Geopolitical Risk Theater Links: Iran Talks Extended, Defense Sec Hagel Fired, Neo-Nazi Risk? and more...

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Some interesting geopolitical articles:

1 Small progress between US-Iran: Iran Nuclear Talks Extended 7 Months; $700 Million In Monthly Sanctions Lifted November 24, 2014 Zero Hedge

2 China as galvanizing force? : India-Pakistan Sparring Opens Door for China in South Asia Bloomberg.com November 25, 2014

3 NATO encirclement strategy: NATO Jets Surrounding Russia: Before And After November 24, 2014 Zero Hedge

4 Europe’s tinderbox: Mapping Recent "Incidents" Between Russia And NATO November 24, 2014 Zero Hedge

5 Testing ASEAN’s response: China Said to Turn Reef Into Airstrip in Disputed Water New York Times November 23, 2014

6 War is business; UK approved Israeli arms deals worth £7mn in lead-up to Gaza conflict RT.com November 24, 2014. It’s really more of a racket.

7 Russia seals pact with Georgia’s breakway region. Getting more allies to counter NATO?: Pact Tightens Russian Ties With Abkhazia New York Times November 24, 2014

8 Despite some aerial incursions by Russian jet, Finland to stay neutral: Finland joining NATO would alienate Russia – President Niinisto RT.com November 25, 2014

9 Neo Nazis are a threat?: Ukrainian neo-Nazism threatens to spread across Europe – Russian diplomat RT.com November 24, 2014

10 Indian government itching to have a stealth fifth-generation fighter aircraft (FGFA); Can not keep waiting for stealth fighter, India tells Russia The Times of India November 25, 2014

11 The military oligarchy prevails as the risk of a world at war heightens: Secretary of Defense Chuck Hagel Fired Mises Blog November 24, 2014;

Writes Ryan McMaken

Now it appears that the truly important players in US defense policy — the weapons manufacturers and financiers who benefit most from an "active" foreign policy — have gotten their way. Hagel, of course, knows that the United States is broke and relying largely on monetized debt to pay the bills. At the same time, it's his job to keep the military bureaucrats who lobby continuously for endless spending (i.e., the "generals") while also pleasing "private" contractors like Lockheed Martin who live fat and happy off the sweat of taxpayers.

Hagel was expected to be something of a budget "cutter," (the DC version of "cuts" which are slight reductions in spending growth) and it was he who presided over the DoD during the final days of the sequestration debate during which the military and its private sector allies howled over tiny reductions in military growth rates.  The "cuts" seemed politically necessary at the time since Hagel came into office during a transition period when there was not a clear global bogeyman for the US to use to justify unchecked government spending. Now, the generals and corporate lobbyists at Boeing, et al have breathed a sigh of relief as because the so-called Islamic State is the gift that keeps on giving and will allow the military-industrial complex to advocate for utterly unrestrained spending.

Of course, the taxpayers, who were once were fleeced to create and arm  ISIS at first, will now be charged to disarm it (or so the administration says).  

The landscape has greatly improved from the perspective of military spending, and Hagel can now be replaced with someone more adept at shoveling cash to powerful interest groups whom we will later be told we must thank for defending freedom.

Ron Paul: What Have We Accomplished in Iraq?

Ron Paul on the US Government’s favorite battleground: (from Ron Paul Institute) [bold mine]

We have been at war with Iraq for 24 years, starting with Operations Desert Shield and Storm in 1990. Shortly after Iraq’s invasion of Kuwait that year, the propaganda machine began agitating for a US attack on Iraq. We all remember the appearance before Congress of a young Kuwaiti woman claiming that the Iraqis were ripping Kuwaiti babies from incubators. The woman turned out to be the daughter of the Kuwaiti ambassador to the US and the story was false, but it was enough to turn US opposition in favor of an attack.

This month, yet another US president – the fifth in a row – began bombing Iraq. He is also placing in US troops on the ground despite promising not to do so.

The second Iraq war in 2003 cost the US some two trillion dollars. According to estimates, more than one million deaths have occurred as a result of that war. Millions of tons of US bombs have fallen in Iraq almost steadily since 1991.

What have we accomplished? Where are we now, 24 years later? We are back where we started, at war in Iraq!

The US overthrew Saddam Hussein in the second Iraq war and put into place a puppet, Nouri al-Maliki. But after eight years, last week the US engineered a coup against Maliki to put in place yet another puppet. The US accused Maliki of misrule and divisiveness, but what really irritated the US government was his 2011 refusal to grant immunity to the thousands of US troops that Obama wanted to keep in the country.

Early this year, a radical Islamist group, ISIS, began taking over territory in Iraq, starting with Fallujah. The organization had been operating in Syria, strengthened by US support for the overthrow of the Syrian government. ISIS obtained a broad array of sophisticated US weapons in Syria, very often capturing them from other US-approved opposition groups. Some claim that lax screening criteria allowed some ISIS fighters to even participate in secret CIA training camps in Jordan and Turkey.

