No Coincidence

BALTIMORE – The Dow rose 126 points on Thursday – just shy of 1%. Not enough to reverse the market’s apparent downward bias [ed note: the rebound gathered pace on Friday].

Stocks are most likely headed down because the thing that sent them up has come to an end. Here is a chart that tells the tale:


1-stocks vs. Fed balance sheetFederal Reserve assets vs. the S&P 500 Index


As you can see, over the last six years or so, gains for the S&P 500 have closely tracked the ballooning of the Fed’s balance sheet under QE. After shelling out almost $4 trillion on bonds, the Fed’s QE is on pause. And stocks are struggling. Coincidence? We don’t think so.


Deep State Cronies in Action

We stuffed a few copies of the Hindustan Times in our bag before boarding the plane back from Mumbai. On the front page, French president Francois Hollande is receiving an awkward hug from India’s top man, Narendra Modi.

Over in the entertainment section is another note of interest. Actress Julie Gayet has put together a film production company. And lucky for her – she has backing from one of India’s biggest conglomerates, the Reliance group.

Nowhere does the paper mention that Ms. Gayet is Mr. Hollande’s main squeeze. She is the woman for whom he snuck away on a motor scooter from the presidential palace, where he lived with his then First Girlfriend, journalist Valerie Trierweiler.


francois-hollande-ladiesMr. Hollande and his old squeeze Valerie Trierweiler (left) and her replacement Julie Gayet (right)


Reliance is owned by the Ambani family, which lives in Mumbai in the most expensive house ever built. It is 60-story skyscraper, put up at a cost of $1 billion, which now takes a staff of 600 to keep the furniture dusted. On Sunday, the two events were reported. On Monday, the paper added the connective tissue. It announced that India and France had inked “$15 billion in business deals.”

No mention was made of how Reliance may benefit from any of the French investment. But Mr. Hollande’s deepening ties with India… and Ms. Gayet’s deepening ties with Mr. Hollande… can’t have hurt the former TV actress’s bid for funding from one India’s most powerful and well-connected families. But this is written on Friday, so it’s time to reach back into the archives.


AmbaniThe Ambani House in Mumbai

Photo credit: India Today


U.S. Marine Corps Major General Smedley Butler – who twice won the Medal of Honor – knew war far better than most. “War is a racket,” he wrote. But it’s the Deep State’s favorite racket – partly because there is so much money in it… partly because its main mission is to protect the Deep State’s own elite… and partly because the typical citizen never catches on to what a racket it is. In today’s essay from the archives, we look at why war is so appealing…


War and Peace

[Ed. note: originally published on April 9, 2003]


“The heart has reasons reason cannot reach.”

Sylvie (my French tutor), quoting Sommeil


Man is badly designed. Not in every particular but in a few. That insight comes not as a theoretical point but as a bit of practical information. Sketching out a man’s internal plumbing on a piece of prescription paper, Dr. Moreau of the staff of the American Hospital’s emergency room revealed a design flaw.
“As you can see,” he explained, with the impatience of a nuclear physicist explaining photons to an orangutan, “it’s bound to cause trouble, sooner or later.”

What a strange thing: The same God that built such an exquisite universe seemed to have lost interest when he got to man’s entrails.

For there, on the left side of the intestinal tract, is a little appendix – with no role except to create problems. And then, down below are various tubes and passages. Had one of them been made just a little more commodious… I would have been spared a visit to the American Hospital.


My_name_is_APPENDIX_20140223_MynameisAPPENDIXUseless organs meeting (Spleen to Eye: “I see something you don’t”)


“And look at that,” said Dr. Moreau, holding up an X-ray as though it were an aerial photo of the Hindu Kush. “You’re going to have trouble here.”
He was pointing to the range of lower vertebra. After years of heavy lifting, the cushions between the bones have been worn down.

“You must have lower back pain from time to time,” the doctor noted. It is not our place to carp and criticize. But it would have been nice if the manufacturer had installed more durable cartilage in the 1948 models. And more flexible tubing.

“But that is the problem,” said my French tutor. “Men are not as you want them to be; they are as they are.”


Military Misadventures

What had set Sylvie off was neither my plumbing nor my neglect of the subjunctive, but my thoughts on war and peace.

“Almost every war Americans have ever fought turned out to be a mistake,” I had told her. I had taken her on a brief tour of American military history. Every war had its “reasons,” but they were all absurd.

“What good did the American Revolution accomplish,” I wondered aloud, “when other colonies of Britain negotiated their way to independence and were no worse off for it?”

