Published August 30, 2013

Mexico Invades Syria!

Dear Reader,

As I write, the Mexican president and his senior military staff are finalizing plans to respond with force to the Syrian government's purported use of chemical weapons on the United States' Islamist allies.

"Eeets an outrage!" said President Enrique Peña Nieto in his best English.

He then went on to detail how his secretary of defense, working with allies in Bangladesh and Mozambique as a "Coalition of the Absurd," was moving troops into place to "respond decisively" to the Syrian government's decision to commit collective suicide by engaging in the one act sure to bring international forces into the conflict on the side of the revolutionaries determined to overthrow it.

When asked if it wouldn't be more prudent to wait until the UN inspectors in Syria issued their findings—you know, to avoid a repeat of the mistake the US made when it ignored the UN inspectors' report that there were no weapons of mass destruction in Iraq—Maria Harfarta, Secretario adjunto del Departamento de Estado, snapped, "We are making our own decisions on our own timeline, and we believe that the UN inspection has passed the point where it can be credible."

At which point El Presidente Nieto raised a carbine over his head and, in a particularly deep and masculine tone, yelled, "¡A las armas! Vamos a ir a la GUERRA!!!!"

Of course, dear reader, I have purposely misled you—all in the hopes of making a point.

Namely that it makes no more sense for the United States, the United Kingdom, and France (among others) to attack Syria than it does for Mexico, Bangladesh, and Mozambique.

In an attempt to support that contention, it may prove helpful to engage in the Socratic exercise of asking questions, in the hope of finding answers.

For example…

What national interests are the Western powers defending?

Given that creating a power vacuum in Syria will likely result in yet more chaos in the Middle East, which translates to higher oil prices, it certainly doesn't seem to be in the interest of the cash-starved flailing "democracies."

(I put that word in quotes because according to the latest Gallup polls, 90% of Americans are opposed to siccing the US military onto the Syrians.)

In addition, the action will deepen the strain between the US, Russia, and China, with Russia being a long-term staunch ally of Syria's and China being the largest holder of US Treasury instruments in the world.

It also sets the "West" against the Arab League, which opposes yet another in an almost unbroken string of Western assaults on their region over the last 1,000 years.

For the record, the Arab League includes Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Tunisia, UAE, and Yemen.

While the leaders of certain Arab League countries, for example the Saudi royal stooges, are against the Assad regime, among the 300 million people on the Arab Street there's a strident level of opposition to yet more Western bombs landing in their backyard.

Thus the imminent military action could be like throwing a lit match into a puddle of gasoline, igniting the simmering resentment of the downtrodden in Saudi Arabia and Bahrain (among others) and leading to something approaching an energy apocalypse. After all, over 50% of the world's oil reserves reside under the sand of the Middle East. And much of the rest is located in Russia, the world's largest oil producer.

Furthermore, any serious attack on the Syrian military's ability to defend itself will almost certainly tip the balance of power and allow the rebels to gain control. At which point the US will have delivered yet another large piece of territory unto the Islamists. For a quick lesson in how that has worked out so far, take a glance over at Libya, Iraq, and Egypt.

I don't know, but the last time I checked, it seemed to me that the West was at war with the Islamic extremists. If eating the lungs of their opponents, as one of the commanders of a US ally in Syria did, isn't considered extreme, I'm not sure what is.

So, if an attack doesn't serve the interests of the Western countries now revving up for war in Syria, then whose interests does it serve?

There are two clear winners from the attack.

Based strictly on the hard evidence, one would have to mention Israel (immediately triggering a rainfall of reflexive charges of anti-Semitism on the head of anyone daring to mention it—which is why it's never mentioned in the mainstream press).

Though the end of Assad in Syria means delivering the country into the hands of more overtly anti-Israel extremists, simple observation tells us that once an Arab state fails, it tends to stay failed for many years. That's because it invariably sets off internecine fighting—often supercharged by religious passions—which acts like a cancer, quickly spreading throughout the inner workings of a previously reasonably cohesive state.

Put another way, whereas a well-armed and well-organized Syria under Assad may represent a threat to Israel, a Syria descended into chaos represents no threat at all.

Of course, over time some new strongman is likely to emerge, but I suspect that whoever ultimately prevails over the competition will only do so with help from powerful and deep-pocketed friends… in the West. History tells us that is how puppet governments are created.

The other clear winners are, of course, the rebels. While unfortunate in the extreme for those caught out by the chemicals, a decision by Assad's military to cross the red line on using chemical weapons would be the single best way to bring powerful allies to the side of the rebels.

