Special NOT-the-End-of-the-World Issue - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 24 December 2012
Special NOT-the-End-of-the-World Issue A  A  A

Baltimore, Maryland

Christmas Eve

The US stock market went up 59 points on the Dow on Friday. Traders seemed to take the fact that the world didn't end in a positive light.

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On the other hand gold went down $21, to rest at $1,645. What do we make of that? Gold is a doom and gloom metal. You buy it when you suspect that the political and financial authorities are up to no good... You buy coins and bury them in your back yard. You get a few bars and put them in a safe deposit box. You invest in GLD and hope the company that sponsors it survives the apocalypse.

But the end of the world came and went on Friday. Some people were relieved. Others were disappointed. Most didn't give a damn.

We took the train out to Normandy on Thursday evening...and then drove down past Poitiers on Friday. Traffic continued as normal. The truck stop served us a cafe creme. There was no mention of any disruptions. Apparently, management had decided to continue serving coffee right through the end of the world. Servi kaffe, pereat mundus.

As a card-carrying gold-bug doom and gloomer, we should have liked the end of the world prediction. It sounds about as doom-and-gloomy as you can get.

But we had a sneaky suspicion that the ancient Mayans weren't any better at forecasting than anyone else. And we have another sneaking suspicion that when it finally comes, the end of the world won't be ballyhooed on TV in advance.

You never know. God can throw a curve ball when he wants. He might even get Paul Krugman, Ben Bernanke, Tom Friedman and Larry Summers et al to tell us that the world is ending just to make us think it couldn't possibly be true.

One reason we were looking forward to the end of the world was that we could then drop this whole zombie thing. We, and we alone, seem to have been saddled with the job of explaining to the world who zombies are and why they suck. Not that they are bad people. Not necessarily. Some of our best friends are zombies. Really.

Zombies are made, not born. They are corrupted by a corrupt system, often without realizing it.

Every day, we get new information that helps us more clearly understand it. In short, zombies are parasites. They suck the life out of the rest of the society. They consume; they don't produce.

But real life is never black and white. It is shades of grey. Is a policeman a zombie? A lawyer? A school teacher? A lobbyist? A welfare recipient? A banker?

Answer: it depends. The question may be black and white. But the answer is gray.

Last week we took a look at the world's best-paid cop - a former California lawman. Give him the benefit of the doubt. He probably gave good service while he was on the force. He's earned a decent retirement. But because of the political power wielded by organized government workers, this cop earned more than 10 times the average American salary - nearly $450,000. On the evidence, he's not worth it. A man in North Carolina does the same job for about $120,000.

Our interpretation: a good man has been zombified... He's not the first. He won't be the last. Sometimes whole industries...or whole economies...are zombified. That's what's happened to the US military. It has a purpose: to protect the United States of America. When it is doing what it is supposed to do - looking out for the USA - you couldn't call the Pentagon a "zombie." It wouldn't make sense.

But, Dwight Eisenhower really knew the military. He spent almost his entire career in it. And he knew that, like all organizations, as a military organization ages...it turns sour. Its mission slowly and stealthily shifts from protecting the USA to using threats to the USA to shift power and money to itself. Later, it actually creates threats...bumbling into situations that can cause harm to Americans...in order to keep the money flowing. When that happens the military is no longer a benefit to the people it is meant to look after; it is a liability. It weakens the economy and the nation by draining away resources. It creates enemies where there previously hadn't been any. And it is so focused on its own perks and benefits...so larded with overly-sophisticated (expensive) weapons...so dominated by lumbering, incompetent, self-serving bureaucrats...that it can no longer do its job. It becomes an army of zombies...not of fighting men.

Here Tanya Cariina Hsu reviews the Pentagon's latest adventure:

    Global Research , October 08, 2012

    October 7 marked the eleventh anniversary of the US war in Afghanistan. More than 2,000 American soldiers have now been killed, and as the US presidential candidates debate each other to lead the most dominant power on Earth, perhaps it is time for someone to ask them: Was it worth it?