“What about the War Between the States? If it was fought to get rid of slavery, it was a poor way to do it. Slavery disappeared from the rest of the world with hardly a single fatality. And if it was fought to “Preserve the Union,” it was a fraud. Said union was founded on the principle that people could decide for themselves what government they wanted to plunder them.


MaineThe wreck of the USS Maine – the sinking of the ship was used as a pretext to start the Spanish-American war.

Photo credit: U.S. Naval History and Heritage Command


“As for the Spanish-American War, who knows why it was fought. And who cares? “And World War I…”
“Well, at least you had a good reason for that one,” Sylvie interrupted, smiling. “To come to our aid.”


What’s the Point?

“Yes. But what was the point? If the U.S. hadn’t pumped in so much money, war material, and then soldiers, the war probably would have ended sooner. And much better.

“By 1917, both sides were nearly exhausted. They would have had to negotiate an end to the war. But the entry of the U.S. gave the Allies ammunition and the Germans targets. The U.S. encouraged the British and French to believe they could win the war, so they wouldn’t have to accept a negotiated settlement.

“So, the war continued until Germany finally capitulated. But it was Germany’s defeat, and the terms imposed on her by the Allies, that led to hyperinflation in Germany… the rise of the Nazis… World War II… and the Holocaust…


hcrs-arch-duke-assassinationUS newspaper report on the assassination of Archduke Ferdinand


“The average American couldn’t have cared less about the Archduke Ferdinand. He had no idea who Ferdinand was… or where he stood in the pecking order of European politics.

“He was as ignorant of the Austro-Hungarian Empire as he was of the contents of Austrian sausages. An American of sound mind and decent judgment would have just as soon seen the Archduke stuffed and used as a parlor ornament as revenged.

“But once stirred up by the press – and the big idea of ‘making the world safe for democracy’ – he was ready to enlist and get himself blown up believing that he was protecting Western civilization from the invading Huns.

“World War II was an exception, from a U.S. point of view,” I continued.

“The U.S. was attacked. Japan and Germany declared war on the U.S. It made sense to fight back. But for the people who started the war – the Germans and Japanese – it was a complete disaster. It would be hard to imagine a more foolish course of action. The two nations who caused the war were completely ruined by it.”


nagasaki02The remains of Nagasaki after the nuclear bomb

Photo via Wikimedia Commons


Sylvie had sat quietly through this rant – merely correcting my grammar as necessary. But now she calmly replied:

“You’re right, of course. War doesn’t make much sense. But so what? Who ever said it had to?”


The Absurdity of Reason

In 1910, British author, journalist, and politician Sir Ralph Norman Angell (who later won a Nobel Peace Prize) convinced many of the world’s leading intellectuals that war was a thing of the past. His argument was reasonable, logical… and, of course, ridiculous.

But you, dear reader, are already in on the secret – reason is no rampart against imbecility. Man, with his power of reason, is badly designed. Since he is able to reason, he imagines that the world – and he himself – acts the way it thinks reasonable. But as often as not, reason merely leads him into absurdity. Angell was not the only one to underestimate war. As the soldiers gathered on the eve of World War I, one intellectual argued:


“War is costly; therefore, it will be short. The Germans want to crush the French as quickly as possible so they can turn their attentions to the Russians. The Austrians want to get rid of the Serbians as fast as they can so they can turn to face the Cossacks. The Russians must get to the front as soon as possible so they can relieve France.

“And the French prepare to launch their offensive in Lorraine at the first opportunity. Everyone believes that speed is the key to success.”


Our soldiers leave and leave gaily,” reported French newspaper Le Figaro on August 2, 1914.

We’ll be back… It will be over quickly,” a group of infantrymen told a reporter from another French rag Le Temps.


Chump Heroes

It was widely believed that – like a barroom brawl – the war would be quick and violent. There was no time to wait… no time to think… no time to second-guess. It was time to throw a punch. The Commander-in-Chief of the French forces on the Western Front during the first two years of the war, Marshal Joffre, believed in “the offensive at all costs.”


joffre_josephFrench Marshal Joseph Joffre – believer in offensive war

Photo via


And why not? The war would be over quickly. Why hold back? As another high-ranking French general Louis Grandmaison explained, “In the offensive, imprudence is the greatest safeguard.

The logic was impeccable. If the war was to be swiftly decided, the winner would be the one who brought to bear the greatest force of arms the most quickly; holding back could be fatal.

