Fallout from Obama’s Strategy in Afghanistan

A gradual drawdown of the approximately 100,000 U.S. troops in Afghanistan will begin by withdrawing some 10,000 troops by the end of this year, and a projected total of 33,000 by next summer, a trend supported by Congress on both sides of the aisle. The withdrawal was fueled by a growing, $14.3 trillion national debt at home, as well as a string of relatively positive developments in the region, including the killing of al-Qaeda leader Osama bin Laden (Wolf, 2011). Unfortunately, this drawdown will be offset by troops deployed to other regions of the world, such as Libya by the end of this year; and other military resources will be reallocated throughout the Middle East and Northern Africa (MENA) as needed to counter and/or influence regional uprisings. Therefore, the cost of overseas operations will remain relatively constant through next year. The unresolved issue DoD and White House officials are currently struggling with center around the weakening global economy, an issue that was not addressed by Obama in his speech last night. Countries throughout the MENA region and even Europe are already collapsing from the weight of unsustainable debt and rising inflation. While the “free market” program of finance capital laid the objective economic foundations for the uprisings in the Middle East, the actions of financial authorities in the wake of the global financial crisis provided a significant initial impulse (Beams, 2011). Halfmeasure solutions offered by the Greek Prime Minister and the European Union on June 15-17 to resolve the Hellenic Republic’s structural economic and productivity crisis have failed, accelerating a range of potential problems for European and Mediterranean stability, and the global economic condition (Copley, 2011). Without global economic stability, our overseas military presence cannot stabilize the MENA region economically. With the $600 billion program of Treasury purchases known popularly as QE2 winding up by month's end, Fed Chairman Ben Bernanke made clear Wednesday that QE3 should not be expected even though the central bank cut its forecast for economic growth for this year and next (Forsyth, 2011). The commodity spot prices listed below are an accurate indicator of the depreciation in the value of the U.S. dollar relative to commodities. June 20, 2010 ~ brent crude oil spot price: $77.05 June 20, 2010 ~ Regular 87 Octane gasoline: $2.737 June 20, 2010 ~ silver spot price: $19.17 June 20, 2010 ~ gold spot price: $1256.50 June 20, 2011 ~ brent crude oil spot price: $109.78 June 20, 2011 ~ Regular 87 Octane gasoline: $3.637 June 20, 2011 ~ silver spot price: $36.06 June 20, 2011 ~ gold spot price: $1540.50 With commodities continuing to skyrocket, our national debt and unfunded liabilities will continue to escalate. The dollar carry trade that has covered our national debt has inevitably run its course, with the Federal Reserve now purchasing the majority of our nation’s debt to fund overseas military operations in Afghanistan and elsewhere. Obama’s speech provided no solutions in terms of economic stability; therefore, continuing military operations in Afghanistan and the MENA region at the projected levels outlined above suggest that an economic breaking point will be “imported” to the U.S. from Europe and MENA as early as next year, as that point has already been reached in many countries throughout the MENA region and Europe.

While the information presented is intended to address the situation in Afghanistan and elsewhere from a neutral standpoint, it is indeterminate how the U.S. can continue military operations as outlined above beyond the end of next year while the global economy continues to deteriorate. This does not bode well from a geopolitical standpoint for the U.S. Even with the introduction of a global currency to replace today’s depreciating fiat currencies, there will be a period of global economic instability during which the U.S. will be predominantly concerned with continuity of operations at home. If the abovementioned conclusions are for the most part accurate, then our strategy in Afghanistan will be catastrophically compromised as early as next year. Another issue not addressed in Obama’s speech was the fallout from a comprehensive Middle East peace agreement, an agreement that could set the stage for a substantial drawdown in military forces as early as next year. In September 2011, leaders of the Palestinian authority will seek approval of a UN resolution formally declaring the establishment of a Palestinian state. Many countries have already expressed support for this initiative, a process that was formalized most recently during the Annapolis Conference on November 27, 2007. On April 28, 2011, Hamas and Fatah have come to yet another agreement, the third since Hamas won legislative elections in 2006. Unfortunately, the history of instability throughout the region does not bode well for a comprehensive Middle East peace agreement. Fiat currencies around the globe are burdened with tens of trillions of dollars in debt, an amount that continues to increase exponentially beyond the means of nations to repay these debts, which in turn precipitously depreciates the value of fiat currencies relative to commodities such as silver, gold, and oil, as shown in the GMO Commodity Index in Figure 1. The GMO Commodity Index is an index comprised of the following commodities, equally weighted at initiation: aluminum, coal, coconut oil, coffee, copper, corn, cotton, diammonium phosphate, flaxseed, gold, iron ore, jute, lard, lead, natural gas, nickel, oil, sorghum, soybeans, sugar, tin, tobacco, uranium, wheat, wool and zinc.

Figure 1. GMO Commodity Index (As of February 28, 2011) Burgeoning debt coupled with geopolitical instability has resulted in stagnant employment throughout much of the industrialized West. Oil producing nations in the region are under the threat of instability within their own borders, which is adversely impacting the price of oil as reflected at the gas pumps.

