Walking Liberty is Real Money

Global Walking Liberty 

The highly respected and much followed analyst Peter Grandich, (one of my personal favorites) has recently penned a controversial letter entitled "Man Your Battle Stations", Mr. Grandich does an excellent job of highlighting geopolitical troubles about the world, and relates these troubles as bullish for bullion, rightly so, while indicating that geopolitical time bombs are ready to go off. In large measure, Grandich's global glass is less than half full. Mr. Grandich stated that "The middle east, soon to be front and center", but it already was. So what is new? It is not that it will be front and center, but rather, what are the long term directions, that should concern us all.

While Russian President Putin speaks in terms of peaceful Iranian nuke use, he does not press compliant sanctions, indicating, President Putin likes a little conflict in the oil fields, naturally so, as Russia builds an energy empire rivaling OPEC. The Russian double dutch seems clear, push up the price of oil. Unless you first recognize a problem, a militant nuke Iran, you can not seek a resolution. World focus upon the Iranian nukes was a first good step toward resolution, sanctions is another, war if necessary will be another, but the trick is to keep the pressure on so that something will crack. In terms of significance, Iran is the last significant nut to crack in global militancy, state sponsored terrorism, or naked aggression, as the world's globalization confluence is now being perfected. While Iraq has been difficult, the insurgency seems to be finally abating, with Sunnis now opposing Al Qaeda, and with democratic Kurds, Shia and Sunni facing off against theocratic Shia, hence the birth of true democratic political parties and constituencies. The Turks may do some spanking in Northern Iraq, justifiably so, the PKK is a terrorist organization, and spanking them would be a good thing. In Pakistan, things are finally starting to turn, with democratic Ms Bhutto entering Pakistan, forming an alliance with, of all things, strong man Musharrif, both now opposing extremists. Hello!! Did you get that, strong man Musharrif is bringing in the democrats!!! (He really has no choice, to solve his problem.) This is a very good thing. An injection of a democratic leader into Pakistan should be regarded as a long term positive, trying to civilize that disjointed and conflicted country. Burma and Nepal are in revolt, the democrats there want political power. China is now teaching North Korea, free market operation, WOW!, bringing another GAP nation into the fold of CORE cooperative nations, as nuke are being dismantled. Things are actually moving in the right direction, if you can see it all through the latest car bomb smoke.

So, there are two views, the other is that the glass is way more than half full. Maybe Mr. Grandich would like to go back in time, with his picnic basket, away from these very troubling modern days, and go back to Hitler's Germany, Armenian Genocide, Imperial Japan, Stalin's Soviet Union, Yugoslavia Genocide, you know, the good old days, where multi-million man international armies roamed over continents laying waste to swaths of lands murdering MILLIONS, except lets make sure they all have tactical nuke weapons, just to make sure gold goes sky high, supportive of your favorite share picks. But not to worry, gold will hit $35K/oz when all fiat is outlawed in about 2035 as the world becomes a real money economy, once again. Not to worry, again, your mine shares will do just fine.

Surely there are many hot spots that can be identified, but these, save a potential blockade of Iran (having some UN IAEA legitimacy, and hence would not be totally unilateral, especially when emboldened with a little French wine), are all intra-territorial disputes. Today, there is no pair of UN recognized nations with front line troops battling it out just now, hence, we now, this day, have a world without international WARS. Hello? Did anyone get that? As to intra-territorial disputes or insurgencies, there are many, mostly in the middle east, some in Africa, and some in Indonesia. The degree of insurgency, from armed uniformed insurgent armies, to mass murdering of civilians, to infrastructure terrorizing bombings, to debilitating national strikes, to disorderly rock-throwing protests, to civil demonstrations, and finally to the ballet box, is a civil disorder quantization along an insurgency continuum. As to this continuum, the operating point of a society within a territory is inversely related to the number of years that that society has had a functioning democracy. The USA, the longest living democracy, nearing flew apart in a civil war 80 years after democracy took hold here. It takes many many generations to learn the "democracy" culture of civility, and children do throw temper tantrums occasionally. There is an inverse correlation between intra-territorial civil disorder and the length of time the democracy is in place, as this thing, called democracy, is a learned culture. This learned culture possesses the ability to spew your counter-mantra into another's face, at the drop of the hat, yet, at the end of the debate, shake hands, and submit to majority rule, without firing a shot, the civil thing, which is a very difficult thing to do in theocratic, totalitarian, monarchical, or strong-man cultures.