    Operation Iraqi Freedom officially lasted for eight years and eight months. By December 2011, 4,486 US and 318 non-US troops had been killed fighting in Iraq, more than 1,800 more than who died on September 11th. However, according to the New York Times, a year after operations ceased US Special Operations units have quietly begun re-entering Iraq at the behest of the Iraqi government.

    In Afghanistan, the war that began on October 7th 2002 still marches on. Operation Enduring Freedom is not due to end until 2014, an exact century after the onset of World War One. So far Afghanistan has taken the lives of 3,196 soldiers: 2,130 American, 433 British, and 158 Canadian. Forces killed in Afghanistan also amount to more than all the lives lost on 9/11.

    It gets worse. Once soldiers return from the theatre of operations the numbers keep climbing. For every single death in Afghanistan or Iraq, twenty-five soldiers commit suicide. ...Each year, 6,500 veteran suicides are documented at a rate of one every 80 minutes. Only the Army releases figures and it is unclear if this includes active duty personnel or veterans of other wars. Although only 1% of Americans have served in Iraq or Afghanistan, they account for a massive 20% of the total annual rate. The Department of Veterans Affairs claim 18 veteran suicides per day, and for every successful suicide 20 are attempted yet fail.

    If the lowest suicide rate to assume is one per day by active duty or Iraq/Afghanistan vets, more than 4,000 must be added to the numbers killed above. And if we assume only half of the 6,500 veterans suicides per year are as a result of wars in Iraq and Afghanistan, an additional 36,000 deaths could be included to the totals. Whether suicides account for a further 4,000 or 40,000 deaths, they bring the ratio to between 4:1 to 16:1 deaths in payback for the 2,977 victims of 9/11.

    These are just coalition losses of course. The official number of victims in Iraq has been stuck on 100,000 since 2004, not revised upwards since. But, in 2007 the British Opinion Research Business survey calculated that up to 1.5 million Iraqis had been killed in the war. This confirmed an earlier British survey by the Lancet that calculated 655,000 to 1 million Iraqis had died in just three years, from 2003-2006. Although the war continued for a further five years the studies have not been repeated nor revised to account for additional Iraqi casualties, arguably due to intense American criticism.

    What about the economic cost? In 2003, George W. Bush estimated that the wars would cost $50 to $60 billion. Yet a 2011 study by Brown University's Watson Institute for International Studies estimated the final cost of the wars to be $4.4 trillion, not including medical costs for injured veterans or rebuilding aid to Afghanistan. Economist Joseph Stiglitz estimated the war in Iraq alone would cost $2.2 trillion. And all of the costs are funded upon borrowed money, demonstrated by the US debt skyrocketing from $6.4 trillion in March 2003 to over $16 trillion as of October 1st, 2012.
But let's not end this Christmas Eve issue on such a depressing story. Let's end on something happy and optimistic.

...uh....uh...uh...well, we can't think of anything...

So, Merry Christmas!

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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3 Responses to "Special NOT-the-End-of-the-World Issue"


Dec 24, 2012

crap! whats the point?


Om Prakash Sharma

Dec 24, 2012

No body favours war and should not favour. It is a destruction of every thing not only economy. And there are Zombies. But it is age old wisdom that you maintain army to keep peace. Even though deterrence being present some elements always plan to destabilize the present power structure and establish their own and vice versa. One way politicians,Military men and economists are a necessary evil.Even Christ has not been able to change it by his sacrifice 2012 years back.Can you give us some advice on investment in Gold and silver.



Dec 24, 2012

The end of the world will definitely not be on the predicted date or year or even decade. The GOD is the ultimate gambler of all. Just when human beings think there will not be destruction of the world, there comes one and just when we think there will be one, there will be none.

According to me and my own views we are definitely near the great destruction, may be not in your lifetime or even in my lifetime, But even 75-100 years is too short a period for GOD and too long for human beings. Humans are in the territory of a bubble that has kept expanding since the last 300 years and hardly another 100 years or even earlier to the big burst.

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