March 20, 2015
World War Looms... Unless We Stop It
argues that there are ominous parallels between the conditions
which led to the first world war and today:
The United States is Britain, the
superpower on the wane, unable to guarantee global security.
Its main trading partner, China,
plays the part of Germany, a new economic power bristling with
nationalist indignation and building up its armed forces
rapidly. Modern Japan is France, an ally of the retreating
hegemon and a declining regional power.
The parallels are not exact - China
lacks the Kaiser's territorial ambitions and America's defense
budget is far more impressive than imperial Britain's - but they
are close enough for the world to be on its guard.
Which, by and large, it is not.
The most troubling similarity
between 1914 and now is complacency. Businesspeople today are
like businesspeople then: too busy making money to notice the
serpents flickering at the bottom of their trading screens.
Politicians are playing with nationalism just as they did 100
China's leaders whip up Japanophobia,
using it as cover for economic reforms, while Shinzo Abe stirs
Japanese nationalism for similar reasons.
The New Republic
points out that global downturns can lead to war:
As the experience of the 1930s
testified, a prolonged global downturn can have profound
political and geopolitical repercussions.
In the U.S. and Europe, the
downturn has already inspired unsavory, right-wing populist
movements. It could also bring about
trade wars and intense
competition over natural resources, and the eventual
breakdown of important institutions like European Union and the
World Trade Organization.
Even a shooting war is possible.
notes that the economic crisis in Europe is increasing tensions:
Tensions between European countries
unseen in decades are emerging.
(Indeed, Europe is stuck in a downturn
worse than the Great Depression.)
Well-known economist Nouriel Roubini
tweeted from the gathering of the rich and powerful at the World
Economic Forum in Davos last year:
Many speakers compare 2014 to 1914
when WWI broke out & no one expected it. A black swan in the
form of a war between China &
Both Abe and an influential Chinese
analyst don't rule out a
military confrontation between China and Japan.
Memories of 1914?
Paul Craig Roberts - former Assistant
Secretary of the Treasury under President Reagan, former editor of
the Wall Street Journal, listed by Who's Who in America as one of
the 1,000 most influential political thinkers in the world, PhD
economist - wrote an article about the build up of hostilities
between the U.S. and Russia titled, simply: "War
Similarly, Ronald Reagan's head of the
Office of Management and Budget - David Stockman - is posting pieces
warning of the dispute between the U.S. and Russia leading to World
Trend forecaster Gerald Celente - who
has been making some accurate financial and geopolitical predictions
for decades - says
WW3 will start soon:
Investment fund manager and adviser
Martin Armstrong has charted the "cycles of war" back to 600 BC...
says that we'll have major wars between now and 2020.
written pieces recently entitled, "Why
We will Go to War with Russia", and another one saying, "Prepare
for World War III".
Investment adviser Larry Edelson - who
has long studied the "cycles of war" -
wrote last month:
This year... we will also be hit by
another ramping up of the related war cycles.
All part and parcel of the rising
war cycles that I've been warning you about, conditions that
will not abate until at least the year 2020.
Former Goldman Sachs technical analyst
Charles Nenner - who has made some big accurate calls, and counts
hedge funds, banks, brokerage houses, and high net worth
individuals as clients -
says there will be "a major war", which will drive the Dow to
Veteran investor adviser James Dines
forecast a war as epochal as World Wars I and II, starting in
the Middle East.
Bad Economic Theories
What's causing the slide towards war? We
discuss several causes below.
Initially, believe it or not, one cause
is that many influential
talking heads hold the
discredited belief that war is good for the economy.
Therefore, many are
subtly pushing for war.
Challengers Give Declining Empires "Itchy
Moreover, historians say that declining
empires tend to attack their rising rivals... so the risk of world
war is rising
because the U.S. feels threatened by the rising empire of China.
The U.S. government considers
economic rivalry to be a basis for war. Therefore, the
U.S. is systematically
using the military to contain China's growing economic influence.
Competition for Resources Is Heating Up
In addition, it is well-established that
competition for scarce resources often leads to war.
Oxford University's Quarterly Journal of Economics
In his classic, A Study of War,
Wright (1942) devotes a chapter to the relationship between war
Another classic reference,
Statistics of Deadly Quarrels by Richardson (1960),extensively
discusses economic causes of war, including the control of
"sources of essential commodities."
A large literature pioneered by
Homer-Dixon (1991, 1999) argues that scarcity of various
environmental resources is a major cause of conflict and
resource wars (see Toset, Gleditsch, and Hegre 2000, for
In the War of the Pacific
(1879–1884), Chile fought against a defensive alliance of
Bolivia and Peru for the control of guano [i.e. bird poop]
mineral deposits. The war was precipitated by the rise in the
value of the deposits due to their extensive use in agriculture.
Westing (1986) argues that many of
the wars in the twentieth century had an important resource
As examples he cites the Algerian
War of Independence (1954–1962), the Six Day War (1967), and the
Chaco War (1932–1935). More recently, Saddam Hussein's invasion
of Kuwait in 1990 was a result of the dispute over the Rumaila
In Resource Wars (2001), Klare
argues that following the end
of the Cold War, control of valuable natural resources has
become increasingly important, and these resources will become a
primary motivation for wars in the future.
