QE, UAPs, Aliens and The Invisible War

In the aftermath of the Great Financial Crisis, policymakers concluded that the prices in the market could not be allowed to fall. They made a concerted effort to prevent what they thought would be an unprecedented catastrophe. They dropped interest rates to zero and embarked on a policy of spreading free money around called Quantitative Easing (QE). Ben Bernanke got a Nobel Prize for spearheading the idea. It worked for a while. But soon, they realized that QE could not last forever. They needed another way to get liquidity into the markets. They found it. Defense spending. Today we are seeing the results of this massive jump in defense spending in the form of UAPs, light flashes in the sky, clashes in space, and poor explanations from The White House. Let me explain.

In 2016, I argued, in my book Signals, that the outcome of QE was obvious and inevitable. Inflation would come back, of course, because that’s the whole point of the strategy. That inflation, plus the easy availability of funds, would also end the peace dividend that had been brought about by the end of the Soviet Union and the fall of communism. The decline of interest rates to nothing and the return of inflation would reignite geopolitics. Inflation would destabilize emerging markets and cause governments to race for control over supply chains of food and energy. All that sounded ridiculous in 2016, but I went further and argued that at some point, QE would hit a limit. People would start challenging the policy. Policymakers would have to find a new way to push cash into the economy. It seemed clear to me then that defense spending would become the new QE (as I said on CNBC here and on Real Vision here) because it’s invisible because it’s not subject to any audit process and because it would spur innovation in technology, which it has. To finish, I argued that we were witnessing the start of a new arms race and a re-ignition of confrontations amongst the superpowers.

Today, I stand by all this and will now argue that many of the strange events around UAPs, odd lights in the sky, and other concerning events, are the result of this arms race and the ongoing invisible war that the superpowers are conducting with all this money and new tech in the places the public cannot see: near and far space, across and under the open oceans, within data/cyberspaces, and in, let’s call it, “Spygame land” where spies have returned as a “thing.” The Chinese “Sky Lanterns” floating across the skies have illuminated a previously invisible arms race and a war that we need to understand.

First, it matters that defense budgets are entirely opaque. You cannot complain about this back-door form of fiscal spending spurring inflation if you can’t get a firm grip on how much has been spent. The DOD has never passed a single financial audit despite a clear Congressional mandate since 1990 and five attempts to date. Then there are Special Access and Black Budget programs where even Pentagon officials can’t tell what’s happening inside their own organization. These seem to hold the information about UAPs, by the way. We simply don’t know how much is being spent on defense.

Meanwhile, during this period, the US has consistently pressed its closest allies to increase their own defense spending substantially. Now they are doing it. As of 2023, Poland is set to increase its defense spending to 3% of its GDP and double the size of its army. Germany now says that the 100b Euro increase in defense spending announced in 2023 is not enough, and they need 10b Euros more because they didn’t consider the need for munitions purchases or inflation-driven pay hikes. In Britain, a defense spending increase of £1b is needed this year just to avoid real-term cuts. This is being challenged by the National Audit Office even as the US tells Britain they are not spending enough.

Where is all this money going? Much is being spent on innovation, as it should be. C4ISRNet writes, “DARPA’s detailed fiscal 2023 budget plan was released April 25, nearly a month after the Department of Defense unveiled its top-level spending request. The budget proposal shows a $250 million increase over the $3.8 billion Congress appropriated for DARPA in fiscal 2022, largely driven by an $883 million ask for microelectronics, $414 million for biotech programs and $412 million for AI.” Spacenews writes that the Space Force got “$26.3 billion for the U.S. Space Force, which is nearly $1.7 billion more than the Pentagon requested.” No doubt there are many more examples of this spending.

So, here’s the question: what if the spending is working? What if militaries have developed new capabilities that the public does not know about? What if new innovations are no longer in development but are now deployable or even deployed? Is it possible that your average person expects the new technology to look like an aircraft carrier or a fighter jet but, in reality, the new tech is much faster, much smaller, and deployed further away than anything we’ve seen before? Maybe China and Russia together have a David versus Goliath strategy? Maybe they have developed systems that are very small and which are quite literally under America’s radar.

This raises another question. Where is this battlefield? What is the domain of modern warfare? We look up in the sky and see a balloon, so it must be an air-based war, just as in WWII. We don’t see the satellite shenanigans and thus cannot imagine a war is going on out in space or understand why it matters. Perhaps we are already in what the Pentagon calls “all domain” warfare? That would include the oceans as well as space.

Surprise, surprise, there are tons of events happening at sea and in space. A regular drip of headlines has revealed ongoing attempts to cut the world’s most important undersea internet cables. This has further accelerated the desire to move the internet off of earth into space orbits. Amazon is emerging as a competitor to Starlink in providing satellite-based wifi. Starlink, meanwhile, has been shrinking away from its satellites being used in Ukraine. It’s one thing to provide a besieged civilian population with comms. It’s another to be providing strategic support for offensive military operations. Note that the US just blacklisted six Chinese companies due to the balloon debacle, so everybody can see that it’s a real problem if your firm is seen as a military company.

But wait! The Pentagon’s approach has been to outsource to private companies because they are more efficient, more cutting-edge, and more cost-effective. Also, pretty much everything these days is “dual use,” meaning most tech can be used for civilian commercial purposes or military war-fighting purposes. Personally, I don’t think the term dual use has made much sense since the late 1950s, but we keep pretending that there is an imaginary line between civilian and military technology. Civilian tech innovation is military tech innovation these days.