The direction on earth is a very good one, if you believe the glass is half full, and the direction continues to this day, as we transit from war and FRNs to trade and gold. Nations would rather have political cover, share the costs, through a global organization. Allied Wars, Coalitions, NATO, and allied grouped military forces, (all being indications of the global confluence continued strength), are all precursor to UN peace keepers, as cops on the street, limited to intra-national insurgencies and civil disorder. Currently, the collapse of the FRN is merely a means to reduce foreigner's forex reserves so they pony up for their share in globalization by the US keeping trade lanes free, as a cost of doing business, and the US national debt will be reduced to zero, when gold finally replaces fiat globally in the far out years.

As to trade, the same affect occurs. As state controlled economies shift to free-market economies, ala China, more free trade agreements and packs are being had, as the trade wars heat up, with mutual multilateral trade agreements, just like the trend in multilateral international military forces used to perfect the global confluence of coalitions and UN peace keepers. Commercial free speech leads to political free speech, and all theocratic, monarchical, dictatorial, and totalitarian regimes will continue to have trouble, ultimately failing, because all do not provide a means of free political expression, and they will continue to give rise to new democracies, that will experience initial growing pains, as civil disorder, as the democratic culture is learned and becomes dominate eliminating wars and fiat in the out years.

In the out years, no longer will national military forces strike unilaterally, as the world becomes even more interconnected through the globalization confluence. Unfair competition will be ruled out concurrently by the global traders seeking fair competition, and that means gold will be the medium of exchange in the global confluence and economies. Before our every eyes, Mr. Grandich, war and fiat are being replaced by trade and gold, as the respective preferred tool and medium of global survival of the fittest, due to the inevitable march of political civility of cultural evolution through global confluent democratization and globalized free trade.

Sure, there are many insurgencies about the globe, but one needs to take a step back and look at the big picture. These insurgencies are merely the expected dust raised by the foot prints of "Walking Liberty", first recognized by President Lincoln, in the last paragraph of his 12/1/1862 address to congress, where he stated that our nation must not fail "as the last best hope OF earth", placing our civil war effort above merely preserving the union or freeing slaves, but that, democracy must not fail, as he was the first to recognize democracy as a global solution and hope to cement permanent peace in all conflicted peoples, "if followed". President Bush herald in "democracy century" effectively putting that 1862 recognition into the modern context, as a done deal, at this point in time, where democracies are catching hold and where there are no international wars. Walking Liberty sure has made the rounds, about the globe, starting in 1862, or perhaps even to Jefferson's Barbary pirates. Surely, the trip has been a long one, taking 145 years, and is nearly done, and it has been very painful for mankind. But, in the middle of this 21st century, the cries by all may just be "Free at Last, Free at Last, Praise God Almighty, ALL OF MANKIND is Free at Last". The insurgencies to which Mr. Grandich complains are natural infantile attempts at democracy, along the disorder-insurgency continuum, though not stated as such, addressing opposing views in the only way they really know how, but that will all die a natural death as the culture of democracy is learned by all in the foot prints of "Walking Liberty", enroute to replacing war and the FRN dollar with trade wars and the gold global medium of exchange. When fully back home, when Mr. Lincoln's greenbacks are finally burned, wars will be replaced by trade wars, as the proper place of Walking Liberty is Real Money.

President Kennedy Berlin Wall 1963

President Reagan Brandenburg Gate 1987

Speak Softly but Carry a Big Stick

US foreign policy needs to be noble, preaching democratic principles, free enterprise, and civility in contentious internal politics in other countries. There is nothing inherently wrong with an intranational rebellion as a means of freedom loving people to throw off the yoke of a brutally suppressive totalitarian regime, as freedom and totalitarianism cycle during the ascent of man. US foreign policy is so immediate and US centric, that there is a propensity to militarily  intervene excessively so, all over the world. There are red lines that the US should defend, including genocide, WMD use, terrorism and territorial imperialism. Cultural evolution takes centuries and totalitarianism and freedom will cycle during the ascent of man. Excessive military interventions leads to proxy wars between the great powers, in intractable long lived contests, bankrupting the national treasury, and diverting moneys from more noble purposes domestically. US foreign policy needs to be both noble and limited to red lines, and just let the peoples of other nations find their own way. Humanitarian aid is always a good thing, but picking sides and militarily intervening excessively results in tarnishing America's image, and bankrupting the country.

War and Dollar replaced by Trade and Gold

"It cost about 75 cents to kill a man in Caesar's time. The price rose to about $3,000 per man during the Napoleonic wars; to $5,000 in the American Civil War; and then to $21,000 per man in World War I. Estimates for the future wars indicate that it may cost the warring countries not less than $50,000 for each man killed." Senator Homer T. Bone. I was particularly intrigued by this quote from Senator Homer T. Bone, that the cost per death in war has increased. May I take that analysis a step further? Conclusion: He does not tell the whole story.

