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 uselectionatlas.org

 

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!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

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:

  • Too Much Bubble-Love, Likely to Bring Regret
      Unprecedented Extremes in Overbought Readings Readers may recall our recent articles on the blow-off move in the stock market, entitled Punch-Drunk Investors and Extinct Bears (see Part 1 & Part 2 for the details). Bears remained firmly extinct as of last week – in fact, some of the sentiment indicators we are keeping tabs on have become even more stretched, as incredible as that may sound. For instance, assets in bullish Rydex funds exceeded bear assets by a factor of more than 37...
  • How to Buy Low When Everyone Else is Buying High
      When to Sell? The common thread running through the collective minds of present U.S. stock market investors goes something like this: A great crash is coming.  But first there will be an epic run-up climaxing with a massive parabolic blow off top.  Hence, to capitalize on the final blow off, investors must let their stock market holdings ride until the precise moment the market peaks – and not a moment more.  That’s when investors should sell their stocks and go to...
  • What Kind of Stock Market Purge Is This?
      Actions and Reactions Down markets, like up markets, are both dazzling and delightful. The shock and awe of near back-to-back 1,000 point Dow Jones Industrial Average (DJIA) free-falls is indeed spectacular. There are many reasons to revel in it.  Today we shall share a few. To begin, losing money in a multi-day stock market dump is no fun at all.  We'd rather get our teeth drilled by a dentist.  Still, a rapid selloff has many positive qualities.   Memorable moments from...
  • Monetary Metals Brief 2018
      Short and Long Term Forecasts Predicting the likely path of the prices of the metals in the near term is easy. Just look at the fundamentals. We have invested many man-years in developing the theory, model, and software to calculate it. Every week we publish charts and our calculated fundamental prices.   A selection of 1 and ½ ounce gold bars – definitely more fondle-friendly than bitcoin, but a bit more cumbersome to send around. [PT]   However, predicting the...
  • The Donald Saves the Dollar
      Something for Nothing The world is full of bad ideas.  Just look around.  One can hardly blink without a multitude of bad ideas coming into view.  What’s more, the worse an idea is, the more popular it becomes. Take Mickey’s Fine Malt Liquor.  It’s nearly as destructive as prescription pain killers.  Yet people chug it down with reckless abandon.   Looking at the expression of this Mickey's Malt Liquor tester one might initially get the impression that he is...
  • US Stocks - Minor Dip With Potential, Much Consternation
      It's Just a Flesh Wound – But a Sad Day for Vol Sellers On January 31 we wrote about the unprecedented levels - for a stock market index that is - the weekly and monthly RSI of the DJIA had reached (see: “Too Much Bubble Love, Likely to Bring Regret” for the astonishing details – provided you still have some capacity for stock market-related astonishment). We will take the opportunity to toot our horn by reminding readers that we highlighted VIX calls of all things as a worthwhile...
  • Why I Own Gold and Gold Mining Companies – An Interview With Jayant Bandari
      Opportunities in the Junior Mining Sector Maurice Jackson of Proven and Probable has recently interviewed Jayant Bandari, the publisher of Capitalism and Morality and a frequent contributor to this site. The topics discussed include currencies, bitcoin, gold and above all junior gold stocks (i.e., small producers and explorers). Jayant shares some of his best ideas in the segment, including arbitrage opportunities currently offered by pending takeovers – which is an area that generally...
  • “Strong Dollar”, “Weak Dollar” - What About a Gold-Backed Dollar?
      Contradictory Palaver The recent hullabaloo among President Trump’s top monetary officials about the Administration’s “dollar policy” is just the start of what will likely be the first of many contradictory pronouncements and reversals which will take place in the coming months and years as the world’s reserve currency continues to be compromised.  So far, the Greenback has had its worst start since 1987, the year of a major stock market reset.   A modern-day...
  • Seasonality of Individual Stocks – an Update
      Well Known Seasonal Trends Readers are very likely aware of the “Halloween effect” or the Santa Claus rally. The former term refers to the fact that stocks on average tend to perform significantly worse in the summer months than in the winter months, the latter term describes the typically very strong advance in stocks just before the turn of the year. Both phenomena apply to the broad stock market, this is to say, to benchmark indexes such as the S&P 500 or the...
  • The FOMC Meeting Strategy: Why It May Be Particularly Promising Right Now
      FOMC Strategy Revisited As readers know, investment and trading decisions can be optimized with the help of statistics. One way of doing so is offered by the FOMC meeting strategy.   The rate hikes are actually leading somewhere – after the Wile E. Coyote moment, the FOMC meeting strategy is especially useful [PT]   A study published by the Federal Reserve Bank of New York in 2011 examined the effect of FOMC meetings on stock prices.  The study concluded that these...
  • The Future of Copper – Incrementum Advisory Board Meeting Q1 2018
      Copper vs. Oil The Q1 2018 meeting of the Incrementum Fund's Advisory Board took place on January 24, about one week before the recent market turmoil began. In a way it is funny that this group of contrarians who are well known for their skeptical stance on the risk asset bubble, didn't really discuss the stock market much on this occasion. Of course there was little to add to what was already talked about extensively at previous meetings. Moreover, the main focus was on the topic...
  • When Budget Deficits Will Really Go Vertical
      Mnuchin Gets It United States Secretary of Treasury Steven Mnuchin has a sweet gig.  He writes rubber checks to pay the nation’s bills.  Yet, somehow, the rubber checks don’t bounce.  Instead, like magic, they clear. How this all works, considering the nation’s technically insolvent, we don’t quite understand.  But Mnuchin gets it.  He knows exactly how full faith and credit works – and he knows plenty more.   Master of the Mint and economy wizard Steven Mnuchin and...

Support Acting Man

Item Guides

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

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

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com