Greg’s Note: The inimitable Doug Casey returns today with the first part of an acerbic critique on the Iraq War. Good timing. Especially considering the President’s recent petulant chirping on about his precious “surge.” Where “surge” is merely a euphemism for a desired escalation that would likely have assuredly dismal results. You’ll be rewarded with Doug’s take on how you can turn this situation to your advantage in tomorrow’s edition. Stay tuned. Please read on and send your opinions to your managing editor here: greg@whiskeyandgunpowder.com   

Whiskey & Gunpowder
January 24, 2007
By Doug Casey
Buenos Aires, Argentina

Make War Your Friend, Part I

With the advent of yet another year, we take a close look at the most powerful and least welcome driver of geo-politics—war. As in the misnamed yet overarching War on Terror and in the more specific War in Iraq and, maybe, coming to a theater near you, the expanding New Crusade for the Middle East.

The topic of war—with all its sorry implications—is, of course, emotionally and politically charged. Some believe to the depths of their soul that we need to “stay the course” in Iraq and Afghanistan, “fighting them over there, so we don’t have to fight them over here.” Others judge, correctly in our view, that any military effort in the Middle East is akin to entering a knife fight without a knife. You might survive, but not without losing a lot of blood. Individuals in the latter camp are accused of wanting to “cut and run,” as the talk show morons like to say. But few seem to remember the origins of that phrase. When weather demands it, sailors would cut the anchor line and run before the wind to avoid an approaching catastrophe. It was a sign of intelligence in the face of danger.

Missing from the debate is a candid discussion of the true implications of our current war, not just for the U.S. soldiers killed or wounded, and not just for the local citizens wounded or killed by soldiers sent to deliver “democracy” to people who don’t know what the word means. To an Iraqi caught in the crossfire between an occupying army and its tormentors, the word “democracy” now translates as “duck!”

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Into this morass, we push forward Doug Casey, Chairman of Casey Research and the editor of the International Speculator, a monthly newsletter focusing on investments with the potential for a 100% or better profit over the next 12 months. Never one for moral equivocation or political correctness, Doug, who wrote the best-selling Crisis Investing (Harper Collins 1980), is an avid student of crisis in its many varieties. He foresaw the coming of what many are now calling a world war in his July, 2001, International Speculator article, “Waiting for World War III”. A pertinent excerpt…

Waiting for WWIII

What are the greatest problems facing us today? Domestically, I’d say the continual and accelerating loss of freedom, compounded by the prospect of what I suspect could be the biggest financial/economic crisis of modern times. What might that crisis be like? That’s unpredictable, although the odds are it will be unlike any others that are still fresh in people’s memories, simply because people tend to be most prepared for the things that have most recently scared them. The big problems usually come from an unexpected quarter, and/or at an unexpected time. Like the monetary crisis of 1998 that materialized in Thailand.

That said, the question remains of where to look. My guess (although it sounds so unprofessional to use a word like “guess”; a government briefing would substitute a phrase like “our research shows” or “expert opinion indicates”) is that it will come from outside American borders, in the form of war. War is perhaps the worst thing that can happen, not only for the destruction it will cause in itself, but because it will immensely exacerbate America’s domestic problems. As Stirner famously said, “War is the health of the State.”

But neither a declared war, nor a war in the conventional sense, is likely in the cards. U.S. troops have been in combat in a dozen countries since our last “official” war ended in 1945; the U.S. troops stationed in over 100 countries are an accident waiting to happen. Besides the Balkans and Iraq, Colombia is probably highest on the dance card, but almost any place could erupt unpredictably. Who, after all, could have predicted that the U.S. would invade Somalia in 1991, a country few people other than stamp collectors even knew existed. No place is safe from being attacked in The National Interest of the world’s self-appointed policeman.

Anything is possible within this context, but I discount the possibility of another Vietnam, again because of the “recent collective memory” phenomenon. Vietnam is possibly the major reason why the Iraq attack ended so quickly; quick withdrawal obviated any danger that ground troops might get stuck in a major tar baby. But when you’re sticking your nose absolutely everywhere it doesn’t belong, there are lots of ways to get it bloodied. My guess is that something resembling a Crusade is developing against those who live in the Koran Belt. It won’t be overtly religious like the Crusades of the Middle Ages, but it will have major cultural undertones. And there’s every prospect it will be highly unconventional in nature.

And in August of 2002, he (correctly, it turns out) extrapolated where the attack on Iraq would lead, even before the bombs started to fall. (For the full article, see August 2002 “The Forever War, Chapter Next” in the Archives.)

