Salient to Investors:

Robert Gates said:

While ground forces will undoubtedly get smaller, we must not get fixed on the idea that high technology is the only answer to military challenges. “No matter how a war starts it always ends in mud” – General Stillwell WWII

Pentagon bureaucracy is structured to plan for war and not to wage war. Every time the US has used military force since Vietnam, when it comes to predicting where we would use our military next, we have never gotten it right because the world is unpredictable. The consequences of using military force is unpredictable.

Very concerned that non-state entities have the potential to acquire WMDs, and that unstable countries have already acquired such weapons. Biggest nightmare is WMDs falling into hands of terrorists.

Iran acquiring nuclear weapons would be potentially catastrophic because:

  • a nuclear armed Iran would be able to reach Israel, then Europe than the US.
  • would lead to a nuclear arms race in the region.
  • Iran would be more aggressive in the region.

The only good alternative is that economic sanctions work – the Iran regime is not irrational and Iran does not want a war with US.

US intelligence is not good enough to tell the difference between Iran having the capacity to make and having nuclear weapons. Iran is more worrisome because of its religious leaders – leaders who want to stay in power. Iran is not Iraq or Syria and would respond to an attack on their nuclear facility – an attack would rally the people and move the nuclear development even more underground, lead to a wave of terror in the region, create havoc with the world economy, spur attacks on oil facilities in other countries to drive oil prices through the roof.

Iran, Hussein, Assad,  North Korea leaders have one thing in common – they don’t care how many of their people get killed and only about what happens to them.

Obama is tough-minded and would not hesitate to carry out a promise – he relishes making decisions.

China will not try to match the US militarily having learned a lesson from the Soviets. China is clearly working on cyber and anti-satellite capabilities. The only source of legitimacy for the Chinese regime is to engineer a steadily improving economy – any slowing would fan the significant unrest already in China. The thousands of riots and demonstrations a year, many in rural areas, which used to be known only locally, is with social media  now known all over the country – how they manage that is a big challenge, and if it fails it could resort to nationalism as it did with Japan.

The equivalent to the total population of the UK, Germany and France has moved to the cities, where it does not have the same social status.

China’s rise is not a zero sum economic game so is not a threat to the US.

The US is not yet winning the battle of ideas, more the ideas we hate are losing – e.g. Egypt totally discredited the idea that only violence can get rid of authoritarian regimes, and al-Qaeda’s viciousness in Iraq backfired.

Concerned about the US focus on domestic problems and not on the more complex and more turbulent world.

Human intelligence is every bit as important now as back in the Cold War – the ability to divine people’s intentions.

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