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Good morning
Americans! It’s Friday! Or ought to be.
Well, what’s
happening? Busy lately and can’t find the time to get inside
Microsoft Word. Probably put readers to sleep anyway. Ever wonder
what brought on the first Great World War? Later to be called World War
1. And what the devil brought on the horrible World War II?
Went to my
nephew’s wedding in the Outer Banks last weekend. In Nags
Head. An uppity little enclave for those who think they’re better
bred than the common folk. Give me the laid back atmosphere of the Gulf
of Mexico any day. Even with the now dying marine life and slicked
blackened shores. But Nags Head does have the singular advantage of
being just 6 miles south of Orville and Wilbur Wrights first powered flight
in all the history of man.
In 1903 they did.
And 66 years later mankind was landing on the moon. Something sound
weird about all this? 1900 is when real technological advances really
took off to the stratosphere. And how did new technology affect
wars? Want me to share with you a secret? Don’t tell
anyone. The answer is technology.
Hey! Have you
been following those raids on Israel’s Gaza shoreline? Israel,
Israel, Israel! When will you learn? The United States is trying
to set an example and show the rest of the world there just are no such
things as national borders anymore. The US thinks its great that the
Mexican ruling mafia is stretching out and further into Texas.
The US is a nation of
immigrants and does it really matter if those immigrants are criminals or
breaking laws? National borders are designed today to be entry ports
for those breaking international law. Arkansas is setting a bad example
by desiring to enforce laws on the books. What we are witnessing here
is mean spirited and xenophobic and just plain out unloving behavior.
Can you imagine if
Tyson chicken slaughter houses had to pay real wages because immigration laws
might be enforced? You’ll never see it happen. Illegal
immigration is really all about exploitation and cheap labor. Over the
years how many in Congress itself have proven to employ illegal immigrants to
clean their houses and watch their kids? The real issue here is
about extortion and the ability to blackmail those in a country here
illegally cause so many can profit from paying low wages, no insurance, zero
benefits, etc.
Been reading a book
called “A
Peace to End All Peace.” Written by David
Fromkin. A great history of the fall of the Ottoman Empire and the
creation of the Modern Middle East. A bit wordy. Yes, too much
repetition, but I could tell the author was really excited about the
material.
Before 1900 all of
Europe was always fighting, literally, all the time. Not one day passed
that someone wasn’t throwing a rock at their neighbor. All
countries were always fighting for new territory to conquer and
colonize. And this was a process that had gone on for the past
thousands of years. But what made the difference in 1915?
Technology.
The invention of
practical and easily used machine guns and the use of barbed wire in
abundance really changed things a bit. A big bit. And barbed wire
was only invented in 1874 by the first to successfully patent the idea,
Joseph Glidden. Glidden experimented by using a coffee mill to bend a
short wire around the longer strand of wire. Where would cattle farmers
and soldiers be today without the humble coffee grinding mill?
And the invention of
the machine gun in 1885 we can’t leave out. Hiram Maxim got the
idea to invent the machine gun when he visited the Paris Electrical
Exhibition in 1881. Maxim had been a successful inventor, but only inventing
peaceful electric lamps and such. But at the exhibition he met a man
who told him the following.
"If you wanted to
make a lot of money, invent something that will enable these Europeans to cut
each other's throats with greater facility."
So, Maxim invented the
first successful machine gun able to fire 500 rounds per minute. It had
the firepower equivalent to 100 rifles. Sure made the British and
Europeans happy as they could now kill each other in greater numbers.
But before Maxim died he felt guilt for creating such a powerful death
machine and invented one more peaceful invention, a mouse trap.
And because of all this
new technology the European Western Front became a stalemate. Not often
this ever happened in European wars before. Usually, one side would
quickly and eventually win over the opposing force. So now for a while
a stalemate existed on the Western Front. But again, technology came to
the rescue with the invention of the tank. Now those fellows could ride
over those trenches through the barbed wire and in the face of those machine
guns with ease.
Now what about World
War II? Technology again did the trick. Hitler and his native
Germany designed further newer technology and new ideas. But the
Americans invented the ultimate new technology with the invention and
deployment of the atomic bomb. And since its use the world by and large
has been at a major stalemate. Until the first country has the daring
and nerve to deploy the nuclear bomb again.
And when that day
happens the United States will lose its mythological first power status.
Right after the
“Great War”, World War 1, and the British Empire was at its
zenith. Having acquired 1,000,000 square miles of new territories from
the war and the demise of their enemies. But the cost and terrific
number of soldiers required to police and contain these new territories began
quickly to sap the British treasury. Amazing how quickly that noble
empire that had reigned with prestige for so long just slowly ground to a
dying halt. But that’s the eventual path for every great nation
and each individual person. Sad we don’t prepare personally for
this inevitable fact.