This month, ISIS became the target of a new US bombing campaign in Iraq. The pretext for the latest US attack was the plight of a religious minority in the Kurdish region currently under ISIS attack. The US government and media warned that up to 100,000 from this group, including some 40,000 stranded on a mountain, could be slaughtered if the US did not intervene at once. Americans unfortunately once again fell for this propaganda and US bombs began to fall. Last week, however, it was determined that only about 2,000 were on the mountain and many of them had been living there for years! They didn’t want to be rescued!

This is not to say that the plight of many of these people is not tragic, but why is it that the US government did not say a word when three out of four Christians were forced out of Iraq during the ten year US occupation? Why has the US said nothing about the Christians slaughtered by its allies in Syria? What about all the Palestinians killed in Gaza or the ethnic Russians killed in east Ukraine?

The humanitarian situation was cynically manipulated by the Obama administration --  and echoed by the US media -- to provide a reason for the president to attack Iraq again. This time it was about yet another regime change, breaking Kurdistan away from Iraq and protection of the rich oil reserves there, and acceptance of a new US military presence on the ground in the country.

President Obama has started another war in Iraq and Congress is completely silent. No declaration, no authorization, not even a debate. After 24 years we are back where we started. Isn’t it about time to re-think this failed interventionist policy? Isn’t it time to stop trusting the government and its war propaganda? Isn’t it time to leave Iraq alone?

The US government can’t seem to get enough of Iraq. (hat tip zero hedge)

This video may perhaps explain why. The video shows the US Centcom blowing up a US made Humvee held by the ISIS. 

The US government provide weapons then they blow them up. Who pays for this? Naturally the average Americans. Who benefits from this? The military industrial complex.

The late Major General Smedley Butler, USMC is right: War is a racket

US Finances Israel’s Gaza War via Foreign Aid

The Israel Central Bank estimates the cost of the Gaza War to the Israel at $1.4 billion

From Reuters: The month-long Gaza war cost Israel's economy some $1.44 billion (855.51 million British pound), its central bank governor Karnit Flug said on Thursday, citing interim assessments. "The assessment is that it can reach up to around 0.5 percent of GDP, which is up to 5 billion shekels," Flug told Israel's Channel Ten television.

The CCTV has higher projections. They see that the costs of the war to Israel’s economy will accrue to $3 billion.

For Gaza the assessed cost has been at $ 6 billion, according to Haaretz.com

 

I’ll apply Murphy’s law here where “anything you try to fix will take longer and cost you more than you thought.”

Why? Because of the political economic dimension behind the war.

Of course, wars haven’t just been about damage to property or cost of armaments, the most important costs are people’s lives.

Nonetheless for Israeli politicians “costs” will likely be a less important consideration, why?

Well, because the “costs” to Israel have been financed by the US government via foreign aid.

2015 Foreign Aid has been appraised at $ 3.1 billion, which seems higher than those "cost" assessments.

As the Vox.com reports: (bold mine)

Even Egypt and Pakistan are not, in the grand scheme of things, particularly poor countries. It's just that American foreign aid mostly isn't economic assistance to needy people or needy countries. If it were, India would get more aid than Israel and Haiti would get more aid than Egypt.

Instead, the bulk of the money is spent on buying American military equipment, serving as a kind of indirect subsidy to the military-industrial complex. That's part of how a country like Israel that isn't objectively hard-up for money winds up getting more assistance than anyone else. Israel does have a healthy appetite for advanced military hardware, and it's considered a geopolitically reliable nation that can be trusted with it. So American foreign policy is committed to helping Israel maintain a qualitative military advantage vis-à-vis other Middle Eastern countries. Meanwhile, part of the Carter-era Camp David Accords is a guarantee of a lot of money to the Egyptian military to keep it favorably disposed to a pro-American foreign policy and détente with Israel.

The incentive to go to war is there because of subsidies provided to the Israel government. Consequently, such subsidies enriches the highly influential US military industrial complex. Take away those phony "foreign aid" and the incentive to go to war will most likely diminish. Perhaps the warring parties will learn how to use the markets and trade in order to develop cooperation instead of destroying each other.

And you can also see, foreign aid "flows" reveal that the US hasn’t been helping the poor, but rather helping nations allied to their goals of promoting their role as de facto “global policeman” regardless of their economic conditions.

And it could even be interpreted that the Gaza war could signify a proxy-surrogate war by the US channeled through Israel.

War is indeed a racket

Read more about the modern roots of Israel-Arab conflict from the dean of the Austrian school of economics Murray N. Rothbard here

Michael Rozeff: US Implements the Wolfowitz Doctrine

Retired Professor and author Michael Rozeff on the undeclared "Wolfowitz Doctrine" as blueprint to US imperial foreign policy.

