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Joint warning from Pentagon and Wall Street: ‘Only five years left for Western survival’

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The Reagan National Defense Forum held in California became the scene of critical discussions shaping Washington’s new strategic era.

At the center of the forum were the massive increase in China’s military production capacity, the slowness of the American bureaucracy, and strategic uncertainties in conflict zones ranging from Ukraine to Venezuela.

Warnings from Office of Management and Budget (OMB) Director Russ Vought and JPMorgan CEO Jamie Dimon revealed that the US is in search of a fundamental “paradigm shift” in its defense understanding.

The focus of the discussions was the question of how to secure the speed and resources necessary for the US to maintain its technological superiority.

Declaration of war against bureaucracy

Making one of the forum’s most notable statements, OMB Director Russ Vought emphasized that the biggest obstacle facing the Pentagon and the White House is not a lack of resources, but rather time and bureaucracy.

Pointing out that China’s shipbuilding capacity is 200 times that of the US, Vought announced that radical steps would be taken to alter the current trajectory.

Vought stated, “Just giving an extra billion dollars doesn’t get you a ship delivered any earlier. We have to, in his words, take a bulldozer to the bureaucracy.”

Noting that the administration could use the “budget reconciliation” method to bypass the 60-vote threshold in the Senate to increase defense spending, Vought argued that time is more valuable than political capital.

Vought used the expressions, “Political capital is not our scarcest resource; you can always build that. Time is our scarcest resource.”

The crisis in shipbuilding was one of the forum’s main agenda items. Vought reminded the audience that only 2% of US ship production is domestically linked, whereas China holds 74% of the global market.

Stating that they plan to utilize the capital and expertise of allies like South Korea to address this imbalance, Vought said, “It is my job to change the current trajectory.”

Critical five-year window for the West’s future

Jamie Dimon, CEO of JPMorgan and a heavyweight in the financial world, announced that they have launched a $1.5 trillion investment initiative directed at the defense industry.

Dimon emphasized that the Ukraine war has shattered illusions regarding Western security and that maintaining American military superiority is no longer a choice, but a necessity.

Issuing stern warnings about the risk of Europe fragmenting, Dimon said, “If we were to write a book about how the West was lost, it would be about how we didn’t do our job right here and allowed Europe to fracture.”

Giving a clear answer to the question of how much time remains to take necessary measures, Dimon said, “We have five years,” and added: “Five years means you have to start doing the right thing today.”

RTX CEO Chris Calio also drew attention to the fragility in the supply chain, stating that the Ukraine war has exposed gaps in production capacity.

Calio said, “There were two-year production gaps in systems like Patriot. Multi-year gaps had formed for Javelin,” adding that the industry needs to scale rapidly.

“Hellscape” strategy in the artificial intelligence race

Indo-Pacific Command Commander Admiral Samuel Paparo explained that the character of war is changing and that artificial intelligence, autonomous systems, and data are at the center of this change.

Paparo stated that deterrence against China involves making an attack costly for the enemy.

Saying, “The nature of war never changes, but there are three meta-trends affecting its character,” Paparo listed these as information operations, the proliferation of drone warfare, and precision strike capability.

The Commander emphasized that the US goal is to ensure “decision superiority,” stating, “I want to use artificial intelligence to blind, deceive, and destroy the enemy’s ability to see and perceive.”

Technology investor Joe Lonsdale, who participated in the artificial intelligence panel, complained about regulatory hurdles in the US.

Noting that there are thousands of bills waiting in states to regulate artificial intelligence, Lonsdale warned, “If we allow all these regulations to pass, we cannot win the artificial intelligence race against China.”

The “last 10 meters” debate in the Ukraine war

The future of the war in Ukraine was one of the forum’s most heated topics of discussion. Retired Lieutenant General Keith Kellogg, who plays an active role in negotiation processes, implied that the conflict is close to ending, assessing that “The last 10 meters to the objective are always the hardest.”

Kellogg reminded the audience that the humanitarian cost of the war has reached massive dimensions and that there is a risk of losing a generation.

However, Democratic Senator Chris Coons argued that any concession given to Putin would be dangerous. Coons used the expressions, “Putin is a thug and a gangster. You don’t negotiate with a gangster by saying, ‘You took my thumb, would you like my hand too?’”

