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L: Doug, there are flames going up in the Middle East, something you've
long said was in the cards, but it's not between Israel and its neighbors (click here to read Doug's last article on
Egypt, in which
he predicted social unrest). The revolutionary spirit sparked in Tunisia
seems to have spread to Egypt, the largest Arab nation and a major U.S. ally,
greatly destabilizing an already shaky region. The whole world suddenly seems
in greater peril. What do you make of this?
Doug: Well, I think it's about time – in fact, way past time.
Revolution in the Middle East is long overdue.
L: [Chokes on tea, starts mopping keyboard with napkin.] Care to
elaborate?
Doug: I'm not saying I favor the unpleasantness and inconvenience for so
many people that comes with such events, but this
upheaval is long overdue. These Arab countries have long been the most
repressive places in the world, with the possible exception of the despotisms
in Africa, to their south. It's very good to see these regimes being
overthrown. And the revolution – hopefully that's what it is – is
internally generated. It's not the product of an invasion by foreign troops
from an alien culture, which is what happened in Iraq and Afghanistan. Regime
change in that whole part of the world is inevitable, necessary, and
salubrious. The problematic question is: what are the old regimes going to be
replaced with?
L: Fair enough. Let's take this one piece at a time… I think I
know what you'll say, but do you think this is a fire that's going to spread,
or were Tunisia and Egypt just particularly rickety?
Doug: I think it is going to spread, and I'll tell you why.
First, these regimes are not the only highly
repressive ones. Every regime in the Arab world – in fact every regime
in the Muslim world – is corrupt, backward, and repressive.
Second, with the communications and travel
revolutions of the last few decades, the people in these places know they've been
getting a raw deal and suffering a lower standard of living than much of the
rest of the world. It was one thing, in the old days, to live from hand to
mouth and get beaten by the police if you stepped out of line. People thought
that was the natural order. But now they can see people in the west live
vastly better, and they aren't going to take it any more.
Third, with Facebook,
Twitter, cell phones, text messaging, and so forth, people can actually
organize action on a massive scale far easier than ever before.
So a broad revolution in the Muslim world has been
inevitable for a couple of decades. I suspect it's now imminent.
L: I remember reading that a major factor in the Soviets losing control
was the fax machine, which enabled a primitive form of what you're talking
about. It's interesting that the Egyptian authorities tried to prevent losing
control by shutting down Twitter and other social networks. It didn't work. I
just heard a news story saying that some two billion people across the planet
are now on the Internet in one form or another. I don't think one third of
the planet's population has even been literate at any past point in history,
let alone actively participating in a language-driven system of information
exchange. We've said before that the Internet is the most revolutionary thing
to come along since the printing press – now we're seeing that this is
literally true.
Doug: Yes – you can download the "Flash-Mobs for Dummies"
app right now. And there's no way to stuff the genie back in the bottle.
Technology is everywhere the friend of the common man, starting with fire and
the wheel. But political and religious elites – the Atillas
and the witch doctors of the world – always try to keep the genie in
the bottle. The printing press, gunpowder, the automobile, the computer
– the elites have always hated these things, and don't want the common
man to have them. Radical new technologies always work to overturn the status
quo.
L: So, where do you think the next place will be where the people decide
they've had enough?
Doug: Could be anywhere. Of course we can't be sure this revolution will
succeed – maybe it will be a false start, like the aborted
insurrections in Europe in 1848. But I think it's more likely to catch fire,
like the wars of liberation in South America in the 1820s.
The trouble is that there are all kinds of
revolutions – as different as the Russian revolution of 1917 was from
the one of 1989. I think this one is likely to be more like the latter:
pro-freedom. We're watching chaos theory in action. It could appear in
Pakistan, a perennial candidate, partly because it isn't even a real country
– just a hodge-podge put together by an imperial power. Algeria and
Libya are two more highly repressive regimes that deserve to go. Saudi Arabia
is probably the biggest risk. This is not a Middle Eastern problem, but could
quickly become a worldwide conflagration, especially if a keystone like Saudi
Arabia falls.
L: I could see Saudi Arabia going next – it's hardly a bastion of
freedom and respect for human rights.