From the Lew Rockwell Blog (bold mine)

The U.S. is implementing the Wolfowitz Doctrine. It aims to maintain the U.S. as the sole superpower and to preclude any regional powers. It wants no rivals such as Russia, Iran and China. This agenda is primary for the U.S. Other purported goals of foreign policy such as anti-terrorism, furthering democracy, advancing human rights, and the self-determination of peoples are useful only insofar as they advance the superpower status of the U.S. and the elimination of rivals. Whenever the Wolfowitz Doctrine can be implemented by sacrificing anti-terrorism, democracy, human rights and self-determination, the U.S. does not hesitate to sacrifice them. This is why the U.S. appears to be so hypocritical.

Here is an example out of today’s news. The U.S. condemns separatism in Ukraine and aids Kiev in attacking its own people with heavy and advanced weapons of all kinds. This is because the superpower agenda is served by steering Ukraine into the Western camp. At the very same time, the U.S. condemns China for indicting a professor who is a vocal separatist and critical of Chinese policy in Xinjiang. Hence, we observe the U.S. against separatism in Ukraine but supporting it in China. This is because the U.S. is applying pressure on China wherever it thinks this will succeed in diminishing China as a power. If China has to contend with breakaway movements, the U.S. agenda is advanced.

Numerous other instances of U.S. hypocrisy can be understood in this way. The U.S. will support democracy but then ignore elections and support dictators. It will bemoan the deaths of children in some instances but support their being killed in others. It will condemn interfering in domestic politics in some countries but approve of it in other instances. It will condemn terrorism and then arm terrorists. This is because the overriding agenda is the Wolfowitz Doctrine.

The U.S. supplies the Israeli military with aid and ammunition so as to maintain Israel in the region and prevent regional powers like Iran from growing in strength. When Israel attacks Gaza, the U.S. approves a certain amount of death and destruction. However, if Israel’s killing becomes so excessive that it promises to cause a backlash that weakens Israel or gives rise to an anti-Israel movement that is more radical than Hamas, then the U.S. will switch and disapprove of Israel’s attack and seek to stop it. The criterion being used is that of the supremacy of U.S. power in a worldwide game of power.

This is not to say that the different divisions in Washington are united in this goal or united in how to play this game. It’s not to say that the Wolfowitz Doctrine is sensible. It’s not to say that important leaders are playing this game effectively. In most instances, they are playing it foolishly, rashly, dangerously and in a very costly way that results in diminishing U.S. power. This exclusive superpower goal and game generally reduces American well-being in numerous ways. From that standpoint, the Wolfowitz Doctrine is deeply flawed.

Daniel Adams also at the Lew Rockwell Blog also reveals that the US government just gave a green light to the Israeli government for the use armaments from a US government owned US $ 1 billion cache or “War Reserves Stocks Allies-Israel (WRSA-I) in the ghastly war with the Hamas at the Gaza. Reportedly 80% of the fatalities have been civilians as the military industrial complex benefits from sale of arms.

Sad to see how political (and politically based economic) greed has led to senseless slaughter of innocent lives.

Quote of the Day: War is a Racket

War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.

I believe in adequate defense at the coastline and nothing else. If a nation comes over here to fight, then we'll fight. The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag.

I wouldn't go to war again as I have done to protect some lousy investment of the bankers. There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.

There isn't a trick in the racketeering bag that the military gang is blind to. It has its "finger men" to point out enemies, its "muscle men" to destroy enemies, its "brain men" to plan war preparations, and a "Big Boss" Super-Nationalistic-Capitalism.

It may seem odd for me, a military man to adopt such a comparison. Truthfulness compels me to. I spent thirty- three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.

I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.

I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 (where have I heard that name before?). I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.

During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.

(bold mine)

This excerpt is from a speech delivered in 1933, by two time medal of honor the late Major General Smedley Butler, USMC. (hat tip Marc Faber/Daily Reckoning). War is a racket has been transcribed by Mr. Butler into a book you can read it here. And you can see a video of his speech here.

China Buys Record US Treasuries; Keeps Financing US military

The Chinese government and the private sector bought record amounts of US treasuries last October.

From the Wall Street Real Time Economic Blog

China scooped up more Treasury debt in October than any other foreign investor, a sign recent U.S. fiscal troubles haven’t tainted the Treasury bond market’s status as a global safe harbor.

China boosted its Treasury debt holdings by $10.7 billion in October to $1.3045 trillion, according to the latest monthly capital flows data released by the Treasury Department on Monday. Foreign investors overall added $24.4 billion in Treasury debt holdings in October. China primarily bought T-bills due in one year or less, known as T-bills with $8.4 billion added in October.

China’s overall holdings of Treasurys at the end of October marks the second highest level following a record high of $1.3149 trillion set in July 2011, according to Ian Lyngen, senior government bond strategist at CRT Capital Group LLC. China is the largest foreign owner of Treasury debt.

