Winds of War

Larry Edelson was right: The winds of war are here. The storm is spreading. It’s growing rapidly in intensity. And it’s bound to directly or indirectly affect virtually every asset class on the face of the planet.

Just this week, for example, the Syrian civil war has spilled over into two neighboring countries.

In Iraq, it has reignited battles in the two major cities where American forces had won the bloodiest and most pivotal battles of the entire Iraqi war — Fallujah and Ramadi.

These two critical cities are just 36 and 64 miles from Baghdad, respectively. Their fall spells possible disaster for the entire country, the entire region, and the entire legacy of America’s longest wars in history. And yet, that’s precisely what seems to be happening right there, right now.

Fallujah is one of two major Iraqi cities where battles have reignited.

Just yesterday, radical Sunni militants aligned with al-Qaeda were fighting for control of both cities with the goal of immediately converting the province into an autonomous Islamic state.

They’ve set fire to police stations, freed prisoners from jail and occupied mosques. They’ve blown up several government buildings, including the police headquarters, the local council and the office of the mayor. And government troops rushed into the area have so far failed to put down the rebellion.

In Lebanon, the Syrian civil war has also burst onto the scene with new bomb attacks just this week, helping to plunge the country deeper into what could soon be its own second civil war of modern times.

The last Lebanese civil war lasted FIFTEEN years, claiming an estimated 120,000 fatalities … causing a mass exodus of one million people … dragging Israel plus other foreign powers into the conflict. This one could be equally bad, or worse.

Meanwhile, terror, revolution, and civil war are spreading to the Sudan, Somalia, West Africa … the Caucuses, Pakistan and South Asia … the Philippines and even Western China.

Is The War on Terror Lost?

Yes, America’s drone war has notched many successes. Yes, Osama bin Laden is dead and the U.S. has won key battles. But it looks like the United States, NATO — and the entire community of nations — may be losing the war.

Instead of surgically removing the cancer, we have caused it to spread — regionally and globally.

Like cutting up a starfish into pieces, instead of killing one animal (al-Qaeda), we’ve seeded the growth of dozens of al-Qaeda affiliates, spinoffs and successors …

• Al Qaeda in the Arabian Peninsula (AQAP), headquartered in Yemen, probably stronger in many respects than bin Laden’s core organization at its peak, and the primary current concern of U.S. strategists …

• Al Shabab, recognized by al Qaeda leader Ayman al Zawahari as  one of its leading affiliates in Africa, now launching attacks far beyond its regional borders …

• Al Qaeda in Iraq (AQI), now merged with Syrian-based al Qaeda forces to form a new, more potent organization, the Islamic State of Iraq and Syria (ISIS) — the same group taking over Faluja and Ramadi …

• Al-Qaeda in the Islamic Maghreb (AQIM), now coordinating activities with two new violent Islamist groups in Mali — Ansur al Din and the Movement for Unity and Jihad West Africa …

• Islamic Emirate of the Caucuses (IEC), behind the recent bombings in Volgograd, Russia, in what appears to be a major crescendo of attacks leading up to the Winter Olympics in Sochi …

Recent attacks in Russia threaten the Winter Olympics in Sochi.

Just to mention the most prominent!

Worse, in addition to a SPREAD of the cancer, we have witnessed a dramatic ESCALATION in the conflict.

What was once just a phenomenon of isolated incidents of terror has now been transformed into outright armed warfare.

What was once mostly limited to dreams of revolution has now resulted in the dramatic overthrow of once-powerful governments.

What was once primarily a distant threat of turmoil has now become a series of collapsed, or collapsing, states:

Egypt, once a bedrock of stability and the centerpiece of the U.S. policy in the region, is in the late stages of chaos — the victim of one revolution to overthrow the dictator who was America’s “best friend” in the Middle East … another revolution to overthrow his replacement … and still another now under way to destroy the most repressive military dictatorship in modern Egyptian history … each round in the cycle accompanied by an escalation in the violence, both by the people and against the people.

Upheaval in Egypt could have enormous consequences.

Libya, where U.S. forces claimed a “great victory,” is already a collapsed state, overrun by militias beyond any government’s control, and a fertile breeding ground for al-Qaeda affiliates, or worse.

Much of North, West and East Africa, mostly under control prior to the Libyan war, is now mostly out of control, with entire states under siege, in various stages of collapse.

The Scared Money Phenomenon

Now, put yourself in the shoes of wealthy families or large business interests that are in — or close to — these huge resource-rich regions.

What would you do with your generations of savings, large pools of liquid capital and even difficult-to-sell assets?

Would you wait passively for the next shoe to drop? Or would you dedicate many hours of your days — and nights — to planning and executing a series of strategies to move your money to safer havens?

At first, it was just a minority of the most savvy and sophisticated who took action. Now, with each new shock — the fall of Mubarak in Egypt, the bloody war in Syria, the outrage in Saudi Arabia over a possible pact with Iran and many more — the trickle is becoming a flood.

And much of the money has nowhere to go but to the United States.

Among other key factors, this influx of capital — plus the continued outpouring of funny money from the Fed — is what’s helping to …

* Drive U.S. stock markets and, despite sharp corrections, is likely to continue doing so …

* Set the stage for a new bull market in gold and precious metals …

* Add some momentum to the U.S. economy’s recovery, and …

* Push U.S. interest rates sharply higher.

Stand by. Our Money and Markets team is preparing a series of strategies to help you profit from each of these major trends.

Good luck and God bless!

Martin

 

 

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