Doug: Far from it; it's a medieval theocracy/kleptocracy.
And yet, the "talking heads" on TV are not praising the people for
throwing off their chains. The reason is that most of these horrible,
repressive governments are all U.S. puppets. They are stooges, getting
anywhere from tens of millions of dollars to billions of dollars per year, in
the case of Egypt, in direct support from the U.S.
L: Rape and pillage all you want, we'll support you as long as you're a
good ally.
Doug: Right. But aside from being grossly unethical, this is a
short-sighted policy. In the minds of millions of people all around the
world, it associates the U.S. with repression, rather than freedom, which is
what the U.S. should – and once did stand for – back when it was
America. And unfortunately, people conflate America with the U.S. government,
even though they're totally different things – antithetical things,
actually. I remember years ago walking down the
street in Cairo, and a kid of about 15 yells at me "Damned
American." I'd never done anything to him. But the U.S. government had
obviously done something to make him feel that way. If I'd thought of it, I
would have said, "Hey kid, I've got nothing to do with your secret
police – I'm on your side." But it wasn't the place for a
philosophical discussion.
L: It's Orwellian; the "land of the free and the home of the
brave" is the supporter of tin-plated despots around the world.
Doug: I know – it's totally perverse. We supply their arms. When a
protestor picks up a can of teargas, its label reads: "Made in
USA." They see U.S. military equipment being used against them. The U.S.
government is supporting all these disgusting despots, making enemies of
billions of people, turning the U.S. into a police state, and bankrupting the
American economy. They're truly multi-talented. But, the average American
sees the government as a friend and protector. It's funny – the average
Arab may actually be much more politically hip and realistic, and desirous of
liberty, than the average American. Maybe some day
they'll send their CIA and military over here to bring us freedom.
L: "Underprivileged dictators of the world – apply here for
financial aid!"
Doug: [Chuckles] That's what it amounts to. And it's all free. The Federal
Reserve can create as many trillions of dollars as anyone needs.
L: The amazing thing is that all these Bright Boys in Washington never seem to get a clue. They supported murderous dictators in Latin
America until they got thrown out. They supported the Shah of Iran until he
got thrown out. They supported Saddam Hussein, and then ended up turning on
him themselves. And they still support some of the most brutal regimes in the
world today, sowing the seeds of even more suspicion and hatred – how
can they be so blind?
Doug: They never learn at all. And the worst part of it is that there's no need to – nor benefit in – having any
involvement whatsoever in any of these places. It's both unnecessary and counterproductive
to American interests; it only benefits the people who live within the D.C.
beltway, and those who slop at the same trough. You can't impose a new social
order on a people from the outside. And even if you could – whoever you
put in office, there's going to be some group or another that's going to
object, dig in, and hate you for it to boot. You create more future conflict
and enemies for yourself. All these idiots blathering on about what
"we" should do should just mind their own business.
L: If only the would-be "nation builders" would remember
Jefferson's mandate: "Peace, commerce and honest friendship with all
nations; entangling alliances with none."
Doug: Better watch out – quoting Jefferson can get you on the
terrorist watch list these days. But you know I'm an optimist, and the good
news is that all of this is coming to an end. Whatever happens is going to
happen, and there won't be much the U.S. can do about it, because all this
nation-building nonsense is horrifically expensive and the U.S. is already
tapped out trying to rebuild Iraq and Afghanistan – not to mention
Detroit and New Orleans. It's "game over" for Mubarak, and close to
"game over" for the U.S. empire.
The U.S. government is bankrupt, and will be
increasingly immobilized. In a few years, they'll be completely unable to
meddle anywhere, because there simply won't be any money to pay for it. The
Fed's own projections say the entire budget will be consumed by Social
Security, Medicare, Medicaid, and interest on the debt, with no money even
for the military, unless something is done soon. There is no politically
feasible way to cut spending on those programs. Does that mean the U.S. Navy
will wind up rotting at the dock, like the Soviet Navy? It will be
interesting to see. Either the roughly $1.5 trillion for "defense"
goes, or the $1.5 trillion for Social Security, Medicare, and such goes, or
interest on the national debt goes, or the scores of federal agencies
go…
At this point, the U.S. budget is like Wile E.
