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Daily Missive

How Many Divisions Does Elon Have?

Loading ...Bill Bonner

February 19, 2025 • 4 minute, 38 second read


budgetDOGEElonsavings

How Many Divisions Does Elon Have?

“The only real power comes out of a long rifle.”

—Joseph Stalin


 

February 19, 2025— The question was framed, according to some historians, by Josef Stalin at the Potsdam Conference. Winston Churchill had suggested that the Pope might be brought in to provide moral backing to the Allies’ campaigns against Hitler.

Stalin must have wondered how morality would hold up against Panzer tanks.

“How many divisions does the Pope have?” he allegedly asked.

We wish we could be in the room when the question comes again.

Of all the bloated bureaucracies…among all the corrupt and self-serving federales… and all their boondoggle programs — the military stands out. It fails every audit. It spends trillions, and claims not to know where the money goes.

But it goes somewhere. And those who get it know where it went. They’ve bought and paid for almost every member of the House and the Senate. They’ve put on countless half-time shows…and granted ‘access’ only to toady journalists. They expect to get their money’s worth.

In ancient Egypt, the surplus production of the Nile Valley was spent building monuments to dead rulers. In China, under the first emperor, Qin Shi Huang, much of the surplus output was spent building a Terracotta Army of more than 8,000 soldiers, intended to protect him in the afterlife.

And in America, circa 2025, ‘national defense’ is a sacred myth. Having U.S. troops all over the world…meddling in one foreign conflict after another…trying to replace independent leaders with puppets — all in, it costs over a trillion dollars a year…and almost surely makes Americans less safe.

But now, the U.S. firepower industry may be coming under attack. According to the Washington Post, Musk’s shock troops have crossed the Potomac:

The Trump administration has directed defense agencies to turn over a list of their probationary employees by the end of Tuesday, with the expectation that many could be laid off as soon as this week, according to five people familiar with the matter.

The directive coincides with the arrival at the Pentagon of personnel from Elon Musk’s U.S. DOGE Service, which has overseen the firing of thousands of probationary employees in other federal agencies and coordinated the dismantling of the U.S. Agency for International Development.

“Uh… you want to see our records?” the brass will ask…stunned and confused as Elon and his band of callow nerds arrive at the Pentagon.

“That’s classified,” they will reply.

“We’re here to root out waste,” Elon will explain.

“No useless aircraft? No easily sunk ships? Close unnecessary bases? Stop useless weapons development? Fire some of the three million people who get our paychecks? Tighten our belts? Cancel our beach-house plans?”

“Yeah… that’s right,” Elon might reply.

“What about our enemies?” they’ll ask.

“What enemies?” Elon will reply. “You know perfectly well that there is no country on earth capable of crossing the ocean with a viable armada. They’d be wiped out by missiles and bombers before even leaving port.”

“Uh… what about Russia… China… terrorists?”

“Are you kidding? Russia has a tiny economy. China’s economy depends on selling stuff to Americans, not attacking them. And terrorists have never been anything more than a fake enemy.”

But it’s one thing to reduce spending by USAID. It’s another to reduce it for the U.S. Army, Navy and Air Force. The last time the Pentagon had to cut its budget was after WWII. The troops came home. Soldiers were ‘de-mobed.’ Eisenhower (who knew more about the military than any president since) peeled nearly 30% off the Department of Defense outlays.

That was then…before firepower became the nation’s defining industry, with effective control over both political parties. Today, for appearances sake, the warfighters are likely to shed a few ‘probationary’ employees. Maybe they’ll sacrifice some weapons that they never wanted anyway.

But why should the world’s ‘most lethal’ fighting force take its orders from an immigrant from Africa? Sooner or later, whether voiced or tacit, the question is bound to come up:

“And how many divisions do you have, Elon?”

Regards,

Bill Bonner
Grey Swan Honorary Member, via Substack

P.S. Before DOGE even tackles the Department of Defense’s spending, it’s managed to save taxpayers over $112 billion so far, according to DebtClock.

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That’s about $700 per taxpayer in annual savings. Not too shabby.

However, there’s now some talk about sending some of the savings back to taxpayers.

Given the $36.5 trillion national debt, which still continues to tick higher at a faster rate than DOGE can find savings, perhaps the best use of DOGE right now is to move away from today’s perilously high debt-to-GDP ratio.

As we noted in research last year, the Federal Reserve went “in the red” in 2022. Instead of earning money on its holdings and sending its surplus to the U.S. Treasury, the central bank is sitting on record losses caused by soaring bond yields.

If DOGE can’t make good on Elon Musk’s promise to reduce the deficit by $1 trillion annually, the math suggests that America’s debt will snowball from here. Bond investors will want increasingly higher yields, and the end result will likely be a hyperinflationary episode that permanently wrecks the dollar.

Gee, no wonder people can’t seem to get enough physical gold. For more on our forecast on what’s possible for the gold price in the short-term, click here.

Send your comments to addison@greyswanfraternity.com. Thank you in advance.


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But notice something crucial: the steepest increases coincide precisely with periods of massive government intervention. The post-dot-com bubble recovery fueled by Fed easy money after 2001. The housing bubble inflated by government-backed mortgages and Fannie Mae shenanigans. The recent explosion driven by unprecedented monetary stimulus and COVID lockdown policies.

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