The Chinese accumulation of USTs has now reached $1.3045 trillion. 

The US government has earmarked $633 billion for her defense budget in 2014. This can be as interpreted as the Chinese government partially financing the US military.

Here is the 2012 global budget on military spending

US defense budget has been projected to keep rising.

Question is why does the Chinese government continue to finance America’s budget (or military spending) if both countries have been really at odds with each other?

Of course, the report is as of October, which is prior to the PBoC’s announcement last November that their accumulation of USTs may be put on hold.

Could the PBoC’s threat to decrease funding of the US debt be reason behind the recent political brinkmanship by the US on China’s declared Air Zone?

Chinese buying of USTs has also helped in keeping the bond vigilantes at bay last October. Yields of 10 year UST notes fell in October.

So the American government significantly depends on the foreign buying, particularly from China and Japan, to keep her debt musical chairs ongoing, yet media and politicians try to camouflage on these.

This becomes even more accentuated as US banks have been reported to have been reducing their holdings of USTs. 

And in the absence of US banks and foreign buying, USTs will become almost entirely a US Federal Reserve dynamic.  The FED now owns 33% of the outstanding 10 year USTs, according to the Zero Hedge. Fed holdings of USTs will significantly affect the capital standards required for the banking and financial system

So it has been a Dr.Jekyll and Mr. Hyde when it comes to the bilateral relationship between China and the US, as geopolitics and financing appear to be worlds apart.

As I have been saying, the theatrics in arguing and posturing over uninhabited islands seem to be meant at justifying more military spending (through inflationism) by the incitation of nationalism.

And nationalism based rationalization of defense spending it has been. The Japanese government recently approved an increase to her military spending budget… 

From Reuters:

Japan will boost its military spending in coming years, buying early-warning planes, beach-assault vehicles and troop-carrying aircraft, while seeking closer ties with Asian partners to counter a more militarily assertive China.

The planned 2.6 percent increase over five years, announced on Tuesday, reverses a decade of decline and marks the clearest sign since Prime Minister Shinzo Abe took office a year ago that he wants a bigger military role for Japan as tension flares with China over islands they both claim…

The policies, including a five-year military buildup and a 10-year defense guideline, call for stronger air and maritime surveillance capabilities and improved ability to defend far-flung islands through such steps as setting up a marine unit, buying unarmed surveillance drones and putting a unit of E-2C early-warning aircraft on Okinawa island in the south.

Japan will budget 23.97 trillion yen ($232.4 billion) over the coming five years for defense, up from 23.37 trillion yen from the previous five years.

Who will benefit?  No other than the US military complex…

U.S. contractors would be major beneficiaries of Abe's increased spending. These include V22 Osprey maker Boeing Co, lead F-35 fighter-jet contractor Lockheed Martin Corp, missile-fabricator Raytheon Corp, and Northrop Grumman Corp, which builds the Global Hawk unarmed drone.

Another corporate winner could be Britain's BAE Systems PLC, which through its American subsidiary, U.S. Combat Systems, is a major supplier of "amtrack" assault amphibious vehicles to the U.S. Marines.

You see, wars signify as good business, particularly for the politicians and their private sector allies. All that is needed is public approval. And to do this governments drum up nationalism by creating conflicts.

Of course governments also use wars as diversion from economic malaise.

The risk is that when the pantomine transmogrify into reality.

Senkaku Islands Dispute: The Risks from Political Brinkmanship

The US, Japan and China appears to be playing a dangerous geopolitical brinkmanship game.

From today’s headlines at the Inquirer.net

Days after China asserted greater military control over a swath of the East China Sea to bolster claims to a cluster of disputed islands, the US defied the move Tuesday as it flew two B-52 bombers through the area.

China, however, insisted Wednesday it has the capacity to enforce its controversial newly declared air zone over islands disputed with Japan, despite Beijing’s reluctance to intervene after American B-52 bombers flouted its rules.

The US said what it described as a training mission was not flown to respond to China’s latest military maneuver, yet the dramatic flights made clear that the US will not recognize the new territorial claims that Beijing laid out over the weekend.

There are several angles I see here

One these nations have been attempting to promote “nationalism” in order to justify government spending in their respective military industry, to “pump prime” their fragile economies.

If this is true then, then all these has been a smokescreen in favor of pushing the interests of the military industrial complex. (charts above from the Economist)

Second, since China’s central bank recently signaled that they may be scaling back on purchases of US treasuries (euphemism for financing of the US government which includes the military) because these “does not benefit any more from increases in its foreign-currency holdings”, the US taunting of China’s government at the disputed Senkaku islands could have been implicit threat on the Chinese to sustain such such financing arrangement or else…

As one would note, both Japan and China has been providing support to the US government by cushioning the impact of the bond vigilantes through record UST accumulations.

