Looking back at history provides invaluable insights into the missteps that have led America to its current economic state. Learning from the past is not just critical; it’s empowering.
Following World War II, the United States stood as a symbol of economic and military strength. This journey began with the War of Independence, where victory over the Brits laid the foundation for a democracy that shone as a beacon of freedom, liberty, and equality. Through triumph over significant challenges like the Civil War and the Great Depression, the U.S. emerged as the world’s most robust economy with the most powerful military. The nation’s commitment to fundamental freedoms and unparalleled creative drive fueled American dominance in cutting-edge scientific fields. As a result, the United States continued to lead the West in innovations and technology.
The American Dream remained powerful, promising that hard work could lift anyone from poverty to great success. Over the next twenty-five years, American technologies increased productivity and economic material gains. Naturally, the entire Western world moved in stride with U.S. leadership to improve the overall living standard for everyone, upholding the belief that all individuals are created equal.
War & Remembrance
The United States faced a fateful test when, however misguided, it became involved in a civil war in Vietnam, an insignificant country halfway around the world. Aside from the 58,000 American soldiers who lost their lives in the Vietnam War, the seven-year debacle nearly emptied America’s coffers.
After the Vietnam War ended in 1973, economic growth accelerated, and the United States continued to prosper. Between 1965 and 1972, which covered the length of the war, annualized real GDP growth was 5%. By comparison, the annualized GDP before the Vietnam War (1947 – 1962) was only 4%. This may not seem like a massive difference; however, it came with a hefty consequence: a sharp rise in inflation as growth from inflation climbed much faster, from 2.2% to 4.2%.
Excessive government military spending on the Great Society of WWII and Vietnam led to an explosion in economic stimulus and a sharp increase in the government deficit.
Abandoning the gold standard, which previously allowed dollar holders to redeem their greenbacks for gold, was a crucial event in the United States economic history. Gold – which had served as America’s monetary & spiritual anchor – had lost its mooring. Instead of a gold standard, the United States created fiat currency backed only by the good faith of the U.S. government.
During the final years of the Vietnam War, it became increasingly clear that maintaining the gold standard was no longer feasible. Toward the end of 1971, Nixon abandoned it, formally declaring that the dollar was no longer backed by gold. When America ditched the gold standard, it ushered in the petrodollar. In efforts to maintain the hegemony of the U.S. dollar, the United States and Saudi Arabia entered into a “handshake deal” in which the Saudis would price oil in dollars in exchange for military protection.
The petrodollar deal, a significant factor in the United States’ economic trajectory, required every nation to purchase oil in USD rather than their own currency; hence, all oil trade was conducted in dollars.
“If the decline of the U.S. can be traced back to the Vietnam War and the subsequent abandonment of the gold standard, it’s crucial to understand their profound impact. These events have significantly shaped America’s economic trajectory, and it’s relevant to look at why the United States stayed committed to fighting a senseless war for so long.”
History: Can We Learn From Our Mistakes?
History provides crucial insights into America’s mistaken path, on which this nation is going further astray from its fundamental interests. The United States leaders and citizens alike must learn from the past to avoid repeating the same mistakes in the future.
Although I’m an economist, I concur with the plethora of historians who believe that history would have played out very differently if President Kennedy hadn’t been assassinated in 1963 or Robert Kennedy in 1968. The potential alternative outcomes underscore the weight of historical outcomes and their lasting impact.
Before President Kennedy’s assassination, he started to have grave doubts about the United States’ continued involvement in the Vietnam War. Not surprisingly, one month after his death, President Johnson rescinded the executive orders Kennedy had previously signed to begin the withdrawal of U.S. troops from Vietnam. Subsequently, Johnson then launched a draft — of which roughly 30% of draftees would die in Vietnam. The draft sparked intensified opposition to the war, especially among the younger generation.
Tying into this timeline, Robert Kennedy, running on a platform of complete U.S. withdrawal from Vietnam, was a leading candidate for the Democratic nomination, and his victory in the California primary made his nomination a near certainty. Most historians believe he would have beaten Nixon. RFK’s assassination on the night of his win in California, easing the way for Nixon’s election a few months later, likely changed the course of history.
We may never know for sure the true story behind the two Kennedy assassinations. But for what it’s worth, I’m presenting here a portion of the famous farewell address from President Eisenhower because I think it contains a dark foreboding that is both prescient and pertinent:
“Now, this conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every Statehouse, and every office of the Federal government. We recognize the imperative need for this development. Yet, we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved. So is the very structure of our society.”
“In the councils of government, we must guard against the acquisition of unwarranted influence by the military-industrial complex, whether sought or unsought. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.”
If you define the military broadly enough to include the various intelligence agencies, particularly the CIA, you can view Eisenhower’s warnings as chillingly prescient. Since the early 1970s, America gradually lost its political, economic, and spiritual underpinnings. Unbeknownst to the average citizen, the military-industrial complex began to play an ever-greater role in America’s life. With the assassination of the Kennedys and the Vietnam War, the deep state became the king of a vicious circle in which power and money infiltrated themselves into American society.