Not to put too fine a point on it, knowing full well the consequences, the only possible explanation for Assad green-lighting a chemical attack would be a psychotic breakdown. Especially considering that he allowed UN chemical weapons inspectors into the country the very day before the chemicals were unleashed.

Which begs the knock-on question, "Would the rebels really use chemical weapons on their own fighters and innocents?"

In addition to a certain callousness (not to mention poor taste) attributable to the eating of human body parts, one could certainly see the rebel leaders doing the math and deciding it was acceptable for a few hundred people to die from a false-flag operation in order to bring the world's most powerful military into the conflict on their side. After all, far more would die should the rebellion stretch out for months or even years.

Of course, at this point all we have is conjecture, though something a little harder than that is starting to bubble to the surface… this just in from the Live Trading news website…

Testimony from victims now strongly suggests it was the rebels, not the Syrian government, that used Sarin nerve gas during a recent incident in the revolution-wracked nation, a senior UN diplomat said Monday.

Carla del Ponte, a member of the UN Independent International Commission of Inquiry on Syria, told Swiss TV there were "strong, concrete suspicions but not yet incontrovertible proof," that rebels seeking to oust Syrian President Bashar al-Assad had used the nerve agent.

But she said her panel had not yet seen any evidence of Syrian government forces using chemical weapons (CW), according to the BBC, she added that more investigation was needed.

(Full story here.)

So, given all the rhetoric about punishing the perpetrators of the chemical attack on the outskirts of Damascus, one has to wonder whom Obama et al. will smite should the attack be found to have emanated from the rebels? Hmm…

At this point, given the scale of the rhetoric, I suspect any evidence pointing in the direction of the rebels will be discarded or denounced in favor of alternative evidence conveniently uncovered by military spying apparatuses. They are good at that sort of thing.

Of course, the US isn't the only Western power with an itchy trigger finger. Socialist French patsy François Hollande has also signed on for a tour of duty, as has UK prime minister David Cameron who said in Parliament yesterday, "This is not like Iraq. What we are seeing in Syria is fundamentally different."

Yes, one country is spelled I-R-A-Q and the other S-Y-R-I-A. How much more different could things be than that?

Just because it's kind of interesting, the map here shows—in white—the countries that Britain has NOT invaded over the centuries. Must be something in the Anglo-Saxon DNA that periodically requires us to take the show on the road.

How else to explain the illogic of attacking Syria? And I have little doubt that the attack is coming, if not now, then on some other pretense in the weeks just ahead.

Evidence that the attack will happen sooner than later are comments made by one of the participants in a meeting in Istanbul earlier this week, where Western diplomats from the 11 countries that make up the "Coalition of the Willing" "Friends of Syria" met with rebel leaders…

"The opposition was told in clear terms that action to deter further use of chemical weapons by the Assad regime could come as early as in the next few days."  —Reuters

If it makes no obvious sense for the US and its allies to once again start firing heavy metal into the Middle East, why would they do it?

Several possible explanations…

  • Wag the dog. As I don't need to tell you, the degrading Western democracies are broke as broke can be. In the case of the United States, the next debt ceiling will be reached in mid-October, after which the government will have to effectively stop answering the phones. Having run out of money for bread, putting on a circus might seem just the thing.
  • The military-industrial complex is alive and well. I assume every one of you dear readers has already seen Dwight Eisenhower's incredible farewell speech to the nation in which he warned against allowing the rise of a military-industrial complex. Unfortunately, not enough of the right people paid attention to 'Ike," and the military-industrial complex has grown huge… and politically very powerful. War is the health of the state, opined Randolph Bourne. And right now, the state could use a booster shot.
  • US foreign policy has been hijacked by the Neocons. This notion is something I have written about before. Evidence for it arrived earlier this week in a short video forwarded by a dear subscriber. The video, which appeared on ZeroHedge, is from 2007 and features Gen. Wesley Clark calmly describing how in the days immediately following 9/11, a general working with the US Joint Chiefs of Staff showed him a memo outlining a US plan to take out seven countries in the Middle East, including Iraq, Syria, and Libya, before ultimately finishing up with Iran. It certainly seems a plausible scenario to me.

    Here's the video… it's pretty eye-opening.

As I go to press, it seems as though the rush to war that was so evident as recently as Wednesday is running into a wall of public opposition. So much so that David Cameron has started back-pedaling and Obama begun waffling.

