- Done deal notwithstanding, U.S. threatens to bomb-bomb Iran
- Byron King describes what a war on Iran would look like
- Follow the money as the military’s top uniforms name the “greatest threat” to the U.S…
- Yellen’s “Don’t worry be happy” act… and the numbers that belie it
- Most outrageous tax grab we’ve seen in, well, a week… Gresham’s law and how Star Trek Next Gen jumped the shark… a Canadian reader who wishes us “all the bad luck in the world”… and more!
This seems like a strange way to celebrate a reconciliation between Iran and the West.
Hours after the Iran nuclear deal was sealed in Vienna yesterday, Defense Secretary Ashton Carter said the United States is “prepared and postured” to “bolster the security of our friends and allies in the region, including Israel” and that “we will utilize the military option if necessary.”
Hang tight as we connect a few dots this morning. It could be worth $21,900 to you…
Israel’s Prime Minister Benjamin Netanyahu, meanwhile, is stressing Israel is “not bound” by the deal. Well, no. Israel isn’t a party to the deal, so why would Israel be bound by it?
Netanyahu signaled he too remains ready to order an attack on Iran at any moment.
If you have a long memory, you’ll recall in 1981, Israel knocked out the Osirak nuclear reactor in Iraq, then under construction by Saddam Hussein’s regime. A squadron of eight F-16As got the job done in an afternoon.
What’s the likelihood of a rerun, carried out by either Israel or the United States?
“Any attack on modern Iran to take out its nuclear sites would require weeks and perhaps months of constant bombing,” says our military affairs analyst Byron King.
No one-and-done operation here, in other words. “We’re not dealing with a few nice, clean, tightly ringed sites full of nuclear scientists and equipment,” he explains. “Nothing is marked on maps, either. Bomb Point A; bomb Point B; etc. We’re looking at multiple locales, many of them not well-known or understood, and many more buried — and I mean deeply.”
Resources? “We’re looking at large numbers of ships, submarines, aircraft carriers and associated aircraft, long-range aircraft, support aircraft (electronic, and LOTS of tankers)… and many people in front-line, combatant service. Lots of munitions too, of course.”
Just the start of the campaign would be a huge undertaking: “Every modern campaign,” Byron goes on, “begins with suppression or destruction of air defenses — aircraft, radars, anti-air missiles, anti-air artillery, electronic jamming sites and more. That’s not easy on the best of days, particularly because opponents on the ground have a tendency to shoot back when you bomb them.”
And Iran’s capability to shoot back is about to be enhanced — with some help from Russia.
In 2007, Iran agreed to pay Russia $800 million for a battery of S-300 surface-to-air missiles — just the ticket to repel an attack by enemy aircraft. In 2010, Russia canceled the contract and banned the sale of such weapons under international pressure.
But three months ago, President Vladimir Putin lifted the ban — a goodwill gesture as the Iran nuclear talks continued to make progress. (Russia was a party to those talks. So were China, Britain, France and Germany.)
From Russia with love: S-300 launcher at a Moscow military parade.
[Picasa photo by Vladimir Ryabtsev]
It’s true, the deal signed yesterday includes a five-year extension of an arms embargo on Iran. But Russian state media hinted last night the embargo would not apply to the S-300s. They’re “a merely defensive system,” a source tells the Interfax news agency. Russia and Iran are hammering out the terms of a new contract.
Russia poses an “existential threat” to the United States, in the mind of the man President Obama has nominated to be the next chairman of the Joint Chiefs of Staff.
“If you want to talk about a nation that could pose an existential threat to the United States, I’d have to point to Russia,” said Gen. Joseph Dunford during his confirmation hearings before Congress last week.
He cited Russia’s “recent actions” in Ukraine, but maybe he had the S-300 deal with Iran in the back of his mind. “If you look at their behavior, it’s nothing short of alarming.”