The impact of these factors has resulted in the United States being positioned less favorably to support the implementation of a two state solution, an outcome specifically expressed in the May 2010 National Security Strategy: “We will be unwavering in our pursuit of a comprehensive peace between Israel and its neighbors, including a two-state solution that ensures Israel’s security, while fulfilling the Palestinian peoples’ legitimate aspirations for a viable state of their own.” The likelihood of successfully implementing a lasting, comprehensive Middle East peace agreement is unlikely under current circumstances. Therefore, how will this agreement impact the global WMD threat environment? The power that asymmetric forces aligned against the West possess remains largely dependent on their ability to successfully acquire and utilize WMDs in a manner that will produce maximum effect in terms of destruction upon their enemies. Within the construct of an increasingly fragile geopolitical and economic environment, the likelihood of a WMD attack is also increasing. Another 9/11-magnitude event would completely destabilize fiat currencies such as the euro, dollar, yen, and pound to the point where a centralized, global currency would have to be approved by the United Nations (UN) members and implemented as quickly as possible through the International Monetary Fund (IMF). Global markets would likely collapse during the transition from modern fiat currencies to a global currency, as there is nothing currently in place to provide a stable transition to a global currency. At the very least, it would take the IMF and UN months to approve and implement a global currency, a plan already outlined by the IMF in their April 13, 2010 report on international monetary stability - presented in Figure 2.

Figure 2. Ideas to Mitigate Demand and Diversity Supply of Reserves for IMS Stability

During the months-long transition to a global currency, the flow of goods would essentially halt, as fiat currency-based transactions would not be possible, while banks across the country would be closed for an indefinite period of time. As discussed in Stratfor’s article by George Friedman published on April 26, 2011, the Obama administration has adopted a policy that places greater responsibility on our allies and regional powers directly affected by the Middle East uprisings. This strategy makes the uprisings more difficult to control, which in turn heightens the likelihood of another 9/11 magnitude event. One solution proposed in the Fall/Winter 2009 issue of Combating WMD Journal (p. 18) was to adopt existing advanced energy technologies, technologies that would initiate the process of ‘defunding’ oil exporting nations that provide petrodollars to terrorist entities either directly or by proxy. Unfortunately, the implementation of such a solution will arrive a day late and a dollar short. Our nation must now place greater emphasis on WMD consequence management planning, in preparation for a WMD attack against the West as the Middle East continues to destabilize. We must prepare our families and our nation for a regional Middle East conflict, as well as the impact of asymmetric warfare that will precipitate out of such a conflict. The Department of Homeland Security (DHS) recently requested large diesel and gasoline stockpiles for North Carolina, South Carolina, Louisiana, Texas, Alabama, Mississippi, Georgia and Florida. Meanwhile, FEMA has issued multiple requests totaling 140 million items which include packaged meals, blankets and underwater body bags, primarily for a national level response within the continental United States, where earthquakes nearly as large as the March 2011 Japan earthquakes have occurred. DHS ordered over 350,000 National Detainee Handbooks for distribution with a ‘MUST deliver’ by date of April 29, 2011, an order that was initially posted online on April 18, 2011. In conjunction with these preparations, FEMA recently conducted a National Level Exercise in May 2011 which focused on earthquake hazards and the simulated displacement of hundreds of thousands of people. 2011 is the bicentennial anniversary of the 1811 New Madrid earthquakes. New Madrid, Missouri, was the city adjacent to an initial pair of very large earthquakes that occurred on December 16, 1811. At least one of these earthquakes exceeded 8.0 on the Richter scale, and shook windows and furniture as far away as Washington, D.C. Another earthquake of this magnitude in the New Madrid Seismic Zone would collapse the Central U.S. electrical grid for an extended period of time. This region’s electrical grid provides backup power to dozens of nuclear reactors, many of which have the same General Electric Mark I reactor design as the failed nuclear reactors in Japan. Specifically, there are three separate reactor facilities with the Mark I design in Decatur, Alabama, rated in excess of 1000 MW output at each facility. Within a week of losing backup power, these facilities would begin pouring radioactive fallout via the jet stream over Washington, D.C. and surrounding areas, prompting water and food restrictions, as well as mandatory evacuations throughout portions of the East Coast and/or South Central states most affected by the fallout. Through a $385 million federal government contract, Halliburton via its subsidiary KBR has built facilities throughout the United States to provide shelter for thousands of people who would relocate to these facilities during a disaster. These facilities are now fully operational. The abovementioned items are a truncated list of disaster preparations our nation has taken that could also be utilized during the consequence management phase of a WMD incident.

References Beams, N. (2011, March 5). Global forces driving Middle East uprisings. Retrieved June 23, 2011, from wsws.org: http://www.wsws.org/articles/2011/mar2011/pers-m05.shtml Copley, G. (2011, June 20). U.S. economic metrics similar to those of Greece; Inaction moves global economy to the brink. Retrieved June 23, 2011, from Geostrategy-Direct: http://www.worldtribune.com/worldtribune/WTARC/2011/eu_greece0755_06_20.asp Forsyth, R. (2011, June 23). Bernanke Offers No New Answers to Economic Conundrum. Retrieved June 23, 2011, from Barron's: http://online.barrons.com/article/SB50001424053111903794804576402753703322980.h tml?mod=BOL_hpp_highlight_bottom Wolf, R. (2011, June 23). Analysis: Afghanistan drawdown has bipartisan backing. Retrieved June 23, 2011, from USA Today: http://www.usatoday.com/news/washington/2011-0622-afghan-withdrawal-poll_n.htm

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