Coons stated that closing the path to NATO membership for Ukraine or giving territorial concessions would send the wrong message to other authoritarian regimes like China.

Finnish Minister of Defense Antti Hakkanen emphasized that Europe needs to implement harsher economic sanctions against Russia, saying, “What will bring Putin to the table is the hard collapse of the Russian economy.”

Venezuela and “backyard” security

The prioritization of Western Hemisphere security in the new administration’s National Security Strategy brought the issues of Venezuela and the fight against drug cartels to the forefront.

Former Secretary of Defense Leon Panetta and Retired General Jack Keane discussed military activity in the region and possible regime change scenarios.

Stating that 25-30% of the US Navy is deployed off the coast of Venezuela, Panetta said, “If Maduro is still there after the deployment of this fleet, this is clearly a failed mission.”

General Keane emphasized that the administration is approaching the region with a comprehensive perspective and that the Maduro regime has become intertwined with the cartels. Keane said, “The President has already said he is interested in regime change because he asked Maduro to leave.”

US Vice Chief of Staff of the Air Force General Dan Caine also stated, “Protecting the homeland is no longer just a term we say, it is a real thing,” indicating that the military will take action to protect its own neighborhood.

Responding to a question about whether an artificial intelligence arms race has been entered with China, Caine replied, “There is a possibility we are entering an artificial intelligence arms race.”

Technology revolution and unmanned aerial vehicles at the Pentagon

The US Army’s modernization efforts were addressed by Lockheed Martin CEO Jim Taiclet and General Randy George.

Taiclet explained how artificial intelligence is being used in operations conducted against the Houthis in the Red Sea. Stating that data from Aegis radar systems is transferred via Starlink to a center in New Jersey where it is processed to distinguish targets, Taiclet said, “It took us about a month to narrow 38 false targets down to two.”

Taiclet also mentioned a new technology that allows F-22 pilots to control drones from the cockpit. “We are doing this with a tablet you can buy from the Apple Store,” Taiclet said, explaining that a pilot can manage eight unmanned aerial vehicles (CCA) with a fingertip.

General George emphasized that the army is working to reach the “one million drones” goal and that integrating unmanned systems into units is of vital importance.

Saying, “I think the first contact will be established with drones,” George expressed that the transformation on the battlefield is inevitable.

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Trump nominates federal prosecutor Jay Clayton to lead national intelligence agency

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US President Donald Trump, following controversies over experience in Congress, has nominated Jay Clayton, the US Attorney for the Southern District of New York, to lead the Office of the Director of National Intelligence (ODNI), the nation’s most senior intelligence post.

The selection, which will fill the vacancy left by incumbent Director Tulsi Gabbard when she departs on June 30, comes after turbulent weeks following Trump’s appointment of Bill Pulte as acting director.

“There are very few people in the legal community who are as highly respected as Jay,” Trump said in a statement on his social media platform, Truth Social, calling on the US Senate to confirm Clayton’s nomination as quickly as possible.

A political independent, Clayton has served since August 2025 as the US Attorney for the Southern District of New York—a position legal experts describe as the most powerful post within the Department of Justice.

Trump had nominated Clayton to this post shortly after winning the 2024 presidential election, describing him as “a tough fighter for the facts.”

From Wall Street lawyer to federal prosecutor

Born in West Virginia, Clayton began his legal career from 1993 to 1995 as a law clerk to Judge Marvin Katz of the US District Court for the Eastern District of Pennsylvania.

He then worked at the Sullivan & Cromwell law firm from 1995 to 2017, first as an associate and later as a partner. During this period, Clayton represented major financial institutions such as Goldman Sachs, building a multi-million dollar fortune during his time as a Wall Street lawyer.

In 2017, at the beginning of his first presidential term, Trump nominated Clayton to chair the US Securities and Exchange Commission (SEC). During his confirmation process, Clayton pledged to fully sever ties with his law firm and his Wall Street clients, which included Barclays Bank, Royal Bank of Canada, and Deutsche Bank AG.