At risk of being unpopular (admittedly a risk I’ve run my whole life), let me state my brief: the impending war is not only unnecessary, it’s unethical, will turn out to be totally counterproductive, will serve to further erode Americans’ freedoms, and move them further towards national bankruptcy, to boot. Are there any positives to it? I’m not sure there are any at all.

Quite frankly, the current drive toward war with a small (13 million people), backward country pretty much on the other side of the globe puzzles me. I have no question that its leader is a sociopath. But that’s true of many, if not most of the world’s leaders, and we aren’t about to start wars with them for that reason; many have been, or are, “allies.”

And here we are, four years later—with Doug’s dire predictions borne out. Where does Doug see things going over the next four years, and what are the Forever War’s more immediate implications for the global economy? We caught up with him in Buenos Aires, Argentina.

Q.: It’s sort of hard to know where to start. One day, the country was ticking along, the next, September 12, 2001, we were up to our neck in a global war. In the beginning, there was an international outpouring of support for the U.S. Now we are increasingly isolated. What was the name of the truck that hit us? Or, put another way, what do you think were the controlling mindset and principles of the Bush administration that led us to this point?

A.: First let’s look at who’s been pulling the strings in Washington. The Bush Administration is overwhelmingly composed of Neocons.

They’re highly ideological academics and intellectuals who started off as hard-line socialists but converted to “conservatism” because they were bright enough to see socialism is a one-way street to universal poverty. But they don’t believe in free markets for any reason other than they generate more wealth for the people in charge to allocate—pretty much the same pragmatic approach taken by the Chinese Communist Party. And they never believed in personal freedom. Political hacks are pretty similar, no matter where you find them.

The Republicans in the U.S. have always pretended to believe in free markets while they nurtured the warfare state, but they were quite sincere in their disavowal of social freedoms. The Democrats, on the other hand, have always pretended to believe in social freedoms, and sometimes mounted weak rhetorical attacks on the warfare state, but they were quite sincere in their dislike of free markets. It was logical that, as Wolfowitz, Feith, Perle, and the rest of them saw the writing on the economic wall, they’d become Republicans. The Neocons, in other words, take most of the worst in both theory and practice from both parties. They’re fans of both the Welfare State and the Warfare State. They’re dangerous people.

In addition, almost all high-level Bush types are either Zionist Jews or Fundamentalist Christians, in either case reflexive and zealous supporters of the state of Israel. For myself, I have no problem with Israel going about its business; but I think the U.S. should treat it like any other of the world’s 200-odd countries.

Of course the U.S., as evidenced by the approximately $4 billion of aid it gives Israel every year, plus another $1.3 billion to bribe Egypt to be cordial toward Israel, has long treated the country as something approaching the 51st state. Bush has taken this to a new level.

Q.: How do Osama bin Laden and al-Qaeda fit into this?

A.: It’s funny, people talk about Osama bin Laden all the time. But nobody ever listens to him. This is very unwise, in that the single most important thing in a conflict is to understand your opponent’s mindset. Osama has said several times that he’s conducting his jihad for three rather simple and clear reasons. First, he wants foreign troops out of Islamic countries. Second, he wants foreign powers to stop propping up dictators in Islamic countries. Third, he wants foreign powers to cease their support of Israel, which he views as the usurper of Palestinian lands. These impress me as reasonable goals. He’s never said he’s fighting the U.S. because, as Bush seems to think, he “hates our freedom.”

Of course he loathes the U.S. and what it stands for, but that’s really got nothing to do with the actual reasons for his attacks.

The attacks were vastly more successful than Osama could have imagined—but only because of the Administration’s idiotic response. Bush immediately puts the world on notice they’re either “for us or against us,” then invades two small, primitive countries, neither of which had anything to do with the attack. This is followed up with all kinds of draconian measures at home and abroad—Abu Ghraib, Gitmo, snatching people on suspicion, the PATRIOT act, disregard for habeas corpus. Then, at least initially, the American people jumped on the jingoist bandwagon with their self-proclaimed war president and make a big deal of things like Freedom Fries. A hundred heavy-handed and pointless measures added up to convince people around the world that the U.S. had whooped itself into an out-of-control bully, undeserving of sympathy.

The U.S. likes to blame all terrorism on Osama and al-Qaeda. That’s because it makes the problem seem containable; it makes it seem as though there’s just one little group of bad guys the U.S. can track down and eliminate. That was once close to the truth. But now it’s just posturing. Today there are scores of Islamic groups all over the world, with similar worldviews and agendas. Of course they are all mutually sympathetic and try to support one another, but they’re completely independent. The way the U.S. has handled the problem is directly responsible for the metastasis.