Unfortunately, for strictly political reasons, the odds are high that President Obama won't back down completely. If he did, the loud-mouthed opposition would pillory him as being weak and indecisive, and we couldn't have that. So, he'll take action, if only to fire off a few billion dollars' worth of missiles at random Syrian military targets.

(Speaking of loud-mouthed opposition, I feel compelled to mention John McCain, whom I now firmly believe to be insane. No, really. He has become a dangerous character á la Dr. Strangelove, advocating the invasion of Iraq and, to this day, defending it as a good idea.

As bad as Obama is—and in my view he's about as bad as the younger Bush—I think we'd all be scraping for food through radioactive rubble if McCain had won the presidency.

Since we're chatting about radioactivity, a song of the dramatic genre I so enjoy recently caught my ear—though I suspect it will appeal only to the headbangers among you. The song is a live version of Radioactive, by Imagine Dragons.)

Finally, what consequences might there be to a Western attack on Syria?

There are many words and phrases used in describing war, including "fog," "hell," and "wow, never saw that coming."

At its very core, war is unpredictable: any conceivable outcome can occur once the bombs start flying.

But we can make some general assumptions as to how things might work out. For example, we know that military leaders tend to fight the last successful war.

Having been burned by the long-term consequences of putting boots on the ground in Iraq and Afghanistan, it is probable that in Syria the US military will look to follow the script from Kosovo where the war was fought almost entirely from a distance using long-range cruise missiles and fighter planes. It was, as far as the West was concerned, a wonderful little war in that there were no NATO casualties as a direct result of the conflict.

If the Syrian war goes according to that script, the Syrian military response will be limited to hiding in bunkers and muttering angry prayers to an angry god as missiles rain down upon their heads. Back at the US fleet, the sailors would spend their free time sunning on the decks and painting snappy slogans on the side of missiles yet to be deployed ("Special Delivery DAMASCUS" and "Next Stop Syria!"—that sort of thing).

While there is little chance that Syria could prevail against the West under pretty much any circumstance, it might be premature to think they have no means of retaliation. For instance, in the world of today—as opposed to at the time of the Kosovo conflict—there is such a thing as computer hackers.

And (surprise, surprise) there is actually a group called the Syrian Electronic Army that, this week, took down the New York Times website.

Could this group—or someone who uses the group as cover to pursue a separate agenda—tip the switches on the fragile North American power grid? Or cause the US air traffic control system to take a nap at a busy time of day? It's not out of the question.

Then there are the Russian shore-to-ship missiles deployed along the Syrian coast. One assumes the US Navy is smart enough to have calculated their effective range and is parking its billion-dollar ships well outside of that range, but what if there has been a miscalculation? Or the Russians have secretly upgraded the Syrian missiles? Could happen.

Or what if Iran, seeing the cards on the table for what they are—i.e., that they are next—decided to take an active role in the conflict? Maybe by closing the Persian Gulf? Unlikely, I know, but what if?

Could the attack trigger a quick and violent sympathetic public uprising in Saudi Arabia, sending the Saud family on the run and oil prices to $200 or more?

In terms of consequences of a less violent nature, what if the Russians and the Chinese, the latter being Syria's largest trading partner, decided to protest by dumping some of the massive amount of US dollars they hold?

I could go on, but won't.

Instead, I'll leave off by saying that, given the risks vs. the rewards of yet another Western attack on the Middle East, I personally couldn't be more opposed to it. Hopefully there are enough people in what's left of the degraded Western democracies who feel the same way (and who are willing to express themselves): that the politicians should follow Mexico's example and mind their own business, rather than blundering forward into Syria with blunt force.

Hopeful thinking, I know. But one does like to try and walk on the sunny side of the street whenever possible.

Kiss Your Pension Goodbye!

Dennis Miller, Editor, Money Forever Portfolio

I was on the reunion committee for my 50-year high school class reunion a few years back. As we tried to track down classmates, we discovered that many—including a few I had known quite well—had died from lung cancer. These folks would light up a cigarette, joke about cancer sticks, cough, and make fun of their addiction. They ignored their symptoms and the constant warnings from their families and doctors, and they suffered the ugly consequences.

Former US Comptroller General David Walker appeared on 60 Minutes back in July 2007. His message? Our country is suffering from a fiscal cancer far more dangerous than any external threat. The federal government is broke. It has promised entitlement benefits—health care in particular—that it cannot afford. While few economists disagreed with Walker's projections, politicians were unwilling to actually address the problem. From their standpoint, it's always better to push the problem off to a later date in the vain hope (or delusion) that it will simply disappear.

