The New Great Game
By: David N. Vaughn
Tuesday, 8 June 2010
Well, what’s happening? Busy lately and can’t find the time to get inside Microsoft Word. Probably put readers to sleep anyway. Ever wonder what brought on the first Great World War? Later to be called World War 1. And what the devil brought on the horrible World War II?
Went to my nephew’s wedding in the Outer Banks last weekend. In Nags Head. An uppity little enclave for those who think they’re better bred than the common folk. Give me the laid back atmosphere of the Gulf of Mexico any day. Even with the now dying marine life and slicked blackened shores. But Nags Head does have the singular advantage of being just 6 miles south of Orville and Wilbur Wrights first powered flight in all the history of man.
In 1903 they did. And 66 years later mankind was landing on the moon. Something sound weird about all this? 1900 is when real technological advances really took off to the stratosphere. And how did new technology affect wars? Want me to share with you a secret? Don’t tell anyone. The answer is technology.
Hey! Have you been following those raids on Israel’s Gaza shoreline? Israel, Israel, Israel! When will you learn? The United States is trying to set an example and show the rest of the world there just are no such things as national borders anymore. The US thinks its great that the Mexican ruling mafia is stretching out and further into Texas.
The US is a nation of immigrants and does it really matter if those immigrants are criminals or breaking laws? National borders are designed today to be entry ports for those breaking international law. Arkansas is setting a bad example by desiring to enforce laws on the books. What we are witnessing here is mean spirited and xenophobic and just plain out unloving behavior.
Can you imagine if Tyson chicken slaughter houses had to pay real wages because immigration laws might be enforced? You’ll never see it happen. Illegal immigration is really all about exploitation and cheap labor. Over the years how many in Congress itself have proven to employ illegal immigrants to clean their houses and watch their kids? The real issue here is about extortion and the ability to blackmail those in a country here illegally cause so many can profit from paying low wages, no insurance, zero benefits, etc.
Been reading a book called “A Peace to End All Peace.” Written by David Fromkin. A great history of the fall of the Ottoman Empire and the creation of the Modern Middle East. A bit wordy. Yes, too much repetition, but I could tell the author was really excited about the material.
Before 1900 all of Europe was always fighting, literally, all the time. Not one day passed that someone wasn’t throwing a rock at their neighbor. All countries were always fighting for new territory to conquer and colonize. And this was a process that had gone on for the past thousands of years. But what made the difference in 1915?
The invention of practical and easily used machine guns and the use of barbed wire in abundance really changed things a bit. A big bit. And barbed wire was only invented in 1874 by the first to successfully patent the idea, Joseph Glidden. Glidden experimented by using a coffee mill to bend a short wire around the longer strand of wire. Where would cattle farmers and soldiers be today without the humble coffee grinding mill?
And the invention of the machine gun in 1885 we can’t leave out. Hiram Maxim got the idea to invent the machine gun when he visited the Paris Electrical Exhibition in 1881. Maxim had been a successful inventor, but only inventing peaceful electric lamps and such. But at the exhibition he met a man who told him the following.
“If you wanted to make a lot of money, invent something that will enable these Europeans to cut each other’s throats with greater facility.”
So, Maxim invented the first successful machine gun able to fire 500 rounds per minute. It had the firepower equivalent to 100 rifles. Sure made the British and Europeans happy as they could now kill each other in greater numbers. But before Maxim died he felt guilt for creating such a powerful death machine and invented one more peaceful invention, a mouse trap.
And because of all this new technology the European Western Front became a stalemate. Not often this ever happened in European wars before. Usually, one side would quickly and eventually win over the opposing force. So now for a while a stalemate existed on the Western Front. But again, technology came to the rescue with the invention of the tank. Now those fellows could ride over those trenches through the barbed wire and in the face of those machine guns with ease.
Now what about World War II? Technology again did the trick. Hitler and his native Germany designed further newer technology and new ideas. But the Americans invented the ultimate new technology with the invention and deployment of the atomic bomb. And since its use the world by and large has been at a major stalemate. Until the first country has the daring and nerve to deploy the nuclear bomb again.
And when that day happens the United States will lose its mythological first power status.
Right after the “Great War”, World War 1, and the British Empire was at its zenith. Having acquired 1,000,000 square miles of new territories from the war and the demise of their enemies. But the cost and terrific number of soldiers required to police and contain these new territories began quickly to sap the British treasury. Amazing how quickly that noble empire that had reigned with prestige for so long just slowly ground to a dying halt. But that’s the eventual path for every great nation and each individual person. Sad we don’t prepare personally for this inevitable fact.