Based on the US Treasury’s TIC September data, Japan holdings of USTs has spiked to record levels while China’s drifts at record levels

So while we see these countries posture and debate on media, behind the scenes Japan and China appear as coordinating their support to the US government via the bond markets against the bond vigilantes.

So we have a strange case of Dr. Jekyll and Mr. Hyde.

Third, the three crisis prone governments have earnestly been trying to divert the public’s attention from the real issue.

As shown above (via the Zero Hedge) despite the so-called 7+% economic growth in China, the PBoC has been rapidly expanding her balance sheet faster than the US.

And with unfulfilled expectations for real economic growth, despite the huge ballooning of central bank assets, governments need schemes to distract the public. And geopolitical brinkmanship with major political economies looks like a convenient way to achieve this.

Of course, it could all be a combination of the above

And we understand that all wars have been financed by inflationism.  

The problem is when games transform into reality.

Philippine Politics: South Korean War Jets Means Bigger Taxes and More Financial Repression

From Today’s Inquirer headlines

Move over. The big boys are coming.

President Benigno Aquino III said the Philippines was close to finalizing a deal with a state-owned Korean aerospace firm to buy a squadron of FA-50 fighter jets worth P18.9 billion—a move seen to bolster the country’s aerial power and defend its territory in the disputed West Philippine Sea (South China Sea).

Mr. Aquino said he discussed the procurement of 12 brand-new multirole combat aircraft from the Korea Aerospace Industries Inc. (KAI) when he met with South Korean President Park Geun-hye at the Blue House, South Korea’s seat of power.

He said it was part of the commitment of both countries to improve their military cooperation, in line with a memorandum of understanding they entered into on Thursday.

The first statement should have read 

Filipino taxpayers beware. The big taxes are coming

Funny how media glamorizes what has been sold by political agents to the public as patriotic mirage of defending domestic territories. In reality, the territorial dispute has served as smoke screen for expansionist government via bigger deficit spending, more political control (lesser civil liberties), promoting US bases and the military industrial complex (here and abroad)

As the recent Zamboanga City crisis has revealed, superiority and capability plays little in the way the Philippine military operates. The sordid Zamboanga episode exhibits how the much 'superior' Philippine military bungled their operations relative to a much ill equipped, inferior in numbers and in training insurgents (Wikipedia note; MNLF participants 500, Philippines army participants 5,000 with tanks personnel carriers, and air support—attack aircraft, helicopters). 

Yet it took 16 days for the military to crush the insurgents (casualties Philippine military: 25 dead 184 wounded, MNLF: 183 dead, 292 captured). This is hardly an example to justify the government's claim to increase defense spending.

And it seems no more than wishful thinking for anyone to believe that new ‘modern’ armaments will serve to neutralize the far superior nuclear and drone equipped Chinese army. A chart comparing the US and Chinese military in Asia, I have previously posted here.

The reality is that invoking nationalism to defend “insignificant scrubby rocks” (John Keller) which supposed ‘rich’ resource reserves will only be beneficial to politically connected allies (cronies) via service contract permits issued by the government.

Societies hardly get rich from resources, they get rich from free trade, the market economy or economic freedom. 

Natural resources have in fact been a blight to many countries. This has been known as the resource curse. Resource revenues tend to cover up on government's mismanagement. Also the ruling elite who control these resources tend to pushback on economic reforms.

Yet politicians have been agitating for war, whose benefits will accrue to a few and whose costs will be distributed and paid for by the productive agents of the Philippine society.

Spurious nationalism will be funded by bigger taxes and by more financial repression (inflationism, negative rates, deposit caps and other capital controls)

Of course in case of actual shooting encounters, it won’t be the politicians life whom will be at stake but the lowly foot soldier, who either earnestly believe they are fighting for a righteous cause or out of the lack economic opportunities. Unfortunately they serve as unwitting pawns of grandstanding politicians.

But the best way to resolve such impasse will be to deepen trade and commercial relationships that will promote deeper social interactions that would empower the citizenry rather than brinkmanship politics from politicians.

As I have been saying, all these has partly been about promoting the return of the US military bases—a legacy the incumbent administration wishes to fulfill which had been terminated in 1992 during the incumbent’s mother’s administration. 

Despite denials by the US to seek permanent presence, the US wants extended access to Philippine bases. The rehashed US-Philippine military relationship has been framed in the context to become palatable to public opinion.

The Left has alleged that the Philippine government has spent Php 500 million in building base infrastructure in Palawan to accommodate US military. If true, then this has been foreordained as popularity ratings will be used to formally bring back US bases. Except of course, the pork barrel scam has frayed into these populist ratings.