Coyote after he's run off the edge of a cliff. His legs are still windmilling in the air, but he doesn't realize it yet.
Sometimes things need to get worse before they can
get better. It almost certainly means that in the not-too-distant future,
U.S. foreign interventions are going to be scaled way back, or stop entirely,
because they simply won't be possible anymore. That will be a good thing for
backward countries all over the world.
L: Okay, back to the Middle East, which is looking more and more like
the Muddled East, do you think there's any chance this could blow over and
die down?
Doug: These things are chaotic over the short run, but I'd say no. I think
the cat's out of the bag, for the reasons we
discussed earlier. I have not been spending much time there lately, so all I
know is all anyone knows – if you can say they know anything at all
from watching TV and reading the papers. One interesting thing about Egypt,
in particular, is that no one really knows that much about the "Muslim
Brotherhood" – what they actually believe, how powerful they are,
and what they'd actually do if they take over.
I think back to the French Revolution. It was,
initially, an excellent thing; they got rid of a tyrant and the entire old
regime – a big plus. But what replaced it? First they got Robespierre
and his Committee of Public Safety, the Jacobins and La Terreur
– then they got Napoleon, who was another kind of disaster. The same
thing could happen in the Middle East.
Nobody appreciates a busybody. Especially one who's
consistently backed repressive criminals for decades. The best thing the U.S.
could do at this point would be to butt out completely.
L: I'm not going to hold my breath for that.
Doug: I'm glad, because good analysts are hard to find. I've said for
years that the way to defuse and start unwinding the war with Islam is to
listen to what Bin Laden said was upsetting those people so much. We should
get our troops out of their holy land, stop setting up brutal puppet regimes,
and stop supporting Israel. If we did that, and sincerely apologized for our
destructive actions and the criminal actions our tax dollars have paid for, a
lot of those people would cool off and go back to herding goats, looking for
oil, making shish kebabs, or some other pursuit of happiness.
L: We should not have to say this – and I know you won't try to
justify your remarks – but some people are so touchy on this subject,
so let me stress that you are not singling Israel out for harsh treatment.
You would have the U.S. government stop supporting all government overseas,
including Israel's Arab neighbors, as well as Israel itself. The point is not
to take the Arab world's side against Israel, but to let the Israelis and the
Arabs work out their own problems.
Doug: Of course. Israel and all countries should be treated the same
– free trade and no military involvement, as you and Mr. Jefferson
said. It's really that simple. I went into a lot of detail on Israel in the April, 2002 issue of International
Speculator. And I wrote an analysis of Islam in the July, 2001 issue of IS. Never let it
be said that I shy from controversy.
L: Perish the thought. Hm. You're saying there's no reason for this
fire to be contained in the Middle East – I wonder if there's any
reason for this fire to be contained by religion or culture. I'm remembering
the mass protests I got caught up in Belarus, just a few weeks ago, which is
about as far from the Muslim world as you can get. I have to wonder if Lukashenko, the Belarusian dictator, is watching what's
happening in Tunisia and Egypt and wondering how close he came to being
forced to flee the country – if the military had switched sides on
December 19, as they appear to have just done in Cairo, he'd be toast. I have
to wonder if people suffering under other highly repressive regimes around
the world are watching and wondering if their time has come to reach for
freedom. Could it be that we're seeing another "shot heard ‘round
the world" today?
Doug: I think the chances are excellent. Whatever happens, I'm convinced
that the next five years are going to be among the most interesting in
history, from about every point of view. At some point it should get interesting
enough for me to jump in to the Egyptian, Tunisian, Pakistani, and Iraqi
stock markets with both feet.
L: Interesting in the Chinese sense of the word.
Doug: Yes. Particularly interesting is the risk of 21st century Robespierres. The problem is that all these people still
think in terms of government by nation-state. In that regard, unfortunately,
what's happening is not really revolutionary – changing one ruler for
another doesn't get to the root problem of the rule of some people by
others.
Egypt is a perfect example. The government there
serves absolutely no useful purpose whatsoever. It has done nothing but repress the people, act as a vehicle for theft by those in
power, and hold the place back for decades. It's likely that whoever replaces
Mubarak is just going to have his own goofy ideas of what the government
should do, instead of just getting the government out of the way.