After the Office of Government Ethics determined that there was no conflict of interest, Clayton was confirmed by the Senate in May 2017 by a 61-37 vote and assumed office.

Then-Senate Majority Leader Mitch McConnell, a Republican, praised the nomination and said he looked forward to Clayton’s leadership, while Democrats, including Senator Elizabeth Warren, voted against him due to his Wall Street ties.

During his tenure as SEC chairman, Clayton frequently testified before Congress on issues such as market integrity, digital asset regulation, cybersecurity, and US-China economic interdependence. After leaving office, he returned to Sullivan & Cromwell while also taking on executive roles at Apollo Global Management and American Express.

He also continued his academic work, serving as an adjunct professor at the University of Pennsylvania Carey Law School since 2009 and at the Wharton School since 2021.

Between 2022 and 2025, he co-chaired the university’s Institute for Law and Economics.

New York prosecution

In June 2020, Trump announced he would appoint Clayton to the post of US Attorney for the Southern District of New York after dismissing then-US Attorney Geoffrey Berman.

Clayton expressed interest in the position but did not comment on whether he was aware that Berman would be dismissed.

The appointment did not materialize at the time, and Audrey Strauss was appointed to the role.

Clayton was nominated again for the US Attorney post for the Southern District of New York in 2025, at the beginning of Trump’s second term.

Clayton sought the office to replace an interim judge who had refused to assist the Department of Justice in dropping charges against New York City Mayor Eric Adams.

Clayton’s appointment, which was not directly confirmed by the Senate, was finalized by the court’s own approval. At the time, The Wall Street Journal commented that Clayton, who typically avoided political controversies, found himself in the midst of a “partisan battle” with this move.

The most notable process conducted by Clayton’s prosecution office was the indictment and litigation process initiated in January against Venezuelan President Nicolás Maduro on charges of “narco-terrorism” and other offenses.

Clayton’s team also played critical roles in reviewing documents related to Jeffrey Epstein and in the case of an Iraqi citizen accused of plotting attacks on US soil on behalf of Iran.

Recently, The New York Times claimed that Clayton spent frequent time with Trump, played golf, and was “often absent” from his office.

Like Bill Pulte, Jay Clayton has no prior experience in the intelligence world. Trump’s previous choice, Bill Pulte, had been accused of targeting Trump’s political opponents by filing criminal complaints over mortgage fraud allegations during his tenure as director of the Federal Housing Finance Agency (FHFA).

While none of these cases resulted in convictions, the Government Accountability Office (GAO) launched an investigation into how the FHFA conducted its investigative processes.

Pulte’s lack of intelligence-gathering experience and the politically charged investigations he initiated drew intense criticism in Congress.

In this new phase, however, members of Congress have reacted more positively to Clayton’s nomination. Republican Senator John Thune said of Clayton, “I think he is a highly qualified professional with great skills to manage complex problems.”

Senator Mark Warner, the ranking Democrat on the committee that will vote on the nomination, also described Clayton as “very qualified.” According to The New York Times, CIA Director John Ratcliffe also supported Clayton’s appointment to the post.

Statements on election security

Days before being nominated as Director of National Intelligence, Clayton appeared as a guest on CNBC, where he addressed the possibility of irregularities in California’s elections.

Speaking about election security during the June 8 broadcast, Clayton said, “We are doing an absolutely terrible job, and the American people are right to question it.”

Arguing that the state’s laws—which allow mail-in ballots to be sent to all voters and allow votes to arrive after Election Day—”create opportunities for irregularities,” Clayton’s claims came at a time when Trump was asserting, without providing any evidence, that the elections were “rigged.”

Jay Clayton, who holds a bachelor’s degree in engineering from the University of Pennsylvania, completed his graduate studies at King’s College, Cambridge. He received his law degree in 1993, also from the University of Pennsylvania.

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US inflation climbs to three-year high as energy prices surge

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US inflation accelerated to 4.2% in May, the highest level since April 2023, driven by a surge in energy prices linked to the Iran war.

Inflation rose above 4% for the first time in three years, though the increase was broadly in line with expectations amid concerns over how far higher energy costs would ripple through the economy.

The reading marked the highest level since April 2023 and exceeded April’s 3.8% rate.