Yesterday, the president’s nominee for vice chairman of the Joint Chiefs went Dunford one better. Gen. Paul Selva identified what he saw as the greatest threats to U.S. national security. He named Russia, China, Iran, North Korea and Islamist jihadists “in that order.”
Dunford and Selva are clearly on the same page with their commander in chief.
Last fall, Obama identified the three biggest threats to global order during a speech at the United Nations.
“As we gather here,” he said, “an outbreak of Ebola overwhelms public health systems in West Africa and threatens to move rapidly across borders. Russian aggression in Europe recalls the days when large nations trampled small ones in pursuit of territorial ambition. The brutality of terrorists in Syria and Iraq forces us to look into the heart of darkness.”
Russia’s acid-tongued foreign minister Sergey Lavrov was astonished: “We earned the second place among the threats to international peace and stability,” he told reporters.
With Ebola retreating from the headlines, Russia has vaulted into first place on the president’s list of priorities.
As with any undertaking of government, we seek to follow the money. In this case, it’s a $156 billion spending spree the president and Congress are set to unleash.
“In short,” says Byron King, “two-thirds of what’s known as America’s ‘nuclear triad’ is set for a MASSIVE, once-in-a-generation modernization under Obama’s watch.”
With the help of his extensive network of contacts inside both government and the defense industry, Byron has identified the players poised to grab the lion’s share.
What’s more, he’s identified a way for you to generate outsize gains. It’s possible a $1,000 grubstake could turn into $21,900 in pure profit.
Usually, the government doesn’t move very fast… but in this case, it behooves you to act soon. “The way I see it,” says Byron, “this opportunity comes to a head starting Tuesday, July 21.”
That’s only six days from now. Why the urgency? Byron explains when you follow this link.
To the markets… where there’s not much to say. The major U.S. stock indexes are little moved, although the Nasdaq is up almost a third of a percent at 5,120.
The greenback is picking up steam, the dollar index back above 97. That’s helped send gold to $1,149 — a level seen only once before in the last eight months.
With Greece and China retreating from the headlines, traders are turning their attention to — God help us — the every-six-months testimony to Congress of Federal Reserve chief Janet Yellen.
It’s nothing they haven’t heard before: The economy is strong enough to justify raising the fed funds rate sometime before the end of the year. Or as she put it, “Economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target, thereby beginning to normalize the stance of monetary policy.”
Our Jim Rickards has already weighed in on Twitter even as Yellen continues yakking…
To say nothing of the economic numbers that came out only this morning. Let’s take a look…
- Wholesale prices: Up 0.4% in June. But that was goosed by gasoline, and as Jim points out, a flood of Iranian crude coming on the market will likely send oil prices down. The year-over-year change, you ask? Deflation of 0.7%. Even the “core” figure showing 0.8% inflation is nowhere near the Fed’s 2% target
- Industrial production: Up 0.3% in June. But that’s the first increase in seven months. And it was driven mostly by utilities and mining. Manufacturing was flat for a second straight month, and up an anemic 1.8% year over year
- The Fed’s first read on manufacturing in the month of July is likewise weak: The Empire State survey of factory conditions in New York state rang in at 3.9. The most you can say about that is it’s better than last month’s below-zero reading, which indicated a shrinking factory sector.
Of the latter two figures, Bloomberg sees “a manufacturing sector that is being hurt by weakness in exports and that’s dragging down the economy’s growth.”
Ms. Yellen, would you care to revise and extend your remarks?
“The government’s never-ending quest to find new and expanded ways to define taxable income has reached a new frontier,” writes Ira Stoll at his Future of Capitalism blog.
Brace yourself for this one: Review copies of books are now taxable income.
Last month, Amazon sent the following to its (unpaid) reviewers who take part in the website’s Vine program: “Starting July 1, 2015, you will be required to provide valid tax information by completing Amazon’s tax questionnaire to continue participating in the Vine program…..As of that date, we will be tracking the value of products you order through Amazon Vine. If you exceed the threshold of $600 in aggregated product value within a calendar year, you will be issued a 1099-MISC at the end of that year.”
