raise funds and press forward with the plan drew the attention and ultimately the involvement of the Japanese central government. The efforts also gave China a way to distract from its military and political standoff with the Philippines over control of parts of the Spratly Islands in the South China Sea.

For decades, Tokyo and Beijing generally abided by a tacit agreement to keep the islands dispute quiet. Japan agreed not to carry out any new construction or let anyone land on the islands; China agreed to delay assertion of any claim to the islands and not let the dispute interfere with trade and political relations. Although flare-ups occurred, usually triggered by some altercation between the Japanese coast guard and Chinese fishing vessels or by nationalist Japanese or Chinese activists trying to land on the islands, the lingering territorial dispute played only a minor role in bilateral relations.

However, Ishihara’s plans for the Tokyo municipal government to take over the islands and eventually build security outposts there forced the Japanese government’s hand. Facing domestic political pressure to secure Japan’s claim to the islands, the government determined that the “nationalization” of the islands was the least contentious option. By keeping control over construction and landings, the central government would be able to keep up its side of the tacit agreement with China on managing the islands.

China saw Japan’s proposed nationalization as an opportunity to exploit. Even as Japan was debating what action to take, China began stirring up anti-Japanese sentiment and Beijing tacitly backed the move by a group of Hong Kong activists in August to sail to and land on the disputed islands. At the same time, Beijing prevented a Chinese-based fishing vessel from attempting the same thing, using Hong Kong’s semi-autonomous status as a way to distance itself from the action and retain greater flexibility in dealing with Japan.

As expected, the Japanese coast guard arrested the Hong Kong activists and impounded their ship, but Tokyo also swiftly released them to avoid escalating tensions. Less than a month later, after Japan’s final decision to purchase the islands from their private Japanese owner, anti-Japanese protests swept China, in many places devolving into riots and vandalism targeting Japanese products and companies. Although many of these protests were stage-managed by the government, the Chinese began to clamp down when some demonstrations got out of control. While still exploiting the anti-Japanese rhetoric, Chinese state-run media outlets have highlighted local governments’ efforts to identify and punish protesters who turned violent and warn that nationalist pride is no excuse for destructive behavior.

Presently, both China and Japan are working to keep the dispute within manageable parameters after a month of heightened tensions. China has shifted to disrupting trade with Japan on a local level, with some Japanese products reportedly taking much longer to clear customs, while Japan has dispatched a deputy foreign minister for discussions with Beijing. Chinese maritime surveillance ships continue to make incursions into the area around the disputed islands, and there are reports of hundreds or even thousands of Chinese fishing vessels in the East China Sea gathered near the waters around the islands, but both Japan and China appear to be controlling their actions. Neither side can publicly give in on its territorial stance, and both are looking for ways to gain politically without allowing the situation to degrade further.

Political Dilemmas in Beijing and Tokyo

The islands dispute is occurring as China and Japan, the world’s second- and third-largest economies, are both experiencing political crises at home and facing uncertain economic paths forward. But the dispute also reflects the very different positions of the two countries in their developmental history and in East Asia’s balance of power.

China, the emerging power in Asia, has seen decades of rapid economic growth but is now confronted with a systemic crisis, one already experienced by Japan in the early 1990s and by South Korea and the other Asian tigers later in the decade. China is reaching the limits of the debt-financed, export-driven economic model and must now deal with the economic and social consequences of this change. That this comes amid a once-in-a-decade leadership transition only exacerbates China’s political unease as it debates options for transitioning to a more sustainable economic model. But while China’s economic expansion may have plateaued, its military development is still growing.

The Chinese military is becoming a more modern fighting force, more active in influencing Chinese foreign policy and more assertive of its role regionally. The People’s Liberation Army Navy on Sept. 23 accepted the delivery of China’s first aircraft carrier, and the ship serves as a symbol of the country’s military expansion. While Beijing views the carrier as a tool to assert Chinese interests regionally (and perhaps around the globe over the longer term) in the same manner that the United States uses its carrier fleet, for now China has only one, and the country is new to carrier fleet and aviation operations. Having a single carrier offers perhaps more limitations than opportunities for its use, all while raising the concerns and inviting reaction from neighboring states.

