Open Paddock 9!

Open Paddock 9!

Given the demographic characteristics and interests of my kids, I have watched an inordinate number of movies over the last few years with the word “Jurassic” in the title.  And I have watched some of those movies an inordinate number of times.

Anyway, there is a scene in one of these shows, the climactic battle scene, in which a character does something that might otherwise seem incredibly stupid but that is brilliant in the moment.  Near the end of 2015’s “Jurassic World,” as the plucky protagonists are about to be killed/crushed/disemboweled/eaten/or otherwise annihilated by the hybrid dinosaur Indominus Rex, our heroine, Claire, sprints from the battle to enlist the help of a new combatant.  She runs to “Paddock 9” and demands that Nick Miller open its doors and release its inhabitant – which just happens to be a Tyrannosaurus Rex.

Long story short, the T-Rex joins the battle against the Indominus, with help from a few friends manages to win the fight, and everyone left alive at this point lives happily ever after – or at least until the next movie.

We’ve been thinking a great deal about this scene the last few days, ever since Friday, when we read the following:

In a major break from its strictly self-defense-only postwar principle, Japan adopted a national security strategy Friday declaring plans to possess preemptive strike capability and cruise missiles within years to give itself more offensive footing against threats from neighboring China and North Korea.

With China, North Korea and Russia directly to its west and north, Japan “faces the severest and most complicated national security environment since the end of the war,” the strategy said, referring to World War II. It named China as “the biggest strategic challenge” — before North Korea and Russia — to Japan’s effort toward ensuring the peace, safety and stability for itself and the international society.

Possession of the strike-back capability is “indispensable” as deterrence to discourage enemy attacks, Prime Minister Fumio Kishida told a news conference Friday, calling it “a major change to Japan’s postwar security policy.”

“When threats become reality, can the Self-Defense Force fully protect our country? Frankly speaking, the current (SDF capability) is insufficient,” Kishida said.

Under the strategy, Japan’s defense spending through 2027 will increase to about 2% of Japan’s GDP to total some 43 trillion yen ($320 billion)….

This puts an end to Japan’s 1956 government policy that shelved counterstrike capability and only recognized the idea as a constitutional last-ditch defense.

Regular readers know well that this is something that we have been expecting and have been tracking for years, as momentum to rearm has been building slowly but surely in Japan and among its allies.  Obviously, there was a reason Japan was disarmed and was constitutionally prohibited from rearming.  Once upon a time, Japan was the bad boy on the east Asian block – with an emphasis on “bad.”  Those days are long gone now, and neither Japan nor the rest of the world can pretend that the region doesn’t desperately need a military counterbalance to China.

Regular readers also likely know that we have long acknowledged that Japan is a tacit yet officially undeclared nuclear power, which is to say that it clearly has the capacity and the knowledge to build nuclear warheads but has chosen not to.  Given that, we found this version of the story – which was published a few days before the official budget announcement – telling.

Alarmed by increasing security threats and the risk of war in the Indo-Pacific, Japan will seek to purchase hundreds of U.S.-built Tomahawk cruise missiles as part of a major defense buildup unprecedented in the postwar period, Japanese and U.S. officials said.

The missile buy would boost Japan’s long-range strike capability and mark a stunning break with a long tradition of eschewing offensive weapons. And it would enhance Japan’s conventional deterrent as China undertakes a sweeping military modernization and North Korea barrels ahead with its nuclear program….

The decision to buy hundreds of Tomahawks — 400 to 500 by some accounts — will put China and North Korea on notice that Japan is serious about self-defense, and that the bilateral alliance — arguably the most significant militarily in the region — is growing stronger in the face of threats from Beijing and Pyongyang, officials said….

To date only Britain has been sold the Tomahawks, noted Hornung, from Rand. The United States selling to Japan “sends a message that you are in our top tier of really trustworthy countries as allies,” he said.

Tomahawks can be equipped with conventional or nuclear payloads.  And we’d guess that there will considerable strategic ambiguity from Japan about whether or not it has the capability or the intention of equipping any of its four or five hundred new Tomahawks with the latter.

Whatever the case, this is an enormously significant development.  Reports say that Japan’s military budget will now be the third largest in the world, behind only the United States and China.  We have to assume that, since we knew this was coming, the CCP knew it was coming too.  The question now is what, if anything, are they going to do about it?  What, if anything, have they already planned to do about it?

And we have to assume that they’ve planned to do something.  After all, while we see Japan as the secret, equalizing weapon that’s been cooped up in Paddock 9, Xi and the CCP still see it as the insatiable beast that shakes water cups, crushes cars, and eats creepy lawyers off the toilet in the porta-potty.

Either way, the world has changed.  Again.

Stephen Soukup
Stephen Soukup
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Steve Soukup is the Vice President and Publisher of The Political Forum, an “independent research provider” that delivers research and consulting services to the institutional investment community, with an emphasis on economic, social, political, and geopolitical events that are likely to have an impact on the financial markets in the United States and abroad.