National Defense reported on Debtpocalypse, where Army futurists see another financial meltdown. Francis A. Finelli shared his crystal ball at the meeting:
Finelli said the United States must either slow down its borrowing or risk a big meltdown. The Federal Reserve is fueling a future crisis by flooding the economy with money. The Fed’s balance sheet more than tripled since 2007 by $2.5 trillion, said Finelli. “Such tremendous increase in the money supply has not been accompanied by economic growth in the United States.” A rather shocking statistic, he said, is that the U.S. economy was actually larger in the fourth quarter of 2007 than it was in the second quarter of 2011.
The money supply problem, combined with potentially rising interest rates and inflation, could leave the United States facing trillion-dollar-a-year interest payments and unable to continue to live on borrowed money, Finelli said. “The United States for the next couple of years probably muddles through,” but the pain will come in the second half of the decade, he forecasted. “That is when Bob Wiedemer projects the money supply will start manifesting itself in higher interest rates and higher inflation.”
The U.S. military’s feared potential peer competitor, China, is expected to overcome future economic shocks more easily than the United States or Europe could, Finelli said. The strength of China will not come from its missiles or submarines, but from its wealth, he said. “China does view financial power as an exercise of power in a way that the United States does not. The United States only exercises financial power through its corporations.”
Finelli omitted how his employer, The Carlyle Group, ramped up borrowing to finance deals the past decade. He neglected to mention how Carlyle coached Chinese leaders in the exercise of financial power. When Finelli's boss isn't cracking jokes, Carlyle co-founder David Rubenstein is effusive in his praise of potential "peer enemy" China, the wild Far East.
Note: The image of China came from a Carlyle Group video. It seems the Army had probable cause to take Francis Finelli into custody. Did they cuff and bag Finelli? Doubtful. I bet it was more like a standing ovation.
Ironically, the Army may reinvent itself along private equity underwriter (PEU) lines via cutbacks and partnering.
The Alternative Futures seminar is part of the Army’s “Unified Quest” series of war games, which are conducted annually to examine issues that the Army chief of staff considers critical to current of future force development.
Watch where the 36th Army Chief of Staff General George W. Casey Jr., the 37th General Martin E. Dempsey and 38th General Ray Odierno land after their military service. Given the revolving door, all three had a hand in picking PEU Francis "Frank" Finelli as a speaker. Did Carlyle's Booz Allen Hamilton, a huge government/military consulting contractor, have a role in suggesting Francis?
The Army's future offers multiple ways for PEUs to profit, from anti-cyber terrorism to infrastructure enhancements to control of water resources. Rest assured, Carlyle knows how to pry dollars from Uncle Sam's trillion dollar purse, while minimizing contributions.
Retired General George W. Casey Jr. served as John Negroponte's senior military adviser in Iraq. Negroponte was behind the recent Concordia Summit focusing on international terrorism. Concordia stressed public-private partnership solutions to global terror problems like cyber terrorism. What will Concordia do with China being a financial threat? I see armies of bankers and shadow bankers marching as to war from the safety of their trading desks, happily paid by Uncle Sam. It's truly a PEU world and likely a matter of time before Casey is drafted by KKR, Bain, Blackstone or Carlyle.
Good luck to those who have to wait for the next economic recovery, predicted by Army futurists to begin in 2020 and run to 2028. What kind of machinations will PEUs foist on the globe before 2020 hits? They plan to be supremely profitable.
It's a PEU world, where everything should be remade in its image, including the military and religion.
