The Daily SA for Thursday, 01 July 2021 – Forward Observer

The Daily SA for Thursday, 01 July 2021


  • The Navy wants to buy foreign ships to increase sealift capacity
  • A joint U.S.-Japanese naval exercise prepares for China
  • Drought conditions will bolster food price inflation
  • Hazards: Tropical Storm Elsa pointed towards Florida
  • EW: Recession indicators and the Fed’s next hurdle


NAVY: Navy officials warn that increased maintenance on aging vessels and slowed dry-dock time is limiting readiness. The Defense Department is now seeking Congressional waivers to buy used foreign ships to accelerate modernization and increase sealift capacity. The plan allows for the purchase of 16 additional vessels to move Army and Marine Corps equipment and personnel, potentially to theaters of war this decade. (Analyst Comment: This is in direct preparation for an expanded U.S. presence in the Pacific. In order to accomplish effective island-hopping campaigns, massive air and sealift capacity will be required. – D.M.)

CHINA: Following recent expansions to Japanese military capabilities, ongoing joint U.S.-Japan military exercises address a potential conflict with China. The top secret tabletop exercise portion intends to maximize U.S.-Japanese interoperability in a contested multi-domain war. Japan is using increasingly creative interpretations of its post-war pacifist constitution as they view Chinese invasion of Taiwan as assured. (AC: The Pacific Allies have all strategically oriented themselves against Chinese expansion. The significantly expanded military cooperation and exercises in the Pacific are supposed to showcase unity against the Chinese Communist Party. – D.M.)

DROUGHT: Drought conditions persist for much of the American West, threatening farm and ranch production. Feed grain prices are at the highest levels since 2013, another period of exceptional drought in the region. Higher production costs and depleted production are expected to compound inflationary effects on food prices. – M.S.


HURRICANE SEASON: The National Hurricane Center has upgraded a disturbance off the northern coast of Brazil to Tropical Storm Elsa. Elsa is currently projected to make its way towards Florida and arrive early next week.

In today’s Early Warning, I know it’s hard to believe, but there have actually been several recession warnings. I take a look at three indicators flashing red. I also explain the next hurdle for the Federal Reserve and the downside risks we’re likely to see. Upgrade your situational awareness to situational understanding with Forward Observer’s Early Warning brief at

Mike Shelby is a former Intelligence NCO and contractor. He's now the CEO of Forward Observer.

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