Japan, by contrast, has seen two decades of economic malaise characterized by a general stagnation in growth, though not necessarily a devolution of overall economic power. Still, it took those two decades for the Chinese economy, growing at double-digit rates, to even catch the Japanese economy. Despite the malaise, there is plenty of latent strength in the Japanese economy. Japan’s main problem is its lack of economic dynamism, a concern that is beginning to be reflected in Japanese politics, where new forces are rising to challenge the political status quo. The long-dominant Liberal Democratic Party lost power to the opposition Democratic Party of Japan in 2009, and both mainstream parties are facing new challenges from independents, non-traditional candidates and the emerging regionalist parties, which espouse nationalism and call for a more aggressive foreign policy.

Even before the rise of the regionalist parties, Japan had begun moving slowly but inexorably from its post-World War II military constraints. With China’s growing military strength, North Korea’s nuclear weapons program and even South Korean military expansion, Japan has cautiously watched as the potential threats to its maritime interests have emerged, and it has begun to take action. The United States, in part because it wants to share the burden of maintaining security with its allies, has encouraged Tokyo’s efforts to take a more active role in regional and international security, commensurate with Japan’s overall economic influence.

Concurrent with Japan’s economic stagnation, the past two decades have seen the country quietly reform its Self-Defense Forces, expanding the allowable missions as it re-interprets the country’s constitutionally mandated restrictions on offensive activity. For example, Japan has raised the status of the defense agency to the defense ministry, expanded joint training operations within its armed forces and with their civilian counterparts, shifted its views on the joint development and sale of weapons systems, integrated more heavily with U.S. anti-missile systems and begun deploying its own helicopter carriers.

Contest for East Asian Supremacy

China is struggling with the new role of the military in its foreign relations, while Japan is seeing a slow re-emergence of the military as a tool of its foreign relations. China’s two-decade-plus surge in economic growth is reaching its logical limit, yet given the sheer size of China’s population and its lack of progress switching to a more consumption-based economy, Beijing still has a long way to go before it achieves any sort of equitable distribution of resources and benefits. This leaves China’s leaders facing rising social tensions with fewer new resources at their disposal. Japan, after two decades of society effectively agreeing to preserve social stability at the cost of economic restructuring and upheaval, is now reaching the limits of its patience with a bureaucratic system that is best known for its inertia.

Both countries are seeing a rise in the acceptability of nationalism, both are envisioning an increasingly active role for their militaries, and both occupy the same strategic space. With Washington increasing its focus on the Asia-Pacific region, Beijing is worried that a resurgent Japan could assist the United States on constraining China in an echo of the Cold War containment strategy.

We are now seeing the early stage of another shift in Asian power. It is perhaps no coincidence that the 1972 re-establishment of diplomatic relations between China and Japan followed U.S. President Richard Nixon’s historic visit to China. The Senkaku/Diaoyu islands were not even an issue at the time, since they were still under U.S. administration. Japan’s defense was largely subsumed by the United States, and Japan had long ago traded away its military rights for easy access to U.S. markets and U.S. protection. The shift in U.S.-China relations opened the way for the rapid development of China-Japan relations.

The United States’ underlying interest is maintaining a perpetual balance between Asia’s two key powers so neither is able to challenging Washington’s own primacy in the Pacific. During World War II, this led the United States to lend support to China in its struggle against imperial Japan. The United States’ current role backing a Japanese military resurgence against China’s growing power falls along the same line. As China lurches into a new economic cycle, one that will very likely force deep shifts in the country’s internal political economy, it is not hard to imagine China and Japan’s underlying geopolitical balance shifting again. And when that happens, so too could the role of the United States.

Understanding the China-Japan Island Conflict is republished with permission of Stratfor.

Politics, Strategy

War and Bluff: Iran, Israel and the United States

September 11, 2012 halfwayfoods

As always, George Friedman, author of Strafor’s indispensable publication Geopolitical Weekly, provides clarity into what on the surface is a situation on the verge of erupting. A situation that, if poorly handled, has the potential to unleash chaos throughout the world.

In a world where Might makes right, striking a delicate balance between one’s rhetoric and actions is the statesman’s most important task. A task that would be rendered useless were we all to chose the better way.