We have had a lull in really significant military deaths for about 65 years. But this lull will end. A suitcase nuclear bomb? A blast from North Korea or unstable Iran? We have already seen the hunger exercised and fed by the World Trade bombings in 2001. Personally, I wish as a country the US had rebuilt those twin towers to stick a finger of defiance. Mark my words. We’ll see eventually some kind of repeat of that horror. In the 20th century it is estimated that from 200 to 300,000,000 died in all the wars and conflicts, civilians and soldiers. Wonder what that number will be for the 21st century?
And what of The Great Game?
The Great Game has been European interests fighting and clawing one another since before the time of Caesar. Battling for trade and territorial conquests Allies and enemies always changing sides for whatever convenience. Today it goes on. Much of these battles are being fought for control of the Middle East and Central Asia. Eastern Central Asia remains a volatile area where the battles for control never end. The Middle East has vast riches in oil.
Eastern Central Asia in particular has tremendous vast wealth. Eastern Central Asia is rich in minerals, gold, uranium and oil and gas. A Russian mining engineer, Paul Nazaroff, escaped the Bolsheviks in 1919 and wrote in his book, “Hunted Through Central Asia” the following.
“What a rich country it is, where a man, fleeing for his life can casually stumble upon valuable deposits of ores and other minerals!” Paul Nazaroff
Tell me more about The New Great Game? Concerning the present struggle for Eastern Central Asian riches… Last year, 2009, Russia warned vocally that war was on its way as the battle intensified for control of valuable and much needed Central Asian global energy resources. Make no mistake. The wars of the new 21st century are gong to be centered on the acquisition of the worlds remaining energy resources.
In Central Asia the rich and enormous oil and gas energy pipelines are headed in the direction of China and not mother Russia. In the days of the old Soviet Union these energy rich countries all belonged to the Soviets. But now these countries are free. Until the eventual wars for their possession begin.
The 2 most important countries in Central Asia remain Kazakhstan and Uzbekistan. The battle for these resources will be where the next major wars are fought. China, Russia, Iran and others in the region needing these resources for survival into the 21st century. So, The Great Game continues and forever will until the last man standing.
And what the heck has gold got to do with this? Some of us have already witnessed the need in the past few years to exercise the need to sell gold holdings to raise cash (and pay the bills.) And this will not be the last time gold will come in handy. Remember, gold is insurance. When cash becomes unstable and questionable we use the precious metals to secure the needs we need for daily survival.
Roubini, “In my line of business your reputation is based on being right.” What is Dr. Doom right about? Roubini believes we are still in the thick of a crisis. A crisis that has not even begun to play out. For those who forget who this Roubini fellow is the following tells the story. He’s a noted economist with a good reputation for making accurate financial predictions. Roubini, “The crisis is not over; we are just at the next stage. This is where we move from a private to a public debt problem.”
Presently, the countries of the world are continuing to attempt to bale one another out. And they are all sinking in debt. But the trouble is there just is not enough money to go around. And that recession is slowly and inevitably moving toward a real bonafide depression. And when one of these European countries fails the others will not be far behind. And as far as that goes have you read how many states across the great United States of America are broke and can not even pay their state public employees?
Collapse, collapse, collapse.
I know you’re getting tired of those words. But get used to hearing them. Cause they’re going to be around for a long time. Public debt. Rising, rising, rising. The euro as a major reserve currency is losing its credibility. Wonder to me the US dollar has maintained its tarnished credibility for so long.
But the most telling prediction Roubini makes is that inflation will have to eventually rise. It has to. In what way could all these indebted countries, including the US, ever pay off all that enormous debt? But the remarkable thing about inflation is that it lowers the value of your indebtedness. How convenient. And it also lowers the value of your paper savings.
And what about gold?
How’s it doing in these uncertain times? As the Euro continues to weaken gold only rises further as many investors continue to lose their confidence. I understand Bloomberg came out with an article on 5-24-2010 that speculators are buying gold faster than gold can be mined.
It may be fair to say that 1,000 is now the floor price for gold. I think a lot of folks believe gold to be heading short term toward 1,500 an ounce. But don’t forget. Physical gold is not held for speculative purposes. Or shouldn’t be by the amateur investor. Physical gold is an insurance plan for when your paper dollar begins to crumble in value.
Excellent Gold Stocks…
George Soros and a buddy, John Paulson, have accumulated a record of almost 2,000 tons of gold. 2,000 tons. A lot of gold. Even when the nasty financial crash occurred in 2008 gold still went up almost 6%. Many “conservative” analysts are predicting $5,000 to as high as $10 grand before this decade has reached its end. But at that price the world system will probably have crashed for good.
Be sure we always own a stable hard asset such as gold to sell when cash needs to be raised to pay the bills.
Gold Letter, Inc.