In the good old days, say, pre 1500s, when tribal kingdoms engaged in war, they took no prisoners, except women as concubines and slaves, and hence, the causality rate for the loser was 100%, the victor's rate was not much less, and one-on-one battles usually meant equal rates of causalities. Then came the middle ages, and chivalry, and if a besieged defender surrendered early, the garrison was spared with honor, otherwise the black flag. Then came the guns, but still, the ratios of deaths were even, with casualty rates of say 20%. Then came long range rifles and smoothbores, with many battles having 10-15% casualty rates, and garrisons were not slaughtered, but imprisoned or even exchanged or paroled. In the WWI and WWII the casualty rates continued to drop as a percentage to those engaged. In Korea and Vietnam, the technology differences became apparent, with kill ratios of 5:1 to 10:1 or more in many battles, but US death rates per battles were down to less than 5% for the stand up fight. The cold war provided a dry spell, but then emerge Gulf I and Gulf II, with advanced technology.

The military technology is exponentiating, and it seems that the bend in the curve seems to have occurred in the mid 1900s. Each day, our military technology advances and increases our differential effectiveness over our opponents who have like curves, but delayed in time, until we have reached a point these days, that in a stand up fight, we have less than 1% casualty rates. This is astounding! Of the 200K troops that have been cycled through mid-middle east, the casualty rate is about 1%. Along side these trends is the endless printing of fiat paper money to fund these military expenditures.

So, it seems that, over the last two millennia, the costs per death has increased, as the casualty rate has decreased, making a relative, net sum zero, in the cost of war, generally. War, in terms of the US perspective, has become more expensive but more safe for the US fighting man/woman, which supports the contention that the administration is providing fighting Joe with the best chances he ever had of surviving a battle or a war. Our armies and navies are all volunteer, and this should not change in the foreseeable future. The fighting Joe knows he has the best chances in history to survive. Along side this trend, is the trend toward fewer and less deadly wars, in terms of US battle casualties, but more expensive, the quid pro quo.

The cost of war will change in kind. The proclaimed demise of the almighty dollar, projected to start in mid summer 2006, is already upon us, and the dollar is expected to collapse around 2010-11. As trade wars become more popular over military wars, governments will be more keen to keep cheating banks from printing fiat money and from hiding state sponsored subsidies, and will seek to spend their military dollars on trade war productivity rather than unnecessary military hardware and personnel. The fights will be in trade wars, that will necessarily required a monetary standard of money that all can unequivocally agree upon as to value. Gold and Silver are the only real alternatives. Hence, as military war become disfavored over monetary trade war, additional pressures will come upon and to the end of fiat paper money, with the resulting use of paper money certificates that are backed up by Gold and Silver in bank and corporate vaults. Gold and Silver mines will be the real banks of mid 21st century. By 2025, there will be a boom in Gold and Silver prices and mining stock values the world has never seen in 5000 years of mining precious metals, which boom will make $20,000/oz Gold and $1,000/oz Silver seem a great bargain.

Projections into the 21st Century

So, lets now do something positive, and project these concepts into this century. There will be fewer wars, fewer battle casualties, but it will cost allot more to wage or be prepared for war, until such time, that globalization become substantially complete (with the N. Korean or Iranian resolutions for examples) and cements the functional geo-economical-political rules sets that render military expenditures largely unnecessary for dispute resolutions. The inevitable globalization and confluence will in time render military expenditures largely unnecessary as world powers seek domination by trade and not by guns, as one does not wage war on one's customers, and all will seek to avoid perturbation shocks, such as 9/11. Contrary to popular belief, the Russians and Chinese have the most to loose in an Iranian war, and will seek to get Tehran to compromise with the "Great Satin" on the nuke issue.

The later half of this century will wage war, not by guns, but by trade, and the major issues then will be fair free trade war which in fact has begun in earnest, as well as over population, and environmental issues and resolutions. I wont be around to enjoy the fruits of 5000 years of cultural evolution of man-kind, in this regard of the inevitable global confluence, but it seems, that we as a specie are moving to a better plane of intercourse. With endless fiat money printing, paper currency will become history as well to prevent cheating banks from destroying the value of hard earned savings and wealth in order to sustain the trade wars. The world banks' and governments' only solution to fair trade, is the necessary use of a standard medium, Gold and Silver. As governments learn that expenditures of real money on military hardware and personnel diminishes their returns and limits their abilities to invest in trade productivity in trade wars, expenditures will shift away from war materials and fiat money to trade capital assets and real money for improved global trade competition. The ultimate projection is that the Dollar and War are completely replaced by Gold and Trade, say by 2030!