Nonetheless, Friedman helps us to cut through the rhetoric to recognize both the motivations of and limitations on each of the actors in what has become a game of brinksmanship of epic proportions, and the stakes have never been higher.

We encourage you to review the full report which is reproduced below with the permission of Stratfor:

War and Bluff: Iran, Israel and the United States

By George Friedman

For the past several months, the Israelis have been threatening to attack Iranian nuclear sites as the United States has pursued a complex policy of avoiding complete opposition to such strikes while making clear it doesn’t feel such strikes are necessary. At the same time, the United States has carried out maneuvers meant to demonstrate its ability to prevent the Iranian counter to an attack — namely blocking the Strait of Hormuz. While these maneuvers were under way, U.S. Secretary of State Hillary Clinton said no “redline” exists that once crossed by Iran would compel an attack on Iran’s nuclear facilities. The Israeli government has long contended that Tehran eventually will reach the point where it will be too costly for outsiders to stop the Iranian nuclear program.

The Israeli and American positions are intimately connected, but the precise nature of the connection is less clear. Israel publicly casts itself as eager to strike Iran but restrained by the United States, though unable to guarantee it will respect American wishes if Israel sees an existential threat emanating from Iran. The United States publicly decries Iran as a threat to Israel and to other countries in the region, particularly Saudi Arabia, but expresses reservations about military action out of fears that Iran would respond to a strike by destabilizing the region and because it does not believe the Iranian nuclear program is as advanced as the Israelis say it is.

The Israelis and the Americans publicly hold the same view of Iran. But their public views on how to proceed diverge. The Israelis have less tolerance for risk than the Americans, who have less tolerance for the global consequences of an attack. Their disagreement on the issue pivots around the status of the Iranian nuclear program. All of this lies on the surface; let us now examine the deeper structure of the issue.

Behind the Rhetoric

From the Iranian point of view, a nuclear program has been extremely valuable. Having one has brought Iran prestige in the Islamic world and has given it a level of useful global political credibility. As with North Korea, having a nuclear program has allowed Iran to sit as an equal with the five permanent members of the U.N. Security Council plus Germany, creating a psychological atmosphere in which Iran’s willingness merely to talk to the Americans, British, French, Russians, Chinese and Germans represented a concession. Though it has positioned the Iranians extremely well politically, the nuclear program also has triggered sanctions that have caused Iran substantial pain. But Iran has prepared for sanctions for years, building a range of corporate, banking and security mechanisms to evade their most devastating impact. Having countries like Russia and China unwilling to see Iran crushed has helped. Iran can survive sanctions.

Visit our Iran page for related analysis, videos, situation reports and maps.

While a nuclear program has given Iran political leverage, actually acquiring nuclear weapons would increase the risk of military action against Iran. A failed military action would benefit Iran, proving its power. By contrast, a successful attack that dramatically delayed or destroyed Iran’s nuclear capability would be a serious reversal. The Stuxnet episode, assuming it was an Israeli or U.S. attempt to undermine Iran’s program using cyberwarfare, is instructive in this regard. Although the United States hailed Stuxnet as a major success, it hardly stopped the Iranian program, if the Israelis are to be believed. In that sense, it was a failure.

Using nuclear weapons against Israel would be catastrophic to Iran. The principle of mutual assured destruction, which stabilized the U.S.-Soviet balance in the Cold War, would govern Iran’s use of nuclear weapons. If Iran struck Israel, the damage would be massive, forcing the Iranians to assume that the Israelis and their allies (specifically, the United States) would launch a massive counterattack on Iran, annihilating large parts of Iran’s population.

It is here that we get to the heart of the issue. While from a rational perspective the Iranians would be fools to launch such an attack, the Israeli position is that the Iranians are not rational actors and that their religious fanaticism makes any attempt to predict their actions pointless. Thus, the Iranians might well accept the annihilation of their country in order to destroy Israel in a sort of megasuicide bombing. The Israelis point to the Iranians’ rhetoric as evidence of their fanaticism. Yet, as we know, political rhetoric is not always politically predictive. In addition, rhetoric aside, Iran has pursued a cautious foreign policy, pursuing its ends with covert rather than overt means. It has rarely taken reckless action, engaging instead in reckless rhetoric.