General Grandmaison was a real thinker. But his thinking couldn’t make the world behave as he thought it should. He believed in “attaque à outrance” – best understood as an excessive or reckless attack. It was just such an attack that got him killed in one of the first battles of the war, at Reims.

The war continued for four long years. The final outcome was determined not by the initial attacks but by what was held in reserve: manpower, material, and money. And although the patriotic élan of the soldiers may have made their countrymen proud, it was the profit motive of the bankers and manufacturers in London and New York that decided the outcome.


paris-funeral-of-general-loyseau-de-grandmaison-the-parade-of-the-cw5a0gThe funeral of General Louis Loyseaux Grandmaison

Photo credit: Roger-Viollet


Surely, on some forgotten monument in some forgotten burg somewhere in France, you will find Grandmaison’s name among “Nos Héros… Mort Pour La France.”

Perhaps someone has inscribed a parenthetical remark: “General Grandmaison – A hero and a chump… faithfully imprudent to the end.


Chart by: Bonner and Partners


Image captions by PT


The above article originally appeared as A Brief Tour of America’s Military Misadventuresat the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.




Emigrate While You Can... Learn More



Dear Readers!

It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding a little value to your life!


Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke


2 Responses to “Military Misadventures”

  • No6:

    One point of correction if I may,
    it was actually the Japanese that were fighting back after the US seized all Japanese assets, Japan lost access to three-fourths of its overseas trade and 88 percent of its imported oil.
    Japan did not want war with the US, the US wanted war with Japan.

  • wmbean:

    Yes, was is a racket just as many other human endeavors are reckets. Of course the experience of war is dependent on one’s participation status. In the end, wars are won through logistics. The problem is that so many in the West believe that having the most up to date toys is the superior edge. We, meaning the US Army and Marine Corps should have taken note from the Chinese in Korea. It is said that we had the best toys money could buy. But the Chinese had people, far more than we could imagine. To lose a million soldiers in battle would be like our losing four or five carriers. When your population is multiples of tens of millions, your logistics and strategies are base on the use of those millions. We fought like the British redcoats in the French and Indian War while the Chinese fought like the indians. This is why cops hate being surrounded by large crowds of people. You might be able to kill a few of the large mob but in the end you’re dead.

    But logistics is more than physical goods or numbers of people. We “lost” Vietnam because we lost our will to fight. In wars such as that one must be willing to kill off a huge number of the population. This is why we have “lost” the middle east, we aren’t willing to kill enough of them. But wars tend to be short sighted in their outlook. War, for us lowly enlisted men was merely surviving each day when on the line, otherwise it was surviving the boredom and discomfort of what is really a disorganized affair. Rank has its privilege and those junior officers had the privilege of dealing with the wrath of the lowly enlisted who were angry at the decisions made by those at the top.