While it is true that Philippines will be buying these jets from a Korean state defense industry, what has not been revealed is that the FA-50 has essentially been powered, equipped and armed by mostly the US-Israel military industrial complex 

From the Wikipedia (bold mine)

The FA-50 is the most advanced version of the T-50. It is equipped with a modified Israeli EL/M-2032 pulse-Doppler radar with further Korean-specific modifications by LIG Nex1, and has more internal fuel capacity, enhanced avionics, a longer radome and a tactical datalink The radar selected for the FA-50 has a range two-thirds greater than the TA-50's radar. The EL/M-2032 was initially chosen over Lockheed Martin's preferred AN/APG-67(V)4 and SELEX Vixen 500E AESA radars. Other AESA radars such as Raytheon Advanced Combat Radar and Northrop Grumman's Scalable Agile Beam Radar are options for future production, and will likely be shared with the same AESA radar chosen for the USAF and ROKAF F-16 fighters. Samsung Thales is also independently developing a domestic multi-mode AESA radar for FA-50/ In December 2008, South Korea awarded a contract to Korea Aerospace Industries to convert four T-50s to FA-50 standards by 2012. In 2012, The Republic of Korea Air Force has ordered 20 FA-50 fighters to be delivered by the end of 2014 The maiden flight of FA-50 multirole fighter variant took place in 2011. The 60 FA-50 aircraft are to be produced from 2013 to 2016. Korea Aerospace Industries (KAI) received a 1.1 trillion won ($1 billion) order for FA-50 fighter aircraft in May 2013.

The T-50 is the proposed base for the more advanced F-50 fighter with strengthened wings, AESA radar, more internal fuel, enhanced electronic warfare capability, and a more powerful engine. The proposal is designated as T-50 Phase 3 program by KAI. Wing strengthening is required to support three underwing weapons pylons, compared to two underwing pylons on the TA-50 or FA-50. The AESA radar was expected to be RACR, which has 90% commonality with the AESA radar of the Super Hornet, or SABR, both of which are competing for KF-16's AESA radar upgrade program. Samsung Thales' AESA radar is also a possible option. The aircraft was altered to a single-seat configuration to allow more space for internal fuel and electronic warfare equipment. The engine could be either Eurojet EJ200 or General Electric F414, upgraded to 20,000 lb or 22,000 lb thrust, which is about 12-25% higher than the F404's thrust. The engines are already being offered for the baseline T-50 for future customers. A similar Korean-led international fighter program exists named the KAI KF-X.

TA-50/FA-50 armaments again from Wikipedia

The TA-50 version mounts a three-barrel cannon version of the M61 Vulcan internally behind the cockpit, which fires linkless 20 mm ammunition. Wingtip rails can accommodate the AIM-9 Sidewinders missile, a variety of additional weapons can be mounted to underwing hardpoints. Compatible air-to-surface weapons include the AGM-65 Maverick missile, Hydra 70 and LOGIR rocket launchers, CBU-58 and Mk-20 cluster bombs, and Mk-82, −83, and −84 general purpose bombs.

FA-50 can be externally fitted with Rafael's Sky Shield or LIG Nex1's ALQ-200K ECM pods, Sniper or LITENING targeting pods, and Condor 2 reconnaissance pods to further improve the fighter's electronic warfare, reconnaissance, and targeting capabilities. Other improved weapon systems over TA-50 include SPICE multifunctional guidance kits, Textron CBU-97/105 Sensor Fuzed Weapon with WCMD tail kits, JDAM, and JDAM-ER for more comprehensive air-to-ground operations, and AIM-120 missiles for BVR air-to-air operations. FA-50 has provisions for, but does not yet integrate, Python and Derby missiles, also produced by Rafael, and other anti-ship missiles, stand-off weapons, and sensors to be domestically developed by Korea

The South Korean army has also essentially been supported (28,000 troops) by the US, as well as armed and equipped (from army, navy, air force to marine corps mostly by the US military and US defense contractors. 

So the Korean defense industry represents a token of real defense spending $31.7 billion (2013), where according to Wikipedia arms exports totaled $183 million (2012) compared to imports at $1.131 billion (2010). 

In July 2013, the South Korean military appealed to the Parliament for an increase 13.7% of the military budget which translates to $38.5 billion to beef up the nation's missile defense. 

The point is South Korean defense industry has been deeply tied with the US military complex. So this reflects on the dynamics behind the Philippine government's proposed buying of South Korean jets.

Bottom line: The fantasy of arming for defense by the Philippine government to protect against the far more powerful China serves as economic privileges for the US-Israel defense industry (also Korea’s KAI), the Philippine bureaucracy and the Philippine military as well as the US military. 

The first three will be charged to us, the Philippine taxpayers. The US military base/s will be charged to the American taxpayers but whose subsequent social and environmental costs will a burden to local communities in the Philippines who will serve as host/s to the base/s.

