Early Warning for 02 January 2019

Good morning. Here’s your Early Warning for Wednesday, 02 January 2019.

ADMIN NOTE: Good morning and happy 2019. I hope everyone had a merry Christmas and holiday season. After the break, we’re back in the saddle again and all reporting activities resume this morning.

 

White House

The President is scheduled to hold a border security briefing for members of Congress today.

 

Shutdown: The government is still partially shut down, going on 12 days now. House Democrats take over tomorrow and have vowed to bring an end to the shutdown, but President Trump has signaled that without border wall funding, there will be no agreement. Unless the two sides are willing to meet somewhere closer to the middle (say, border wall funding for DACA protections), there’s no telling when the shutdown will actually end.

Border: Over the weekend, Border Patrol used tear gas to disperse a crowd of 150 migrants who were trying to breach the border fence in Tijuana, Mexico.

Trade War: Talks are set to resume in China this week over trade tariffs as U.S. and Chinese officials try again to find a deal. but to boil this down to tariffs is really oversimplifying things. Led by Robert Lighthizer, the U.S. side is negotiating an end to aggressive industrial and economic espionage and forced technology transfers that have given China an unprecedented economic advantage for 20 years. The issue isn’t just trade, it’s ending a system upon which the Chinese economy partially depends.


 

State Department

Secretary Pompeo attended the inauguration of Brazilian president Jair Bolsonaro, who promised to “fight Marxist trash” and “prepare children for the job market, not political militancy” in his inauguration speech. Today, Secretary Pompeo is meeting with Colombian president Ivan Duque to discuss, among other things, the Maduro regime in neighboring Venezuela. (AC: Duque, a right wing populist, is a staunch U.S. ally in the region. Last year, a U.S. delegation that included then-Defense Secretary Jim Mattis visited a handful of countries across South America and held meetings where the Maduro regime was a central focus. During that trip, Mattis outlined his support for Brazil and Colombia not only as regional security powers, but also in taking the lead to solve the issue of Venezuela. Secretary Pompeo’s trip to Brazil and Colombia likely reinforces that commitment now that Mattis is out.)


 

Defense Department

Acting Defense Secretary Patrick Shanahan has no publicly scheduled events.

 

These are the last publicly reported locations of these ships. Conflict requiring an aircraft carrier/carrier strike group does not appear imminent.

The Carl Vinson (CVN-70) was last reported as having returned to San Diego.

The Abraham Lincoln (CVN-72) was last reported as having returned to Norfolk.

The John Stennis (CVN-74) was last reported as in port at Jebel Ali, United Arab Emirates.

The Harry Truman (CVN-75) was last reported as having returned to Norfolk.

The Ronald Reagan (CVN-76) was last reported as having returned to home port in Yokosuka, Japan.

The George H. W. Bush (CVN-77) was last reported as having returned to Norfolk.

 

Bold indicates significant changes to last reported location or other amplifying information.


 

Congress

Significant House Activity:

  • Democrats are scheduled to take control of the House on Thursday, and Rep. Nancy Pelosi (D-CA) is expected to be elected as the new Speaker of the House.

Significant Senate Activity:

  • Nothing significant to report.

* Only events pertinent to national security are listed. Significant reporting will appear in this week’s Strategic and National Intelligence reports


 

Economy/Finance

What’s on the menu for 2019? Debt. Or, I should say, that’s been on the menu since 2008. Global debt now stands at $250 trillion. Back home, U.S. corporate debt is at $9 trillion, and U.S. consumer debt reached $4 trillion, both of which eclipse debt levels during the 2008 financial crisis. So far, economic growth, rising wages, and the usual numbers cited about a strong U.S. economy, have at least given the appearance that the debt remains manageable. But the problem is that, as an early warning indicator, credit card company default write-offs have risen to 3.1 percent from 2.5 percent two years ago. If credit card defaults are rising during strong economic growth, the logical conclusion is that they will accelerate during an economic downturn. A recession is not imminent, at least not by the numbers, but one thing the numbers do show is that Americans have racked up cheap debt in spite of the lesson of 2008, which is that cheap debt is manageable as long as its cheap and economic times are good. My bet right now is that China leads the next debt panic, which could become a full-blown global debt and financial crisis that looks a lot like 2008 all over again.


 

What I’m Looking at this Morning

Chinese railgun may already be deployed, ahead of schedule

The future might not belong to China


 

Notable Quotable

“The country is growing strong, the nation is rejuvenating and unification between the two sides of the strait [Taiwan] is the great trend of history… We make no promise to abandon the use of force, and retain the option of taking all necessary measures.” – Chinese President Xi Jinping on reunification with Taiwan.

(AC: In a speech this morning, the Chinese president reaffirmed his position that Taiwan would be reunified with mainland China, peacefully or through conquest. I mention this because just a few days ago, President Trump signed the “Asia Reassurance Initiative Act of 2018”, which lays out U.S. policy on Taiwan and includes a commitment to arms sales. It also spells out U.S. diplomatic, economic, and military support to allies in the Indo-Pacific region. [source] I should point out that after the roll out of the European Reassurance Initiative, which was later renamed the European Deterrence Initiative, this is now two continents the U.S. has explicitly committed to defending.)

Samuel Culper is a former military intelligence NCO and contract Intelligence analyst. He spent three years in Iraq and Afghanistan and is now the intelligence and warfare researcher at Forward Observer.

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