IS AMERICA A DANGEROUS NATION?

by Egon von Greyerz, Gold Switzerland:

“America is now a dangerous nation.” This is the title of an article written by the journalist Gideon Rachman in the Financial Times last week. He goes on to declare: “Under Donald Trump, America looks like a dangerous nation.”

As I stated in my KWN article last week, the risk of a major war is now very high. The dilemma is that this is just one of many problems with potentially catastrophic consequences that the world is currently facing. Looking at total global risk, the current situation is probably graver than anything the world has faced in history. The world is now standing in front of a potential nuclear war between the US and North Korea, a war that easily could lead to a world war involving initially China and Russia and many more nations. The economic, financial and political consequences would obviously be catastrophic for the world.

IGNORANCE IS BLISS

Ordinary people are very fortunate that they are never exposed to the real problems in the world. Between Facebook, Instagram, YouTube and some game shows on television, they are blissfully ignorant of the very precarious position the world is in. Luckily for most people, television news and newspapers report very little that touches on anything but local news or the latest divorce or affair by their favourite artist. Virtually no journalist today is capable of doing any analysis or objective reporting. They just report what they are being fed by government or a handful of media organisations that dominate the world.

NINE STEPS TO THE ABYSS

The average person is totally ignorant of the insoluble risks facing the world currently, namely:

  • Record global debts of $225 trillion which can never be repaid and will bankrupt most nations in the next few years. This includes public as well as private debt.
  • Their money, whether it is dollars, euros yen or yuan will become worthless within 5 or maximum 10 years as governments finish off the 100 year debasement of all currencies which are already down 97-99% since the Fed was founded in 1913.
  • Most assets will decline by 75% to 99% in real terms. This includes the bubble markets financed by the credit boom and money printing such as stocks, bonds and property.
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  • Central banks will become insolvent. Most central banks are today hedge funds with massive leverage. The assets they hold, government bonds, stocks and other bonds will all become worthless. The demise of these banks will be a blessing for the world since they are the primary cause of the coming financial collapse.
  • The banking system will fail and most assets held in a bank will disappear. This includes both money and securities.
  • As nations go bankrupt and money printing has no effect, the state will become totally ineffective. This means that there will be virtually no money left to maintain the socialist system that the world has experienced for almost a century. A system which in most Western countries absorbs and wastes more than 50% of what the country produces. As the very wise Margaret Thatcher said: “The problem with socialism is that you eventually run out of Other People’s Money.” (abbreviated OPM).
    And this is exactly what will happen next. As the world runs out of OPM, there will be no money or taxes to fund social security, medical care, pensions, defence etc. On the one hand, this will of course be devastating for most people who are totally dependent on the state and OPM. On the other hand, government tax departments will be decimated or disappear, and all the unproductive bureaucrats and civil servants will also be gone. This will be a very good thing. I do realise that the transition will be devastating for most people initially but hopefully the Phoenix that will come out of this will create a much stronger and sounder system based on personal initiative and self-reliance rather than destructive socialism.
  • The core of democracy and values are being totally torn down as a result of the socialist system. The family is for many no longer the kernel of society. In the West, the divorce rate is 50% or above in most countries. Many people are restless and less grounded. This is also linked to the earth’s magnetic field which is weakening significantly. Religion as well as moral and ethical values are waning. Heritage, history and culture is denied by the powers that be. Tearing down historical monuments is a sign of this. Everything must now be politically correct. And political correctness is determined by the minorities and not the majority.
  • There will be political upheaval in most countries in coming years. The party in power will be pushed out or lose the next election since they can’t fulfil their socialist promises. The opposition party will gain power since they will promise the earth. But they will soon run out of OPM and also fail.
  • We will see social unrest and also civil wars. People without money or jobs will revolt. There will be major clashes or civil wars between political phalanges.

ARE KIM AND TRUMP DANGEROUS FOR THE WORLD?

So is the US now a dangerous nation based on the conflict with North Korea? Yes, this is certainly a high-risk event. Both Kim and Trump are impulsive characters. With over 28 resignations or firings in Trump’s administration over the last seven months, there are clear signs of instability and lack of harmony. As I said in an interview with Grant Williams after Trump had been elected in late November, that with Trump being a dominant individual and an entrepreneur, I expected him to change his mind constantly. Most entrepreneurs have no strong principles but the ability to change their mind frequently. It is this flexibility that makes them successful in business. But this doesn’t work in politics. I also predicted that Trump, being a very strong individual, would not be able to retain people with strong personalities. Hiring a number of very top people, including billionaires, was a high-risk strategy for Trump. The 28 people who have left so far proves that point.

The risk with a leader who is under tremendous pressure on the domestic front is that he turns outwards and starts a war. This is an extremely normal pattern in history. And nobody in the US can stop the President to push the nuclear button. In theory, the military could disobey orders from the commander in chief but normally generals are very keen to start wars. With three top generals in the White House as Trump advisors, the risk of war is significantly heightened. But hopefully Trump will understand the horrendous consequences of starting a nuclear war. Trump should avoid a desire to join former war hungry leaders such as Bush, Obama, Blair, Cameron, Sarkozy and others who through their ignorance and megalomania managed to change global history for the worse, for a very, very long time.

As regards Kim of North Korea, he would probably be very keen to prove his nuclear power. The biggest risk is that his missiles miss Guam, making him into a laughing stock. As an alternative, South Korea would be an easier target and therefore more likely. But let us hope and pray that we will not see a nuclear war. That would be the end of the world most of us know today.

A LESS SAFE WORLD

The fact that many, especially in Europe, see the US as a dangerous nation is of course not new. Since WWII, the US has been involved in numerous wars, many of which were started by the US, assisted by other nations. The unprovoked attacks on Iraq and Libya are examples of US interference with dire consequences for especially Europe but also for the rest of the world. In Iraq, more than ½ million people died as a result of the war. But the serious and long term effect of these wars is the migration which Europe is now experiencing. Germany for example has had 1.5 million immigrants since January 2015. There are no jobs, nor housing or schooling for most of these migrants and the legal system cannot cope with all the asylum seekers. This will have long term and permanent social and cultural consequences of major proportions for most European countries. Europe will be a very different place in 2050. Also, the terrorism that the world is now experiencing is only the beginning.Even without a major war, the world as a whole will be much less safe due to terrorism and increase in crime. I was born at the end of WWII and have experienced a long period of peace and prosperity as well as safety. Sadly, my children and grandchildren are unlikely to be so lucky.

TIME TO ACT

I do realise that bearers of bad news are unpopular figures. If they are right, nobody will thank them and many people will blame them. If they are wrong they will be ridiculed. But as most readers know, I am not here to be a prophet of doom and gloom. No, my purpose is just to tell things as I see them and to warn people about the massive risks that the world is now facing. Some people will argue that ignorance is bliss. Yes, it could be, especially since we don’t know exactly when the end of an era is upon us. But it is very clear to me that the time for change is now very near, as I outlined in last week’s article.

So at least for the ones who are forewarned, they can take some preventive actions. But even the knowledge of major changes in the world would probably ease the shock.

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