This brings us to “all domain warfare.” The battlefield now includes all physical domains. Have we seen signs of warfare across all domains? Funnily enough, yes. In fact, I have long argued that despite the terrible situation in Ukraine, the fight between the West and the Russia/China alliance is principally naval. This is a particularly murky, low-visibility space that involves submarines, ocean-going vessels, and deep underwater anomalies. It’s fascinating to me that nobody wants to talk about Sy Hersh’s explosive reporting that accuses the US of having blown up Nordstream 2. Any such suggestion of it is deemed to be Russian disinformation. Given the escalation that’s going on, perhaps we should consider the possibility that Norway’s Special Operations divers (The MKD or Minedykkerkommandoen) might have had a hand in it? After all, it sure looks like the Russians cut the internet cable in Svalbard last year, which connects almost all high-altitude satellites to earth, as I reported at the time. Russian subs keep surfacing nearby Norway and Denmark. To the credit of the Norwegians, an internet search comes up with absolutely nothing: “Your search - Norway mkd Nordstream - did not match any news results.” No fingerprints.

While Scandinavians seem to be completely invisible when it comes to countering their opponents, their opponents are becoming increasingly visible. Spies are being unearthed everywhere in Scandinavia. A Brazilian working at the Center for Peace Studies at the University of Tromsø in Norway’s Arctic Circle turned out to be a Russian spy named Mikhail Mikushin. Two Iranian brothers in Sweden, Peyman Kia and Payman Kia, were recently arrested as Russian spies too. As the Guardian wrote last month, “Peyman Kia, 42, served in the Swedish security and counter-intelligence service, Säpo, and in armed forces intelligence agencies, including the foreign intelligence agency (Must) and KSI, a top-secret unit dealing with Swedish spies abroad.” His brother Payam, “Payam, 35, was convicted of aggravated espionage for planning the crime and managing contacts with Russia’s GRU military intelligence agency.” Spy games are back.

Today spy games are all too real. Mind games are too. The Chinese may be concerned about spy-ops but the Russians are concerned about psy-ops. When we see Foreign Policy Magazine, a serious publication, writing about Putin’s fear of “psychic attacks”, we can conclude that Putin is mad. Or, we can wonder at what technological innovations combined with huge injections of QE and defense spending have happened in neuroscience that make mind games something that is very real indeed. When I searched for “neuroscience military,” the first thing I got was an article in The National Defense Magazine called, Weaponizing the Brain: Neuroscience Advancements Spark Debate. That was from 2017! A more recent article can be found in Neuroscience News in 2022: “Brain-Computer Interfaces Could Allow Soldiers to Control Weapons With Their Thoughts and Turn Off Their Fear.”

We can only conclude that we are now in all-domain warfare, which includes stuff that genuinely makes the inside of your head spin. Not long ago, in 2021, General Hyten, the Vice-Chairman of the Joint Chiefs, called All-Domain Operations “the biggest key to the future of the entire budget.” Even if that warfare is sub-threshold, hybrid and, until now, invisible to the public, it is still very real. This Invisible War relies on the dual-use tech that a well-funded private sector developed during the QE/Defense spending boom years.

But, let’s face it, the public does not know much about science or tech at the best of times, a problem that Carl Sagan considered to be outright dangerous in a democracy. We spend our lives depending on a mobile phone that operates on the basis of wifi, GPS, Sat Nav and yet cannot understand why the superpowers are in a contest for control over space. Just as electricity does not come from the socket in the wall, GPS and sat nav, and increasingly wifi, do not materialize out of thin air. They all depend on satellites in space. It behooves us to notice that just last week, yet another Russian satellite, the Kosmos 2499, disintegrated into a sea of razor-sharp shards hurtling through space at some 25 thousand miles per hour.  This happened last year too, when Russia deliberately exploded their own satellite in an Anti-Satellite Test.

Could it be that we’ve got the wrong end of the story? Could it be that the issue here is that the superpowers are duking it out via satellites, as well as balloons, depriving each other of valuable orbits by creating debris fields and now even threatening to chuck each other’s satellites into the back of beyond via satellites with powerful robotic arms? On this last matter, only the US and China have such strong-arm satellites. The Chinese have been demonstrating this capability for a while. The Drive explained in January 2022:

“On January 22, China’s Shijian-21 satellite, or SJ-21, disappeared from its regular position in orbit during daylight hours when observations were difficult to make with optical telescopes. SJ-21 was then observed executing a “large maneuver” to bring it closely alongside another satellite, a dead BeiDou Navigation System satellite. SJ-21 then pulled the dead satellite out of its normal geosynchronous orbit and placed it a few hundred miles away in what is known as a graveyard orbit.”

While we can all see China’s giant, 200-foot balloons drifting over the US, we cannot see what’s going on in the graveyard of space. Ignorance is bliss. Could we be at war in space, and nobody but the military knew? Yes.

This takes us to Unidentified Flying Objects, which were only recently and conveniently reconsecrated as Unidentified Aerial Phenomena. What if well-funded secret military programs have succeeded in creating aerial and even submarine capabilities that we don’t know about? Wouldn’t it be surprising if all that money had not resulted in new capabilities? It strikes me as very interesting that NORAD is loaded with all kinds of cameras and sensors for detecting inbound nuclear missiles, which is their principal mission. After the first Chinese balloon wafted straight over Alaska, Canada, and the entire US Continental land mass, NORAD decided to “open the filters” on these sensors so that they could detect smaller objects. Suddenly…….