    Lest we believe war is that great waste with no rational purpose we should pause to reflect a couple of its positive effects. Those times of real peril, real possibilities of death, the individual comes to know the meaning of true comradeship, of the trust in friendship that will survive the long decades of peace. It is a measure of a man’s reaction to fear of death. Fear does not go away simply because a man chooses to ignore death and act the braveheart. It’s concern for one’s friends, one’s comrades that transcends fear, not sense of bravery. To put it very simply, if you’ve never been in hell you’ll never know the worth of heaven.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • 5-cotmmrangegc03Ganging Up on Gold
      So Far a Normal Correction In last week's update on the gold sector, we mentioned that there was a lot of negative sentiment detectable on an anecdotal basis. From a positioning perspective only the commitments of traders still appeared a bit stretched though, while from a technical perspective we felt that a pullback to the 200-day moving average in both gold and gold stocks shouldn't be regarded as anything but a normal - and in this case actually long overdue -...
  • gold_bullionGold Sector Correction – Where Do Things Stand?
      Sentiment and Positioning When we last discussed the gold sector correction (which had only just begun at the time), we mentioned we would update sentiment and positioning data on occasion. For a while, not much changed in these indicators, but as one would expect, last week's sharp sell-off did in fact move the needle a bit.   Gold - just as nice to look at as it always is, but slightly cheaper since last week. Photo via The Times Of India   The commitments of...
  • wryAustralian property bubble on a scale like no other
      Australian property bubble on a scale like no other Yesterday Citi produced a new index which pinned the Australian property bubble at 16 year highs:   Bubble trouble. Whether we label them bubbles, the Australian economy has experienced a series of developments that potentially could have the economy lurching from boom to bust and back. In recent years these have included:    the record run up in commodity prices and subsequent correction;  the associated...
  • urban_ii_croppedPope Francis: Traitor to Western Civilization
      Disqualified There has been no greater advocate of mass Muslim migration into Europe than the purported head of the Catholic Church, Pope Francis.  At a recent conference, he urged that “asylum seekers” be accepted, “through the acts of mercy that promote their integration into the European context and beyond.”*   Before we let Antonius continue with his refreshingly politically incorrect disquisition, we want to remind readers of two previous articles that have...
  • 9-market-internalsBubble Dissection
      The Long Term Outlook for the Asset Bubble Due to strong internals, John Hussman has given the stock market rally since the February low the benefit of the doubt for a while. Lately he has returned to issuing warnings about the market's potential to deliver a big negative surprise once it runs out of greater fools. In his weekly market missive published on Monday (entitled “Sizing Up the Bubble” - we highly recommend reading it), he presents inter alia the following eye-popping...
  • andy-duncan-and-claudio-grassA Looming Banking Crisis – Is a Perfect Storm About to Hit?
      Andy Duncan Interviews Claudio Grass Andy Duncan of has interviewed our friend Claudio Grass, managing director of Global Gold in Switzerland. Below is a transcript excerpting the main parts of the first section of the interview on the problems in the European banking system and what measures might be taken if push were to come to shove.   Andy Duncan of (left) and Claudio Grass of Global Gold (right)   Andy Duncan: How do you see the...
  • spankinggoodtimeUS Stock Market - a Spanking May be on its Way
      Iffy Looking Charts The stock market has held up quite well this year in the face of numerous developments that are usually regarded as negative (from declining earnings, to the Brexit, to a US presidential election that leaves a lot to be desired, to put it mildly). Of course, the market is never driven by the news – it is exactly the other way around. It is the market that actually writes the news. It may finally be time for a spanking though.   Time for some old-fashioned...
  • fischersDoomed to Failure
      Larded Up and Larded Over We’ve been waiting for the U.S. economy to reach escape velocity for the last six years.  What we mean is we’ve been waiting for the economy to finally become self-stimulating and no longer require monetary or fiscal stimulus to keep it from stalling out.  Unfortunately, this may not be possible the way things are going.   As Milton Jones once revealed: “A month before he died, my grandfather covered his back in lard. After that, he went...
  • state_police_980_600_s_c1_t_c_0_0_1Are the Deep State’s Drones Coming for You?
      What’s Aleppo?   Look out kid Don’t matter what you did Walk on your tip toes Don’t try "No Doz" Better stay away from those That carry around a fire hose Keep a clean nose Watch the plain clothes You don’t need a weather man To know which way the wind blows – “Subterranean Homesick Blues,” Bob Dylan   The entrance to Baghdad's “Green Zone”. Photo credit: Karim Kadim / AP   DELRAY BEACH, Florida – Biggest foreign policy blunder...
  • larry-1Meet Your New Stimulus Allocation Czar
      March Towards Midnight The march towards midnight is both stirring and foreboding.  Like a death row inmate sitting down to savor his last meal, a grim excitement greets the reality of impending doom.  Thoughts of imminent mortality haunt each bite.   Tic-toc, tic-toc...   As far as the economy’s concerned, there’s no stopping its march towards midnight.  The witching hour’s rapidly approaching.  We intend to savor each moment and make the best of...
  • speculatorInterview with Doug Casey
      Natalie Vein of BFI speaks with Doug Casey   Our friend Natalie Vein recently had the opportunity to conduct an extensive interview with Doug Casey for BFI, the  parent company of Global Gold. Based on his decades-long experience in investing and his many travels, he shares his views on the state of the world economy, his outlook on critical political developments in the US and in Europe, as well as his investment insights and his approach to gold, as part of a viable strategy for...
  • walmart-st-augustine-flaEvacuate or Die...
      Escaping the Hurricane BALTIMORE – Last week, we got a peek at the End of the World. As Hurricane Matthew approached the coast of Florida, a panic set in. Gas stations ran out of fuel. Stores ran out of food. Banks ran out of cash.   A satellite image of hurricane Matthew taken on October 4. He didn't look very friendly. Image via   “Evacuate or die,” we were told. Not wanting to do either, we rented a car and drove to Maryland. “We’ll just...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank




Realtime Charts


Gold in USD:

[Most Recent Quotes from]



Gold in EUR:

[Most Recent Quotes from]



Silver in USD:

[Most Recent Quotes from]



Platinum in USD:

[Most Recent Quotes from]



USD - Index:

[Most Recent USD from]


THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Buy Silver Now!
Buy Gold Now!