We have had a lull in
really significant military deaths for about 65 years. But this lull
will end. A suitcase nuclear bomb? A blast from North Korea or
unstable Iran? We have already seen the hunger exercised and fed by the
World Trade bombings in 2001. Personally, I wish as a country the US
had rebuilt those twin towers to stick a finger of defiance.
Mark my words. We’ll see eventually some kind of repeat of that
horror. In the 20th century it is estimated that from 200 to 300,000,000 died
in all the wars and conflicts, civilians and soldiers. Wonder what that
number will be for the 21st century?
And what of The Great
Game?
The Great Game has been
European interests fighting and clawing one another since before the time of
Caesar. Battling for trade and territorial conquests Allies
and enemies always changing sides for whatever convenience. Today it goes
on. Much of these battles are being fought for control of the Middle East and
Central Asia. Eastern Central Asia remains a volatile area where the
battles for control never end. The Middle East has vast riches in
oil.
Eastern Central Asia in
particular has tremendous vast wealth. Eastern Central Asia is rich in
minerals, gold, uranium and oil and gas. A Russian mining engineer, Paul
Nazaroff, escaped the Bolsheviks in 1919 and wrote in his book, “Hunted
Through Central Asia” the following.
“What a rich country
it is, where a man, fleeing for his life can casually stumble upon valuable
deposits of ores and other minerals!” Paul Nazaroff
Tell me more about The
New Great Game? Concerning the present struggle for Eastern Central
Asian riches… Last year, 2009, Russia warned vocally that war was
on its way as the battle intensified for control of valuable and much needed
Central Asian global energy resources. Make no mistake. The wars
of the new 21st century are gong to be centered on the acquisition of the
worlds remaining energy resources.
In Central Asia the
rich and enormous oil and gas energy pipelines are headed in the direction of
China and not mother Russia. In the days of the old Soviet Union these
energy rich countries all belonged to the Soviets. But now these
countries are free. Until the eventual wars for their possession begin.
The 2 most important countries in Central Asia remain Kazakhstan and
Uzbekistan. The battle for these resources will be where the next major
wars are fought. China, Russia, Iran and others in the region needing
these resources for survival into the 21st century. So, The Great Game
continues and forever will until the last man standing.
And what the heck has
gold got to do with this? Some of us have already witnessed the need in
the past few years to exercise the need to sell gold holdings to raise cash
(and pay the bills.) And this will not be the last time
gold will come in handy. Remember, gold is insurance. When cash
becomes unstable and questionable we use the precious metals to secure the
needs we need for daily survival.
Roubini, "In my
line of business your reputation is based on being right." What is Dr. Doom
right about? Roubini believes we are still in the thick of a
crisis. A crisis that has not even begun to play out. For those who
forget who this Roubini fellow is the following tells the story.
He’s a noted economist with a good reputation for making accurate
financial predictions. Roubini,
"The crisis is not over; we are just at the next stage. This is where we
move from a private to a public debt problem."
Presently, the
countries of the world are continuing to attempt to bale one another
out. And they are all sinking in debt. But the trouble is there
just is not enough money to go around. And that recession is slowly and
inevitably moving toward a real bonafide depression. And when one of
these European countries fails the others will not be far behind. And
as far as that goes have you read how many states across the great United States
of America are broke and can not even pay their state public employees?
Collapse, collapse,
collapse.
I know you’re
getting tired of those words. But get used to hearing them. Cause
they’re going to be around for a long time. Public debt. Rising,
rising, rising. The euro as a major reserve currency is losing its
credibility. Wonder to me the US dollar has maintained its tarnished
credibility for so long.
But the most telling
prediction Roubini makes is that inflation will have to eventually
rise. It has to. In what way could all these indebted countries,
including the US, ever pay off all that enormous debt? But the
remarkable thing about inflation is that it lowers the value of your
indebtedness. How convenient. And it also lowers the value of
your paper savings.
And what about
gold?
How’s it doing in
these uncertain times? As the Euro continues to weaken gold only rises
further as many investors continue to lose their confidence. I
understand Bloomberg came out with an article on 5-24-2010 that speculators
are buying gold faster than gold can be mined.
It may be fair to say
that 1,000 is now the floor price for gold. I think a lot of folks
believe gold to be heading short term toward 1,500 an ounce. But
don’t forget. Physical gold is not held for speculative
purposes. Or shouldn’t be by the amateur investor. Physical
gold is an insurance plan for when your paper dollar begins to crumble in
value.
Excellent
Gold Stocks...
George Soros and a
buddy, John Paulson, have accumulated a record of almost 2,000 tons of
gold. 2,000 tons. A lot of gold. Even when the nasty
financial crash occurred in 2008 gold still went up almost 6%. Many
“conservative” analysts are predicting $5,000 to as high as $10
grand before this decade has reached its end. But at that price the
world system will probably have crashed for good.
Be sure we always own a
stable hard asset such as gold to sell when cash needs to be raised to pay
the bills.
David Vaughn
Editor,
Gold Letter, Inc.
www.goldletterdv.com
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