Former Federal Reserve chairman Alan
many world leaders) admitted that
the Iraq war was really about oil, and former Treasury Secretary
says that Bush planned the Iraq war before
9/11. And see
Libya, Syria, Iran and Russia are all
oil-producing countries as well …
Indeed, we've extensively documented
that the wars in the Middle East and North Africa are
largely about oil and gas. The
war in Gaza may be no exception. And
see this. And Ukraine may largely be
gas as well.
James Quinn and
Charles Hugh Smith say we're running out of all sorts
of resources... which will lead to war.
Central Banking and Currency Wars
We're in the middle of a
global currency war - i.e. a situation where nations all compete
to devalue their currencies the most in order to boost exports.
Brazilian president Rousseff
said in 2010:
The last time there was a series of
competitive devaluations... it
ended in world war two.
Currency wars lead to trade wars,
which often lead to hot wars. In 2009, Rickards participated in
the Pentagon's first-ever "financial" war games.
While expressing confidence in
America's ability to defeat any other nation-state in battle,
Rickards says the U.S. could get dragged into "asymmetric
warfare," if currency wars lead to rising inflation and global
As does billionaire investor
Trade wars always lead to wars.
Given that China, Russia, India, Brazil
and South Africa have joined together to create a
$100 billion bank based in China, and that more and more trades
are being settled in Yuan or Rubles - instead of dollars - the
currency war is quickly heating up.
Indeed, many of
America's closest allies are joining China's effort... which is
challenging America and the Dollar's hegemony.
Multi-billionaire investor Hugo Salinas
What happened to [Libya's] Mr.
Gaddafi, many speculate the real reason he was ousted was that
he was planning an all-African currency for conducting trade.
The same thing happened to him that
happened to Saddam because the US doesn't want any solid
competing currency out there vs the dollar.
You know Gaddafi was talking about a
Senior CNBC editor John Carney
Is this the first time a
revolutionary group has created a central bank while it is still
in the midst of fighting the entrenched political power? It
certainly seems to indicate how extraordinarily powerful central
bankers have become in our era.
Robert Wenzel of
Economic Policy Journal thinks the central
banking initiative reveals that foreign powers may have a
strong influence over the rebels.
This suggests we have a bit more
than a ragtag bunch of rebels running around and that there are
some pretty sophisticated influences.
"I have never before heard of a
central bank being created in just a matter of weeks out of
a popular uprising," Wenzel writes.
some say that recent wars have really been about bringing all
into the fold of Western central banking.
Martin Armstrong argued that war plans
against Syria are really about
debt and spending:
The Syrian mess seems to have people
lining up on Capital Hill when sources there say the phone calls
coming in are overwhelmingly against any action. The politicians
are ignoring the people entirely.
This suggests there is indeed a
secret agenda to achieve a goal outside the discussion box. That
is most like the debt problem
and a war is necessary to relief the pressure to curtail
The same logic applies to Ukraine and
Billionaire hedge fund manager Kyle Bass
Trillions of dollars of
debts will be restructured and millions of financially
prudent savers will lose large percentages of their real
purchasing power at exactly the wrong time in their lives.
Again, the world will not end,
but the social fabric of the profligate nations will be
stretched and in some cases torn. Sadly, looking back through
economic history, all too often
war is the manifestation of simple economic entropy played to
its logical conclusion.
We believe that war is an inevitable consequence
of the current global economic situation.
Paul Tudor Jones - founder of the Tudor
Investment Corporation and the Tudor Group, which trade in the
fixed-income, equity, currency and commodity markets -
said this week:
This gap between the 1 percent and
the rest of America, and between the US and the rest of the
world, cannot and will not persist.
Historically, these kinds of gaps
get closed in one of three ways: by revolution, higher taxes or
Billionaire investor Jim Rogers
A continuation of bailouts in Europe
spark another world war, says international investor Jim
"Add debt, the situation gets
worse, and eventually it just collapses.
Then everybody is looking
for scapegoats. Politicians blame foreigners, and we're in
World War II or World War whatever."
Economist and investment manager Marc
says that the American government will start new wars in
response to the economic crisis:
Martin Armstrong - who has
managed multi-billion dollar sovereign investment funds -
wrote in August:
Our greatest problem is
the bureaucracy wants a war.
This will distract everyone from the NSA and justify what they
have been doing. They need a
distraction for the economic decline that is coming.
War Is Destroying Our National Security, Our
Democracy and Our Economy
We spent trillions in Iraq and
Afghanistan. Yet a
top Pentagon official say we're no safer - and perhaps less
safe - after 13 years of war.
Indeed, war only
dramatic expansion of even worse terrorists.
Never-ending wars are also destroying
our democratic republic. The Founding Fathers
warned against standing armies, saying that they destroy freedom.
Perversely, our government treats
anti-war sentiment as terrorism.
The Founding Fathers - and the
father of free market capitalism - also warned against
financing wars with debt. But according to Nobel prize winning
economist Joseph Stiglitz, the U.S. debt for the Iraq war could be
as high as
dollars according to a study by Brown University.)
Indeed, top economists say that war is
destroying our economy.
But war is
great for the
bankers and the
defense contractors. And - as discussed above - governments are
desperate for war.
So it's up to us - the people -
to stop wider war...