On a monthly basis, inflation increased at a slower pace than in April, potentially signaling that the worst of the recent price pressures may have passed.

Another encouraging sign was a slight decline in gasoline prices.

Asked about the Bureau of Labor Statistics report on Wednesday, President Donald Trump said, “I love inflation,” and argued that oil prices had fallen because “we destroyed 22 ships last night.”

According to the report, much of the increase in inflation stemmed from a 3.9% rise in energy prices, which pushed the 12-month increase in that category to 23.5%.

Core CPI, which excludes the more volatile food and energy components and is widely viewed by analysts as a better indicator of future inflation trends, offered some grounds for optimism.

Core prices rose 0.2% in May, down from a 0.4% increase in April and below analysts’ expectations for a 0.3% gain.

Core goods prices fell 0.1% on a monthly basis, suggesting underlying price pressures remained contained.

On an annual basis, CPI increased 2.9%, in line with economists’ expectations.

Ground beef, roast beef and steak prices declined last month, although the parasitic fly outbreak reported in the United States last week could complicate logistics for farmers and contribute to higher prices.

Food prices rose just 0.2%, while shelter costs — a key component for Federal Reserve policy decisions — increased 0.3%, half the pace recorded in April.

Shelter, which accounts for more than one-third of the CPI basket, rose 3.4% from a year earlier.

Government and industry officials stressed that the insect, whose name has attracted widespread attention, does not pose an immediate threat to food supplies.

Meanwhile, transportation services prices fell 0.6%, potentially indicating that higher energy costs have not yet spread broadly across other sectors.

Similarly, services excluding energy services — another measure closely watched for signs of oil-price pass-through effects — rose 0.3% after increasing 0.5% in April.

New vehicle prices fell 0.3%, while used car and truck prices edged up 0.1%.

However, airline fares, a clearer indicator of energy costs feeding through to consumer prices, rose 2.7%, while motor vehicle insurance prices fell 1.7%.

As for interest rates, few observers expect the Federal Reserve to cut rates when it delivers its first policy statement under new Chair Kevin Warsh next Wednesday.

Market expectations point to just one rate move this year: an increase in December.

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US nuclear weapons spending jumps 22% to $69.2 billion, ICAN says

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US spending on nuclear weapons rose by 22% in 2025 compared with the previous year, according to a report published by the International Campaign to Abolish Nuclear Weapons (ICAN).

Washington spent $69.2 billion on its nuclear arsenal during the year, a figure that exceeded the combined nuclear weapons expenditures of all other nuclear-armed states.

The world’s nine nuclear powers — the United States, Russia, China, the United Kingdom, France, India, Pakistan, Israel and North Korea — increased total spending on their arsenals by 19%, reaching a record $119 billion.

China ranked second in spending with $13.5 billion. The United Kingdom spent $12.6 billion, overtaking Russia to become the third-largest spender. France’s nuclear weapons expenditure reached $7.7 billion.

According to data cited in the ICAN report, nuclear-armed states have spent a combined $471 billion on their arsenals over the past five years.

The report emphasized that the amount spent on nuclear weapons in a single day during 2025 would have been sufficient to provide food for 2 million people for a year, while total annual spending could fund the United Nations’ regular budget for 32 years.

Before those developments, Russian Foreign Ministry Ambassador-at-Large Andrey Belousov commented on the issue.

Belousov said Russia continues to insist on the withdrawal of US nuclear weapons from Europe and the dismantling of all infrastructure established in the region to support their deployment.

Under its nuclear-sharing programme, the United States has stationed nuclear weapons in NATO countries across Europe since the 1950s.

Today, US-made B61 nuclear bombs are stored at military bases in Belgium, Germany, Italy, the Netherlands and Türkiye.

Although NATO does not possess its own nuclear weapons, operational control over those weapons remains with Washington.

Earlier, the Financial Times reported that the United States was considering expanding its nuclear presence in Europe beyond the countries currently participating in the nuclear-sharing programme.

According to the newspaper, Poland and the Baltic states had expressed interest in hosting US nuclear weapons.

Sources cited by the Financial Times linked those discussions to concerns among European allies that the United States could reduce its military presence in the region.

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