Hmmm… Your editor’s wife, a voracious reader, gets galleys from LibraryThing now and then as a token of gratitude for the reviews she posts. Probably not worth $600 in a year, though…
“What’s next?” laments Mr. Stoll. “Is the government going to start taxing news organizations on the value of their free seats at sporting events, concerts, plays and movie screenings? Will The New York Review of Books and The New York Times Book Review have to start paying taxes on the value of their review copies?”
“Are you kidding?” reads the first of several replies to the Gresham’s law confusion that’s been rattling around in our virtual mailbag.
“When’s the last time the person who said ‘good money always chases away bad money’ got any silver coins in change?”
“In the past,” another reader elaborates, “dimes, quarters and half dollars were silver. In the ’60s, the Mint introduced nickel-copper-clad coins. The silver coins disappeared from circulation, and now only the clad coins are available. In this case, the good money was chased out by the bad money.
“You can still get the silver coins. To do this, you use the bad money for the purchase. The current price will be more than $15.00 of bad money to buy one dollar of good money.”
“It seems to me the readers are speaking about two sides of the same coin (Ha!),” writes a third.
“Reminds me of the Star Trek Next Gen episode where Data is taken over by an ancient god — we’ll call it the sun god — who then gives way to the moon god and so on, and they chase each other throughout eternity, each reigning in his or her own time. I think Data was Masaka!
“(This episode, along with the de-evolving episode where Troi grew gills and lived in her tub, pretty much sounded the warning bell for the end of that series, great though it was.)”
“Compared with the mainstream media, you guys practically wear halos,” writes our final correspondent.
“On the other hand (notice the lack of the word ‘but’), with all the talk of making tons of money on cancer cures — not to mention various other human ailments, it seems like quite a while since there has been any mention of all the many ways to avoid getting sick in the first place.
“I miss the occasional mention in your newsletter about how prior to the modern GMO- and pesticide-heavy farming techniques and hormone- and antibiotic-laden milk, chicken and hamburger, cancer and heart disease were both virtually unheard-of. It seems like a situation of food monopolies causing problems and Big Pharma trying to solve those problems, not dissimilar to the Fed blowing up financial bubbles and then charging onto the scene to save the day with bubbles of a different hue.
“I know it’s hard to invest in altruistic campaigns, but once in a while, it’s nice to be reminded that you are some of the good guys.”
The 5: Make sure you scroll down all the way when you open our Saturday edition, 5 Things You Need to Know. Each week, we run an essay from Living Well Daily, the health e-letter written by my colleagues Nate Rifkin and Jasmine LeMaster.
And there’s plenty more where that comes from. If you sign up to receive Living Well Daily free in your inbox, you’ll get a 12-page guide called Sin Foods for Healthy Living. Check it out right here.
Best regards,
Dave Gonigam
The 5 Min. Forecast
P.S. “You have a lot of gall to teach your public how to rip off your neighbors to the north,” writes an outraged reader. “Obviously, I am a Canadian.
“Why don’t you just try to copy our apparently superior Social Security system rather than stealing from our innocent taxpayers? Seems like an act of war to me. So screw you and anybody who can justify thinking like you. I shall contact the leaders of the political parties running in the fall election (in Canada) as well as CSIS, if necessary. Such action is totally against my philosophy, but sometimes one must fight fire with fire.
“You are in the same class as Jamie Dimon, CEO of J.P. Morgan, and yes, I must admit, the CEO of our Scotia Bank. Scumbags all. I wish you all the bad luck in the world… you deserve it.”
Really?
We said this a couple of months ago, and we’ll say it again. No Canadians will be “scammed” or otherwise lose a penny of the benefits they have coming to them in the course of Americans piggybacking off the Canada Pension Plan.
If you haven’t yet heard about this phenomenon — and how it can delivery anywhere between $400 and $4,700 a month in supplemental income — we urge you to check it out at this link.
