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
DELRAY BEACH, Florida – Biggest foreign policy blunder in U.S. history?
Not at all!
Invading Iraq was what The Economist magazine had in mind when it pronounced judgment on President George W. Bush’s most spectacular failure.
But here at the Diary we look at the event in broader context.
We’ve been looking at America’s various phony “wars” – the War on Poverty, the War on Drugs, the War on Terror – through a new lens. They have peculiar characteristics not common to real wars:
They can’t be won. Poverty… drugs… terrorists – they will always be with us.
The “enemy” draws strength from the war. You pay people to be poor; you have more poor people. You make drugs illegal; profits go up for criminal drug dealers.
They create new corrupt public-private industries.
Combatants on both sides benefit; the innocent public loses.
Today, we look at the War on Terror.
We see that it was no “blunder” at all.
Far from failure, the invasion of Iraq was a great success.
According to Brown University researchers, by 2017 the U.S. will have spent or committed $4.79 trillion dollars.
That money didn’t just disappear; it went into the pockets of the terror industry.
And that’s just on “our” side…
The “terrorists” on the other side have also been great beneficiaries. Fame, fortune, power – a guy who might otherwise have a hard time getting a job in Aleppo is now commanding the troops that are destroying it… and using millions of dollars of weaponry (much of it supplied by Uncle Sam).
The press has had fun belittling the Libertarian Party’s presidential candidate, Gary Johnson, for asking on a morning talk show: “What’s Aleppo?”
But that is exactly the right question.
It would be better put as: “What the Hell is Aleppo?” Or, in the more modern parlance: “WTF is Aleppo?”
The honest American has no idea…
He’s got his business to worry about; he hasn’t got time to worry about Levantine politics. He knows it’s none of his business; he shouldn’t be poking his nose into it.
Besides, he’s about 100 times more likely to be killed by a cop than by a terrorist; he knows the War on Terror is not worth his attention.
And, he’s lost the plot… The cast of characters is just too big… and too mobile.
In the blowing sands of the Middle East, it’s hard to see what’s going on.
He doesn’t know whether we’re fighting al-Qaeda or whether we’ve joined forces with al-Qaeda to fight ISIS!
At the start of September, the news came out that the terror fighters (those on our side) had attacked six different countries over the Labor Day weekend.
Ask any American to name the countries – six of them – in which the U.S. is currently killing people. Ask why. Most likely you will get answers worthy of a presidential candidate.
That is, you will get nonsense.
We are not fighting the Gooks, the Japs, or the Huns. We’re not fighting anyone in particular… and we’re doing it for no particular reason.
This is a new kind of war, a fake war designed merely to shift money and power to a corrupt Deep State industry: the terror industry.
Here’s former CIA and military intelligence officer Philip Giraldi with more background:
The phrase “deep state” originated in, and was often applied to Turkey, in Turkish “Derin Devlet,” where the nation’s security services and governing elite traditionally pursued the same chauvinistic and inward-looking agenda both domestically and in foreign affairs no matter who was prime minister.
In countries where a deep state dominates, real democracy and rule of law are inevitably the first victims. A deep state like Turkey’s is traditionally organized around a center of official and publicly accepted power, which means it often includes senior government officials, the police and intelligence services as well as the military.
It has been claimed that deep state activities in Turkey are frequently conducted through connivance with politicians who are able to provide cover for the activity, with corporate interests, and sometimes even with criminal groups, which can operate across borders and help in the mundane tasks of political corruption to include money laundering. This connection of political power with the ability to operate under the radar and generate considerable cash flows are characteristic of deep state.
Last week, we described how the War on Drugs and the War on Poverty were early models for these new fake wars. The idea is not to win; it is merely to suck up more of the nation’s real wealth.
In that respect, the War on Terror stands out.
It has been a phenomenal success for both sides in the conflict.
The more the U.S. runs riot in Muslim countries, the more “terrorists” come out to oppose it.
Then the fantasy fight becomes more and more real, requiring more and more resources! And more and more control over the public.
And here is where the public may really lose… and lose big.
In his 4 a.m. moments of darkness and paranoia, your editor gets the heebie-jeebies. He fears that the War on Terror abroad is a prelude to unleashing the dogs of war at home.
According to a new report by the watchdog group American Transparency, titled “The Militarization of America: Non-Military Federal Agencies Purchases of Guns, Ammo, and Military-style Equipment”:
In the nine years until 2014, […] 67 agencies unaffiliated with the Defense Department bought $1.48 billion in weapons and ammunition. Of this total, $335.1 million was spent by agencies traditionally viewed as regulatory or administrative, such as the Smithsonian Institution and the U.S. Mint.
In the theater, if you bring a cannon on stage, you have to fire it sooner or later.