Walker eventually gave up trying to educate politicians and took his message straight to the people. The Wall Street Journal referred to him as "Chicken Little," and no one in Washington wanted to hear his doom-and-gloom message. After all, the economy was fine (remember, this was 2007). They either could not or would not see the problem. Walker was ignored.

Since then, the fiscal cancer Walker warned of has continued to grow. In July 2007, our national debt was $8.9 trillion. Six years later, it has nearly doubled to $16.7 trillion. The cancer has metastasized.

A Different Fiscal Cancer Hits Closer to Home

While the fiscal cancer Walker warned of continues to grow, pensioners are about to battle another type of cancer—one that is eating away at the money they thought would sustain them through retirement.

As I recently mentioned in Miller's Money Weekly, the Employee Benefit Research Institute reports that 97% of private-sector employees do not have a pension plan. They have to save for retirement through a 401(k), IRA, or some other elective savings program. Government employees often stop reading right there. I've heard comments like, "I retired from the government. I have a guaranteed pension, so there's no need for me to worry." If you really think that's true, I suggest you take another look.

Back up and consider why 97% of private-sector employees don't have a pension. Older private businesses realized that they could not meet their pension commitments and found various means to renege on their promises. I have several friends who retired from a large airline, each with a sizable pension. Of course, then the airline filed for bankruptcy, and the benefits of higher wage-earners were cut in half.

Newer private companies never offered pensions in the first place. Sure, they administer 401(k)s and have various matching programs, but funding retirement in the private sector is now the job of employees, not employers. The demise of private pensions is foreshadowing that of government pensions; reality just caught up with the private sector faster, as it usually does.

Motor City Blues

Detroit is bankrupt and plans to cut its pensions. A recent New York Times article was full of sad stories about retired folks caring for invalid spouses who would be unable to return to work if their pensions were cut. Policemen and firemen are saying they risked their lives, held up their end of the bargain, and now it is up to the government to keep its promises. These folks have legitimate gripes, but that won't keep their pension checks rolling in.

Will the state of Michigan bail out Detroit? Upon reading the Michigan Public School Employees' Retirement System fiscal-year 2012 annual report, the author of the Pension Facts blog reported that Michigan has unfunded pension liabilities of $48.3 billion. In short, the state government has its own problems.

The scramble is on to grab the last few pennies left in Michigan. Bondholders—who have a higher ranking on the bankruptcy totem pole—will have to battle public unions fighting to preserve their pensions. The press will label them "rich" and "greedy" despite the fact that many are also pensioners. As we saw with General Motors, the government will find a way to usurp the law. All sides will take a financial hit and scream about broken laws and broken promises.

Were people lied to? Absolutely! Were promises broken? Absolutely! But it makes little difference now, as pensioners and creditors are left fighting over the scraps.

So who is next? Bloomberg reports: "Mounting pension liabilities have cost Chicago another cut in its credit standing." Moody's reduced the city's debt rating by three steps to A3. Why? Because of Chicago's $36 billion retirement-fund deficit and "unrelenting public safety demands" on the budget.

Can the state of Illinois save Chicago? Nope. After the state legislature failed to address its $100 billion in unfunded liabilities in May, according to the article, "Fitch dropped the state to A-, its fourth-lowest investment grade. … Moody's cut it to A3, the equivalent rank. Standard & Poor's put the state at the same level."

Moody's is also reviewing 15 other cities, including Cincinnati; Portland, Oregon; and Minneapolis. On a similar note, is any city in California on sound financial footing?

Government employees who currently receive or expect to receive a pension will ultimately suffer greater losses than folks in the private sector. Most government workers counted on their pension being there and have not built up their own nest eggs. They will get the short end of the stick as their pensions are drastically reduced. The stories of human agony will be tragic.

Court of Broken Promises

Most of us on the reunion committee were smokers at one time… some, heavy smokers. Yet we all finally looked at the facts and weaned ourselves off our cancer-causing addiction. Unfortunately, politicians will never do the same with their spending addiction. We've heard countless speeches about unsustainable spending, and yet no matter who is in office, these fiscal cancers continue to grow.

Our governments are broke: cities, states, and the federal government. Detroit's plight is just the first of many ugly endings. Government pensions are not safe, and no one relying on them will be immune to the fallout. At that point, complaining will be futile. When cupboards are bare and there is no money left, it's too late to prepare for the problem.

Just like the private sector, government pension promises will be broken. Sure, politicians might feel badly about their broken promises, but that won't keep former firemen, teachers, or other retired government workers with roofs over their heads and food in their bellies.