You know how it is: it's the most cunning, ruthless,
and polished liars – the ones who can persuade the most people to
support them by promising to take from others – who get elected.
Dictatorship is no answer, but absolutely neither is democracy.
Over the long term – the entire span of
history – humanity has gone from a state of 100% plunder by rulers to
now only about 50% plunder. The long-term trend is, therefore, good –
but I don't see any reason why we should take a cosmic leap forward just now,
as nice as that would be.
L: Sounds like you've been listening to that song by The Who, Won't Get Fooled Again: "There's nothing in the street, looks any
different to me, and the slogans are replaced, by-the-bye… Meet the new
boss, same as the old boss."
Doug: Does seem appropriate. Behind the scenes, the U.S. is certainly
going to be agitating for another repressive stooge, such as it always picks.
Since World War II – or really, since the days of Teddy Roosevelt
– when has the U.S. not picked the most repressive toady? And while the
U.S. won't have much power around the world in a few years, because of the
economic problems it's going to have, it's pretty powerful now, and it will
be pushing in that direction.
L: Well, instead of a freer world, would you say this new revolutionary
fervor is going to end up a big step backwards, setting the stage for worse
repression and more war?
Doug: It's entirely possible, but I'm not going to make that prediction.
Remember the French Revolution. Remember Rome: they assassinated Caligula, but then got Claudius;
they killed him and ended up with Nero. And after Nero, they had a bloody
civil war, in the Year of Four Emperors.
L: Well, Nero, I've read, at least had the grace to kill himself. Okay
– investment implications seem pretty clear; oil just shot up over
$100/bbl.
Doug: Yes indeed. I think the commodity bull market is likely to stay
intact, and this instability is bullish for energy prices – good news
for companies not operating in the Middle East or other areas at high risk.
Sustained higher oil prices are also very bullish for alternative energies,
especially alternatives to light sweet crude, including heavy oil, oil sands,
and shale oil. All of these are abundant in the Americas, and some even in
Europe. These are the kinds of opportunities we specialize in, in our energy newsletters.
On the other hand, this is very bearish for the
economies directly affected. The top revenue industry in Egypt, for example,
is tourism, and tourism there has dropped to zero. That's going to be
devastating and make it all the harder for the place to get better.
L: So, bearish on the region, but bullish on commodities.
Doug: Yes, but looking ahead for the bright side, once places like Egypt
bottom out, there could be some real bargains to be had there. There could be
fantastic deals on prime real estate in Cairo and Tunis, and the local stock
exchanges could become a gold mine, for those daring enough to buy when no
one else will. Too early now, but the time could be coming.
L: One more question. A lot of people are probably wondering what you
think of the changing odds for open warfare in the Middle East? If pro-Israel
stooges get replaced by people whose sentiments more closely reflect those of
the Arab masses – who are no fans of Israel – doesn't that bring
the area that much closer to a shooting match?
Doug: Well, it's anyone's bet, but these people have been having wars with
each other for the last 5000 years – I see no reason for them to stop
now. And as close to the edge as the poor people in these repressive Arabic
countries live, and with the economic outlook looking so grim, anything could
happen. Even with Israel's nuclear deterrent, anything could happen.
L: That's a very sobering thought. If the oil fields of the Middle East
turn into large glass bowls, that will have obvious and dramatic consequences
for energy prices – but what if this all blows over instead of blowing
up? Could oil prices retreat, hurting those who buy in now?
Doug: I think oil prices will go up anyway. There are new technologies on
the horizon that could all but eliminate the use of oil as an energy source,
but that's years away. Based on the fundamentals that underlie the commodity,
I expect steadily rising prices for years to come, with fluctuations along
the way, of course. Everything we see says that trend is very solid, so on
top of that, political turmoil is just a bonus.
L: Okay then. Not exactly pleasant thoughts, but important ones. Thanks
for your insight.
Doug: You're welcome. I feel insulated from the turmoil, here in
Argentina. But only a plane ride away if I want to smell tear gas in the
morning. ‘Til next
week.
L:
Hasta la proxima.
Doug Casey
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