How the Korean Peninsula Crisis will be Settled

Historian Eric Margolis at the lewrockwell.com offers the scenario (bold mine)

Now, the US has finally deployed its diplomatic muscle by sending the new Secretary of State John Kerry to Beijing to try to arm-twist China into clamping down on its errant bad boy, North Korea. The result was a joint communiqué calling on the US and China to jointly pursue the de-nuclearization of the Korean Peninsula.

China has long advocated this policy, so nothing new here. But the North American media hailed it as a breakthrough in the crisis. In fact, China is not happy with North Korea’s nuclear program, but Beijing considers an independent, stable North Korea essential for the security of its highly sensitive northeast region of Machuria.

Chinese strategists fear the collapse of the Kim dynasty in North Korea would lead to the US-dominated South Korea absorbing the north and even implanting US bases within range of Manchuria and the maritime approaches to Beijing. In 1950, China responded to the advance of US forces onto its Manchurian border, the Yalu River, by intervening in the Korean War with over 1.5 million soldiers.

The collapse of North Korea would also move South Korean and US military power 200 km closer to Russia’s key Far Eastern population and military complex at Vladivostok.

Accordingly, China’s strategy to date has been to talk moderation and issue occasional blasts at North Korea to appease the outside world and its major American trading partner while quietly ensuring that North Korea remains viable. China supplies all of North Korea’s oil, part of its food, and large amounts of industrial and military spare parts.

North Korea’s Kim Jung-un appears to have climbed too far out on a limb by issuing dire threats that include nuclear war. His problem is to climb back without losing too much face or appearing to be forced by the United States.

Prestige is a key factor in dictatorship. An obvious defeat can lead to the dictator’s fall. That’s why Hitler refused to retreat from the deathtrap at Stalingrad, rightly fearing such a loss of prestige and his mystique of military genius would encourage his domestic foes to move against him.

So Kim will likely need Beijing’s help in ending the crisis, and Beijing will be both happy to do so and end up in a position to demand useful concessions from Washington.

Beijing has been claiming that the US whipped up the current Korea crisis to justify deploying new military forces to Asia and emplacing more anti-missile systems in Alaska and a new one in Guam – all part of President Barack Obama’s much heralded "pivot to Asia."

At the end of the day, North Korea will remain as the convenient bogeyman, stooge, prop and supposed “buffer” for the benefit of both China and the US (particularly the military industrial complex and the neocons).

The vaudeville of the geopolitics of blackmail continues.

China’s Cheap Drones: A Threat to Whom?

This article is worried that China’s cheap clones may end up in the wrong hands, or could be owned and used by the adversaries of the US government.

From Technewsdaily.com

Cheap drones made in China could end up arming potential U.S. foes such as North Korea, Iran and terrorist organizations.

China already makes drones that don't quite match up to U.S. military drones, but for a fraction of the cost. The Chinese military envisions such unmanned autonomous vehicles (UAVs) scouting out battlefield targets, guiding missile and artillery strikes, and swarming potential adversaries, such as U.S. carrier battle groups…

China has built a huge military-industrial complex to support its growing drone fleet, which consisted of about 280 military drones as of mid-2011, according to a report released by the Project 2049 Institute on March 11. Chinese manufacturers supplying the military and state agencies also have begun seeking foreign buyers in a global drone market that aerospace and defense market research firm Teal Group estimates to be worth $89 billion over the next 10 years…

The idea of cheap, China-made drones may not tempt countries such as Japan, South Korea, Taiwan, Australia or NATO allies that want to buy the best U.S. or Israeli drone hardware. Instead, China is seeking buyers in the Middle East and Africa at glitzy expositions such as China’s biennial Zhuhai Air Show.

While such concern could partially be true, considering the estimated $89 billion market, my guess is that China’s cheap drones will likely threaten politically connected US drone providers/suppliers more than terrorists or US foes having access to them. 

Besides, anti-drone laser weapon system has already been developed. Foes of the governments are likely to use them than use drones.

Yet demand for commercial drones has been estimated to reach 10,000 according to the US Federal Aviation Administration (FAA). 

Many of such demand come from hobbyists.

A good example of the growing commercial use of drones has been in photography or cinematography particularly in the covering of field events. The Golf Channel used a drone to film a recently held tournament, according to the Business Insider.

The point is commercialization of drones will likely mean more price competition, more innovation, more applications and an increasing use of them by the markets. China's cheap drones may be one factor in driving the commercialization of drones.

How Foreign Interventionism Has Incited West Africa’s Political Woes

Government operation to free hostages ensnared by an al-Qaeda-linked group in a natural gas plant in a remote area in Southeastern Algeria apparently ended up in a fiasco: most hostages were slain along with their captors.(Bloomberg)

Historian Eric Margolis at the LewRockwell.com sheds us  insightful historical compendium of the recent revival of the political turmoil at West Africa.

