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The Coming Global Wars Will End the U.S. Empire

Written by Damon Geller

Israel has engaged in another war with the Arabs.  A commercial jet shot down in Ukraine has ignited U.S. conflict with Russia.   Islamic terrorists have seized a huge portion of Iraq and we're being dragged back in.  The U.S. once again launches into global warfare from many angles at the same time.  Whether we’re “spreading democracy and liberty” or simply protecting our dollar & oil interests, our ability to save the U.S. economy by drumming up war has come to an end.  Experts now say that trillions of dollars in Fed paper money-printing, a jobless "recovery," and unsustainable levels of record-debt have pushed the U.S. beyond the point of return.  Not only will the coming global wars not produce the economic stimulus of previous wars, it will end the American Empire.  And that's why millions of people and entire nations have been scrambling to theone safe haven that's impervious to falling bombs and rapid gunfire.

The Economic Stimulus of War

It’s a widely known fact that war serves as economic stimulus.  World War II, for example, famously ended the decade-long Great Depression.  When the nation goes to war, government spending causes a dramatic increase in manufacturing, jobs and overall economic activity.  The Iraq War alone put several trillion dollars into the U.S. economy.  So as the U.S. launches into the burgeoning crises in Israel, Ukraine, Iraq, Syria, and elsewhere, the powers-that-be are licking their chops at the prospect of pumping trillions of phony dollars into the choking economy.

But the problem of any government stimulus program is that it comes with a major cost:  crippling debt. Putting aside the human costs of war, war-debt dramatically debases the dollar and puts the nation in a hole that takes decades to dig out of.  In the past, the U.S. has been able to recover from its war debts.  But times have changed.  Trillions of dollars in Fed paper money-printing, a jobless "recovery," and unsustainable record debt have pushed the U.S. beyond the brink.  Not only have we lost the ability to fund a major war, war can no longer produce the economic stimulus of previous wars.

We’ve Already Lost the War on Debt

Right before the U.S. launched into the unfunded wars in Afghanistan and Iraq, the U.S. debt stood at just over $5 trillion.  After a decade of war and other stimulus programs, the U.S. debt has more than TRIPLED to $17 trillion, on its way to $28 trillion by the time the next president takes office.  Just look at how debt has skyrocketed since the war drums started beating:

So as the U.S. prepares for its next major war, the printing press is already broken.  The Fed has already begun to end its stimulus programs after pumping $7 trillion into the economy, because the Fed is out of ammo.  What’s more, trillions of dollars in U.S. stimulus has done little to stimulate the economy.  Unemployment is still crippling the nation, wages are falling, and the American middle class is shrinking by the day.  So not only can we not afford another round of war stimulus, stimulus itself no longer works.  We’ve literally broken the bank.

Protecting Your Savings & Retirement during Times of War

War is never predictable, but very predictable things happen in markets when we go to war.  There is a fear trade or “risk-off” trade that happens every time. Equity markets collapse, and money flows to “safe haven” assets like U.S. treasuries, cash and gold.  Of those three, which one are you most comfortable putting your savings & retirement?  Let’s examine…

U.S. treasuries were a historically safe but low-return asset.  But with the U.S. debt hitting $28 trillion by 2018 and the nation heading straight toward insolvency, who in their right mind would hand their savings & retirement money over to the U.S. government?  Obama is so desperate to get you to buy U.S. treasuries that he launched his MyRA – your savings pays for U.S. debt.  No thank you.

Keeping money in cash is sometimes recommended by financial analysts as the safest way to preserve wealth, yet nothing could be further from the truth.  Why?  Because they ignore one HUGE liability of cash:  REAL inflation.  REAL inflation is killing this country, regardless of the lies we're being told.  Whether food, housing, or education, we’re all choking on runaway inflation that is actually 5 times what the government claims!> As you can see from the graph below, the U.S. Dollar lost 50% of its value versus other currencies during the last two wars!

That leaves gold & silver.  Wars have been around for thousands of years, and so have gold & silver.  So we have a long history of tracking gold & silver during times of war and global upheaval.  And how do gold & silver stand up to the ravages of war?  Quite simply, gold & silver have always been the greatest wealth protector during times of war and social unrest.  In fact, as you can see from the graph below, gold increased over 5 TIMES during the last two wars in Afghanistan and Iraq:

The Empire Will Collapse, But You Don’t Have to

Empires rise and fall.  And while it’s painful for any of us to think that the American empire is nearing its end, the simple lesson of history is that war & debt ultimately destroy the greatest of empires.  So as this bankrupt nation heads into its next – and possibly last – major war, don’t let your savings & retirement go down with the empire.  Do what major nations like China and Russia are doing:  Protect yourself now with the ONE asset class that is bolstered by war – the one asset class that rises as empires fall:  Gold & Silver.