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Q.: You seem to think that Afghanistan wasn’t complicit in the 9/11 attacks. But there is a strong connection between Osama bin Laden and the Taliban, and even bin Laden himself said he was behind 9/11. So wasn’t some sort of punitive action called for?

A.: The first thing is to decide whether the events of 9/11 were an act of war by another state, or simply an act of criminality by independent actors. Clearly it was the latter. There’s no evidence whatsoever that the government of Afghanistan, run at the time by the Taliban, had anything at all to do with it. Is there a connection between the Taliban and Osama? Yes, of course. Osama was something of a national icon for helping to drive out the Soviet invaders in the ‘80s, which is why he was living there. But people forget that none of the 20 conspirators was an Afghan, and 15 of them, not to mention Osama himself, were Saudis. There was as much reason to attack Saudi Arabia as Afghanistan.

So we have an independent act of criminality with only an incidental tie to Afghans. And these are, incidentally, the same Afghans we armed and supported in their fight to evict the Soviets in 1980. At least the Soviets were invited in by the ruling government, as we were in Vietnam. Somehow we seem to think Afghans like our soldiers running around killing people and destroying property more than they liked the Russians doing the same thing. They don’t. The difference in political goals and the ideological distinctions between the U.S. and Russia are completely lost on these backward, religious, tribal people. So you can plan on the Afghan War growing ever larger and nastier.

Q.: Getting back to what should have been done…

A.: What should have been done if 20 IRA soldiers, or 20 Quebecois separatists, or 20 Colombian Mafiosi had done the same thing? It’s a crime, albeit a very large, spectacular and unusual one, but you treat it like a crime. The U.S. military is not suited for police work.

Few Americans realize that the Constitution provides for the issuance of “letters of marque,” that authorize private bounty hunters to bring pirates to justice. Outfits modeled on Pinkerton’s of the 19th century or Executive Outcomes of the 20th would be far more effective in dealing with al-Qaeda and vastly cheaper than a regular army. That, and less likely to invite retaliation against the U.S. itself. But who reads the Constitution anymore?

One interesting thing about al-Qaeda and its clones is that I think they’re indicative of the way the world is going to evolve. The nation-state, which is only an historical aberration in the big scheme of things, and a terrible idea, is on its way out. It’s going to be replaced by transnational groups of people who coalesce based on what’s important to them—religion, race, hobbies, philosophy, any of a million things that draw people together. Loyalties won’t be to a bunch of people who happen to share some government ID document, but to self-selected, and much stronger, groups. There’s a lot more I could say about this.

Q.: I think I know your answer this to one already, but why do you think the U.S. invaded Iraq? You’ve said that attacking Iraq for 9/11 would have been like bombing China for Pearl Harbor. So, why did we do it?

A.: Einstein said that, after hydrogen, stupidity was the most common thing in the universe. And I think that really is the best explanation. But Bush gave two reasons for the invasion. One, that Iraq was “linked” to al-Qaeda. Two, that Saddam was developing so-called Weapons of Mass Destruction. At the time I said that both excuses were pitifully transparent, even ridiculous, lies.

As to the first point, Saddam’s Baath regime was highly secular; the Baathists and the Islamic fundamentalists viewed each other as mortal enemies. True, they both had reason to distrust and dislike America in general, and the Bush regime in particular. But Saddam was precisely the type of Arab leader Osama wants to get rid off. The assertion they were “linked” is laughable.

The Weapons of Mass Destruction issue is more interesting. Anybody at all with some money, technical skill and motivation can develop biological and chemical weapons. Atomic weapons are more complex and expensive, but hardly rocket science in today’s world; the methods for making them are well known. My God, even North Korea, one of the most backward countries in the world, has done it. These things used to be lumped together as ABC (atomic, biological, chemical) weapons because they were unconventional. But only atomic weapons are actually capable of mass destruction. The WMD moniker was coined recently by the U.S. as a propaganda gimmick, to create an atmosphere of hysteria conducive to the war. It’s a stupid designation, but the press seems to like it. A classical artillery barrage, or a B-52 strike, is really much more of a WMD than chemical or biological weapons.

By the way, last November, there was a video released showing Saddam and his generals before the Iraq war, discussing the possible use of slingshots, Molotov cocktails and crossbows to fight back against the U.S. In the video, Saddam got quite excited about the idea of providing every Iraqi with a slingshot. So much for the scary WMDs.