If the Israelis believe the Iranians are not deterred by the prospect of mutually assured destruction, then allowing them to develop nuclear weapons would be irrational. If they do see the Iranians as rational actors, then shaping the psychological environment in which Iran acquires nuclear weapons is a critical element of mutually assured destruction. Herein lies the root of the great Israeli debate that pits the Netanyahu government, which appears to regard Iran as irrational, against significant segments of the Israeli military and intelligence communities, which regard Iran as rational.

Avoiding Attaining a Weapon

Assuming the Iranians are rational actors, their optimal strategy lies not in acquiring nuclear weapons and certainly not in using them, but instead in having a credible weapons development program that permits them to be seen as significant international actors. Developing weapons without ever producing them gives Iran international political significance, albeit at the cost of sanctions of debatable impact. At the same time, it does not force anyone to act against them, thereby permitting outsiders to avoid incurring the uncertainties and risks of such action.

Up to this point, the Iranians have not even fielded a device for testing, let alone a deliverable weapon. For all their activity, either their technical limitations or a political decision has kept them from actually crossing the obvious redlines and left Israel trying to define some developmental redline.

Iran’s approach has created a slowly unfolding crisis, reinforced by Israel’s slowly rolling response. For its part, all of Israel’s rhetoric — and periodic threats of imminent attack — has been going on for several years, but the Israelis have done little beyond some covert and cyberattacks to block the Iranian nuclear program. Just as the gap between Iranian rhetoric and action has been telling, so, too, has the gap between Israeli rhetoric and reality. Both want to appear more fearsome than either is actually willing to act.

The Iranian strategy has been to maintain ambiguity on the status of its program, while making it appear that the program is capable of sudden success — without ever achieving that success. The Israeli strategy has been to appear constantly on the verge of attack without ever attacking and to use the United States as its reason for withholding attacks, along with the studied ambiguity of the Iranian program. The United States, for its part, has been content playing the role of holding Israel back from an attack that Israel doesn’t seem to want to launch. The United States sees the crumbling of Iran’s position in Syria as a major Iranian reversal and is content to see this play out alongside sanctions.

Underlying Israel’s hesitancy about whether it will attack has been the question of whether it can pull off an attack. This is not a political question, but a military and technical one. Iran, after all, has been preparing for an attack on its nuclear facilities since their inception. Some scoff at Iranian preparations for attack. These are the same people who are most alarmed by supposed Iranian acumen in developing nuclear weapons. If a country can develop nuclear weapons, there is no reason it can’t develop hardened and dispersed sites and create enough ambiguity to deprive Israeli and U.S. intelligence of confidence in their ability to determine what is where. I am reminded of the raid on Son Tay during the Vietnam War. The United States mounted an effort to rescue U.S. prisoners of war in North Vietnam only to discover that its intelligence on where the POWs were located was completely wrong. Any politician deciding whether to attack Iran would have Son Tay and a hundred other intelligence failures chasing around their brains, especially since a failed attack on Iran would be far worse than no attack.

Dispersed sites reduce Israel’s ability to strike hard at a target and to acquire a battle damage assessment that would tell Israel three things: first, whether the target had been destroyed when it was buried under rock and concrete; second, whether the target contained what Israel thought it contained; and third, whether the strike had missed a backup site that replicated the one it destroyed. Assuming the Israelis figured out that another attack was needed, could their air force mount a second air campaign lasting days or weeks? They have a small air force and the distances involved are great.

Meanwhile, deploying special operations forces to so many targets so close to Tehran and so far from Iran’s borders would be risky, to say the least. Some sort of exotic attack, for example one using nuclear weapons to generate electromagnetic pulses to paralyze the region, is conceivable — but given the size of the Tel Aviv-Jerusalem-Haifa triangle, it is hard to imagine Israel wanting to set such a precedent. If the Israelis have managed to develop a new weapons technology unknown to anyone, all conventional analyses are off. But if the Israelis had an ultrasecret miracle weapon, postponing its use might compromise its secrecy. I suspect that if they had such a weapon, they would have used it by now.

