Live from the Casey Research Summit in San Antonio
The day dawned hot here in San Antonio—again—and the topic most on the minds of the day’s featured speakers was the hottest one of all: war.
War, as we all know from the writings of early 20th century progressive Randolph Bourne, “is the health of the state.” That famous quote is often misconstrued to mean that war is a healthy thing for a country to engage in. But Bourne actually made an important distinction between society—in which individuals interact in peace—and the state, which seeks continual accretion to its power. Society, Bourne wrote, “is a concept of peace, tolerance, of living and letting live. But State is essentially a concept of power, of competition; it signifies a group in its aggressive aspects.”
And nothing allows the state to assume ever greater power to itself and to act as an oppressor, than war.
Or, as Summit speaker Justin Raimondo, editorial director of Antiwar.com, put it this morning, “War is inevitably good for expansion of government power and bad for citizens.”
How close is the US to engaging in yet another war? Pretty close, most of the speakers would agree, with any number of flash points to be found in the world: the Middle East, Ukraine, Africa, and many more.
Grant Williams—managing editor of Things that Make You Go Hmmm…—noted that the worse things get economically, the more likely war becomes, especially at times of economic dislocation and when most people consider a major conflict unthinkable. As in 1914. As today, on the hundredth anniversary of the war to end wars.
Others spoke of alternatives to a hot, shooting war. Jim Rickards, senior managing director of Tangent Capital Partners, talked about a financial war game he participated in in 2009. Back then, he posited a war in which China and Russia cooperated in the creation of a gold-backed currency of their own, in which they would demand that other nations pay in this currency if they wanted Russian or Chinese goods and services. His team in the game was ridiculed for this idea; yet today, something very like that is beginning to play out.
Casey Research’s own Marin Katusa offered a preview of his new book, The Colder War, due out in early November. Vladimir Putin, Marin asserts, is winning this new cold war at the expense of an ineffectual President Obama. Putin laughs at US sanctions. They have no real teeth, Marin explained. They will mean nothing until the president proposes something that would actually hurt Americans—such as cutting off Russian exports of uranium to the US. Don’t expect to see that any time soon.
Williams—who wowed the audience with a dynamic presentation that included a sound bite from Richard Nixon and an image of Ben Bernanke in a Hannibal Lecter serial killer mask—also noted that the news is full of stories about the wars in Syria, Ukraine, and Gaza, and about domestic wars on poverty, drugs, and Christmas (yes, Christmas). Yet the war that directly affects the most people in the US is never mentioned in the media. That’s the war on savers, waged through the debasement of the currency in which citizens have saved.
While the prospects of various kinds of wars were clearly on many minds, this is not to say that day one of the Summit was wall-to-wall doom and gloom.
Stephen Moore, chief economist at the Heritage Foundation, is very optimistic. He believes that bad times are coming to an end and that the prosperity on the way will be driven by America attaining energy independence, which should happen within five years or so. US companies have streamlined themselves over the past few years, and are now the best run in the world. And Moore ended with a message for Washington: if you really want to see the economy take off, cut the corporate tax rate to zero.
Rick Rule—chairman of Sprott US Holdings and always a popular speaker at Casey Research Summits—lived up to his self-proclaimed role as the ray of sunshine in the room. The way to make money, Rick said, is to buy quality companies when they’re extremely undervalued. After a brutal three-year bear market, that’s currently the case with junior resource companies. Thus this is the time to position yourself for the inevitable rebound.
Five years from now, Rick predicted, we’re going to look back on the present and say: “Those were the good old days.”
Hedge fund manager Mark Yusko provided an even more positive outlook... for those who invest outside of North America. He sees the developing world stock markets dramatically outperforming US and European stocks and is himself heavily investing there, including having been a venture investor in yesterday's smash IPO for Chinese ecommerce giant Alibaba.
Mark and the others were joined on stage by economist Mike "Mish" Shedlock, who the NY Times named one of the prescient voices ahead of the 2007 market crash. Mish also correctly called the current deflation and inflation tug-of-war, and the debt crises that have plagued the EU system. Now he's another big market change headed our way.
If you’d like to hear what the next event to rock our markets is shaping up to be, and all the other the great presentations given here at the Summit, be sure to preorder the complete audio collection and get every presentation on CD or in MP3 format. They’re still available at a significant discount, so don’t hesitate to take advantage of this great offer to receive all presentations and associated slides.
Doug Hornig
Senior Editor
Casey Research
