The U.S. Department of Defense is now activating the Army’s Individual Ready Reserve for combat duty. Given the inherent problems associated with such a move, it is clear that U.S. war planners were caught in a trap: Defense Secretary Donald Rumsfeld’s “revolution in warfare” has not evolved as expected.

Al Qaeda has launched a multiphase war in Saudi Arabia. The militant group has mid-term operational goals and long-term strategic goals, with an endgame focused on ultimate control over one of the world’s top oil producers.

Attacks against expatriates working in the Saudi Arabian oil patch have accelerated in tempo and intensity during the past several months. If this trend is not reversed — which is not likely — Riyadh will slowly fall from its current position as the kingpin of global energy markets. Oil prices will be both higher and more volatile, Saudi social stability far less guaranteed and OPEC less a force to be reckoned with.

The United States has clearly entered a new phase of the Iraq campaign in which its relationship with the Iraqi Shia has been de-emphasized, while relationships with Sunnis have been elevated. This has an international effect as well. It obviously affects Iranian ambitions. It also helps strengthen the weakening hand of the Saudi government by reducing the threat of a Shiite rising in strategic parts of the kingdom that could threaten the flow of oil. The United States is creating a much more dynamic and fluid situation, but it is also enormously more complicated and difficult to manage.

On Feb. 19, in a piece titled “Ahmed Chalabi and His Iranian Connection,” Stratfor laid out the close relationship Chalabi had with the Iranians, and the role that relationship played in the flow of intelligence to Washington prior to the war. This week, the story of Chalabi, accused of being an Iranian agent by U.S. intelligence, was all over the front pages of the newspapers. The media, having ignored Chalabi’s Iranian connections for so long, went to the other extreme — substantially overstating its significance.

Last week, Stratfor published an analysis, “The Edge of the Razor,” that sketched out the problems facing the United States in Iraq. In an avalanche of responses, one important theme stood out: Readers wanted to know what we would do, if we were in a position to do anything. Put differently, it is easy to catalogue problems, more difficult to provide solutions.

The strategy of the United States in its war with radical Islam is in a state of crisis. The global strategic framework is in much better shape than the tactical situation in the Iraq theater of operations — but this is of only limited comfort to Washington because massive tactical failure in Iraq could lead to strategic collapse. The situation is balanced on the razor’s edge. The United States could recover from its tactical failures, or suffer a massive defeat if it fails to do so. One thing is certain: The United States cannot remain balanced on the razor’s edge indefinitely.

Significant uncertainty erupted in Chinese banking circles this week as reports circulated globally that the China Banking Regulatory Commission had suspended all lending for three days. This would effectively create a lending moratorium for well over a week due to the upcoming May Day celebration. The story, which appeared in the Wall Street Journal and other media, was quickly denied. However, Western media, including Agence France-Presse, are citing specific examples of Chinese banking officials who claim to have seen the order. Officials at the China Merchants Bank said they received the order from the CBRC -- and that it was issued by the Chinese Cabinet.

U.S. forces have reached a written cease-fire agreement with Sunni guerrillas operating in Al Fallujah. More than ending — or at least suspending — the battles in Al Fallujah, the cease-fire has turned the political situation in Iraq on its head, with the United States now positioned strategically between the majority Shia and the Sunni insurgents.

President George W. Bush’s press conference on Tuesday evening was fascinating in its generation of a new core justification for the Iraq campaign: building a democratic Iraq. It is unclear why Bush would find this a compelling justification for the invasion, but it is more unclear why the administration continues to generate unconvincing arguments for its Iraq policy, rather than putting forward a crisp, strategic and — above all — real justification.