In any event, was the fear of Saddam getting ABC weapons a reason to invade Iraq? Well, it wasn’t enough of a reason to invade Israel, India or Pakistan when they got them. The fact is that there are a couple dozen countries that could have a nuclear arsenal within a year if they wanted it. The nuclear weapons genie has long been out of the bottle.

And you don’t have to build them to own them. I’ll be quite surprised if some Russian general doesn’t sell some to a party with the right amount of cash. Or maybe some Russian sergeants, since they’re the ones who actually handle them. But the big danger here is Pakistan. The Islamic world views Musharraf as a stooge of the Americans. After he’s assassinated, the odds of which are very high, there’s no telling what will happen to Pakistan’s nuclear arsenal.

Bush’s rationale for invading Iraq has morphed from the Osama links and WMD’s to an altruistic desire to bring “democracy” to the Middle East. Like almost everything else the man says, it makes no sense. In the first place, democracy is just a means of installing rulers; it doesn’t in any way guarantee protection for free minds or free markets. In fact, in today’s idiom, it’s nothing but mob rule dressed up in a coat and tie. What I personally want is individual liberty, which is possible only with an extremely limited government, whose sole purpose is to protect one’s life and property from aggression. I recognize I’m in a small minority, even among Americans, who today view government as a cornucopia of all they desire and see democracy and majority rule as their opportunity to scoop out as much as they want.

But Americans, even though they’re pretty far from being libertarians, come a lot closer than the average devout Muslim, for whom the Koran is the direct and incontrovertible word of Allah. It’s not just the prohibition on drinking, gambling and earning interest and the other puritanical features that make the faith unacceptable to me. Not just the obligatory zakat, which, feeling as I do about charity (see IS 6/2006), doesn’t fit. Not just the ritualistic prayer five times a day or the pilgrimage to Mecca. It’s that Islam is more than a religion; it’s a way of life that submerges politics, philosophy, economics, everything. It’s not a religion that allows for much individual liberty; the word itself means “submission.”

Q.: So here we are, three years later, and the situation is a real mess, as you and others accurately warned would happen even before the first shots were fired. Humor us by describing how you think the current mess in the Iraq and then in the Middle East will unfold from here.

A.: One thing is now clear to all but the dimmest observers: the U.S. has lost this war, and the longer it goes on, the worse it will get. The outcome was obvious from the start, because it’s not possible for an army from the other side of the planet to win a guerrilla war. At least not in a politically correct way. You could engage in wholesale ethnic cleansing, the way the Romans, Genghis Khan and Tamerlane did, but, at least in today’s world, that would be counterproductive in any number of ways, entirely apart from moral considerations. Simply killing guerrillas serves no purpose; to the contrary, the more you kill, the more you get. And, as the statistics show, for every fighter you kill, you kill several non-combatants. And there you’re really sowing dragon’s teeth, especially in a society that has high chronic unemployment among young, unmarried males—which are extraordinarily dangerous and volatile creatures.

My guess is that the next U.S. president will try to get out of Iraq and Afghanistan. But it’s going to be harder then, because the U.S. will be in full retreat, taking many more casualties than today. The Brits and other members of the phony “coalition of the willing” have already bailed. >From a strictly tactical point of view, it’s going to be much tougher than leaving Vietnam. The only portion of the Iraqi army that won’t have stripped off their uniforms and turned into the biggest jogging team in Asia will be the ones who are working with the insurgents. But, unfortunately, that’s the best-case scenario.

The worst case, and a not unlikely one, is there is another incident like 9/11, possibly much more serious, especially while Bush is in office. At that point, mass hysteria may take over, and the government will lock the country down like one of its many new federal prisons. If the Iranians are implicated, it may be the excuse Bush is looking for to launch an air strike against them. Now you’re looking at WW3.

A surprising number of Neocon types are saying that WW3 has already started. They’re not just saying that to make an astute observation; they’re saying that because they want the U.S. to actually broaden the war. The enemy is Islam.

To be continued…
Doug Casey

Greg’s Note: The above essay appeared in International Speculator, a newsletter Doug writes that connects his incisive macro analysis with equally aggressive stock plays. Here’s a little proof: last year, he recommended 19 stocks…and all 19 have gone up at least double digits. In fact, the four biggest winners have already provided 139.1%, 223.2%, 235.3% and 437.2%… If those kinds of returns interest you, you can look here for more information:

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