Similarly, when a nation builds up a military machine at home, it is just a matter of time until someone turns on the switch.
This will not be a war against marginal Muslims, driven mad by the assaults on their heroes… their homelands… and their sacred myths. There are not enough of them to seriously challenge the United States of America.
Instead, it will be a war in which the Deep State fights the rest of us – to hold on to its power… its money… and its reputation.
Its drones will track down domestic “terrorists”… its checkpoints will capture homegrown “insurgents”… its gendarmes will round up “suspected American rebels”…
…and its money system will cut off funds to anyone who challenges it… and divert the nation’s output to itself. (Watch the plain clothes!)
So far, it is just your editor’s nightmare. Perhaps it will never be more than that.
Tomorrow… the Deep State’s war on the markets.
Further Reading: You can see Bill’s full exposé of the Deep State in a special online presentation, titled “General Eisenhower’s Final Warning.”
By Chris Mayer, Chief Investment Strategist, Bonner Private Portfolio
I write to you today from the Casablanca Hotel off Times Square in New York City. I’m here for Grant’s Fall Investment Conference. I’ve come almost every year since 2004.
Last year, I heard money manager James Litinsky deliver a stunning presentation that included the case against Valeant, the Canadian pharma company.
This was a contrarian call at the time. Valeant was riding high at around $200 per share, up from just $50 three years ago. Its CEO, Mike Pearson, was a celebrated dealmaker. The company had the backing of some prominent investors, including Bill Ackman’s Pershing Square, ValueAct, and the Sequoia Fund.
Yet, Litinsky made a compelling case that the debt-ridden acquisition machine was about to go kaput.
I told my readers about it as soon as I returned from the conference. The stock today is about 90% lower.
Beyond the speakers at Grant’s, I come to mingle with the other attendees. I’ll visit with Johannesburg’s Francis Daniels, who runs the Africa Opportunity Fund. I’ll see Charles De Vaulx, the chief investment officer at International Value Advisers. He manages almost $20 billion. I’ll see Jeff Gramm, author of the enjoyable book Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism (2016).
Seth Klarman, the brilliant investor behind Baupost, is here. And so is Julian Robertson, the legendary fund manager.
But I’m most looking forward to meeting Steven Bregman, the co-founder of Horizon Kinetics. He’ll talk about "Indexation… delivery agent of the great bubble." What’s that mean? I’ll let you know soon…
I love being your eyes and ears at gatherings like this. You can be sure I’ll be working the room on my subscribers’ behalf.
I’ll report back to my subscribers with what I learn from these gurus. If history is any guide, there will be a whopper.
Why Successful Investors Don’t Focus on the Overall Market
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Value of Negative-Yielding Bonds Hits Almost $12 Trillion
The total face value of negative-yielding corporate and sovereign debt jumped to $11.6 trillion as of Sept. 30. That’s up 6% from a month earlier. Most of these bonds are issued in Japan.
The Problem Isn’t Making Money… It’s Keeping It
Jesse Livermore was probably the greatest Wall Street Trader who ever lived. He died $340,000 in debt. Here are practical steps you can take to hold on to what you’ve got.
Lots of great feedback today on the Grand Opening of Agora’s overseas headquarters in County Waterford, Ireland, which Bill wrote about in yesterday’s Diary.
Great article about your new international headquarters. It’s really beautiful. You did a great job on the renovation.
Nice to see you put your money where your mouth is. Your efforts here will certainly be appreciated by the locals. Best of luck in your new corporate home.
– Jerry L.
Congratulations on a job well done in Ireland. Your Diary is always my most interesting and educational read.
– John L.
Congratulations on renovating Woodlock House and opening in Portlaw. My wife is from Ireland. If we do the grand tour, we may take time out to at least see the outside of the place.
– Simon S.
Congratulations on the win-win in Ireland with the mansion. Although I do not know Elizabeth, or you, it seems she has a great sense of decor. Please keep up the travelogues – I get a vicarious pleasure from them.
– Ron R.
Thanks Bill and Elizabeth for what you have done at Woodlock House. As an architect dealing in “period homes,” it is a welcome relief in a sea of maudlin and slow decline to see such grandeur restored and spirits uplifted.
– Tom W.
Happy to see Elizabeth standing next to Bill at the Grand Opening. It would appear she has fully recovered from her recent horse-riding accident.
– Tex N.
At last we get to see the elusive Elizabeth. Glad to see she’s recovered from her recent fall. Best wishes with the new project.
– Anthony O.
Well, that was certainly a surprise. I don’t recall you ever mentioning an ongoing project in Ireland until just recently. And I’m sure it took a substantial amount of time, as restoration projects do.
Elizabeth looked great. And here we thought she was still in France recovering from her riding mishap! Bravo, all the way around!
– Bob K.