Army Futures Conference Sees US Financial Meltdown Soon

There was an Alternative Futures Symposium recently put on by the Army Capabilities Integration Center (ARCIC) at the Army Training and Doctrine Command in Fort Eustis, Virginia. They didn’t look at the threat posed by a nuclear Iran or Islamist terrorism. They looked instead at the prospects of a US financial meltdown. The news is not good.

The seminar included 85 experts from finance, academe and the military. How bad is the American debt situation? “If you were a banker would you lend us money?” asked Robert Wiedemer, one of the participants. “The answer is ‘no.” He said things don’t look that dire right now because interest rates are so low. But when they go up by just 1% (which they will inevitably), that will raise the interest on the debt by $150 billion a year. Over the next few years, he predicted, we are “going to see bad things.”

Another problem is the exploding U.S. money supply. Frank Finelli, a managing partner of The Carlyle Group, told the group we are risking a major crisis by flooding the market with money. “Such tremendous increase in the money supply has not been accompanied by economic growth in the United States,” he said. He noted that the U.S. economy was larger in late 2007 than it was in the second quarter of 2011.

Lurking in the background as America deals with its financial mess is China. “China does view financial power as an exercise of power in a way that the United States does not,” said Finelli. “The United States only exercises financial power through its corporations.”

General Patrick J. Donahue of ARCIC said that the Army and the other services will need to cutback to pull America back from the financial precipice. The situation “requires some changes in how we think and how we operate.” Proposed solutions include reducing overseas bases and setting up new alliances with allies that can better finance overseas operations.

Like everything else today, these Futures Conferences are on Facebook. You can learn more about them here.

You can read more about the conference here.