Good morning. Here’s your Early Warning for Wednesday, 15 August 2018. (All times Eastern.)
ADMIN NOTE: We’ve reprised the Early Warning for a while now based on subscriber feedback. I’d like to know your thoughts. How are we doing? What would you like to see in this morning email each day?
White House
The President is scheduled to receive his intelligence briefing and then has no other publicly scheduled events.
State Department
Secretary of State Mike Pompeo and other State Department officials have no publicly scheduled events of significance.
Of note: The Under Secretary of State for Arms Control and International Security is on travel from 12-26 August to Indonesia, Vietnam, and Australia. In Indonesia, U.S. officials will meet to discuss expanding defense trade and regional security issues. All three meetings are likely central to the U.S. Indo-Pacific security strategy to prevent China’s dominance of the entire region.
Defense Department
Defense Secretary Mattis is traveling today. He was last reported giving a speech at the Brazilian War College, where he told students that the U.S. “will earn your trust daily. We want to be your partner; especially if trouble looms.” Mattis is currently stressing the importance of deeper relationships with South American security partners (Brazilian troops fought alongside U.S. soldiers in World War II) as China quietly builds influence on the continent. Mattis is scheduled to be in the Indo-Pacific in September and will then travel to Europe. (Analysis on Chinese influence in South America will appear in this week’s Strategic Intelligence Summary.)
The Carl Vinson (CVN-70) was last reported as having returned to port in San Diego.
The John Stennis (CVN-74) was last reported back as participating in an exercise off the coast of southern California.
The Harry S. Truman (CVN-75) was last reported in port at Norfolk.
The Ronald Reagan (CVN-76) was last reported has having departed port in Yokosuka, Japan.
The George H.W. Bush (CVN-77) was last reported as having returned to port in Norfolk.
Conflict requiring a Carrier Strike Group does not appear imminent.
Congress
Significant House Activity:
- Nothing significant to report.
Significant Senate Activity:
- Nothing significant to report.
* Reporting will appear in the Strategic Intelligence Summary or National Intelligence Bulletin.
Economy/Finance
– The NFIB Small Business Optimism Index recently hit a high not seen since 1983, showing that small businesses in America are hiring and selling more products.
– Household debt has nearly doubled since 2004, from just over $2 trillion to nearly $4 trillion in the first quarter of this year. Much of that debt is in student loans, which is now a $1 trillion problem. My concern is that during the next recession we have a significant number of current or former students unable or unwilling to pay back students loans. Student loan debt can’t be discharged in bankruptcy court, so this will become a much larger political issue.
– Trump economic advisor Larry Kudlow appeared in the U.S. media this week, saying that he expects another quarter of four percent economic growth. Saying that the economy was “very strong,” Kudlow predicted that November’s mid-terms will be referendum on the economy and expects the GOP will keep the House and Senate. Third quarter economic numbers come out in late October.
-Additionally, Kudlow said that President Trump’s team was working on a bilateral trade agreement with Mexico and that the situation with the European Union will be sorted out, which is putting pressure on China. He says, “China right now is struggling with a bad economy, a terrible currency, and to be honest with you, in 30 or 60 days China might find themselves very isolated in the world trade game.” This is something I pointed out in last week’s Strategic Intelligence Summary; read here.
Weather
The National Hurricane Center reports a tropic depression has formed in the Atlantic, but is heading east and isn’t likely to make landfall in the United States.
Drought conditions persist across much of the Southwest. This map is updated every Thursday.
What I’m Looking at this Morning
NATO “ally” Turkey shifts toward Russia after U.S. sanctions
Twitter suspends Alex Jones over new tweet
Did Feinstein’s Chinese spy disclose classified information?
Notable Quotable
“I want any adversary to know that they are better off to deal with our secretary of state and our diplomats. They do not want to deal with me and my soldiers, sailors, airmen and Marines.” – Secretary of Defense Jim Mattis, speaking at the Brazilian War College about building strategic security partnerships in South America