I categorized his essay into different headings

1. Not an endemic Islam Story

Western governments and media have done the public a major disservice by trumpeting warnings of an "Islamist threat" in Mali. It’s as if Osama bin Laden has popped up on the Niger River. Our newest crisis in Africa is not driven primarily by religion but by a spreading uprising against profoundly corrupt, western-backed oligarchic governments and endemic poverty.

2. The Repercussions of Libya War and the French Client States

Mali’s troubles began last year when it shaky government was overthrown. Meanwhile, heavily-armed nomadic Tuareg tribesmen, who had served Libya’s late Col. Gadaffi as mercenaries until he was overthrown by French and US intervention, poured back into their homeland in Mali’s north. A major unexpected consequence. Fierce Tuareg warriors, who battled French colonial rule for over a century, were fighting for an independent homeland, known as Azawad.

They, a small, violent jihadist group, Ansar Din, and another handful of obscure Islamists drove central government troops out of the north, which they proclaimed independent, and began marching on the fly-blown capital, Bamako.

France, the colonial ruler of most of West Africa until 1960, has overthrown and imposed client regimes there ever since. French political, financial and military advisors and intelligence services ran West Africa from behind a façade of supposedly independent governments. Disobedient regimes were quickly booted out by elite French troops and Foreign Legionnaires based in West Africa that guarded France’s mining and oil interests in what was known as "FrancAfrique."

3. Contagion and Diversion from Domestic Political-Economic Affairs.

Overthrowing African regimes was OK for France, but not for locals. When Mali’s French-backed regime was challenged, France feared its other West African clients might face similar fate, and began sending troops to back the Bamako regime. President Francois Hollande, who had vowed only weeks ago not to intervene in West Africa, said some 2,500 French troops would intervene in Mali. But only on a "temporary basis" claimed Hollande, forgetting de la Rochfoucauld’s dictum "there is nothing as permanent as the temporary!"

Other shaky western-backed West African governments took fright at events in Mali, fearing they too might face overthrow at the hands of angry Islamists calling for stern justice and an end to corruption. Nigeria, the region’s big power, vowed to send troops to Mali. Nigeria has been beset by its own revolutionary jihadist movement, Boko Haram, which claims Muslim Nigerians have been denied a fair share of the nation’s vast oil wealth, most of which has been stolen by corrupt officials.

France’s overheated claim that it faces a dire Islamic threat in obscure Mali could attract the attention of numbers of free-lance jihadists, many who are now busy tearing up Syria. Paris was better off when it claimed its troops were to protect ancient Muslim shrines in Timbuktu. Or it could have quietly sent in the Foreign Legion, as in the past.

Instead, Mali has become a crisis with the US, Britain, West African states and the UN involved in this tempest in an African teapot. A nice diversion from budget crisis.

4. Hostage taking in Algeria and the Expansion of the Theater of War by Interventionists.

Another Algerian jihadist group just attacked an important state gas installation in revenge for France’s assault on Mali. This bloody action has awoken Algeria’s hitherto quiescent Islamic resistance groups. They waged a ten year war against Algeria’s US and French backed military regime, one of the continent’s most repressive regimes, after Algeria’s armed forces crushed Islamists after they won a fair election in 1991.

Over 250,000 Algerians died in a long, bloody civil war. The Algiers government often used gangs of its soldiers disguised as rebel fighters to commit gruesome massacres to blacken the name of the opposition. Algeria may again be headed for a new bloodbath, this time with minority Berber people calling for their independent state.

US air forces and small numbers of Special Forces from its new Africa Command are now entering action in Mali and Algeria. More are sure to follow as West Africa smolders

My comments

As diversionary ploy to distract the public’s attention, wars has usually been the recourse of economically strained nations to drum up political support (via nationalism), as well as, to “suppress dissension among members of the productive class” (Salerno)

Wars has been typically used as justification for further inflationism and for expansionary government or the “opportunity to intensify economic exploitation” (Salerno)

Wars have been used to promote the financial and political interests of vested interested groups represented by military industrial complex “the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex” (President Eisenhower), as well as, the neoconservative cabal through the ideological role of “global policeman” which formerly had been based on “global struggle against communism” (Gordon) and neocon goals of “continuing privileged hierarchical rule, and to continue to worship the nation-state and its war-making machine” (Rothbard).

Most likely today’s imperial foreign policies as evidenced by West Africa’s conflicts signify as cauldron of the factors above.

Video: Revolving Door Relations Between Pentagon and Defense Contractors

The following investigative video is another wonderful example of crony capitalism. This can be seen through the lens of the political relationship between the military industrial complex and the Pentagon.  

We see how regulatory capture has evolved into revolving door relationships--former regulators (military officers) end up as officials for defense contractors, and where intense lobbying in shaping public policies, channeled through these former insiders, has reaped enormous "rent" profits for politically privileged firms. 

The implication is that the interventionist US "imperial" foreign policies (warfare state) are likely manifestations of the advancements of the interests of such clique.