The Military-Industrial Complex
Inequalities have become standard on both the individual and corporate levels. These gross inequalities have resulted in the inclusion of lobbying by major corporations and extraordinarily wealthy individuals to the military-industrial complex as major influencers of those elected to office. One could argue that the military-industrial complex has been replaced by what many refer to as “the deep state.”
Reflecting Eisenhower’s warning, politics is ever more associated with compromising America’s fundamental freedoms. More and more, Americans’ view of the world is controlled by narratives barely distinguishable from outright propaganda. As for spirituality, it has been stripped away by those same narratives that tell us what to think. The naked materiality of our country is wholly inconsistent with the sacred values that our founding fathers viewed as foundational to American democracy.
While not everybody believes the deep state killed the Kennedys, I have little doubt about it, and any doubts I previously had were removed after hearing an interview with Ray McGovern. One of the great CIA analysts of the 20th century’s second half, McGovern started his career in the CIA when JFK was President and continued through the administration of George Bush Sr. In the 1980s, he chaired the National Intelligence Estimates (NIE), the authoritative summary of the CIA’s assessment of particular security issues. McGovern was the daily briefer of many officials in the Reagan administration, including President Reagan. When he retired, he received one of the agency’s most coveted medals. Later, McGovern returned it when he realized the CIA’s portfolio had included many activities he knew nothing about.
During the interviews with McGovern, which are available on YouTube, you can see a book in the background. I’ve read the book and found it to be utterly convincing:
JFK and the Unspeakable, by James Douglass
The top line on the cover reads:
WHY HE DIED AND WHY IT MATTERS
HE CHOSE PEACE. THEY MARKED HIM FOR DEATH
McGovern’s display of that book leaves little doubt as to the who and why of JFK’s assassination. The books on the assassination of RFK are just as compelling in making the case that his assassination was, as was the case with his brother, the work of the deep state.
Deep State Narratives
Equally frightening is how the deep state has extended to the pharmaceutical industry, whose drive for profits overwhelms any urge to do good. One example is the mandating of mRNA vaccines. Several recent peer-reviewed papers prove vaccines have done far more harm than good. All-cause mortality in virtually every Western country continues to rise several years after the worst of COVID-19. The U.S.-made vaccines are the most likely explanation for the excess deaths. In some cases, the death was an actual horror show in which a patient’s organs, including the brain, were overwhelmed by blood clots.
The mandating of these vaccines should be considered a crime against humanity, and it has been compounded by the refusal of authorities to approve far less expensive treatments like ivermectin – which was used extensively in Japan and whose benefits are detailed in peer-reviewed Japanese articles. Japan experienced a small fraction of the deaths experienced in the U.S. and the collective West. Ivermectin was used widely in other Asian and African countries as well. In all cases, cheap drugs producing little or no profits for their manufacturers were far more successful than expensive and harmful vaccines.
There is vital evidence that the horrors of “long Covid” are side effects of the vaccine and not the disease itself. A prime example is Japan, where deaths directly attributed to COVID were rare. Japan strongly advocated Ivermectin in journal articles, criticizing the World Health Organization (WHO) for not recommending it. With that said, it comes as no surprise that WHO’s significant funders are all closely related to one of the world’s wealthiest men, Bill Gates, who also played an essential role in funding Moderna, one of the two major manufacturers of mRNA vaccines.
Japan, a U.S. ally, also used American-made vaccines and has paid mightily for its loyalty. So-called turbo cancers, which occur only when the immune system is completely compromised, have emerged as a killer in Japan. Some hope comes not only from the gradual awareness of the problems but from actions like those of the religious Kansas attorney general who maintains his spirituality and rejects the current narrative. He recently sued an mRNA manufacturer for not reporting side effects. It’s notable that 10% of pregnancies beyond the first trimester ended in miscarriages compared with a 2%-4% average of miscarriages seen in pregnancies beyond the first trimester.
Final Thoughts For Investors
In my last book, China’s Rise And The New Age Of Gold, I detailed America’s decline and will have more to say regarding this topic in future blogs. For now, I want to focus on what America needs to regain its mojo. The critical question is whether or not it’s possible. Likely, Americans will first have to live through the most challenging economic period the United States has ever experienced.
I’m not alone in believing bad economic times lie ahead. Even the nearly perennially optimistic Warren Buffett agrees. In his most recent letter to investors, Buffett said Berkshire Hathaway holds record amounts of cash because an economic catastrophe could be close. He commented:
“I believe Berkshire can handle financial disasters of a magnitude beyond any previously experienced. This ability is one we will not relinquish. When economic upsets occur, as they will, Berkshire’s goal will be to function as an asset to the country – just as it was in a minor way in 2008-9 – and to help extinguish the financial fire rather than to be among the many companies that, inadvertently or otherwise, ignited the conflagration.”
The key phrase is “magnitude beyond.” It suggests that the next crisis could be on a different scale than the 2008-09 crisis. Buffett doesn’t predict when he thinks his outsized cash position – far more considerable in actual and relative terms than in 2008 – might be called upon or even whether it ever will be. But there’s a clear implication that he thinks the next disaster could be a natural-born killer. For my avid readers, I just want to express a high probability of a financial crisis on the horizon that may be an order of magnitude greater than 2008-09. And the road to recovery will be long and painful.
