Dave's Newsletter Has A New Name

Geopolitics: US Marines are taking positions around the Afghan town of Marja in the Helmand Valley. This town is the center of Afghanistan’s opium industry and taking it will cripple the bad guys financially. The invasion route is very nasty, thick with landmines. The town center will be even worse. The Battle for Marja will be a pivotal moment in the Afghan war. There is little doubt that the Marines will win a set piece battle like this. The real test will be how well the Afghan Army does. This is what the people of Afghanistan will be focused on. If the good guys can honestly say the Afghan Army kicked ass, then recruitment will skyrocket. The Afghan Army recently increased its base salary, which is now slightly higher than the salary of a Taliban fighter; better food too.
India and Pakistan are getting ready to begin formal peace talks. Informal talks have been ongoing. The new round of talks will be between civilian governments. India would rather hold talks with the Pak Army because it can veto anything the civilian government agrees to. If the Pak Army joins these talks it will be a good sign. Pakistan now has 140,000 troops battling the Taliban and could easily double that number if a peace breakthrough occurred. The US has a hand in all this, of course.
Meanwhile, the fighting in Pakistan continues. Saturday, after a fierce battle that relied heavily on helicopter gunships and jet fighter-bombers, the Pak Army has raised the national flag over the town of Damadola. A majority of the dead bad guys are believed to have been buried alive in collapsed underground bunkers and tunnels. This town was a financial center for the bad guys, a conduit for cash flows from the opium fields of Afghanistan and donations from wealthy (but radical) Arabs. CIA drones hit Damadola four separate times before the Pak Army settled the matter once and for all. Taking out a financial center speaks to greater coordination between America and Pakistan (bullish).
In Yemen, shortly after the Houthi rebels signed a ceasefire with the Saudi Army they agreed to a standing ceasefire offer that Yemen had made a while ago. The government of Yemen said the deal was no longer valid. Over the past few days fighting has flared up again with dozens killed on both sides. The Saudi Air Force is still bombing the Houthi rebels. The US is exerting enormous pressure on the Yemeni government to honor its original peace deal. AQAP is catching a break as the war in northern Yemen heats up; bad news since we know AQAP is plotting a terror strike against the US.
Iran says it is ready to negotiate away part of its nuclear program. The offer cuts into the nuclear enrichment cycle, giving control to foreign governments, and would make it impossible for Iran to produce nuclear weapons; that is if Iran were actually sincere. While making the peaceful offer, Iran test fired a long range missile. Team Obama responded by announcing a plan to extend its missile shield to Turkey and Romania. This is in addition to the missile shield already extended to several Gulf Arab states and the Persian Gulf waterway via Aegis anti-missile destroyers. Last week the Navy ran a simulation of an Iranian missile attack. The Navy’s missile interceptors failed to hit their target. The last 10 simulations were successful however.
Germany and France are failing to live up to their NATO troop commitments in Afghanistan. The big continental European powers simply have no will to fight. And yet we know there is an Al-Qaeda franchise called Al-Qaeda in Britain (AQIB) and Al-Qaeda cells all over Europe. In the North Caucus region of Russia the bad guys are making slow but steady progress. America’s anti-Iranian missile shield in Romania is designed to protect Europe. This is the big picture: Without America the barbarians would storm the gates and tear into the heart of European civilization. This supports the dollar and allows America to issue more debt than would be possible if only economic principles were at play. Indeed, geopolitics is more important than fundamentals and you will notice that the name of the newsletter has been changed. It will now focus more on geopolitics.