"Gunning for America"
In a blaze of war and inflation,
the empire leads the world to conflict...
by Bill Bonner
Baltimore, Maryland - “For the first time in 20 years, the US is not at war…we’ve turned the page,” said the commander in chief on the 21st of September, 2021. But last week, Biden turned another page: Dem, GOP Lawmakers say Biden had no authority to launch Yemen strikes, fears of escalation to a regional war are running high
Members of Congress from both sides of the aisle Thursday night were lambasting the Biden administration for not getting congressional approval before moving ahead with military strikes against Houthi targets in Yemen. “Only Congress has the power to declare war,” posted Kentucky Republican Rep. Thomas Massie. “I have to give credit to @RepRoKhanna here for sticking to his principles, as very few are willing to make this statement while their party is in the White House.”
“Why don’t you stick to finance,” is a question that comes from readers from time to time. The answer: we’d love to. But two great questions hang in the balance. The first is whether international conflicts can be resolved by a ‘rules-based order?’ The second is like unto it; can an extraordinary debt pile be managed – by a rich, advanced nation – without resorting to inflation? Both questions put in doubt the competence and goodwill of our leaders.
“Peak America”: Deep down in the megapolitical mulch, the roots of finance and politics intertwine, competing for nutrients. Politicians rely on finance for Big Money. Big Money relies on politicians for wars and special favors.
Our guess is that we’ve already seen “Peak America” in the late ‘90s. That was the best time – ever – to sell US equities. The Dow was trading at over 40 ounces of gold. So, if you had $100,000 in stocks…and you traded them for gold, you would have gotten 357 ounces. If you’d left your money in stocks, it would have grown from $100,000 to over $370,000 over the next 23 years. Not bad. But your gold coins would have gone from $280 per ounce in 1999 to over $2,000 an ounce today, turning your $100,000 into $714,000.
The Soviet Union had ended the Cold War by dissolving itself. The US should have enjoyed a ‘peace dividend’…and should have used it to pay down debt, fix problems at home, and increase the value of its industries and the earnings of their employees.
But no…it was too late. By then, Americans had begun to think like the citizens of a late, degenerate empire; they sought protection from the outside world, not access to its markets. And they believed problems could be solved not by diplomacy and honest bargaining, but with firepower. Their movies signaled the glory of the Pentagon. Their sports events saluted the uniforms. And the ‘defense industry’ had so many members of Congress in its pocket that it could barely find its car keys. Threats to America went down, but military spending went up, and the opportunity was lost. Debt grew by $29 trillion so far this century.
And during that time, in the real-est terms possible, the value of America’s equity – the crème de la crème of its public businesses – fell by half. The US squandered its ‘peace dividend’ by starting a pointless war against ‘terrorism.’ It bungled up its economy with fake money and fake interest rates. It added more ‘stimulus’ to its economy than the world had ever seen, but it didn’t stimulate; it sedated. Growth rates fell from an average around 2.5% in the 1990s to only about 1.5% now. And the US also wasted its position as the leader of the ‘free world,’ by imposing sanctions, sponsoring nonsensical wars, and putting whistleblowers in jail and scoundrels in public office.
An Inglorious Blaze: In other words, it did what major empires tend to do…it headed down in a blaze of war and inflation. To the typical American, the US bombing of the Houthis is another battle of good vs. evil…right vs. wrong…the rule of law vs. terrorism. But nature is much too mischievous to deliver up her gifts so neatly wrapped.
More or less at the same time the US and Britain were hammering the Houthis, the International Court of Justice was taking up a claim, by South Africa, that the Israelis were committing genocide, aided and abetted by the USA. If the charge sticks, the government of Yemen – according the Genocide Convention – has not only the right, but the duty, to interdict shipping to Israeli ports.
Right? Wrong? Good? Bad? It might be easy to see world events in those terms. That’s the way, for example, that the Houthis see things:
God is the Greatest
Death to America
Death to Israel
A Curse Upon the Jews
Victory to Islam
Gunning Up: But everyone has his own simpleminded fantasies and prejudices. And there’s always more to the story. More importantly, what we see is the whole world ‘gunning up’ – led…or prompted…by the US. And there are more people gunning for the USA than ever before. America is providing firepower on a scale not seen since WWII. The rest of the world believes it needs firepower of its own. People do not believe they can trust the US or the ‘rules-based order’ to protect them. They guard their homes with Smith and Wesson…and their countries with missiles and tanks.
It has been two generations since the bloodbath of the 1940s. People now see violence as a reasonable…perhaps necessary…way to get what they want. Where this leads, we don’t know. But it could very well result in more violence, not less, and a further mark-down in the real value of US equities. In the meantime, let’s keep our eyes open...and the ammo near-to-hand."
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