Bankruptcy court is the "court of broken promises." In theory, it's an orderly way to fight over the scraps of a carcass. But at the end of the day, scraps are all that's left. It's sad to say, but many pensioners will find themselves in that fight, with few other resources to fall back on.

How to Come Out Ahead

While others fight over the scraps, pensioners—actually, everyone approaching retirement—can take concrete steps to protect themselves. So where should we start?

  • Accept the fact we cannot rely on anyone else to help us. Fretting over the injustice of it all is wasted energy.
  • Get out of debt.
  • Take an inventory of our assets.
  • Learn how to safely build a nest egg in turbulent times.
  • Position assets to minimize potential government confiscation.
  • Diversify assets for additional protection.
  • Seek out investment bargains. While others are fighting with the government over scraps, we should be looking for opportunities.

Fiscal cancer is not a communicable disease unless we allow it to be. While we may not be able to protect others from destruction, we can certainly protect ourselves. As Doug Casey has said many times, we are all going to get hurt; we just want to keep our share to a minimum.


The total of the US government's unfunded liabilities currently stands at $86.8 trillion, or 550% of GDP. Will this be the death of retirement in America, and what can you do to escape poverty in your old age? Watch our important online event, America's Broken Promise: Strategies for a Retirement Worth Living, with media stars John Stossel and David M. Walker, plus investment experts Jeff White, Dennis Miller, and David Galland.

Mark your calendar for Thursday, September 5, at 2 p.m. Eastern. Registration is free—click here to save your seat.

Friday Funnies

Raptor Chase Prank

A terrified Japanese office worker being chased by a hungry dinosaur. This is too funny.

A Bucket, Two Chickens, Some Paint, and a Goose

A  farmer stopped by the local mechanic shop to have his truck fixed. They couldn't do it while he waited, so he said he didn't live far and would just walk home. On the way home, he stopped at the hardware store and bought a bucket and a gallon of paint. He then stopped by the feed store and picked up a couple of chickens and a goose.

However, struggling outside the store he now had a problem—how to carry his entire purchase home. While he was scratching his head, he was approached by a little old lady who told him she was lost. She asked, "Can you tell me how to get to 1603 Mockingbird Lane?"

The farmer said, "Well, as a matter of fact, my farm is very close to that house. I would walk you there, but I can't carry this lot."

The old lady suggested, "Why don't you put the can of paint in the bucket, carry the bucket in one hand, put a chicken under each arm and carry the goose in your other hand?"

"Why, thank you very much," he said and proceeded to walk her home. On the way he said, "Let's take a short cut and go down this alley. We'll be there in no time."

The little old lady looked him over cautiously, then said, "I am a lonely widow without a husband to defend me. How do I know that when we get in the alley, you won't try to have your way with me?"

The farmer replied, "Holy smokes, lady! I'm carrying a bucket, a gallon of paint, two chickens, and a goose. How in the world could I possibly do that?"

The old lady responded, "Set the goose down, cover it with the bucket, put the paint on top of the bucket, and I'll hold the chickens."

That's It for This Week

There's much more I would have liked to have commented on this week, but time has flown and the work load presses, so I'll sign off.

I would, however, like to congratulate the Casey Tech team on its latest home run—Prana Technologies, recommended in Casey Extraordinary Technology on August 15 when it was trading at just $3.73. As we go to press, it's trading at $5.25, a two-week 40% gain.

Recently, Alex Daley, the head of the Tech team, sent out an email gently boasting about the exceptional track record his team had over the last year, but, based on the performance, I think he was way too modest. If you haven't given the Casey Extraordinary Technology service a try, now is a very good time to do so.

(And please don't rush out and blindly buy Prana now that it's had a big run up… continuing to monitor our recommendations is a key function we provide in our paid service, and there have been two follow-up alerts in the short space since recommendation.)

Our other research teams aren't taking Alex's challenge lightly. In fact, the energy team is hard at work on a special report and an alert for Casey Energy Report subscribers on a small-cap company they are convinced is sitting on a massive new oil play.

Having spent a lot of time looking at the company, including interviewing management, I have to agree that the company has huge potential. All that we're waiting on now is a press release by the company, on or around September 16, with the results from its first well. If things work out as well as we think they will, it will go a long way toward proving the company's hypothesis that it is sitting on the next Bakken and the share price should skyrocket. There's still time to sign up for the Casey Energy Report ahead of that release, but don't put it off overly long as the release could come at any time.

And with that, I will sign off by thanking you for reading and for being a Casey Research subscriber!

David Galland
Managing Director
Casey Research