The battlefield challenges posed by the Iranians are daunting, and a strike becomes even less appealing considering that the Iranians have not yet detonated a device and are far from a weapon. The Americans emphasize these points, but they are happy to use the Israeli threats to build pressure on the Iranians. The United States wants to undermine Iranian credibility in the region by making Iran seem vulnerable. The twin forces of Israeli rhetoric and sanctions help make Iran look embattled. The reversal in Syria enhances this sense. Naval maneuvers in the Strait of Hormuz add to the sense that the United States is prepared to neutralize Iranian counters to an Israeli airstrike, making the threat Israel poses and the weakness of Iran appear larger.

When we step back and view the picture as a whole, we see Iran using its nuclear program for political reasons but being meticulous not to make itself appear unambiguously close to success. We see the Israelis talking as if they were threatened but acting as if they were in no rush to address the supposed threat. And we see the Americans acting as if they are restraining Israel, paradoxically appearing to be Iran’s protector even though they are using the Israeli threat to increase Iranian insecurity. For their part, the Russians initially supported Iran in a bid to bog down the United States in another Middle East crisis. But given Iran’s reversal in Syria, the Russians are clearly reconsidering their Middle East strategy and even whether they actually have a strategy in the first place. Meanwhile, the Chinese want to continue buying Iranian oil unnoticed.

It is the U.S.-Israeli byplay that is most fascinating. On the surface, Israel is driving U.S. policy. On closer examination, the reverse is true. Israel has bluffed an attack for years and never acted. Perhaps now it will act, but the risks of failure are substantial. If Israel really wants to act, this is not obvious. Speeches by politicians do not constitute clear guidelines. If the Israelis want to get the United States to participate in the attack, rhetoric won’t work. Washington wants to proceed by increasing pressure to isolate Iran. Simply getting rid of a nuclear program not clearly intended to produce a device is not U.S. policy. Containing Iran without being drawn into a war is. To this end, Israeli rhetoric is useful.

Rather than seeing Netanyahu as trying to force the United States into an attack, it is more useful to see Netanyahu’s rhetoric as valuable to U.S. strategy. Israel and the United States remain geopolitically aligned. Israel’s bellicosity is not meant to signal an imminent attack, but to support the U.S. agenda of isolating and maintaining pressure on Iran. That would indicate more speeches from Netanyahu and greater fear of war. But speeches and emotions aside, intensifying psychological pressure on Iran is more likely than war.

War and Bluff: Iran, Israel and the United States is republished with permission of Stratfor.

August 31, 2012 halfwayfoods

Effectively Countering Workplace Violence

With the recent shooting at the Empire State building, the focus is back on workplace violence. While it is extremely important to maintain vigilence in the workplace, it is equally important to understand that:

1. Despite the high profile media attention that acts of workplace violence generate, these types of incendents are extremely rare and,

2. As with terrorist attacks, they rarely occur without the perpatrator exhibiting suspicious behavior, which is easily observed by the untrained eye, well in advance of the attack. If this behavior is reported and the intelligence acted upon, most incidents can be difused before an attack takes place.

Stratfor’s Scott Stewart details a number of ways in which employees can through their own vigilence, take ownership of their own safety at their place of work to help ensure that a similar tragedy never occurs at their place of work.

You can read his report (report name) via Stratfor:

Countering Workplace Violence

While the report focuses on the voilence between coworkers, it is interesting to note that the nine bystanders that were wounded in the Empire State Building shooting were injured by NYPD police gunfire as they tried to aprehend the assailent. Sadly, it is simply another of many examples of how one senseless act of violence leads to another, a fact of life when society subscribes to the “Might makes right” doctrine as its guiding light.

August 10, 2012 halfwayfoods

Why European leaders have forced Draghi’s put

Another great piece by George Friedman explaining what is going on in Europe. Will the new economic ties trump not so ancient rivalries? Only time will tell, but European leaders will do everything within their power, including a trashing of the Euro’s value, to ensure they do. Via Stratfor:

Financial Markets, Politics, and the New Reality

August 3, 2012 halfwayfoods

Good Mideast Dictators by Robert D. Kaplan

Stratfor’s Robert Kaplan analyzes the Arab Spring and the complexities it presents to both the US and the remaining autocratic regimes in the region. Mr. Kaplan’s report can be seen here via Stratfor:

Good Mideast Dictators