The Fiscal Cliff, US Defense Budget, and Russian Navy - InvestingChannel

The Fiscal Cliff, US Defense Budget, and Russian Navy

Fiscal Cliff

 

I haven’t followed the fiscal cliff much lately. Partly because I’ve learned that when tempers heat up in the fourth quarter, third down – the clock stopped: Look at the bench – what kind of kicker is there? – Has his sensible foot attended to with proper pedicure and received the right nail varnish?

That is one reason I’ve made my small dissertations about China – and Chinese military. There is no doubt that a large portion of the budget cuts in the coming years will come from defence cuts. Before screaming about the imminent hostile occupation of Down Town San Francisco. a critical assessment of the actual defence need is called for. The armed forces can swallow up any number USD. The question is: How much is needed?

To answer that, an examination of the actual potential of a security threat is the sane starting point. In the case of China there is little doubt the intention is there – anyway, never measure intentions – they are fickle and particularly so in China, which in the economic field has displayed an almost incredible incongruity between posture and performance. Something like the North Koreans claiming that their “Beloved Leader” on his first visit to the golf course went something like 60 under par and had 10 hole-in-one (I forget the claim actually made; but it was something like that).

No any threat assessment ignores the intent and concentrates on the capability. When you have a fair idea of capability then you might start thinking about how to do something about it – if the nut cases actually do start a war. Now strategic military planning is long term. WW2 was an exception. The defence policy of the Barack Obama administration is something he has inherited from previous administrations – not just the George Bush administration; but we go back at least to the eight years of Bill Clinton – why do you think he keeps touring weird places in Europe? He is of course keeping taps on how things are progressing with all the deals that wasn’t written down.

This means the defence cuts for the coming years are very deliberate and the product of 20 years planning. So while everybody is googling China – they should look where the cuts are actually made! The basic tactical principle for ANY military commander is to exhibit economy of force – and the US President IS the supreme commander – like it or not; but he is. Economy of force means thinning out forces, building fortifications where there is a return.

So you can stop screaming about China – that problem is being dealt with. Look at all the weapons programmes the long term plans decided always involves hundreds and hundreds of planes and ships, but year by year that number is cut – and people start screaming. The fact is that since last year greater knowledge has been obtained that reduces the planning worst case scenario. Only when a change of plan has been done and dusted – the public (and the potential enemy) is told. So for the coming US defence cuts where should you look? Not China, not the Arabian Sea; but the polar ice cap! The Chinese might be dumb; but not that dumb they are talking about rare earths and make polar expeditions. Why? They want to know what the Hell is going on! Resources are always a convincing cover for the tree-hugging public.

So what IS going on? I’ll save the Chinese intelligence an awful lot of money by telling them. Do I not betray national secrets? Well, if I do, they should keep them out of the press and – above all – out of the published defence budget!

So where is the successor to at least one aircraft carrier being build? Well, my guess is Karstensens Shipyard in Denmark – mainly repair fishing trawlers. The newest defence budget (overall cutting ½ bio. USD in Denmark) includes a third Knud Rasmussen – class patroller. Can that “thing” replace an aircraft carrier?

Well, it can do something a US aircraft carrier can’t: Break 60 cm of ice (as far as I recall). Danish admirals are coy: They call frigates: Fisheries protection ships – and icebreakers for patrol boats!

Now using the proper analytical tool:

Russia has 4 arctic capable nuclear icebreakers of the Arktika-class (NS Rossiya, NS Sovetskiy Soyuz, NS Yamal, NS 50 Let Pobedy) – another Russian class of ships persued by problems. The Wikipeda links are not the best (if you get my drift?), but you’ll get the picture – especially since the NS Yamal has sitting capacity for 100 in the cafeteria. Furthermore there is a container ship with icebreaking capability NS Sevmorput .

Now what does that tell us?

1)      We probably can discount the other Russian icebreakers as there must be a reason for the 48 mm of steel in the icebreaking zone of the Arktika-class. Strangely enough the RDaNavy has four Thethis class frigates (Thetis, Triton, Vædderen, Hvidbjørnen – couldn’t call one of them the Falken as the Icelanders might take offence) – of which Thetis is officially rebuilt with command facilities (my guess is that some gadget were left in place after the publicized circumnavigation of Vædderen – just guessing).

2)      The information of dining facilities for 100 passengers is roughly equivalent to a company – might be a company, additionally now the Polar Sea around the North Pole is rarely used as a tourist attraction.

3)      The Sevmorput is a bit more puzzling, but as there is a deplorable scarcity of 7-11 stores north of the polar circle. But quite recently:

Never look at intentions; but after capabilities. The official explanations of commercial sailing to Alaska can be dismissed. Why do you think they are nuclear powered? My guess is that icebreaking is so very hard that conventional ships run out fuel before getting very far. So, just how likely is it there is a commercial profit in that?

What do you do about that?

1)      Apart from building the third Knud Rasmussen-class as mentioned – she will be needed anyway as the icebreakers for the Danish Belts are in for a renewal anyway. You only break ice in the Arctic in the summer, as the winter is to cold. Note steel and ice are equally hard at those temperatures.

2)      There are the four Thetis-class with 20 cm ice capability.

3)      There has just been ordered 9 SeaHawk helicopters for the RDaNavy.

4)      It transpires that there is money in the budget for increased surveillance by satellite and drones.

Any surprises?

No, not really: There has been talk about the third ship for 10 years, but the money hasn’t been found until now. The present Lynx helicopters were in for a replacement. As to satellites – well there has been some ice surveillance on a budget for a couple of years: Call anything “green” and the unwashed public will swallow it.

So to return to the US defence budget: Why does the US need a carrier hanging around in very uncomfortable waters for? Is the US defence posture slacking? Not in the least. But don’t think the defence budget is just a number the administration just pull out of a hat!

Question: When will the US cough up with an extra 15 F-35 for the same price as the already ordered 30?


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